The White House has ruled out the possibility of tapping U.S. oil reserves to drive down soaring prices while experts warned the oil price might continue to climb after it briefly hit 100 U.S. dollars a barrel on Wednesday for the first time.
U.S. President George W. Bush "would not use the Strategic Petroleum Reserve (SPR) to manipulate prices unless there was a true emergency," White House press secretary Dana Perino said on Wednesday.
"Right now we understand that prices are high and demand is extremely high," she said.
However, doing a temporary release of the SPR is not going to change prices very much, she said. "We know that from past experience."
The SPR was established in December 1975, following the Arab oil embargo, but the first barrels were not delivered until the summer of 1977.
It currently holds 695.5 million barrels of oil in inventory to be used in a supply emergency, according to the Energy Department.
Perino said Bush wants to increase oil supply in the United States in the face of rising world demand and soaring prices.
"What the president will do this year is continue to push Congress to work toward expanding domestic production here in the United States in environmentally sensitive ways," Perino said.
Light, sweet crude for February delivery rose 3.64 dollars to settle at 99.62 dollars a barrel after briefly hitting the 100 dollar a barrel landmark on Wednesday.
Analysts believed oil prices will continue surging after hitting the 100-dollar mark on rising demand and short supply.
Claudia Kemfert, an energy expert at German economic research institute DIW told newspaper Berliner Zeitung on Thursday that oil prices could double to 200 dollars per barrel within 10 years.
"Oil reserves are becoming increasingly scarce, which will further drive up the prices," Kemfert said.
The German expert said the recent record oil price was largely attributed to market speculation, adding the oil price could rise to 150 dollars per barrel in five years.
"The share of the oil price that is derived from speculation is around 20 percent," she said.
The expert said she does not expect an ease of oil prices in the coming weeks, considering the financial crisis in the United States and political turmoil in some oil producing countries like Algeria and Nigeria.
The oil price may continue to rise up to 105 dollars per barrelin the short term, she said.
However, Eugen Weinberg, a raw material expert of the German Commerzbank said he remains skeptical of a further rise of oil prices.
The market is "very optimistic" for all raw materials, including oil and gold, but "the market only want to see a three-digital number, which is like a magnet," Weinberg told Handelsblatt newspaper.
Now the price has a tendency to go down, he said.
Oil prices rose nearly 58 percent last year, the biggest annual gain this decade, rallying strongly in the fourth quarter to touch a record 99.29 dollars a barrel on Nov. 21 as the dollar fell and U.S. oil inventories sank.
The oil price rally soured the first stock trading day of the year in New York on Wednesday, with the Dow Jones Industrial Average closing 1.7 percent lower, its worst start since a slide of 1.9 percent on the first day of trading in 1983.
High oil prices boosted oil majors by midday on Thursday at London's stock exchange while other British stocks were lower. BP advanced 2.7 percent, and Royal Dutch Shell climbed 1.8 percent.
At the Hong Kong stock exchange, oil companies fell on Thursday on rising oil prices. PetroChina, the world's largest company by market capitalization, dropped 2.9 percent to 13.20 HK dollars and Sinopec fell 4.5 percent to 11.10 HK dollars.
Source: Xinhua
|
Comment
Tell A Friend
Print Format
Save Article