Idris: There's no global fuel shortage

Thursday June 5, 2008
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

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


This might be true, the current oil price goes to high due to this speculation. Anyone
here who has friend working in Oil and Gas company, ask them how their company
doing at the moment. The speculation make it worst mainly from the west. And Pak Lah why
dont you start it by not using tax payers money to fill in your car, how's that sound.