Opec holds oil production as BP says energy demand rose

[happychicken]

http://www.bbc.co.uk/news/business-13699952

"It seems to me that with crude prices as high as they are, most members are already producing as much as they possibly can," said Tom Bentz, director at BNP Paribas commodity futures.

Sounds like peak oil to me

[RGR]

[quote="happychicken"]

[PS_RalphW]

What we used to call crude oil peaked in supply in 2006 according to the IEA.

However, organisations like the EIA keep redefining oil to include all sorts of other stuff, like corn ethanol.

For OPEC to publicly fall out like this, the first tiime in it's 50 year history, is just another chink in the armour of official denial.

[JavaScriptDonkey]

For OPEC to publicly fall out like this, the first tiime in it's 50 year history, is just another chink in the armour of official denial.

Another view point could be that it is the votes of more politically robust countries such as Libya, Venezuela and Iran that have set the policy based on the perceived harm that it is doing the Western economy.

You could also argue that those countries like high oil prices as it enables them to offset expensive food imports.

That's not to imply that I think that oil is a limitless resource of course.

[RGR]

[quote="RalphW"]

[kenneal - lagger]

I think the current pissing contest among cartel members has nothing to do with what you think it does.

Let the Oracle speak then.

[RGR]

[quote="kenneal"]

[kenneal - lagger]

I was wondering whether to incite the troll or not and I shouldn't have bothered this time, should I. He had nothing original or useful to say. Definitely not the Oracle!

[2 As and a B]

You need to get posting here RGR to counter the group think developing amongst Torygraph readers: Oil price jumps as Opec holds production quotas.

[adam2]

What is unclear is if OPEC have spare capacity or not, I suspect that they do still have at least a little spare capacity, but no one knows for certain.

Hard core doomers would say that OPEC are not increasing production because they can not.
Those slightly more optimistic would say that they are not raising production because they cant agree to do so.

If they do have spare capacity , then this might be erroded quite soon.
Suppose that OPEC can produce 110X of oil, but only choose to produce 100X in order to support prices.
At a depletion rate of a few % it would take only a few years for the voluntary limit at 100X, to become an actual limit.

Many existing oil fields are depleting rapidly, but the total production capacity would decline more slowly since new oil is still being discovered.
These new oil fields tend to be smaller and therefore only partly offest the decline from existing fields.

It appears increasingly likely that crude oil production permanetly peaked several years ago.
This cant be stated as an absolute certainty since an all-out effort by OPEC and others might raise production above previous levels.
Appears very unlikely though, why would they want an "all-out effort" to reduce prices and deplete supplies more quickly ?
And with each passing year it will get more diffecult to surpass previous peaks.

[PS_RalphW]

Of course having 1.6Mbpd offline in Libya does not help.

Iraq's pronouncement that that it would produce 12Mbpd by 2020 has been officially scaled back to the less ludicrous 6.5Mbpd but even that looks unlikely to fully materialise.

Iran's production could be increased but Iran is still in USA's bad books and unlikely to get the investment needed to stop it's production falling off a cliff.

Saudi Arabia is investing huge amounts of money in reworking old fields and deepwater fields etc. but the only 'spare capacity' they seem to have is heavy, sour and possibly heavy metal contaminated crude that there is very little refinery capacity to handle, worldwide. They may have enough new capacity to increase output a token 0.5Mbpd, but they signally failed to do that when Libya went offline.

The world could in geological terms pump a bit more oil. In the real world it can not.

Russia is the world's most important oil producer these days. Production has more or less plateaued but held up better than some people expected.

They are the biggest unknown in terms of global oil capacity.

[JavaScriptDonkey]

What is unclear is if OPEC have spare capacity or not, I suspect that they do still have at least a little spare capacity, but no one knows for certain.

I suspect OPEC as a unit could increase the rate of supply of useful oil significantly but that Saudi Arabia on its own can't.

I also have to question Saudi's on going motivation to regulate prices down anyway. With the succession of revolutions/protests/civil wars breaking out in the Middle East, if I was El Saud I would be doing everything to appear to realign myself to the Arab world rather to the Western democracies.

'Make the dogs pay for our oil' and all that but I'm sure he could never admit it.

Maybe it is convenient to lay all the blame on countries already in the USA's bad books? Certainly I wouldn't expect a face value, straight up report from a cartel, devoid of any double dealing or machiavellian shenanigans.

[PS_RalphW]

What is unclear is if OPEC have spare capacity or not, I suspect that they do still have at least a little spare capacity, but no one knows for certain.

I suspect OPEC as a unit could increase the rate of supply of useful oil significantly but that Saudi Arabia on its own can't.

I also have to question Saudi's on going motivation to regulate prices down anyway. With the succession of revolutions/protests/civil wars breaking out in the Middle East, if I was El Saud I would be doing everything to appear to realign myself to the Arab world rather to the Western democracies.

'Make the dogs pay for our oil' and all that but I'm sure he could never admit it.

Maybe it is convenient to lay all the blame on countries already in the USA's bad books? Certainly I wouldn't expect a face value, straight up report from a cartel, devoid of any double dealing or machiavellian shenanigans.

In my opinion your opinion is wrong on every point.

But then, my opinion matters exactly as much as yours - nothing at all

[JavaScriptDonkey]

In my opinion your opinion is wrong on every point.

But then, my opinion matters exactly as much as yours - nothing at all

Indeed. Shall we wallow in our uninformed irrelevance?

[DominicJ]

but the only 'spare capacity' they seem to have is heavy, sour and possibly heavy metal contaminated crude that there is very little refinery capacity to handle, worldwide.

Its not like we cant build new refineries.