Lower demand, more than geopolitics, dents oil price - Shell CEO

Lower demand, more than geopolitics, dents oil price – Shell CEO

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Softening oil prices a reflection of geopolitical issues, demand; Shell expects global LNG demand to double by 2025; LNG sales in 2011 rose 12 pct; more output in Qatar, Nigeria, Russia

June 5, 2012 11:30 by Reuters

Royal Dutch Shell said a drop in oil prices was due more to lower demand, with geopolitical issues having less of an impact on the market.

Brent crude has fallen to under $100 a barrel to a 16-month low as weak economic data from the United States and China adds to ongoing worries about the euro zone crisis.

“The softening of the oil price at the moment is a reflection of geopolitical issues being less dominant and lower demand coming into the picture,” Shell CEO Peter Voser told reporters at the World Gas Conference.

Ministers and central bankers from the United States, Canada, Japan, Britain, Germany, France and Italy will discuss the euro zone debt crisis later on Tuesday in a sign of heightened global alarm about the strains in the 17-nation European currency area.

Concerns over the state of the world economy and ample global crude supplies have taken the spotlight from lingering tensions between Iran and Western powers, which just three months ago helped push Brent crude prices to above $128 a barrel.

Speaking on the liquefied natural gas market, Shell said exports of the fuel from the United States would help meet the rapid growth in world demand.

“It’s hard to see how the industry can lift supply to meet the speed of demand without a contribution from North America,” De La Rey Venter, Shell’s head of global LNG, said at the same conference.

Rex Tillerson, CEO of Exxon Mobil Corp, sais earlier that his company, the world’s largest publicly traded energy firm, is considering exporting LNG from the United States. Exxon Mobil has been North America’s largest natural gas producer since its bought XTO Energy Inc in 2010.

Asked at the World Gas Conference in the Malaysian capital whether Exxon Mobil planned to export LNG from the United States, Tillerson said: “We are studying it.”

Shell expects global LNG demand to double by 2025.

It sold 18.83 million tonnes of LNG in 2011, up 12 percent from 2010 on higher output from Qatar, Nigeria and Russia.

Shell has 8 million tonnes per annum (mtpa) of LNG under construction, all in Australia, and has some 15 mtpa of new LNG capacity under study globally.