Oil Industry Headlines: Week of October 26
As the prospect of $100 oil becomes more likely, analysts are weighing in on how record crude prices will affect consumers this winter. According to CNN Money, “a lack of refining capacity means U.S. refiners will struggle to produce both gasoline and heating oil, so the country will end up importing more gas during the holidays . . . importing gas with a weak U.S. dollar is an expensive proposition.” Many analysts are forecasting gas above $3 before Christmas, while others say that the rise will be delayed until spring. Either way, analysts do agree that if crude prices stay near current levels, U.S. consumers will see significant prices hikes. Until now, Chinese consumers have been mostly shielded from recent crude price increases. “Chinese consumers, though less energy-efficient than their Western counterparts, are shielded from the impact of surging oil prices which would otherwise curb their thirst by hefty government subsidies . . . The burden falls primarily on Chinese oil companies: China National Offshore Oil Corp. Ltd. (CEO) and PetroChina Co. (PTR), which are obliged to pay a windfall tax whenever the price rises above $40 a barrel, shelled out more than $2.3 billion in the first half of this year,”Rigzone reported last week. This week, however, China’s National Development and Reform Commission surprised just about everyone when they announced that benchmark prices for gasoline and diesel would be reset almost 10% higher than current rates. The commission had previously stated there would be no energy price increases in the remaining part of 2007.Published Thursday, November 1st, 2007 at 2:48 pm and filed under Industry News.