The three factors that drive today’s oil price – rising political tensions, strong levels of demand and tight supplies – continue to work together, exacerbating the fear of a supply shortage.
Commentator’s view: This is the view of respected commentator, Charles Whall, oil sector analyst for London’s Newton Investment, an offshoot of Mellon Global Investments, quoted in The Australian (12/8/06 p12).
Mid-East hostilities: In a paper published earlier this month, Whall said the escalation of hostilities in the Middle East highlighted the extent of tensions throughout the region.
Uprisings in Nigeria Elsewhere, Nigeria, Africa’s supplier of crude oil, continues to suffer from destabilising uprisings in key oil producing areas ahead of the country’s elections next year.
Resource nationalism: Potentially more disturbing, however, was the growth of “resource nationalism”.
Dominance of state-owned companies: “State-owned or controlled national oil companies already account for around 90 per cent of the world’s oil and gas reserves and are becoming increasingly confident in their ability to manage the future on their own terms,” Whall said.
Populists in South America: “The re-emergence of populist politics across South America as in Ecuador, Venezuela, Argentina and Bolivia, demonstrates just how fast the playing field is changing.
Tightening controls on western companies: "Meanwhile, tightening of controls on Western companies across Russia, Qatar, United Arab Emirates (UAE) and Algeria, underlines how quickly the energy agenda is being wrestled away from the end-users.”
The Australian, 12/8/2006, p. 12
source: Erisk Net