Reserve replenishment fueling oil prices - BP economist

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Although oil production is higher than demand, fuel prices are continuing to rise, Christof Ruehl said at an international conference on energy security in Moscow. He said countries are replenishing their reserves to use or sell later.

MOSCOW, March 13 (RIA Novosti) - Higher prices for energy resources are not only due to increasing consumption but also to major consumer countries replenishing their reserves, the chief economist at energy giant British Petroleum said Monday.

Although oil production is higher than demand, fuel prices are continuing to rise, Christof Ruehl said at an international conference on energy security in Moscow. He said countries are replenishing their reserves to use or sell later.

Ruehl said oil prices leapt from $35 to $55 in 2005, which he said was related to GDP growth.

He said consumption had risen from 1.2 million to 4.2 million barrels per day, and attributed such dynamics to intense global economic growth and an increase in usable capacities.

Ruehl predicted that although oil production would continue to be higher than demand in 2006, markets would remain uncertain and prices would stay at their current levels due to a shortage of available oil.

According to Ruehl, oil prices will not fall below $40 until 2009-2010, when the stock of available oil will be replenished.

As for the medium and long terms, he said world oil demand would grow with GDP.

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