Output close to capacity, says Opec head

[aneerkoinos]

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1073281175000


"Opec countries are producing oil at "near maximum capacity" as a result of "leakages" above its current agreed quotas, according to the oil cartel's president.


Increasing production now made little sense, Purnomo Yusgiantoro, Indonesia's energy minister, said on Tuesday, since demand was expected to decrease in the second quarter of this year with the end of winter in the northern hemisphere.

In an interview with the Financial Times, Mr Yusgiantoro, president of the Organisation of Petroleum Exporting Countries, indicated his opposition to an increase in production despite calls for the oil cartel to raise its quotas in response to high prices worldwide.

Crude prices have hovered at more than $30 a barrel in recent weeks, well above Opec's preferred $22-$28 range. That has raised speculation that the cartel might move to increase production at its meeting in Algiers on February 10 and possibly earlier."

more...


OK, this is crappy incoherent article with very little hard facts. But perhaps there is one more hint that Oil Peak is in fact matter of history, and OPEC is producing at full capacity and could not increase production even if they wanted - regardless what they say their reasons are not increasing production. So Algeria blast, Nigeria restlesness etc. can really rock the the tight market while Chinese consumption is increasing fast and US oil stocks are at 70's-levels(!).

[waterman]

1. Well isn't that just a huge bummer

[hatrack]

2. China's already reporting spot shortages all over the place

I'd post the article if I had the link at hand. Of course, in China's case, it just might be skyrocketing demand combined with a crappy distribution system.

However, if OPEC is indeed running close to flat-out (assuming they're telling the truth), this is potentially very interesting.

[aneerkoinos]

5. Some observers

in the peak oil crowd have been saying that OPEC ran flat-out some time before the war. After the war they've only reduced production. AFAIK this is the first time OPEC bigshot says so publicly. We can't trust the media to report correctly the important stuff even when extremely important things are uttered, and question why is it uttered at this time and place. Feb 10 again, but what is the message? Create panic?

[earthside]

13. " Feb 10 again, but what is the message?"

What does this mean?

e-mail: [e-mail]

Check out:
www.earthside.com/endofoil.html
and
www.lifeaftertheoilcrash.net

[bahrbearian]

27. Demand is part of Peak Oil..

[DUreader]

3. Wow, if true, wow!

[reprobate]

4. This isn't interesting, it's terrifying.

If we are NOW approaching peak production it says to me that we are nowhere near ready for it. American gov't is hell bent on taking over all available oil reserves at the very time that those reserves are reaching the point of diminishing returns.

Instead of researching alternative energy sources like hydrogen and fuel cells, they invade Iraq. Don't make much sense.

If true that we are reaching peak oil, things are going to get real nasty real fast. Europe has been putting billions into research of hydrogen vehicles and fuel cells. They will be ready. We will not.

[aneerkoinos]

6. Not reaching peak, over the peak

is the implied message (some say peaked 2000). Oil supply does not satisfy demand and never will, that's what Peak means. Beyond huge.

Here's one really scary idea. Cheney knows and has known for ages. Either before election (if looking bad for boy king to cancel it) or rather after announces Oil Peak publicly and declares martial law in US. Under the circumstanses that may well be the only responsible thing to do. The real purpose of Patriot acts, anyone...?

[jpak]

7. The Petroapocalypse Cometh????

What will the Bushies do when gasoline and heating oil prices exceed $2 (or even $3) a gallon???

[asjr]

8. To hell with the-

Bushies--what will we do? Just heard Dan Rather mention $3.00 a gal. come summer.

[BrokenSegue]

15. Somthing Big

They'll do anything to keep the public happy. It's election time.
Guess it's time to crack those oil reserves

[Fovea]

20. The Bushies will make insane amounts of money

and the rest of us will bend over.

[DoYouEverWonder]

9. It takes a lot of fuel

to run the US War Machine. That's why they are seeing such a huge demand.

[Gin]

10. Once we use up all the oil...the next natural resource grab will be water.

gin

[DUreader]

11. They have been grabbing water for years

[peacetalksforall]

12. We have exceeded output because of the the fighter flyovers and

escorts over the last two plus years and all the commuting between here and Iraq -- at the same time we know that government stand-downs on the morning of 9-11 weren't caused by fuel shortages even though only little white Lear jets without numbers were flying around, plus our President.

[BrokenSegue]

14. Hu

Yeah Right,I bet their running out of sand too.

[DUreader]

17. You Would Be Right: Saudis 'Fear Sand Shortage'

Not that I think you'll be back to read this


http://news.bbc.co.uk/2/low/middle_east/3243623.stm


Saudi Arabia has reportedly imposed strict border checks to enforce a ban on the export of
sand.

There are fears that the growing demands of the construction industry could lead to a shortage in the
desert kingdom.

The Arab News newspaper reports that neighbouring Bahrain needs to import large quantities of sand
for reclaiming land from the sea.

Demand is also expected to grow as the process of reconstruction in Iraq gathers pace.

Although sand remains plentiful in Saudi Arabia, construction experts say the high costs of bagging and transporting make
exploiting it difficult.

[BeFree]

16. Yeah, Peak

Production capacity has reached it's limit. Do you think the Saudis would not pump more oil at $36 bbl? They probably are seeing some wells getting harder to pump. That's a sure sign of Peak.

Throw in the fact that the $ has has been recently devalued, and one can't help but feel all things oil are gonna get real dicey in short order.

