Inside Industry Publications Fear Oil Glut

[norml]

African oil export cartel in the offing?
By Cyril Widdershoven

As the last OPEC meeting, December 4, has not really shaken international markets, traders and financial analysts, the latter are still keeping an eye on developments within and especially around the international oil cartel. The possible rift between leading members of OPEC, especially Saudi Arabia, Iran and Kuwait on one side and Nigeria, Algeria, Libya and possibly Venezuela on the other, seems to be widening. Still no real threats are looming on the horizon in the coming weeks, but it has become clear that the internal powers of OPEC are waning.

Most analysts agree that the next meeting could be the first step to a possible oil glut in the years to come, largely due to the unwill of non-OPEC producers to control their production and export increase and the growing pressure inside of OPEC to renegotiate their respective export quota. Nigeria, Algeria en Libya could become the powerbrokers in a new OPEC scheme, to be devised after December 2003. The exponential growth of their crude oil production in the coming years cannot be sustained within the current export quota of OPEC. To counter this internal dissent, Saudi Arabia and Venezuela, the leading member countries that have set the latest quota system and price-band of the cartel, are at present trying to find external support for their control of the international crude oil markets.

To compensate for possible internal dissent, both leading members are setting up meetings with countries such as Russia, Norway and Mexico. With the latter a meeting is scheduled in the coming days, just after the end of Ramadan (after November 28/29), to discuss the stability of the global market. Additionally, international politics will be discussed, such as the attacks in Turkey and Iraq, which are both having a direct influence on international oil price levels as we have seen. The same negotiations have been conducted officially, and unofficially with other major producers. The success story of OPEC since 1999 has partly been built upon the support of leading non-OPEC members for the price-band tactics and export quota scheme of the cartel. Time will show if this can be repeated indefinitely.

Most factors that are currently forming international energy markets are not anymore purely related to the price of crude oil or the overall export levels of producing countries. External factors have taken over the primacy of supply and demand factors in the oil market. Diversification of energy sources and supply routes have caused a decrease in the importance of the oil factor, not only in the economy but also in the financial and political- strategic sectors. The emergence of natural gas, and the widespread production and usage worldwide of the this commodity is changing the market place forever. OPEC’s (perceived) stranglehold on American and European consumers is decreasing rapidly. In stark contrast to the fact that more 60% of the world’s crude oil reserves are in the Arab (Persian Gulf) countries, natural gas has been more evenly spread, with most reserves being found in the Former Soviet Union (FSU) countries, such as Russia or in the Caspian, or in Iran, Norway, Canada and Egypt. West Africa will play a major role in the new natural gas markets worldwide.



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http://www.meprc.com/publications/gesa1356.shtm

[radwriter0555]

1. BUT WHAT ABOUT PEAK OIL???? whaaaahhhhhh!

Gee, doesn't everyone think there is a coming oil shortage?

[phantom power]

3. Asia and India will eat up any extra production

that they can bring on line. And that production won't last. It might help keep prices stabilized for a while, but not forever.

[radwriter0555]

4. Not if they install nuclear reactors to generate energy, as they're

planning.

See that changes things, doesn't it?

[phantom power]

6. It will help, but not radically.

Those will take years to come on line, and the amount they currently have planned will not satiate their increasing energy demand. In fact, it won't even replace more than about 20% of their current demand.

I'm definitely glad they are doing it, and I sure wish we were too (in the US).

Worldwide demand for energy is growing by leaps and bounds. The growth of nuclear (or other alternatives) is lagging far, far behind. Maybe that will change (I hope), but everybody's current plans are insufficient, by a lot.

[norml]

5. In time there may be Peak Oil, but that's not what's moving prices now

It's Iraq's oil being taken off the market. It's naked market manipulation, and it's so obvious.

[bpilgrim]

9. no, most people think it's all blue skies and sunshine

and never heard of Dr. Hubbert

http://www.hubbertpeak.com

psst... pass the word ;->

peace

[norml]

11. Commentary: How oil, housing, and China could all crash

Rate hikes may create 'perfect storm'
Commentary: How oil, housing, and China could all crash
By Joe Duarte
Last Update: 11:00 AM ET April 5, 2005
E-mail it | Print | Alert | Reprint |

Republishing to add dropped word in first paragraph.

Editor's note: Dr. Joe Duarte's Daily Market IQ is published daily at www.joe-duarte.com. Duarte offers free news coverage and analysis at www.intelligentforecasts.com.

