MercoPress. South Atlantic News Agency

Shell CEO says there's no physical shortage of oil in the world

Oil giant Shell corporation Chief Executive Jeroen van der Veer said on Monday he did not see any shortage of physical oil supplies, echoing the view of many OPEC ministers who say the world market is well-supplied.

Oil prices have risen more than fourfold since 2004 and gained about a third this year, partly on increased fears among investors that producers will struggle to produce enough oil to meet demand in a decade's time, according to market analysts. "There are no physical shortages in the world. We don't have ships waiting in the Middle East, no people queuing up for gasoline" Van der Veer told reporters in Malaysia where he was briefing on Shell's Asian business plan. "From a stocks point of view the whole value chain works well... It (the price) has a lot to do with psychology". US crude prices hit a record high of 135 US dollars a barrel last month before retreating to below 126 US dollars on Monday. Ministers from the Organization of the Petroleum Exporting Countries have blamed the falling dollar, geopolitical tensions and factors beyond their control for the price spike. They have argued that there's a close link between the fall in the US dollar value and the increase in crude market prices. Most recently US politicians have put pressure on regulators to stem the influx of investment funds into the market. "Oil prices, like many other commodities group, have relatively high volatility. That is difficult to manage" Van der Veer said. Asked for his views on governments trying to have a larger oil pie, Van der Veer said it was nothing new that with price rises, governments would try to increase their stake in projects. But with the hefty price of investments nowadays, he said companies will have to be "very careful with where they invest". "We think it is very important that governments stick to contracts which they have crossed in the past," he added. The Shell chief also said that while there should be no immediate concern about supply, the world must dig into less easily accessible energy sources to meet growing future demand. "In addition to easy oil and easy gas, we need unconventionals and we need renewables," he said.