Piling on the pressure

The release of emergency US oil reserves in the wake of Hurricane Katrina and a stepping-up of the search for new oil sources by members of the Organisation of Petroleum Exporting Countries may have clipped the rise in crude oil prices for the short term. But, with Brent still above $60 a barrel, few are predicting a major price reversal in the absence of an economic slump.

OPEC, the cartel controlling an estimated three quarters of world oil reserves, revealed its key member states had drilled 7.5 per cent more wells last year than in 2003, with the number of rigs operated by OPEC members up 18.8 per cent. In August of this year, 248 rigs were operating in the Middle East, the most since November 1988 and a hundred more than the average during the 1990s.

Tiny Petrel Resources, controlled by colourful Irish entrepreneur John Teeling, announced it had been awarded a contract for development services for the Subba and Luhais oil fields in troubled Iraq. According to Petrel’s managing director David Horgan, the contract is to develop the production from the two fields from 50,000 barrels a day to more than 200,000 barrels a day in three years.