I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Posted: Wed May 10, 2006 2:43 am Post subject: Re: Is Opec at Peak Production
If I can throw a little thought in here, related to game theory.
In a pre peak world where supply outstrips demand, it is in the interests of countries to maximise their share of the world market so as to maximise their take. This leads to the cheating and tragedy of the commons type behaviour that pushes down prices, leading to the development of a cartel. So much so obvious.
In a post peak world not shipping oil today just pushes up prices tomorrow. Reduce supply 5% and tomorrow the 95% you are still shipping is worth 190% of today's price. And you can still ship that 5% later. The incentive is to constrain supply and make more money.
However being obvious about this is dangerous. You never know who will decide to invade and just take as much as they want. You walk a tightrope. That leads to two strategic approaches. First, beef up your defences and act to push your biggest potential adversaries into a slow decline that makes them strip their offensive capability. Second, make sure you have plausible deniability as to why your supply is curtailed. Faults, lack in refining capacity, geological problems - all can be called upon to slice the few percentage points off the top that are needed.
Between the two states there is a period of tactical manouevering and game playing as you switch operating modes and implement plans. To make things worse, the consuming nations can do the same analysis - they know what you're up to. The game is played by shot and countershot, signalling hidden understanding and intention.
Viewed in this light things become clearer. Statements and actions are shots in a hidden battle of brinkmanship. In all probability oil isn't truly peaking - but it might as well be as supply is curtailed and games are played. We are probably a good few years and million bpd off of the real peak, but now is the time when politics and strategy define production - not geology. If you want to model depletion and the peak, you need to model the game playing interactions.
I'll leave it as an exercise for the reader to work out the strategies that allow each side to win. _________________ Arcane Domain
Joined: Aug 14, 2004 Posts: 2068 Location: San Diego, Ca.
Posted: Wed May 10, 2006 1:51 pm Post subject: Re: Is Opec at Peak Production
Quote:
Reduce supply 5% and tomorrow the 95% you are still shipping is worth 190% of today's price. And you can still ship that 5% later. The incentive is to constrain supply and make more money.
The other problem is withholding oil from the market (to increase the price) may eventually cause demand desctrution, damage to the global economy and the price of oil to drop (think 1980). _________________ "Peak oil isn't more than an interesting industry factoid and doesn't have anything to do with the hysterics speculated on ad nauseum around here!" ReserveGrowthRulz
Posted: Thu May 11, 2006 1:56 am Post subject: Re: Is Opec at Peak Production
jato wrote:
The other problem is withholding oil from the market (to increase the price) may eventually cause demand desctrution, damage to the global economy and the price of oil to drop (think 1980).
The point is, its going to happen anyway, post peak. Better to control the time and circumstances to your advantage.
Its a game of transition. _________________ Arcane Domain
Saudi Arabia cut its oil production in April and May to its lowest level in a year, according to agency reports. Tanker tracking consultancy Petrologistics said that this was due to a dip in global refinery demand, as a result of widespread plant maintenance. Output in April stood at 9.1m bpd, down from 9.4m bpd in March.
Joined: Oct 15, 2004 Posts: 2251 Location: Arkansas
Posted: Fri Jun 02, 2006 7:57 pm Post subject: Re: Is Opec at Peak Production
According to this report, Opec production is actually less than official numbers. Note that the main reason is Saudi Arabia is producing less than last year. They say its bc there is enough oil on the market, but is there?
Posted: Tue Jun 06, 2006 2:29 pm Post subject: Re: Is Opec at Peak Production
According to the latest Opec Monthly Oil Report, Saudi Arabia produced 9.426 mbpd in March 06 and 9.413 mbpd in April 06. Its rig count is 60 as of April 06. According to above news reports, SA oil production dropped again in May 06 to 9.1 mbpd.
Total OPEC production for April 06 was 29798 mbpd, compare this to October 04 when total Opec production was 30228 mbpd
Posted: Tue Jun 13, 2006 12:53 pm Post subject: Re: Is Opec at Peak Production
seahorse2 wrote:
Interesting article found by Dantespeak, showing yet another monthly drop in SA oil production for the month of April.
DantesPeak wrote:
Petrologistics says, yes, they fall again.
Quote:
6/13/06 Oster Dow Jones 11:45:46
OsterDowJones
Copyright 2006 Copyright (c) 2006 Dow Jones & Company, Inc.
June 13, 2006
DJ Saudi Arabia May Oil Output At 9 Mln B/D - Petrologistics
LONDON, Jun 13, 2006 (Dow Jones Commodities News via Comtex) --Key Organization of Petroleum Exporting Countries member Saudi Arabia produced 9 million barrels a day of crude oil in May as weak demand and an unwillingness to further discount crude prevailed, leading tanker tracker Petrologistics said Tuesday.
Crude output in May was slightly lower than the 9.08 million b/d seen in April when the Kingdom first started to limit supplies.
"The Saudis are following the demand side as closely as they can and supplying what the market can bear and what their customers want," Petrologistics head Conrad Gerber told Dow Jones Newswires.
I know, the optimist rah rah is Venezuelan's are a bunch of fools who don't know how to pump oil. But, numbers count now, not names, and oil production is dropping during summer demand.
Also, Opec production has dropped 2nd quarter of 2006 by 340kbpd, although it daily production recovered by end of the quarter.
Quote:
However, total OPEC crude exported in the second quarter was down by 340,000 barrels a day to 24.62 million b/d compared with the first quarter, Roy Mason said.
Broken down, Mason said he saw a decline in exports of around 700,000 to 800,000 b/d from OPEC's Middle East members in April.
However, by the end of the second quarter volumes shipped had recovered to earlier levels.
As usual, thanks to Carrie for finding these articles
Posted: Tue Jun 27, 2006 11:58 am Post subject: Re: Is Opec at Peak Production
In his latest report, Mathew Simmons says world oil production has peaked and, interestingly, Opec production has peaked and may decline by as much as a third by 2012.
Posted: Sun Jul 09, 2006 9:20 am Post subject: Re: Is Opec at Peak Production
Opec production rose 0.6% in June, says survey
NEW YORK: Crude-oil output by the Organisation of Petroleum Exporting Countries, which pumps 40% of the world’s oil, rose 0.6% in June, led by an increase in Iraqi production, a Bloomberg News survey showed.
Opec output rose an average 165,000bpd to 29.82mn bpd, according to the survey of oil companies, producers and analysts. May production was revised 125,000bpd lower.
“Opec has spare capacity but it’s not the type of oil people want, so we’re just treading water here,’’ said Peter Beutel, president of Cameron Hanover Inc, a New Canaan, Connecticut energy consultant. The Opec production total probably won’t influence prices, Beutel said.
“It isn’t changing enough to have a huge impact,’’ he said.
Crude oil futures touched $75.78 a barrel on Friday on the New York Mercantile Exchange, the highest since trading began in 1983. Prices rose after North Korea test-fired missiles, raising political tensions in Asia.
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
News
Discussions
Resources
Members
Forum FAQ
Search
Usergroups
Profile
Log in to check your private messages
Log in
