Economics, not markets, behind oil price rise: BP CEO
Thursday, 12 June 2008
LONDON, June 11 (AFP): Economic fundamentals, and not financial market speculation, are responsible for the dramatic rise in the price of oil, with more investment needed in the energy sector, the chief executive of British energy giant BP wrote Wednesday.
In a comment piece in the Financial Times, Tony Hayward wrote that there were three myths with regard to increasing prices for energy: that speculation was behind the rise in oil prices; that the supply of fossil fuels was running out; and that the world could switch to a low-carbon economy quickly.
Hayward wrote that while global energy demand in 2007 was above average for a fifth year running, "energy supply has struggled to respond."
He said, however, that this was not to do with declining reserves, but instead with the technologies and policies used to extract those reserves, claiming that the "problems in bringing on new production are not so much below ground as above it, and not geological but political."
In a comment piece in the Financial Times, Tony Hayward wrote that there were three myths with regard to increasing prices for energy: that speculation was behind the rise in oil prices; that the supply of fossil fuels was running out; and that the world could switch to a low-carbon economy quickly.
Hayward wrote that while global energy demand in 2007 was above average for a fifth year running, "energy supply has struggled to respond."
He said, however, that this was not to do with declining reserves, but instead with the technologies and policies used to extract those reserves, claiming that the "problems in bringing on new production are not so much below ground as above it, and not geological but political."