OPEC president says world "oversupplied" with oil

[RamboLiberal]

http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyid=2006-03-03T191348Z_01_N03542028_RTRUKOC_0_US-ENERGY-OPEC-OIL.xml&rpc=23

OPEC President Edmund Daukoru said on Friday that the global oil market is "oversupplied" by about 2 million barrels per day.

"The market is indeed well supplied with crude today," Daukoru told an audience at the National Press Club in Washington, ahead of next week's meeting of the Organization of Petroleum Exporting Countries.

Daukoru's view that the global market had plenty of crude oil differed with that of the United States, the world's biggest oil consuming nation, which believes the market needs more oil.

Daukoru, who is also Nigeria's petroleum minister, said the cartel's spare oil production capacity of 2 million barrels a day has not been able to counter oil price swings caused by market concerns about supply disruptions.

[hatrack]

1. Wow, those 2 MMBD of heavy sour aren't soothing the markets?!?

I wonder why . . .

[depakid]

6. LOL

It's going to get downright bizarre as all of this progresses.

[liberal N proud]

2. That would explain why the price of Gas rose 20 cents yesterday

[jsamuel]

3. exactly, not because of supply or demand, but because they want it to

and by "they" I mean the oil companies

[Raster]

8. the oil companies have to get some return on all the cash they forked

over to get dumbya selected. This is the exxon/mobile pResident, bought and paid for.

[McKenzie]

4. hahaha the belief that it's a supply side problem!

as if price controls will lead to Adam Smith's "invisible hand" regulating the diminshing supply of the ever declining lifeblood of the basis for modern life as we know it. Once Peak Oil kicks in (some reckon we are on the plateau right now BTW) the last thing anyone will be whining about is over supply. They won't even have the electricity to power their stock market software.

In the years ahead people will be thinking wistfully of the days when there weren't power blackouts and economic collapse.

Snort..."oversupplied"...hahaha.

[On the Road]

5. It's Really Hard to Know What to Think

In the current environment, both oil companies and environmentalists have strong reasons to promote limited-oil scenarios. The oil companies can increase profits by depicting, and environmentalists can encourage conservation and development of renewable resources.

Those are good environmental goals. But since there's not much of a domestic lobby for plentiful oil scenarios, I suspect the supply crisis is overblown. Hopefully the world will make the transition to non-fossil energy sources without a major supply crunch and depression. But governments seem to be just as short-sighted as ordinary people.

[NickB79]

7. In other words, how do we cut production without admitting Peak Oil?

My hunch is that OPEC nations are over-reporting reserves in order to maintain calm as long as possible. By trying to claim the world is oversupplied with oil, they pass the blame to investors and shadowy figures that people believe are artificially manipulating oil prices. They usually make claims about abiotic oil, massive oil reserves in Alaska being hidden by the government, or environmentalists preventing us from drilling in ANWR to solve our oil problem.