Oil to ‘Spike’ Without New Investments, Shell Says

Oil to ‘Spike’ Without New Investments, Shell Says

June 8 (Bloomberg) -- Crude oil is set to “spike” without new investments and a price surge is in the making, Royal Dutch Shell Plc Chief Executive Officer Jeroen van der Veer said.

The global energy industry is facing “severe challenges” and the world needs unconventional energy supplies to meet rising demand, he said at the Asia Oil and Gas Conference in Kuala Lumpur today.

Oil’s decline to about $32 a barrel in December from a record $147.27 reached in July prompted explorers to delay or halt projects, a move that will cut supplies and push prices higher as the global economy recovers. Crude has since rebounded, gaining 52 percent this year on signs of economic growth and record production cuts by the Organization of Petroleum Exporting Countries.

“The economy will turn, demand will come back and the overcapacity of supply will disappear,” van der Veer said.
Oil and natural gas won’t be able to meet all the additional demand that’s required, van der Veer said.
Shell, Europe’s largest oil and gas company, forecasts that renewable sources will account for 30 percent of new energy demand, he said.
Crude oil fell as much as 97 cents, or 1.4 percent, to $67.47 a barrel on the New York Mercantile Exchange.

IEA Warning

The International Energy Agency, a Paris-based adviser to energy-consuming nations, predicts that fossil fuels will make up 67 percent of energy use until 2030, according to Nobuo Tanaka, executive director of the group.

It’s essential to avoid an energy crunch in the next two decades and the main problem is a lack of investment, he said at a conference in St. Petersburg on June 5. Read Article... http://www.bloomberg.com/apps/news?pid=20601087&sid=am9pwxTRgZwE