Current high oil prices to take 'many years to solve': US' Bodman

Paris (Platts)--3May2005

US energy secretary Samuel Bodman Tuesday said current oil prices were a
"global problem" that had taken many years in the making and would undoubtedly
take years to solve.

Bodman who was attending the International Energy Agency ministerial meeting
in Paris also said prices at $50-55/bbl should encourage more investment in
the oil sector and in refining capacity but warned OPEC that it was not in its
long term interest to maintain high prices. "It is not in their interest to
have a very high oil price if the net result is to create economic chaos and
recessions but ultimately they will call for a decline in demand for oil and a
corresponding drop in prices," he said. Expectations that OPEC supply may not
be able to accommodate increase demand, a lack of spare capacity, soaring
demand in China and India, and geopolitical risks in key producers Venezuela
and Nigeria as well as the continued insurgency in Iraq have contributed to
record high prices this year. Consuming countries have criticized producers
for failing to increase investments to boost the global supply cushion and
increase refining capacity.

This story was originally published in Platts Global Alert
http://www.globalalert.platts.com

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