Joined: Mar 04, 2005 Posts: 2642 Location: New Zealand
Posted: Wed Oct 31, 2007 8:09 pm Post subject: OPEC to Halt Yearlong Oil Cuts But Markets Want More
OPEC to Halt Yearlong Oil Cuts But Markets Want More
Quote:
Starting Thursday, the Organization of Petroleum Exporting Countries will officially ditch a yearlong policy of cutting production, giving world markets more crude to ease record-high oil prices.
At two meetings at the end of 2006 and after a 25% drop in U.S. oil prices, OPEC scrambled to reduce its production by 1.7 million barrels a day, or 2%, of global demand to reduce inventories and pull crude prices above OPEC's unofficial target at the time of $60 a barrel.
This strategy has worked well for OPEC: Global oil inventories have dwindled to normal levels and crude prices have stayed above $60 a barrel the past seven months, delivering OPEC a flood of oil revenues.
They have the capacity now and they'll have even more next year to deal with the situation we are in today," said Leo Drollas, deputy executive director and chief economist at the Center for Global Energy Studies in London.
The center estimates that OPEC's total spare production capacity in 2008 will grow to 4.9 million barrels a day, or 5.7% of total world oil consumption, up from 4.6% in 2007.
Other analysts, including the International Energy Agency in Paris, say OPEC's effective spare production capacity will grow incrementally next year and stand at around 2.8 million to 3.5 million barrels a day, or roughly 4% of world demand, with the bulk of that held by Saudi Arabia.
PFC Energy in Washington forecasts OPEC production capacity will rise by 682,000 barrels a day in 2008 from this year, up from a net rise of 359,000 barrels a day this year from 2006.
Various OPEC ministers said markets are well-supplied and that the group will fill any supply problems if they occur. Backup crude stocks stand at a decent level of 53.5 days of so-called "forward demand cover" in the U.S. and other industrialized nations.
But what OPEC members consider a reasonable price today is anyone's guess, because the group has grown comfortable with the idea that the world economy can continue growing solidly even with oil at $80 or more a barrel.
Gholamhossein Nozari, acting oil minister of Iran, an OPEC price-hawk, said recently that $90-a-barrel oil was "still cheap" because of the impact of a weaker U.S. dollar, according to the Iranian state news agency.
Other analysts said that despite the recent tumble in inventories, world oil supplies aren't in a danger zone.
rigzone _________________ Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
Joined: Jan 06, 2006 Posts: 508 Location: Pacific Northwest
Posted: Wed Oct 31, 2007 8:16 pm Post subject: Re: OPEC to Halt Yearlong Oil Cuts But Markets Want More
I think that this is put up or shut up time. They have been saying things are fine and that they can do more for months, and still have not. _________________ We stand here, as the light of other days surrounds us.
"Hail the Dead"
Joined: Apr 05, 2005 Posts: 1628 Location: Springsteen Country (NJ)
Posted: Wed Oct 31, 2007 8:28 pm Post subject: Re: OPEC to Halt Yearlong Oil Cuts But Markets Want More
Crap like this makes me so mad I could spit. There's millions of people suffering from oil shortages around the world and they have the gall to say the market is "well supplied"?
There's even fuel shortages in the US heartland. linky
Quote:
Jerry Fuchs, CEO and general manager of Bloom Oil, said North Dakota, being the farthest point north on the NuStar’s pipeline, has historically had some outages lasting a few days, but in the past two months outages have lasted weeks, not days.
“There have been days when we could not find a gallon of diesel in the state of North Dakota,” he said. “I’ve even had to ration some of my customers and give them half of what they wanted so we could keep all the farmers going.”
The Internet is invaluable as a tool to show how much liars lie. _________________ Joe P. United Political Debate
"Only when the last tree is cut; only when the last river is polluted; only when the last fish is caught; only then will they realize that you cannot eat money." - Cree Indian Proverb
Joined: Oct 25, 2004 Posts: 1331 Location: Stalag 13
Posted: Wed Oct 31, 2007 8:40 pm Post subject: Re: OPEC to Halt Yearlong Oil Cuts But Markets Want More
I'm still not sure why Graeme keeps spamming garbage speculation threads like this. Maybe he is a closet cornucopian. Peak oil is right in front of us and we have run out of time. Our current way of life cannot continue. _________________ Now why didn't I think of that?
Joined: Mar 04, 2005 Posts: 2642 Location: New Zealand
Posted: Wed Oct 31, 2007 11:01 pm Post subject: Re: OPEC to Halt Yearlong Oil Cuts But Markets Want More
DP, You've done some terrific work here and you are much better than me at analysing the oil market. BUT I think Dow Jones is a respectable news organisation and I don't believe that they have deliberately got their story wrong. At the bottom of the article, they say that:
Quote:
The producer group [OPEC] could spring a surprise and opt to raise production by another 500,000 barrels a day when the leaders of the members nations and their oil ministers meet in the Saudi capital, Riyadh, Nov. 17-18 for a summit.
