What’s the right price for oil?
Oil exec provides somewhat surprising answer
By Dave Hannon -- Purchasing, 6/10/2009 3:56:00 PM
“There is a rational argument to say that somewhere between $60 to $90 a barrel is the right sort of level” for oil prices that would sustain future investment but not diminish demand.
Would it surprise you to know that quote came not from a buyer or a trader, but from the CEO of one of the biggest oil refiners in the world?
Well it’s true. BP CEO Tony Hayward told Reuters he thinks that range is a good balance for oil prices. Of course, he said it while unveiling data that shows global oil consumption fell dramatically last year as prices spiked then crashed.
Hayward unveiled BP’s annual Statistical Review of World Energy report which shows consumption of fossil fuels declined last year and production outpaced demand. According to BP’s report, global oil consumption fell by 420,000 barrels/day in 2008, the largest decline since 1982. And consumption in the OECD nations fell by almost four times as much, 1.5 million barrels/day.
“For the first time, non-OECD energy consumption surpassed OECD consumption,” Hayward pointed out in the report.
Also of note, the report says global solar energy capacity rose by 69% and wind power capacity rose 30%. The United States passed Germany as the wind energy leader for the first time, with a 49.5% increase in 2008, the report said.
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