Severe gasoline shortage by 2015, says report; 107 billion gallon shortfall projected; $300 oil in view

The International Energy Agency released a report projecting a severe energy supply shortage by no later than 2015. The report warned that increasing energy demand in India and China would result in an oil shortage of up to 7 million barrels of oil per day.

Global annual consumption of 85 billion barrels, is expected to reach 118 billion barrels by 2030. Matthew Simmons, a Houston oil and gas investment banker, told the Associated Press that the price of crude oil is likely to reach $300 a barrel. Oil prices reached a record $98.62 per barrel last week.

In China, fuel riots have occurred because of shortages. The shortages are affecting Shanghai, the southeast coastal provinces, and are spreading to the interior. Diesel is fixed-priced at $2.42 in China, about one third of the price in European markets, and fuel companies are getting squeezed by soaring crude oil costs, leading to production cutbacks and allocations. Prices have not been raised for 17 months despite crude oil rices nearly doubling.

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