SPECULATORS ARE not to blame for the steep rise in oil prices, executives of three of Europe’s biggest energy companies said yesterday, adding to a growing industry consensus that tight supply and high demand are the culprits.
Opec ministers have promoted the idea that speculators are pushing up prices as part of attempts to deflect blame for the recent doubling in the cost of crude.
Yesterday, prices hit a fresh record high of almost $144 (€91.45) a barrel.
US lawmakers have given credibility to the argument that speculators are at fault by launching hearings on the matter.
But chief executives of oil companies are becoming vocal about the issue, dismissing the link between speculators and oil prices.
Jeroen van der Veer, chief executive of Royal Dutch Shell, Europe’s biggest international, integrated energy group, said yesterday: “We don’t think that the financial markets are leading the speculation.
“Probably they follow what other people fear as long-term fundamentals.”
He was speaking in Madrid at the World Petroleum Congress, an industry convention held every three years.
The executives pointed to a supply squeeze as political barriers prevented them and other industry operators from tapping large deposits of oil, many of which were jealously guarded by national groups.
Antonio Brufau, of Repsol, based in Spain, blamed lack of supply and high taxes, saying: “The fundamentals in the industry are the significant reasons for having these prices.”
Tony Hayward, chief executive of BP, the only one of the three European companies to have a large trading desk engaging in speculative buying and selling, said: “This is a fundamental signal; this is not about speculation. Supply is not responding adequately to rising demand.”
The warning came as West Texas Intermediate oil yesterday surged to a record high of $143.67 in New York, while Brent crude oil hit $143.91 in London.
Harry Tchilinguirian, oil analyst at BNP Paribas in London, said the market was rising on the back of “an escalation of rhetoric” over Israel and Iran.
At the weekend, Tehran said it would close the Strait of Hormuz, a waterway in the Gulf vital for oil exports, if attacked by Israel.
The International Energy Agency will today publish its forecasts for the next five years. – (Financial Times service)
