Shell chief bemoans volatile oil trade despite demand surge

13th May 2011, Comments 0 comments

Shell chairman Jorma Ollila warned Friday that the oil business has become much more volatile than in the past, while overall demand for energy is expected to have doubled by 2050.

"The surging energy demand today and the geopolitical tensions really do make oil business much more volatile than it was the case in the past," Ollila said during a conference at the University of St. Gallen.

"The political uncertainty in the Middle East and North Africa which we are now experiencing is a typical example of short term developments driving the volatility," he added.

However, Ollila also highlighted the longer term combination of the growth in emerging economies as well as the increase in the world's population.

"In 2050 the energy demand is expected to be about twice or even more than was the global demand the beginning of this century," he noted.

On Thursday, the International Energy Agency cut its outlook for global oil demand in 2011 by 190,000 barrels per day because of high prices and unexpectedly weak growth in rich countries.

So far this year the IEA had constantly revised its estimates upwards as recovery from the economic crisis broadened.

The downward revision reflected mainly an easing of demand in North America where high prices were beginning to hit demand, the agency said.

© 2011 AFP

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