DALLAS (MarketWatch) -- Uneven growth rates in the United States, Europe, and Japan especially compared to China are setting up a dangerous situation in a competitive world dependent on oil.

Bond and currency markets have recently sounded the alarm, with dramatic climbs in bond yields hitting Germany and the U.S., while the U.S. dollar has begun to fall.

On the one hand, the United States is "exporting democracy" to the world. In the view of conservatives, the export of ideology is boosting capitalist practices around the world, and in turn continuing the seemingly never-ending thirst for raw materials, especially in the emerging markets.

Yet, in Europe, France and Germany are trying to rig the European Union's financial rules in order to allow the expansion of their budget deficits.



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http://www.marketwatch.com/news/story.asp?guid=%7B24EED6D8-E169-476D-90BC-36A4F4F75513%7D&siteid=google&dist=google&cbsReferrer=news.google.com

[lonestarnot]

2. Oil Smoil! Ride a bike or a jackass, weave your own coat made

from sheep in the back yard! Grow your own garden and roll your own smokes!:evilgrin: :smoke:

[norml]

7. Morgan Stanley, in 2002 said "a war with Iraq will be concluded swiftly"

Sept 25, 2002


Global: The Rising Risks to "Soft-Power" US Multinationals
Global: New Oil Games
Asia Pacific: Higher Oil Prices Could Worsen Deflation
Europe - All: Balanced Budget Backdown


Global: The Rising Risks to "Soft-Power" US Multinationals

Joe Quinlan & Rebecca McCaughrin (New York)



The consensus on Wall Street appears to be that a war with Iraq will be concluded swiftly and not destabilize the market. The underlying assumption is that the Republican Guard will be no match for US military forces. The conflict will cause a temporary spike in world oil prices, although crude prices are expected to fall as quickly as they rise, and decline thereafter on the prospect of more oil being pumped from Iraq. A decisive US victory, meanwhile, will buoy US consumer confidence and remove the fog of uncertainty hanging over the financial markets, fostering a more constructive climate for US investors. If only it were that simple.

Missing from the current debate is the shift in US foreign policy, with a preference for "hard power" over "soft power." The former is about exercising power through force and is consistent with Washington’s new foreign policy that includes, among other things, a greater willingness to launch pre-emptive military strikes against perceived dangers. The new doctrine marks the end of such Cold War principles as containment and deterrence. It also subordinates -- to a degree -- America’s so-called "soft power," a term popularized by Harvard’s Joseph Nye, which refers to the spread of American values and culture.

Soft power is manifested in the global spread of well-known American brands and the proliferation of other such (mostly consumer goods) firms that generate a significant share of their revenue abroad. By contrast, hard-power companies include US aerospace and defense firms. Not surprisingly, a warlike atmosphere and a US foreign policy that emphasizes hard power are generally bullish for the US defense industry.

Less understood by investors is the risk of a global backlash against soft-power US multinationals. The key risk, in our opinion, is that "regime change" in Iraq is viewed by the rest of the world as the ultimate unilateral act of a nation intent on dominating the world. In the end, America’s new foreign policy muscle could foster even more global animosity toward the US. Global resentment toward America is already at a high water mark, with US protectionist trade policies, Middle East politics, the war on terrorism, and America’s uncooperative stance on other multilateral issues, like global climate talks, engendering ill will toward the US. In Latin America, anti-US sentiment has been fanned by barriers on US steel imports and other trade restrictions, in addition to Argentina’s meltdown and the role, perceived or otherwise, of the US. Across the Atlantic, US-European relations are near or at an all-time low. Anti-Americanism played a role in the most recent German elections, adding more fuel to the fire. In Asia, there is a growing sense of unease over America’s newfound military might.



snip



http://www.morganstanley.com/GEFdata/digests/20020925-wed.html

[bpilgrim]

8. victory for the US could come at the expense of a soft-power defeat

"In the end, a hard-power victory for the US could come at the expense of a soft-power defeat. How long the conflict lasts is beside the point, in our opinion. Victory will ring hollow if global resentment over America’s unilateral impulse bubbles over and evokes an anti-America backlash against US soft-power multinationals. Stay tuned."

peace

[katamaran]

10. African nations will only be able to get it going....

...if they can keep the locals from constantly cracking open the pipelines to siphon off oil for their villages. Seems like every couple months or so and entire village is wiped out by a pipeline explosion after the villagers tap the line.