Idris: There’s no global fuel shortage

ISTANBUL: There is no shortage of oil in the world and its present price level was driven up by unreal speculation, said Malaysia Airlines managing director and chief executive Datuk Seri Idris Jala.

He said the present oil price at over US$135 was unrealistic and based on certain global events that might have caused a shortage of supply.

These people (speculators and hedge funds) buy oil futures and say that this or that event may cause an oil shortage.

Not very long after this, people react to this and by then the message would be there is a shortage of supply even though there is none, Idris told the international media here at the close of the 64th International Air Transport Association annual general meeting.

IATA, which is an association of legacy full service airlines with over 200 members, had issued a statement at the end of its meeting that the industry was now in a state of an emergency because of the fuel price crisis.

Idris was a former senior executive with Shell Plc based in London and the Hague for almost 20 years. While there, he had headed various departments, including business development.

Speaking as a former oilman, Idris said there were two ways to see whether there was an oil shortage.

First, look at the oil tankers at sea. If they are not moving and just floating out at sea, that means they have no crude or processed oil to transport. That is not happening and that means there is no shortage.

Second, go to the petrol stations. If there are long queues, that means there is a shortage. Again, this is not happening and this can only mean there is more than enough supply.

As an ex-oilman, I tell you there is no shortage.

Idris pointed out that certain analysts and financial companies that produced reports about the shortage were also oil futures traders.

Asked what he thought was the fair value of crude oil at present, Idris replied: US$40.

He also criticised speculators and hedge funds, saying that he did not trust anything that he could not touch.

I always believe in the brick and mortar something I can touch. These people are trading with nothing.

Many years ago, we at Shell had wanted to buy Enron. I was leading the team then and we hired over 60 consultants to study how a company with no oil fields, refineries or gas stations could make so much money.

One of the consultants tried to convince me to recommend to the Shell bosses to buy Enron but I said no because I could not touch what they were trading in, Idris said in the one-hour briefing for the media about MAS performance and future.

He only expressed his opinion on the oil crisis after being asked by several journalists.

Idris was proven right on Enron because the so-called energy company collapsed four years ago under massive accounting fraud.

http://thestar.com.my/news/story.asp?fi … sec=nation

internal agenda…

Experiences worth thousand of explanations!

this man come from a state dat one MP claimed do not hv capable candidates to fill up high rank duties in government post

y d ‘alternative’ energy still expensive (such as solar, wind, biochemical)?

conspiracy conspiracy conspiracy

by the rich men who gather every year at swiss resort…

so is d US 2 blame 4 this??? USD40 per barrel??? cool…

yalor…
USD 40… then make up a lil bit story…
can sell for USD 125… who are making profit there?
we are the victim of OIL AGENDA…

interesting… mayb msian gov using this speculation for their own benefits (ie. stop subsiding petrol)?

point 2 ponder, Dato Idris, years n years of experience in d oil n gas field… he knws what he’s talking abt
PM,… does he knw anything abt d oil industry, or jst listen 2 his “penasihat” who wana make more money 4 themselves…

i agree, jul. this pak lah is now F***ed-up! let’s just see what will happen next. i’m just thinking about the families and people with lower income. can they survive all this?

i think many will want pak lah to come down. just like taiwan and former president chen sui bian

what the gov is doing now is to remove the protection that has been in place to isolate you & i from the world oil price. and eventually the real prices of rice in the world market.

this is not sim city, or e life. crude oil is indeed more than 130 usd a barrel. do you have any good idea why we shouldn’t have to face the real price?

do you have any idea what will happen to our economy if we continue this subsidy?

do you know what happened in 1998 when the hedge funds attack asian currencies and burst the bubbles?

or you don’t care, you just want this want that like a spoiled kid. wah wah wah, my parents don’t give me because they don’t love me. wah wah… may be it’s time to grow up. it’s not going to be easy, this is growing pain.

Interesting comments. Anybody has read this? = http://www.malaysia-today.net/2008/content/view/8433/84/

coming from oil town…we should know better.
oil is trade commodity; as touch will topple down the chain and the worst is the bottom line.

