MADRID -- Market, economic and political fundamentals are the primary forces behind the high and volatile oil prices, rather than speculators or the weakness of the dollar, British Petroleum (BP) said on Monday.
"Some people put the rises down to short-term factors -- so-called speculators, or the weakness of the dollar," BP Chief Executive Officer (CEO) Tony Hayward said at the launch of the company's Statistical Review of the World Energy 2008.
"But the reality is that this is about fundamentals: a very tight balance between supply and demand," Hayward said. "At least for the medium term, the era of cheap energy is over."
Last year was the sixth consecutive year in which oil prices had risen, the first time this had happened since records began in 1861.
Christof Ruhl, BP's chief economist, said that since January 2003, the world has seen cumulative price inflation of 300 percent for oil, 200 percent for traded coal and 100 percent for the U.S. gas, "all accelerating towards the end of the period."
In the past five years, the economist said, the global economy had grown more quickly than at any time since the early 1970s and supply failed to respond adequately.
BP statistics show global oil production fell 0.2 percent to 81.53 million barrels per day in 2007 compared with the previous year, marking the first annual drop since 2002.
Global consumption climbed by 1.1 percent or 1 million barrels per day in 2007, which was slightly below the 10-year average growth rate, according to BP.
Hayward urged more investment to bring new supplies to the market. "High oil prices are a wake-up call to all of us" and the world should invest more and focus on using the energy more efficiently, he said.
The BP chief identified three significant obstacles: the overheated project-construction environment, a resurgence in "resource nationalism" and high taxes.
The BP energy statistics came on the eve of the 19th World Petroleum Congress in Madrid from June 29 to July 4.
With the theme of "A World in Transition: Delivering Energy for Sustainable Growth," the meeting brings together professionals, scientists, experts, engineers and even consumers who will analyze in depth the characteristics, advances and new challenges for petroleum industry.
"Some people put the rises down to short-term factors -- so-called speculators, or the weakness of the dollar," BP Chief Executive Officer (CEO) Tony Hayward said at the launch of the company's Statistical Review of the World Energy 2008.
"But the reality is that this is about fundamentals: a very tight balance between supply and demand," Hayward said. "At least for the medium term, the era of cheap energy is over."
Last year was the sixth consecutive year in which oil prices had risen, the first time this had happened since records began in 1861.
Christof Ruhl, BP's chief economist, said that since January 2003, the world has seen cumulative price inflation of 300 percent for oil, 200 percent for traded coal and 100 percent for the U.S. gas, "all accelerating towards the end of the period."
In the past five years, the economist said, the global economy had grown more quickly than at any time since the early 1970s and supply failed to respond adequately.
BP statistics show global oil production fell 0.2 percent to 81.53 million barrels per day in 2007 compared with the previous year, marking the first annual drop since 2002.
Global consumption climbed by 1.1 percent or 1 million barrels per day in 2007, which was slightly below the 10-year average growth rate, according to BP.
Hayward urged more investment to bring new supplies to the market. "High oil prices are a wake-up call to all of us" and the world should invest more and focus on using the energy more efficiently, he said.
The BP chief identified three significant obstacles: the overheated project-construction environment, a resurgence in "resource nationalism" and high taxes.
The BP energy statistics came on the eve of the 19th World Petroleum Congress in Madrid from June 29 to July 4.
With the theme of "A World in Transition: Delivering Energy for Sustainable Growth," the meeting brings together professionals, scientists, experts, engineers and even consumers who will analyze in depth the characteristics, advances and new challenges for petroleum industry.
