Oil prices to remain stable for rest of year
Oil prices to remain stable for rest of year
JAKARTA (JP): Oil prices will likely remain stable until the
end of this year due to increasing world demand, Minister of
Mines and Energy I.B. Sudjana said.
He told reporters during a gathering with students here
yesterday that the severe summer in the northern hemisphere, the
economic recovery in industrial countries and the reopening of a
number of oil refineries in North Sea countries have raised the
demand for oil.
Secretary General of the Organization of Petroleum Exporting
Countries (OPEC) Subroto, who is here on a home visit, said at a
dinner meeting with oil executives Monday evening that the
world's oil demand will likely increase by 800,000 barrels per
day (bpd) this year.
The dinner, organized by the Indonesian Institute for Energy
Economics (IIEE), was attended by Minister Sudjana, a former
state minister for environment and population, Emil Salim, and
former Indonesian ambassador to the United States Abdul Rachman
Ramly.
Subroto did not specify any figures for the world demand but
said that world oil production is now estimated at 67 million
bpd, of which over 24.9 million bpd are produced by OPEC's 12
members and the remainder by other countries.
He said oil prices, therefore, will most likely remain high
until the end of this year.
On Monday, the average price of OPEC oil increased to US$18.20
per barrel from $16.50 in June, Brent to $18.19 from $17.09 and
the West Texas Intermediate (WTI) to $20.15 from $19.07.
The price for Indonesia's benchmark oil, Minas, rose to a
range of between $20.55 and $20.95 early this month from $16.70
in June.
Discipline
Subroto said the discipline of OPEC members in limiting their
production to their agreed-upon ceilings has also contributed to
the price increases.
OPEC has set its total output ceiling at 24.5 million bpd this
quarter.
Subroto said he was even optimistic that oil prices on the
world market will remain stable until the year 2000 before
increasing afterwards, even though the role of oil in the energy
mix will gradually decline from 40 percent at present to some 30
percent in 2050.
He said the industrialization process in developing countries
will likely increase the portion of their oil utilization from 34
percent at present to 65 percent in 2020, while the portion in
industrial nations will gradually decrease from 66 percent to 35
percent.
"Based on my long-term outlook, developing countries,
therefore, will face serious problems of oil supply," he warned.
He said Southeast Asian countries, for example, will be able
to provide only 40 percent of their oil demand by early 2000,
while the remaining 60 percent will have to be imported. (fhp)