World oil markets to remain tight until 2013: IEA chief
05 July, 2008; economictimes.indiatimes.com: BERLIN: International Energy Agency chief Nobuo Tanaka has predicted that world oil markets will remain tight until 2013, according to an interview with the German economic daily Handelsblatt.
The market willl initially relax from now until 2009/2010 due to a foreseeable increase in supply brought about by new production sites, said Tanaka who is the IAE's executive director.
But the supply will then drop and demand increase, in particular in developing countries, he added in the interview due to be published on Monday.
Tanaka observed that some countries such as Russia were taxing foreign companies heavily.
"This discourages investors," he said, adding that some state oil companies should dedicate a part of their revenue to social measures and investment in production.
On consumption, the IEA chief said he was against the lowering of taxation on petrol products because this would send the "wrong signal" on the subject of the battle against waste.
The price of oil is currently at a historic high at close to 150 dollars a barrel, an increase of more than 100 percent in the past year.
04 July 2008; timesofindia.indiatimes.com: BANGALORE: 'No Stock' boards and empty petrol bunks. Relaxed employees of fuel stations in Bangalore gestured to vehicles driving in on Thursday that there's no supply. Several bunks across the city went dry on Thursday. While many outlets did not have stock, several did not have the 'normal' petrol, forcing people to buy 'premium' fuel. According to a petrol bunk manager near Jayanagar 4th Block, there has been no fuel supply for the past three days. This bunk, among the highest-selling IBP outlets in the state, used to get around 20 kilolitres of fuel every day. With the severe scarcity, the bunk has been promised at least 10 KL, a 50% drop in supply. The estimated loss is more than Rs 3-4 lakh per day and they are requesting the company to at least provide 50% of the supply, he said. The same situation across many bunks forced consumers to flock to outlets which had some stock. Though some bunks didn't display the 'No Stock' board, they still turned customers away. According to Bhushan Narang, president, Karnataka Petrol Dealers' Association, with oil companies not supplying enough fuel, the bunks are closing once the stocks are over. "If situation persists for some time, we might adopt a 7 am to 7 pm business policy and will sell fuel till the prescribed stock for day gets over," Narang said. He explained that there is a demand for about 5 lakh litres of fuel per day but the oil companies are supplying only about 3-3.5 lakh litres, an almost 30% reduction. As the demand is growing due to panic buying among consumers, supply is being reduced. This shortage may lead to rationing of fuel in the city.
04 July, 2008, PTI/Madrid; business-standard.com: India will in October review retail fuel prices after it gets a clear picture of the dent that high international crude prices will leave on revenues of state-run oil retailing firms in the first half of the current financial year. At the June Cabinet meeting that decided to raise petrol, diesel and domestic LPG prices, it was agreed that we will take stock of the situation in October, Petroleum Secretary MS Srinivasan said at the 19th World Petroleum Congress here.
On June 4, petrol price was raised by a record Rs 5 per litre, diesel by Rs 3 a litre and domestic LPG by Rs 50 per cylinder. This hike together with cut in Customs and excise duties only marginally offset the Rs 2,45,000 crore projected revenue loss at that time.
"We do not expect any price revision between now and October. We will review the situation in October and take steps deemed fit by the government to address the scenario," Srinivasan said.
The last round of price hike has pushed headline inflation to over 13-year high of 11.42 per cent. Crude prices which were then $135 a barrel have climbed to a record $145 a barrel today.
While Rs 2,11,400 crore is only the projected revenue loss something that the finance ministry feels is inflated, the October review would base its decision on the actual revenue loss figures for the first half of the current fiscal.
The average price (of Indian basket of crude) at the time of June 4 decision was $123. It is now $128, he said.
For the current financial year, Srinivasan predicted the country's crude oil import bill will jump to $110-120 billion from $67.988 billion of the previous year. India in 2007-08 imported 121.672 million tonnes of crude but this year the quantity will substantially rise following commissioning of Reliance Petroleum's 29 million tonnes a year export-oriented refinery at Jamnagar in Gujarat.
03 July, 2008, Mumbai; Economictimes.com: Total world energy consumption was up 2.4 per cent in 2007, a slight slowdown from 2.7 per cent in 2006 but still an above-average increase. Every major region saw higher consumption, with Asia up the most and Europe the least. With China accounting for more than half the total world increase, it is hard to see much slowdown, even with more recent declines in Eurozone and US consumption, says David Wyss, Standard & Poor's Chief Economist, in a global look at what's driving the demand and supply equation. “The good news is that energy is a smaller part of the US and world economies than it once was,” Wyss notes in his report titled, “As Demand Continues To Increase, How Will The World Cope With Sustained High Oil Prices?” “Even this year, we expect the average US household to spend 6.7% of its income on energy, which is about the same as in 1971, before OPEC.” In 1980 and 1981, energy was 7.9 per cent of income. This reflects a greater efficiency in energy use relative to GDP. Even with that, however, per-capita use of energy has lifted. In the US, higher per-capita GDP has increased energy use per person by 2.0 per cent (1971 to 2005). For the world overall, energy use per head has risen 15.7 per cent (1971-2004). The average American used 4.7 times as much energy as the average for the world in 2005 and nearly twice the average of Western Europe and Japan. Where the energy will go is easy to estimate. The harder question is where will it come from? The EIA expects three sources to meet this rise in demand: OPEC production is expected to rise by 12 million barrels/day, non-OPEC conventional by 9 million, and nonconventional sources (tar sands, shale oil, heavy crude, and biofuels) by 7 million. “Whether producers can actually achieve these increases is highly questionable,” Wyss cautioned. The EIA puts out alternative forecasts based on differing price trajectories. Under a high-price case ($186/barrel by 2030), demand would be only 99 million barrels/day, still up 15 million barrels from 2005. The bottom line is that the future of oil prices remains very uncertain. No one knows how much oil is available or how expensive it will be to get it out of the ground. Deep-sea deposits are especially uncertain, with estimates based on old seismic analyses. Coal seems reasonably plentiful for the near future, but coal could run afoul of global warming concerns. It seems probable that oil prices will be significantly higher in 25 years than they are today. But will they be slightly higher or much higher, and how easy will it be to find alternatives? The sooner we start finding answers to these questions, the easier the transition to a new energy world will be.
General Motors may bring new mini car to US as gas prices soar
04 July, 2008, Detroit; economictimes.indiatimes.com: General Motors Corp is considering a new Chevrolet mini car for the United States as it reworks its product lineup to cope with a dramatic shift from trucks to cars linked to high gas prices, a spokesman said Thursday.
GM spokesman Dee Allen said bringing the Chevrolet Beat, which is about the size of a Honda Fit or Toyota Yaris mini car, to the US is among the options the company is studying.
``It is certainly one of the things that is being looked at from a portfolio perspective,'' Allen said.
The Beat, to be built in South Korea, will be rolled out in other global markets faster than it would be in the US, Allen said. He did not know when the car might be sold elsewhere or in the US.
The car still must be engineered to meet US safety and emissions standards, he said.
GM unveiled the Beat with two other ultra-small cars as concepts at auto shows last year, saying the trio was designed to attract young buyers in urban markets around the globe.
GM currently produces the Chevrolet Aveo sedan and five-door subcompact to compete in the growing mini car market.
The Beat is a front-wheel-drive three-door hatchback powered by a 1.2-liter turbocharged gasoline engine.
The company has declined to put a price tag on the Beat, but Vice Chairman Bob Lutz said last year that GM mini cars ideally would start about $10,000 in the US market.
US mini car sales are up nearly 31 percent for the first half of the year, even though the total US auto market is down more than 18 percent, according to Autodata Corp.
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