Energy Market will Remain Tight in First Half of 2008: Senior Oil Market Analyst of EIA

Oil&Gas Materials 28 February 2008 19:18 (UTC +04:00)

Azerbaijan, Baku, 28 February / corr. Trend A. Badalova/ Despite the prospects of slower oil consumption growth in the developed countries in 2008, EIA expects Energy Market to remain relatively tight in the first half of 2008, Doug MacIntyre, Senior Oil Market Analyst of the U.S. Energy Information Administration said to Trend .

"EIA expects Energy Market to remain relatively tight as evidenced by the low level of surplus production capacity, keeping oil prices at or above $90 per barrel," MacIntyre said on 28 February.

The oil prices exceeded $102/barrels this weak. The price of the deals with futures Light Sweet totaled $101.7/barrels and the price of Brent reached $100.25/barrels. The sharp price rise is necessitated by the drop in value of dollar, as compared to the other currencies.

According to the analyst, there will be a drop in the oil prices in the first half of 2008.

"Looking beyond the first half of 2008, EIA projects surplus production capacity will grow and prices may ease, reflecting the slower consumption growth, fairly flat OPEC crude oil production, and production capacity increases in both OPEC and non-OPEC nations," he said.

In addition to the geopolitical factors, the main upside price risks for the remainder of the year include possible OPEC production restraint, delays in adding new oil production capacity and stronger-than-expected economic growth, he said.

According to analyst, there is also significant downside price potential if there is a larger-than-expected slowdown in the world economy leads to lower oil consumption growth, than is currently expected

According to EIA, the oil reserves in the country increased by 3.2mln barrels totaling to 308.5mln barrels.