another chance to get in at lower price. summer season will see spike. and below...
Oil discoveries can't satisfy needs PetroCan: $50 a barrel may not solve it: Correction must come from demand side, oil company CEO says
Claudia Cattaneo, Calgary Bureau Chief Financial Post
April 27, 2005
CALGARY - Even US$50 a barrel oil may not be enough to boost world supplies because there's a lack of opportunity, the chief executive of Petro-Canada said yesterday.
Ron Brenneman said most oil companies are struggling to replace the oil and gas reserves they are producing.
Any opportunities that do become available are aggressively pursued, he said.
"For the past 15 years, discoveries have failed to keep pace with consumption," Mr. Brenneman told shareholders at the company's annual meeting. "And for the last couple of years, replacement has only been running a little over 50%. That's the situation we face today."
He said the OPEC cartel has limited ability to solve the supply crunch because it has only 1.5 million to 2 million barrels a day of spare capacity, representing barely one year of world demand growth.
Another problem is that oil companies are reluctant to invest on the assumption that oil prices will stay at US$50 over the long term, because the price outcome "is rather unpredictable.