Chinese Oil Giant Chief Punchbags Speculation For Soaring Oil

An insufficient oil supply, a weak U.S. dollar, speculation and geopolitical instability have fanned oil prices to record highs, a senior Chinese oil manager said here Tuesday.

The decisive driving force behind the high oil prices, which reached 143 U.S. dollars per barrel Monday, is severe concern about the fundamentals of oil supply and demand, not just for today, but for tomorrow as well, said Fu Chengyu, President of the China National Offshore Oil Corporation (CNOOC).
A weak U.S. dollar and geopolitical instability have been fully manipulated by speculators to drive up oil prices, Fu said at the on-going five-day 19th World Petroleum Congress.

In his speech "Energy: Challenges and Solutions - A CNOOC Perspective," the Chinese manager said there are more concerns than ever before about energy security. World oil consumption has been growing at 1.5 percent annually since 1996, he said.

Growing energy demand from emerging markets such as China, India and Russia is a natural need, he said. Around 3 billion people in emerging markets are undergoing industrialization, which means more energy and resource consumption.

However, Fu said emerging economies should not be blamed for consuming more as developed economies should not be blamed for consuming too much.

He said per capita oil consumption is 17 barrels each year in countries of the Organization for Economic Cooperation and Development (OECD), a bloc of developed countries, while consumption in India was less than one barrel in 2006, and 2.1 barrels in China.