Conoco chairman sees US gasoline shortage, price spike

Dubai, 27Mar2001
Conoco Chairman Archie Dunham Monday predicted that the US would experience a "fundamental shortage" of gasoline in the summer, which might lead to a spike in gasoline and crude prices. "We are going to have problems with gas this summer," he said. "We are also going to have a problem with electricity because of the different specifications that we have to implement," Dunham told an oil and gas conference in Dubai. "If there is any hiccup in pipelines or refineries," the situation will be worse, he said. Dunham warned that this would cause gasoline and crude oil prices to rise. Dunham said he met the US Vice-President Dick Cheney two weeks ago and has expected the US administration to come up with an energy policy plan soon to solve the supply problem.
"The White House is committed to the development of a new policy by the end of May," Dunham said. "It will focus on supply, the increased use of coal and possibly nuclear and encourage increased access for exploration," he added. Speaking at the Middle East Petroleum and Gas Conference, Dunham criticized the release of crude oil from the US strategic reserve by the former administration of Bill Clinton. "Dipping into the US Strategic Petroleum Reserve for the sake of domestic political considerations was bad US public policy. In the same way, the imposition of unilateral sanctions by the United States is bad public policy," he added, referring to the US sanctions against Libya and Iran.

On crude oil prices, Dunham said the oil industry was happy with oil prices around $28/bbl. "For companies like mine, last year was an enjoyable year and we are grateful to the oil producing nations of this region for your contribution to our prosperity. We really enjoy $28 crude prices," Dunham said. Due to OPEC's cohesion, "we can expect crude prices to spend more time above the historic range than below over the next five years," he said. "But prices will remain highly volatile, and the slowing economic growth we're experiencing today will likely be responsible for the next dip in crude prices," he added.