BP sees no energy supply problem

Lord Browne: Enough oil to go around

BP chief executive Lord Browne has insisted that the global oil industry has the capacity to meet future demand.

"There isn't really a supply crunch at the moment," Lord Browne told the Financial Times newspaper.

"We have the perception of the risk of a supply interruption, but that's all we've got," he said, adding that oil companies are investing to meet demand.

Oil prices rose to their highest level in three weeks on Friday, amid fears Hurricane Ivan would disrupt supplies.

US light crude gained $1.71 to $45.59 a barrel, while London's Brent crude rose $1.70 to $42.45.

"Supply has not been interrupted and can be forthcoming in significant quantities," Lord Browne added.

Lord Browne's comments, which contrast with the views of many industry insiders, come at a time when prices are highly sensitive to any development that could reduce supplies.

The threat of disruptions in Iraq and Russia drove US crude prices to a 21-year high last month, just short of $50 a barrel, prompting fears that higher energy costs would dent global economic growth.

Hurricane hassle

About five million barrels of crude oil output was stopped this week, as oil companies in the Gulf of Mexico closed operations and evacuated workers ahead of Hurricane Ivan's arrival.

Oil companies said they would not know if the storm had damaged platforms until aircraft could fly over the structures.

"We expect this outage to affect oil and natural gas inventory builds over the next few weeks - the loss of production over this period coupled with the disruption to imports offloading in the Gulf of Mexico being the key factors," the investment bank Merrill Lynch said.

Tropical storm Jeanne could further delay shipping and oil imports, but its impact will be limited as it is not expected to enter the Gulf of Mexico.

Opec agreement

On Thursday, Opec said that it expected world oil stockpiles to grow by more than one million barrels per day this year, despite growing demand.

On Wednesday, oil producers' cartel Opec agreed to raise its production quota by one million barrels a day.

Given that Opec's daily output is already running ahead of quota, this was thought more likely to "legitimise" the existing over-production than lead to any extra barrels in the market.