OPEC retains control of volatile oil prices, says transport executive
Although world oil prices will remain volatile, members of the Organization of Petroleum Exporting Countries aren't likely to allow them to swing either too high or too low, the chairman of Plains All American Pipeline LP said Wednesday.
By the OGJ Online Staff
HOUSTON, July 11 -- Although world oil prices will remain volatile, members of the Organization of Petroleum Exporting Countries aren't likely to allow them to swing either too high or too low, the chairman of Plains All American Pipeline LP said Wednesday.
The US is the world's single biggest consumer of crude, so its market inventory of oil is a major influence on world prices in the short term, said Greg L. Armstrong, CEO of Plains All American, at the monthly meeting of members of the Independent Petroleum Association of America in Houston.
However, he said, "OPEC has been good, although not perfect, in anticipating demand and staving off too large a build-up or draw down of supplies."
International futures prices for oil and refined products declined Tuesday in expectation of the continued buildup of US inventories. The American Petroleum Institute subsequently reported US oil stocks increased by 909,000 bbl to 310.4 million bbl last week, while gasoline inventories were up by 382,000 bbl to 220.7 million bbl (OGJ Online, July 11, 2001).
The US will continue to depend on oil imports unless it converts some foreign suppliers into "our 51st and 52nd states," said Armstrong.
"If Cuba had oil, it would already be a state," he said. "I don't think we went into Kuwait just to protect their freedom, but to protect our oil supplies."
Meanwhile, Plains All American, already the third largest US transporter of crude, plans to expand its Cushing, Okla., terminal capacity by 1.1 million bbl to 4.2 million bbl (OGJ Online, June 25, 2001).
That added tank capacity is to ensure the continued flow of crude into the northern portion of the Midwestern US, the largest land-locked portion of the country with a high rate of energy consumption, Armstrong said.
All of the pipeline infrastructure originally built to move oil out of that area has been "turned around" in recent years to transport oil and refined products into that area, he said.