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Fuel card news: Offshore drilling ban 'could increase oil prices'

04 June, 10
Struggling motorists have been warned that the pause on offshore drilling recently imposed by the US government could have global implications.

Analyst firm Bernstein Research has claimed the delay in new drilling initiatives will result in a cut in output of 500,000 barrels daily from 2013 to 2017, driving up production costs which are then likely to be passed on to hard-pressed consumers, Reuters has reported.

In a note to clients, Bernstein said: "Although this may seem small in a global context, such a situation would decrease OPEC spare capacity, especially in the second half of the decade, which would lead to an increase in the oil price."

The organisation also suggested new standards imposed by the American administration may be adopted worldwide, further restricting drilling and increasing operating expenses.

Last month, independent expert Wood Mackenzie told the Financial Times US regulations could reduce output by nearly one-fifth in 2010 and 2011.

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Posted by Tammy BrooksADNFCR-2675-ID-19818363-ADNFCR

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Fuel card news: Offshore drilling ban 'could increase oil prices'