Oil expert warns of recession
By Brian O’Mahony, Chief Business Correspondent
AN oil expert warned yesterday falling oil reserves could trigger a major global economic recession in the longer term.
The warning came as the global economy faced into an uncertain winter. Markets fear prices are likely to rise again as shortage drives up demand.
Crude oil futures rose in Tokyo on expectations cold weather will increase demand for heating fuel while oil prices in New York have risen 2.7% this week as colder weather hit the US and Europe.
Experts warned colder snaps wold push prices higher in the weeks ahead.
Brent crude oil futures in London rose as much as 24 cents, or 0.4% yesterday to $56.45 (€47.89) a barrel as prices firmed.
In Britain the price of gas for delivery in January has risen sharply to well over £1 (€1.45) per therm. Some months back it was selling for 44p per therm for delivery in the New Year.
Dr Colin Campbell, chairman of the Association for the Study of Peak Oil (ASPO), said oil production would peak in 2010.
From then production will decline 2-3% a year.
Dr Campbell, a former exploration geologist who worked for Texaco and BP, was addressing a seminar in Dublin sponsored by AIB Capital markets.
“Notwithstanding reports to the contrary, discovery has been in relentless decline for the last 40 years despite a worldwide search aimed at the best prospects,” he said, adding analysts have been misled by over-generous reporting of reserves.
While oil supply will not immediately reach a critical level in Ireland, he said: “It is crucial that stringent policies be put in place to ensure more efficient energy usage in Ireland and to create a shift towards use of renewable energy.”