The Department of Energy (DOE) allayed fears about a possible oil supply disruption amid heightening tensions in the Middle East and North Africa, as the price of crude shot up to a multi-year record.
Citing information from the International Energy Agency and the Organization of Petroleum Exporting Countries (OPEC), Energy Undersecretary Jay Layug said there is “a high level” of spare petroleum supply to meet global demand.
“The current volatility in the market is unfortunately influenced by political events in some Middle East countries,” Layug said.
In 2010, Philippine crude oil imports were sourced from Saudi Arabia, United Arab Emirates, Qatar, Oman and Iran. Finished petroleum products were imported from neighboring Asian countries, except for liquefied petroleum gas, 40 percent of which came from Saudi Arabia, United Arab Emirates, and Qatar.
The DOE said it has obtained assurances from Pilipinas Shell Petroleum Corp. and Petron Corp. that they have ample inventories. Shell and Petron are the country’s biggest refiners and retailers.
The department also has come up with a contingency plan for possible external supply disruption.
“This plan is now being reviewed and fine tuned to be more relevant to present realities,” the DOE said in a statement.
Oil hit two-year highs in Asian trade Thursday as turmoil continued to wrack the Middle East and threatened to spread to other bigger oil producers in the region, analysts said.
New York’s main contract, light sweet crude for April delivery, rose 93 cents to $98.93 per barrel after passing the $100 mark for the first time since October 2008 on Wednesday.
Brent North Sea crude for April was up $1.41 at $112.66.
Fears of unrest spreading from embattled Libya were pushing crude prices up, said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.
“The concerns go beyond Libya, which is a relatively small oil producer, to the bigger oil producers that may be affected if the revolt spread,” he told Agence France-Presse.
Libya has Africa’s largest oil reserves, is the continent’s fourth largest producer and is a member of the OPEC, the cartel that produces about 40 percent of global supplies.
“Increasing unrest in North Africa and the Middle East has been a key driver of the latest spike,” said Shane Oliver, chief economist at AMP Capital Investors.
He said in a research note that Libya accounts for 1.8 million barrels a day of oil production, while Algeria, which has also seen protests, accounts for 2.1 million barrels.
Oliver added that Iran’s decision to send naval ships through the Suez Canal is adding to the tensions in the Middle East.
“The world could probably live with $100 oil as consumers and businesses are now used to it,” he said, adding however that a continued surge in oil prices, especially if unrest in the Middle East spreads, “could start to be more of a dampener on growth.” –Euan Paulo C. Añonuevo reporter, Manila Times With report from AFP
Short URL: http://www.manilatimes.net/?p=4570
#WearMask #WashHands
#Distancing
#TakePicturesVideos
