OPEC's spare capacity looks likely to grow. Thanks to investment in the boom years, the world's productive capacity should grow faster between 2009 and 2012 than it did from 2003 to 2008, said a report from U.S.-based consultancy Cambridge Energy Research Associates.
Companies May Face Massive Cash Outflows
If companies do not reduce their upstream investment at all during the current economic downturn, CERA said spare capacity could reach 10 million barrels a day by 2013. "This would be an unprecedented margin and would tend to undermine the oil price," the consultancy said.
RIGZONE - Oil Cos' Bet on Swift Price Rebound Has Its Risks
The International Energy Agency fears that an expected recovery in oil demand from 2010 and oil project cancellations due to low crude prices and the credit crisis will mean no spare oil capacity at the end of 2013.
"That is our concern. Investment, investment, investment, that is what we are asking," IEA Executive Director Nabuo Tanaka said at a conference in Lisbon on Friday.
IEA says oil capacity crunch looms - Upstreamonline
With such diametrically opposed outcomes, what's a person to think? Neither agency have been really on the ball with prognostications, so perhaps the answer is in the middle...or CERA's deliberately qualified statement is a hedge on their bet, in awareness of past shortcomings. And waddya know, ASPO has a new piece on CERA's cloudy crystal ball, too: CERA - a peak oiler in the making?
CERA makes a big issue out of their fantastic database, that it is why their forecasts are so superior to everyone else’s. If they are far away from other forecasts the reason is simply that they claim they have much better data to back up their views.
It is therefore an interesting experiment to size them up in a country where the data is simple, transparent and public, and where “a better database” therefore is not really a competitive edge. Let us take Norway. In their 2005 report they were expecting Norway to produce 3 million b/d of liquids in 2010. In their 2006 update this figure had been revised up to 3.15 million b/d.
According to the latest IEA figures and the Norwegian Petroleum Directorate it is expected that Norway to produce about 2.1 million b/d in 2010. This actually means that in 2006 CERA was more than 50% too high in their estimate for capacity 4 years down the road for a country with relatively few fields and the most transparent and public statistics in the world.
So, my bet's on a very tight market, sooner if not later.