Drifter et al, No I'm not a cornucopian as I've stated many times before. I am trying to promote sustainablity, and I'm also searching for the "truth" but this is difficult when reading information supplied by the media because they can publish lies (I don't think this article is lies however) and half-truths. I hope you now realise that OPEC decided to let global inventories run down in order to raise prices. They succeeded. And I do believe that they have the extra capacity over the next few years. Actually at the moment I'm shifting toward the view that peak oil will occur early in the next decade. How expensive oil will be during the coming years and decades is impossible to predict. _________________ Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
Joined: Mar 04, 2005 Posts: 2642 Location: New Zealand
Posted: Thu Nov 01, 2007 12:11 am Post subject: Re: OPEC to Halt Yearlong Oil Cuts But Markets Want More
Here's another indicator [apart from OPEC's policies] of oil's dominance as a transport fuel over the next few years:
Quote:
In case you have missed it, the oil majors are quietly investing in the renewable fuel sector.
Now, are the investments huge? No. Did they exist three years ago? No. Biofuels are both politically popular and extremely popular with the consumer. The big takeaway here is that the alternative energy companies are not alone in this effort today. It all but assures a permanent place for biofuels.
It is becoming a global market like oil and the players who are first to begin the global consolidation will prosper.
Hence oil's dominance in the transport fuel market is going to change very soon. You can expect that biofuels will play an increasingly important part in our transport fuel mix during the next decade. Investments by the major oil companies in the biofuel sector will be worth following. This increase in biofuel production and consumption should alleviate demand for oil and consequently oil prices. _________________ Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
Joined: Oct 25, 2004 Posts: 1331 Location: Stalag 13
Posted: Thu Nov 01, 2007 12:35 am Post subject: Re: OPEC to Halt Yearlong Oil Cuts But Markets Want More
Graeme wrote:
Here's another indicator [apart from OPEC's policies] of oil's dominance as a transport fuel over the next few years:
Quote:
In case you have missed it, the oil majors are quietly investing in the renewable fuel sector.
Now, are the investments huge? No. Did they exist three years ago? No. Biofuels are both politically popular and extremely popular with the consumer. The big takeaway here is that the alternative energy companies are not alone in this effort today. It all but assures a permanent place for biofuels.
It is becoming a global market like oil and the players who are first to begin the global consolidation will prosper.
Hence oil's dominance in the transport fuel market is going to change very soon. You can expect that biofuels will play an increasingly important part in our transport fuel mix during the next decade. Investments by the major oil companies in the biofuel sector will be worth following. This increase in biofuel production should alleviate demand for oil and consequently oil prices.
At some point in the near future most crops will have to be used to grow food, not fuel for cars and trucks. Biofuels is one of the worst ideas ever. It has no future because it is an energy loser. And we all lose in the end because it just drives up food prices even higher. It really pisses me off that most people are willing to sacrifice everything to continue driving and try to maintain an unsustainable lifestyle.
But I am not going to get into an argument with you about this subject. That would be totally pointless. We are past the point of techno-wonder arguments. It doesn't really matter any more. Peak oil is here- now. _________________ Now why didn't I think of that?
Joined: Mar 04, 2005 Posts: 2642 Location: New Zealand
Posted: Thu Nov 01, 2007 2:38 am Post subject: Re: OPEC to Halt Yearlong Oil Cuts But Markets Want More
Drifter, Most people working in biofuel research are aware of your concerns. Yes, mistakes have already been made in the US. Ethanol from corn is not sustainable. I admit that I'm not an expert in this area of biofuel production. So I have to rely on what others report. Here are a few articles I found quite at random on google:
In Microbe, Vast Power For Biofuel
Quote:
Inside the jar, microbiology professor Susan B. Leschine found curious lollipop-shaped microbes with an uncommon ability to break down leaves and plant fibers into ethanol. For 30 years, Leschine has been researching this sort of thing and writing about it for publications such as the International Journal of Systematic and Evolutionary Microbiology.
Some venture capitalists in the area have convinced Leschine that her tiny microbe could be very big business. Now Leschine, who teaches at the University of Massachusetts at Amherst, is also chief scientist at SunEthanol, a start-up firm with about a dozen employees.
EU agriculture chief: Biofuel policy ‘realistic and sustainable’
Quote:
Mariann Fischer-Boel has responded to criticism of the EU’s biofuels policy, arguing that it can bring real benefits to everyone.
“While we take well-reasoned arguments extremely seriously, we have not seen anything yet to deflect us from the goals [that biofuel will make up 10 per cent of transport fuel by 2020] signed up to earlier this year by EU leaders,” she says.
Fischer-Boel, a former Danish minister for food, explained that biofuels are only one factor among many that have pushed up food prices.
“Bad weather in Australia has had a huge influence, key suppliers like Ukraine have banned exports and food demand in the emerging Asian economies is continuing to grow. In Europe, we use less than two per cent of our cereals output for ethanol.”
