World Business

Speculators are not the problem, says Tony Hayward at the World Petroleum Congress in Madrid. Instead, he faults lack of investment and state-owned oil companies

by Danny Fortson

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The oil compensation touched thus far another new high yesterday, serving as a dramatic backdrop for the second meeting of the industry’s top figures in two weeks at the same time that they desperately see for a solution to a riddle that is sending dark reverberations over the world administration.

Speaking at the World Petroleum Congress in Madrid, Tony Hayward, the head executive of BP, became the latest major shape to turn adrift the notion that speculators were to blame for the soaring estimation of oil. The price for travail next month with respect to Brent North Sea crude oil hit $143.91, a modern all-time high.

Instead, Mr Hayward reiterated his view that fundamental issues such as a lack of investment and the rising intransigence of state-owned oil companies were behind the spike, warning that “the problems are above ground, not below it”.

Meanwhile, in the latest instance of growing notorious anger, lorry drivers in France staged a protest yesterday.

Mr Hayward’s views were echoed at the confab by Jeroen van der Veer, the head of Royal Dutch Shell. Both, nevertheless, were in risk of being drowned out amid a cacophony of competing explanations that have been offered from all sides, each tinged with their own element of self-interest.

The likes of BP, Shell, and ExxonMobil are keen to pique out the increasing difficulty they have in accessing new reserves, thanks to the hardening stance of state-owned oil companies which are unconvinced that they need the help of private groups to extract the resource.

Opec, the cartel of oil-prod-ucing nations, has been the most blatant proponent of the villainous role heart played by financial speculators who are supposedly driving up the price of oil for their own financial money-making.

Analysts say this is, in part at least, an effort to exhilarate mindfulness from its own role in the situation. A production cut continue year by Opec, led by Saudi Arabia, first clique the oil price forward its instant meteoric trajectory and a second then helped to keep it going.

Opec held a summit last week in Jeddah, Saudi Arabia, to try to cool the price down, but its pledge to increase production by 200,000 barrels per day did nothing to appease the market.

Yesterday’s price jump came after Iran threatened to blockade oil shipments out of the Persian Gulf if it were attacked by Israel. The febrile environment means that the slightest possibility of disruption can lead to significant estimation jumps.

The oil cost has begun to affect distant corners of the economy. Dry cleaners have seen the cost of their petroleum-based cleaning chemicals rocket.

Plastic bags have become much more dear, while home energy providers have seen the worth of wholesale gas and angel soar.