Idris is right in one part, the oil in worldwide global trade is all speculated…by who… look to dubai>arab saudi biggest oil company…
and connect the chain to USA> oil addict, like drink honey everyday on its economy
look at hedge funds, CIA, NSA …name it all …it is all a private companies working in one roof to shake things up after Iraq invasion by USA.
ppl in Shell know they have the tech and money, just waiting things to burst and pick it up again …
if you work in geology field, you know the deposit around the world still can sustain another 100 years by exact with efficient usage and sustainable approach.
why oil price gone up, 1. profit 2. agency working in one roof pushing their own agenda 3. new global economy in making.

ohya, one more thing, heard of the quote; wait till the lights is turn on in the big room, then we know who is running naked in the room

asian collapse 1998 got t do with internal factor, consider a punishment to the govt hav many crony company set up and failed to support them and when the waves arrived, the whole house collapse coz the foundation is build on sandy soil.
now, the 10 yrs cycle due, and things aint getting better.
prepare for massive recession; sign is alrdy in 1 yr ago. and i doubt malaysia can sustain well, better check up the BNM how much debt it is holding.
im happy the oil price gone up, or else we will suffer most in later future with more to subsidies. besides, im waiting for next bodowi talk, Ok i`ll scrap my mega projects …after 3 times changing name …so this will drive FDI out…happy for ■■■■■■ management :)mass havoc happen and eventually the govt will collapse like suharto indonesia…jadi… bersedialah…just a view…maybe happen, maybe not…

as usual. rpk is a fair man.

unfortunately he did not point our explicitly that again, like many thing malaysian, the rod started with mahati.

don’t be surprised that if anwar wins government, all this money that petronas has but don’t know where they hide, will simply disappear. like all those paper trails that disappeared from the states bn lost.

guys, i work in the oil field … i agree with what idris is talking about. I know there is no shortage heck demand have not even drastically change from 10 years ago … supply & demand remains healthy…but what change is the cost of bring the oil from the ground to your consumers is rising. A drilling rig 10 years ago only cost US$50,000 a day rental … now its hitting almost to US$200,000 within 10 years time still the same drilling rig 10 years ago… Steel, Precious metal is getting the shortage. Its harder to get steel nowadays and to fabricate something like casing takes 3 years lead time. Don’t really want explain more as its quite complicated … but the cost of exploration,drilling,producing & delivery of oil commodity, its not as cheap as before…and we’re drilling deeper and deeper… using highest technolgy ( most expensive ), highest grade material ( most expensive ) & using professional ( damn expensive people ) to get fuel.

yes the advancement of the end technology…getting more complicated.
besides, the driven cost due to the cost of bringing oil from ground to consumer, what other factor in? speculation by hedge funds in oil trading ?

not just the real driven cost, but also speculated cost factor in ? politics, manipulation…this and tat …= sum of the oil price production isnt it?

rab, all those still can’t justify usd130/barrel. 60 usd make more sense. and that’s already very high compared to 10 years ago. the rest is pure speculation - goreng one.

yes the advancement of the end technology…getting more complicated.
besides, the driven cost due to the cost of bringing oil from ground to consumer, what other factor in? speculation by hedge funds in oil trading ?

not just the real driven cost, but also speculated cost factor in ? politics, manipulation…this and tat …= sum of the oil price production isnt it?[/quote]

Yeah i know what you, but what i mention above is what i know… anything about politics … who owns this company, how he transfer money or what going on with under the table … those things i don’t know … because i did not see it… i am just a guy in the field = )

what is exactly wrong with malaysia today? i bet you all know that our very national oil company, petronas had subsidized RM 12 billion, which is half of it’s annual profits. but, still insufficient. what actually went wrong here? where are all the money gone to? i know some had been blindly spent by throwing a malaysian monkey to the space, which left us here with poor living facilities, still… honestly, i’m VERY damn sad of how the country’s income and tax payer’s money had been used like THIS!