Business | Oil & Gas
Alternative energy use 'can check oil-related inflation'
The use of alternative, or 'green' energy could help oil importing countries tackle oil-related inflation, analysts say, as oil prices hover well above $80 per barrel.
- By Saifur Rahman, Business News Editor
- Published: 22:48 October 14, 2007
Dubai: The use of alternative, or 'green' energy could help oil importing countries tackle oil-related inflation, analysts say, as oil prices hover well above $80 per barrel.
In the short to medium term, prices are likely to touch the psychological $100 mark. "Most oil importing countries need to seek alternative energy and ensure lesser use of energy to sustain growth," said an analyst, requesting anonymity.
"Policymakers could ensure the use of compressed natural gas or CNG-powered vehicles or encourage the import of hybrid cars into the market, for example, which will have a strong impact on the economy and the environment of any country."
The world oil supply increased by 415,000 barrels a day in September, to average 85.1 million barrels a day, according to the International Energy Agency. Of this, the Organisation of Petroleum Exporting Countries (Opec) produces about a third, while more than 50 million barrels are produced by the rest.
Global crude refinery output is seen falling to a seasonal low of 73 million barrels this month, 1.9 million barrels below the August peak as maintenance takes place in the OECD, China, the Middle East and the former Soviet Union territories. However, global crude runs are projected to rebound to 75.5 million barrels by the end of the quarter.
WTI crude futures rose above $80 a barrel in September on falling US, European and Japanese crude and product stocks and expectations that tighter conditions will be seen in the fourth quarter.
Although global oil product demand remains virtually unchanged at 85.9 million barrels in 2007 (a rise of 1.5 per cent over 2006) and 88 million barrels in 2008 (a rise of 2.4 per cent), the speculative elements in the international oil trade are going to use any excuses to push the prices up - something analysts feel, needed to be fixed.
Oil price, vulnerable to regional crises and global shocks, crossed $84 a barrel last week, on Iraq-Turkey tensions.
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