Opec head warns oil could reach $200 as BP and Shell soar

Source: Energy Digital

Date :29/04/2008 09:23:25

Royal Dutch Shell and BP Plc record combined profits of more than £7 billion over the last three months, thanks to the rising prices of oil and gas.

Shell made profits of $7.8 billion (£3.9 billion) in the first three months of the year, up from $6.9 billion a year ago.

Rival BP saw its profits rise 48 percent to $6.588 billion (£3.31 billion), from $4.4 billion.

$200 a barrel

The results came as Chakib Khelil, the president of oil producers' cartel Opec, warned that oil could hit $200 a barrel.

"Without geopolitical problems and the fall in the dollar, the prices of oil would not be at this level," he was also quoted as saying in Algerian newspaper El Moudjahid.

Fresh high

His comments came as oil prices hit a fresh high, just below $120 a barrel.

Prices were lifted by a strike by oil workers at the Grangemouth refinery in Scotland, which disrupted fuel supplies and halted much of the UK's North Sea oil production.

Thinking long-term

Simon Wardell, oil analyst at Global Insight, warned that the oil price is unlikely to fall significantly soon.

“Oil prices are high because of the weak dollar and because reserves are under pressure, the spare capacity margin is narrowing, Opec does not have a great deal more oil to pump," he said.

He added that oil firms could not sit back and just watch the profits flow in. "Oil firms have to think about the long-term investment, and what prices might be in the future.”

April 29, 2008