[jmcgowanjm]

18. Algerian blast

You can call it a dupe, but I haven't seen it anywhere in DU
of LNG blast in Algeria.

I posted in the Energy section where we're having it out
on the OliCrash. Come on over.

- A huge blast at an Algerian energy facility is unlikely to
have any immediate impact on liquefied natural gas
shipments to the United States, despite the fact the
U.S. receives about 20 percent of its LNG from the North
African country, some LNG operators said.

If Indonesia imports by the end of 2004
is it no longer a member of OPEC?

http://www.peakoil.net/Newsletter/NL37/Newsletter37.html

[jmcgowanjm]

19. Skikda- it is the source of most of Algeria's oil exports

and about a quarter of annual LNG exports of 60bn cubic metres, mostly to European Union countries.

despite the fact the U.S. receives about 20 percent of its LNG from the North African country, some LNG operators said.

http://www.forbes.com/markets/newswire/2004/01/20/rtr1218437.html

Excuse me, I didn't read to the bottom of your article,
aneerkoinos.

This is a bigger deal than I thought.

The reasond'etre of this article was
the blast.

I've changed my mind, we haven't got five years.

[DUreader]

21. Kinda of explains the desperation of the PNAC cabal

They probably knew a few years back that the peak was upon us

[jmcgowanjm]

22. yes, DUreader, once I started looking, it's right there

http://www.alternet.org/story.html?StoryID=17312

http://www.ecoworld.org/Energy/Articles/articles2.cfm?TID=294

http://www.peakoil.net/Newsletter/NL37/Newsletter37.html

And people aren't seeing the synergy of this,
the steady state disequilibrium stuff.

[peterh]

23. This is a stupid fucking article and the writer should be fired…

SA can crank it up to 10 mil per day in a heart beat like they did in `91. depending on the survey one adheres to, SA is producing anywhere from 8.3 to 8.5 per day currently. The OPEC 10 (11 being Iraq) is producing 1 mil over their quota, which is 24 and change. That is down slightly from their high a few years ago of 27 and change (Opec 11).

Barring the current political turmoil in the respective countries, SA, Venezuela and Nigeria have the most spare capacity to produce above quotas if they choose. SA and the Vens are controlling their own production (a rarity for the Vens) ….While the Nigerians (personal opinion) are not in control (whisper….shell & chevron).

Bottom line: WTI (west texas intermediate) is at $35 because OPEC said fuck the price band (22-28….really 24-30 in relation to WTI) cause the dollar is in the shitter and we’re losing around $5 per bbl on the dollar…..which brings it back into the top range of the band….that’s kinda how the floor traders on the NYMEX are viewing it…..beyond that…

You’ve also got Bush choosing to fill the SPR at an accelerated rate (buy high, sell low), thus artificially, propping the market a tad bit….could it be for his friends????

As with anything else, I’m not surprised with the shit that gets published….

[Spider Jerusalem]

25. This is a less-than-intelligent response.

You make the mistake of assuming that Saudi Arabia still has the same excess production capacity that they had nearly a decade and a half ago. This is possible, but not likely, given that those fields, even though the largest in the world, have been producing steadily in that time. You're apparently unfamiliar with the Hubbert depletion curve. Picture a standard bell curve. A field produces steadily up until it reaches the peak of the curve. Once on the downslope, production tails off to zero. Once peak has been passed it becomes logistically impossible to extract the same quantity of oil. This happens with every oil field. It is mathematically inevitable. And, since many of Saudi Arabia's fields have been producing for decades, and some for the better part of a century, it's safe to assume that some of them are in decline, and that there is thus reduced excess capacity.

There's more to petroleum production than merely economic factors. However, all too many economists think otherwise, which leads otherwise uninformed persons to express opinions such as that which you've just rendered.

[peterh]

26. Some day I’ll acknowledged that someone….

Outside of the biz might honestly know what they’re talking about…
I’m still waiting….

[Spider Jerusalem]

30. What business might that be?

Are you in investment, or are you in the petroleum industry? And if either, in what capacity? We haven't established that YOU actually know what you're talking about. Arrogance makes for a good front, but not much more.

[bahrbearian]

28. Chimpy's buying it for his War Machine

Not a low price in a couple of months.

[aneerkoinos]

31. Don't shoot the messenger

I agree it's not a very good article (did you read it btw?).

The real news is that the OPEC bigshot opens his mouth and says they are producing what they can (many countries (which?) over their quota, but the only country named, Indonesia, under their quota (why?).

SA "up to 10" is not what I've been hearing, certainly not in a heart beat, there were news before the war that they've reached top capacity. It is possible that with extra effort (investing in hardware) SA could squeeze bit more than currently, dunno. The real data ain't public, what is public is for appearenca only, as you should know if you are "in the business".

Venezuela, Nigeria, Iraq, some other, yes, political and other turmoil, but I don't really see that turmoil going away on short notice - or long. Therefore, for political reasons, it is possible that the peak (in cheap oil) happened in 2000.

So, what is your opinion why the OPEC bigshot is saying what he is saying? To answer US is whining about $36, just making up a new excuse that they cannot even if they wanted? (but really they can and he's lying?).

[DarkSim]

24. Black gold.

I wonder what would happen if opec just suddenly stopped producing oil... That would make a nice mess....

[JCMach1]

29. Sorry, but the last news I heard out of here (UAE)

was that OPEC was going to cut production this Spring.