Showing posts with label nucelar power. Show all posts
Showing posts with label nucelar power. Show all posts

Sunday 9 August 2009

Fundamentals driving oil prices higher: BP economist

Fundamentals driving oil prices higher: BP economist
OIL prices are poised to climb higher in the coming years as consumption by industrialising nations are expected to outstrip that of the developed countries, predicted BP chief Asia economist Dr Zhang Chi.

Presenting the latest BP Statistical Review of World Energy report at a briefing yesterday, Dr Zhang pointed out that consumption of coal by industrialising nations have already surpassed that of Organisation for Economic Cooperation and Development (OECD) countries since 1998. And last year, these developing countries have also caught up with consumption on the natural gas front.

Dr Zhang believes it is a matter of time before developing countries will surpass OECD ones in terms of oil consumption.

When this happens "in the next few years", it will put pressure on oil prices to move higher, he said.

"Oil prices are affected by marginal demand ... and in the long term, the trend will put pressure on the margin and it depends on whether that price will bring in more oil on the supply side," he said.

Already, the primary energy consumption of non-OECD countries, including China, has - for the first time - exceeded OECD consumption last year. China alone accounted for nearly three-quarters of global growth in energy consumption, said BP in its report. World energy consumption is measured by the consumption of various fuels such as oil, natural gas, coal, nuclear and hydro power.

When asked how important are speculators in the energy markets, Dr Zhang said: "The fundamental drives the direction, the speculation may add on and follow that trend, rather than determining the trend."

"If you look at last year's fuel price volatility, coal prices were more volatile than oil (prices), but nobody was saying somebody was speculating in coal.

"So, in a sense, speculators look at the same data that we look at - they are not stupid - they look at the fundamental supply and demand trends and then they make their bets," he said.