Turkish attacks part of the oil price hikes
Crude oil prices have recently jumped again as Turkey's military assaulted rebel bases in northern Iraq.
Iraq is the sixth-largest producer in the Organization of Petroleum Exporting Countries, and analysts say the attacks in Kurdish Iraq that began last week have affected prices on world markets, Australian newspaper The Age reported.
But OPEC may still cut its output next month, due to rising inventories and an expected drop in demand, according to President Chakib Khelil.
"I'm not terribly concerned about the geopolitical concerns there," Rowan Menzies, head of research at Commodity Warrants Australia, told the paper. "You can get a kind of knee-jerk reaction to these things but I don't really think that's going to be a major influence over the next two or three weeks."
Crude oil for April delivery has risen more than 58 cents after the Turkish incursion. OPEC produces about 40 percent of the world's oil. The group has a meeting scheduled for March 5 and will reportedly decide on changes to its production then. It meets on March 5 to review the group's production levels.
The group is forecasting a 1.6 million-barrel drop in demand in the second quarter.
"If OPEC did cut output that would change everything, but I just don't see OPEC cutting output," Menzies said. ''The global economy just looks a little too fragile to be cutting output.''
The recent surge in oil prices is because of ''speculation and geopolitical problems'' and the expectation that OPEC will cut production," Khelil said.
Lebanon to begin receiving natural gas from Egypt
The Pan-Arab Natural Gas Pipeline is expected to be operational by the middle of this year, said acting Energy and Water Resources Minister Mohammad al-Safadi.
Lebanon has been experiencing power outages because of the high, and increasing, price of power. Gas from the pipeline is expected to trim the country's energy bill by 30 percent, an adviser to Safadi told Lebanese newspaper The Daily Star.
The $1.2-billion, 1,200-kilometer pipeline will send about 900 million cubic meters of gas annually from Al-Arish in Egypt to Syria. Syria will be able to receive up to 2 billion cubic meters annually through the pipeline, which will be connected to Syria's Deir Ali power plant.
The first phase of the project, linking Egypt with the Jordanian Red Sea port of Aqaba, was completed in 2003, and the second stage, linking Aqaba with Rihab, was completed two years later.
The pipeline could link to Turkey as early as the fourth quarter of 2009 and eventually supply the European Union through the Nabucco pipeline project, which will run from the Caspian Sea area to Western Europe across Turkey.
Australia pushes for new oil and gas finds
The government is backing efforts to find new Australian oil and gas supplies. Some say that if new supplies are not found, it will cost up to $27 billion a year to import enough to meet the country's needs, Australia's The Age and other local newspapers reported.
A report by the Petroleum Production and Exploration Association suggests that only a quarter of Australia's oil and gas reserves have been explored and without further discoveries, Australia's oil production could decline to 32 percent within a decade, leading to a trade and energy crisis. Australia's crude oil and condensate production has decreased from 100 percent of the country's needs in 2000 to about 60 percent now.
The government is planning to offer substantial incentives to help producers fund expensive exploration efforts.
"Australia has many unexplored frontiers," Energy Minister Martin Ferguson said. "The most obvious sedimentary basins and the best prospects for oil that's easy to get at and cheapest to produce have been explored."
The report's author and geoscientist, Trevor Powell, said there are vast, untapped oil reserves untouched.
"There are more than 50 sedimentary basins in Australia, of which 12 are currently producing oil or gas and four have reserves deemed non-commercial," he said. "Given the maturity of Australia's oil-producing areas, only the discovery of a substantial new oil province can arrest the decline in reserves and production."
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Closing oil prices, Feb. 25, 3 p.m. London
Brent crude oil: $97.52
West Texas Intermediate crude oil: $98.98
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