Better Than Corn? Algae Set to Beat Out Other Biofuel Feedstocks
Quote:
Forget corn, sugar cane, and even switchgrass. Some experts believe that algae is set to eclipse all other biofuel feedstocks as the cheapest, easiest, and most environmentally friendly way to produce liquid fuel, reports Kiplinger's Biofuels Market Alert. "It is easy to get excited about algae," says Worldwatch Institute biofuels expert Raya Widenoja. "It looks like such a promising fuel source, especially if it's combined with advances in biodiesel processing."
On its Web site, Solix Biofuels notes that rising gas prices are making algae-based biofuel more attractive. With it and other companies now investing in the technology, experts estimate that large-scale commercial production of algae fuel could be just five years away, Kiplinger's reports.
Second generation biofuel processes can ease the pressure on land, because they can use waste biomass, and existing (untapped) sources of biomass such as crop residues and potentially even marine algae.
I've seen several news articles by European and American biofuel experts who state that biofuel production can be environmentally benign, viable and will not conflict with food production. If I remember correctly from a source in this forum, I understand that biofuels could contribute up to 30% of transport fuels in the US by the end of next decade. At the moment, the US is still at the research and trial stage. There's still a lot to be learned. _________________ Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
Joined: Oct 23, 2004 Posts: 5897 Location: New Jersey
Posted: Thu Nov 01, 2007 7:31 am Post subject: Re: OPEC to Halt Yearlong Oil Cuts But Markets Want More
Graeme wrote:
DP, You've done some terrific work here and you are much better than me at analysing the oil market. BUT I think Dow Jones is a respectable news organisation and I don't believe that they have deliberately got their story wrong. At the bottom of the article, they say that:
Quote:
The producer group [OPEC] could spring a surprise and opt to raise production by another 500,000 barrels a day when the leaders of the members nations and their oil ministers meet in the Saudi capital, Riyadh, Nov. 17-18 for a summit.
OPEC can announce anything it wants, but they don't have the capacity for another 500,000 bpd increase on top of the recent one. Again, basically nothing is stopping OPEC countries from producing flat out anyway.
It's becoming very clear that we are past peak for conventional oil, and there's not much OPEC can do about it. _________________ It's already over, now it's just a matter of adjusting.
I suppose that no-one but the ministers knows what the ministers think that each country should have, and what each country thinks they should have. I mean, the numbers are probably not the same... _________________ "RRrrruuuunnnn!!!" ~Apocalypto
Joined: Oct 23, 2004 Posts: 5897 Location: New Jersey
Posted: Thu Nov 01, 2007 5:13 pm Post subject: Re: OPEC to Halt Yearlong Oil Cuts But Markets Want More
I don't have a link but Oil Movements, a tanker tracker service which releases a report every Thursday, said that the OPEC addition in November would be closer to 180,000 b/d, noting a glut of oilfield shutdowns in the United Arab Emirates.
Sorry that I do not have more details on the Oil Movements report this week, otherwise I would post them. _________________ It's already over, now it's just a matter of adjusting.
Posted: Thu Nov 01, 2007 5:33 pm Post subject: Re: OPEC to Halt Yearlong Oil Cuts But Markets Want More
Graeme wrote:
however) and half-truths. I hope you now realise that OPEC decided to let global inventories run down in order to raise prices. They succeeded. And I do believe that they have the extra capacity over the next few years. Actually at the moment I'm shifting toward the view that peak oil will occur early in the next decade. How expensive oil will be during the coming years and decades is impossible to predict.
Bingo! People confuse Opec policy with geologic constraints.
Joined: Mar 04, 2005 Posts: 2642 Location: New Zealand
Posted: Mon Nov 12, 2007 10:56 pm Post subject: Re: OPEC to Halt Yearlong Oil Cuts But Markets Want More
DantesPeak wrote:
Graeme wrote:
DP, You've done some terrific work here and you are much better than me at analysing the oil market. BUT I think Dow Jones is a respectable news organisation and I don't believe that they have deliberately got their story wrong. At the bottom of the article, they say that:
Quote:
The producer group [OPEC] could spring a surprise and opt to raise production by another 500,000 barrels a day when the leaders of the members nations and their oil ministers meet in the Saudi capital, Riyadh, Nov. 17-18 for a summit.
OPEC can announce anything it wants, but they don't have the capacity for another 500,000 bpd increase on top of the recent one. Again, basically nothing is stopping OPEC countries from producing flat out anyway.
It's becoming very clear that we are past peak for conventional oil, and there's not much OPEC can do about it.
Saudi Arabia Pushes For Extra 500,000 B/D OPEC Hike
Quote:
Saudi Arabia is to push for an extra 500,000 barrels-a- day hike in output by OPEC, or 1.8%, as soon as this week if oil prices drive toward $100 a barrel, an official familiar with the situation said Monday.
Speaking the day after Saudi Arabia's Oil Minister Ali Naimi indicated that the 12-member Organization of Petroleum Exporting Countries may discuss a production increase, an official close to the group's policy discussions told Dow Jones Newswires: "The Saudis want another 500,000 barrels a day in the market. They don't like these prices for consumers."
nasdaq _________________ Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
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Peak oil is right in front of us and we have run out of time. Our current way of life cannot continue.
