G-7 countries call for increased oil output to meet demand
29.08.2012,
13:42
The Group of Seven nations called on oil-producing countries to increase output and is monitoring the threats to their economies posed by high oil prices, according to a joint statement issued today by the U.S. Treasury Department, Bloomberg reports.
YEREVAN, August 28. /ARKA/. The Group of Seven nations called on oil-producing countries to increase output and is monitoring the threats to their economies posed by high oil prices, according to a joint statement issued today by the U.S. Treasury Department, Bloomberg reports.
“We remain vigilant of the risks to the global economy,” the G-7 said. “In this context and mindful of the substantial risks posed by elevated oil prices, we are monitoring the situation in oil markets closely.”
The G-7 said it’s prepared to call upon the International Energy Agency, a 28-member group of oil consuming countries, “to take appropriate action to ensure that the market is fully and timely supplied.” The IEA’s countries made available 60 million barrels of crude and oil products in June 2011 after Libyan output was disrupted by an armed uprising against Muammar Qaddafi.
Oil has advanced 24 percent since reaching a 2012 low in June as stockpiles fell and the U.S. and Europe tightened sanctions against Iran, limiting the country’s ability to sell its crude. Rising prices have raised speculation that President Barack Obama may release supplies from the Strategic Petroleum Reserve.
“The EU and the U.S. have sanctions against Iranian oil which have taken a million barrels a day off the market in conjunction with a hurricane that has shut in 90 percent of Gulf production,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
“This is all combined with rising gasoline and diesel prices, and fragile economies around the world,” he said. “They’re telling governments that they need to look at what kind of action they can take to spur economic growth.”
Today’s statement is similar to a Group of 20 communique following a June meeting in Los Cabos, Mexico, saying the group “will stand ready to carry out additional actions as needed.” The G-20 includes developing nations such as China, India and Brazil. Both statements praised a commitment by Saudi Arabia to mobilize spare capacity to ensure an adequate supply of oil.
Oil rose for the first time in four days in New York as Hurricane Isaac reduced offshore output in the Gulf of Mexico and on speculation that U.S. supplies fell to a five-month low. Before the G-7 statement, crude oil for October delivery rose 86 cents, or 0.9 percent, to settle at $96.33 a barrel on the New York Mercantile Exchange. —0--
