Oil Industry Headlines: Week of December 7
Speaking before the Senate’s subcommittee on energy, EIA Administrator Guy Caruso predicted that the average price of crude would rise approximately 18% in 2008 to $85 a barrel, reported the Associated Press. He added that “Speculators and others have moved toward investing in oil markets because of tight fundamentals . . . In other words, high oil prices are likely to be increasing participation by non-commercial traders, rather than the other way around.”
Last week, the Chinese government announced it would begin subsidizing oil refiners, including PetroChina and Sinopec, to help offset recent heavy losses. Under the current structure, Chinese refining companies import crude oil sold on the open market (which recently hit highs above $99 a barrel), refine the crude, and then sell it at a heavily discounted price set by the government. Before PetroChina and Sinopec finished breathing their collective sigh of relief, they learned that the government would be putting money back in their pocket by . . . taking money out of their other pocket. The Chinese government announced this week it’s plan subsidize oil refiners will be financed by increasing the “windfall tax” collected from oil producers by 33%.
Published Thursday, December 13th, 2007 at 2:08 pm and filed under Industry News.