Some Recent News about Oil
Oil expert Martin Storey writes: You may find the following recent news interesting. These are factual, not partisan reports. The price of oil in the past few days, has never been so high (in money-of-the-day) since the beginning of the Hydrocarbon Age. Bush friends can only be delighted: even dud oil assets are profitable nowadays. Eleven million barrels must be approximately. 15% of the world production/consumption right now. However, it's clear that the US government should do a hairpin turn and resume building friendships in the arab world. In an ironic catch-22, the US being friends with only the rulers, not the people, as in Saudi Arabia, increasingly alienates these rulers from their own people nowadays. It's come to the point where there's not much right the US can do anymore, in the Arab people's (and many others') eyes.The future is gassy, get ready!
Saudi set to pump 11 million bpd. Riyadh, 29 September, OGT—Saudi Arabia, the world's largest oil exporter, will raise production from 9.5 million barrels a day to 11 million barrels, an Oil Ministry official has said.b This was later confirmed by the Saudi Oil Minister Ali al Naimi. Word of the decision came as crude oil topped US$50 a barrel, pushing past the psychological milestone for the first time.
OPEC “is losing power to control oil prices” Dubai, 28 September, OGT—The continuing surge in oil prices is proving Opec's limited influence on the market.This is despite the Vienna-based organisation committing to increasing its production ceiling. These views now being aired publicly by major oil industry analysts reflect researched-based analysis which first appeared several months ago in Oil & Gas VIEWPOINT, Australia’s only weekly industry publication. "Opec's role to shift prices is limited because of the weakness in its spare production capacity which, estimated at one to 1.5 million barrels per day (bpd), constitutes heavy crude that is not sought after by refineries," analyst Waleed Khaduri said. Opec declared in Vienna on September 15 it was lifting its official
production ceiling by 1m barrels daily to 27m bpd from November 1. But the decision left markets unmoved and has so far failed to bring down prices. "Opec does not have the capacity to influence the oil market...which did not react to its decision to increase its production ceiling," Kuwaiti analyst Kamal Abdullah Al Harmi said. "Opec is no longer able to impose a balance on the market, on which the organisation has lost its influence because it no longer has the spare production capacity sufficient to do so," he added. According to Harmi, the market needs light crude, produced notably by Libya, Algeria and Nigeria. Western refineries, notably American, don't want to use heavy crude which is produced by Gulf states and which constitutes Opec's spare capacity," he said. The general view is that the quantity of oil in circulation is sufficient to immediately supply the market. However, the spare capacity of producer countries, which is not providing a "security cushion" in the event of a disruption to production by any one of them, is at its lowest. "Opec is not responsible for the rise in prices and is not able to lower this upward trend," said Abdulwahab Abu Dahesh, who heads investment research at the Riyadh Bank in Saudi Arabia. "According to expectations, Opec and non-Opec producer countries will need many years to increase their production capacity to a level which can reassure the market," said Abu Dahesh.
And a positive news to close: According to the US Geological Survey, the US alone have an estimated 200,000 Tcf (trillion standard cubic feet) of in-place gas resource within the country, in the form of gas hydrates. Expressed as reserves, that's zero right now, because we do not yet have the technology and knowledge on how to exploit methane hydrates, but that will come. 1 Tcf is a very large quantity of gas, equivalent to a large oil field.
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October 8, 2004