Peak Oil News: EU energy commissioner says oil could reach 200 dollars a barrel

Monday, March 03, 2008

EU energy commissioner says oil could reach 200 dollars a barrel


Oil prices could reach 200 dollars a barrel, the European Union's energy commissioner said in an interview published Monday in Spain, two days ahead of an OPEC meeting to decide daily output levels.

"When I arrived at the European Commission in 2004, a barrel of oil cost 52 dollars. It has doubled in three years. We can't rule out that in 2011 it will be at 200 dollars," Energy Commissioner Andris Piebalgs told business daily El Economista.

"What I am saying is, in part, a joke, but it shouldn't surprise us," he said, adding that when US investment bank Goldman Sachs predicted oil could reach 100 dollars three years ago, "everyone took it as a joke."

"We can't rule out 200 dollars because in the last two years, all of us have been completely mistaken, thinking that what is in fact happening now was impossible," Piebalgs said.

Oil prices struck a record-high 100 dollars at the start of January and on Friday the price of New York crude hit a fresh peak of 103.05 dollars per barrel.

The 13 members of OPEC, who together pump 40 percent of the world's oil, are due to meet Wednesday in Vienna, Austria to decide on daily output levels, currently set at 29.67 million barrels.

In a statement made ahead of the meeting, OPEC President Chakib Khelil, who is also Algeria's energy minister, said the body will either hold output steady of cut production "to restore market balance and stability."

Piebalgs told the newspaper he "couldn't imagine (an OPEC production) cut."

"I hope OPEC shows us that we are not running out of oil and that, in the medium- and long-term, it is capable of increasing production. Markets are very nervous," he said.

"Prices are going crazy because there needs to be long-term garantees that OPEC has enough resoruces to respond to the increase in global demand. Its not enough for OPEC members to announce on Wednesday a production increase of 500,000 barrels," he added.


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