Eni warns oil may shoot up to $200 without Opec cuts

Italian oil group Eni has warned oil could shoot up
to $200 a barrel if the Opec cartel fails to cut
supplies.
Eni's chief executive, Claudio Descalzi, said the oil
industry would cut capital spending by 10-13%
this year because of slumping prices.
He said that would create longer-term shortages
and sharp price rises in four to five years' time.
Mr Descalzi was speaking at the World Economic
Forum in the Swiss resort of Davos.
He said: "Opec is like the central bank for oil
which must give stability to the oil prices to be
able to invest in a regular way."
Politicians, economists and industry leaders in
Davos have been voicing their worries over the
impact of lower prices.
Total and BHP Billiton both said on Wednesday
that they would cut back on shale oil projects.
People's Bank of China governor Zhou Xiaochuan
said low oil prices could slow down China's
development of renewable energy projects.
He said: "We worry a little bit that the price signal
may give disincentive for new energy types to
develop and could reduce investment in new non-
fossil energy,"
But he added that lower prices would be good for
the economy and job creation, because China was
dependent on imported oil and gas.
Opec's decision
Opec secretary general Abdullah al-Badri, also
speaking at Davos, defended the group's decision
not to cut output.
He said: "Everyone tells us to cut. But I want to
ask you, do we produce at higher cost or lower
costs?
"Let's produce the lower cost oil first and then
produce the higher cost,"
"We will go back to normal very soon," he said.
Oil prices have sunk by almost 60% since June to
below $50 a barrel because of a large supply glut.
The price slide accelerated after Opec decided in
November not to cut production.