Saudis to increase production by 0.5 million barrels a day

skeptik · Post by **skeptik** » 14 Jun 2008, 16:56

http://news.yahoo.com/s/afp/20080614/ts ... 0614031419

WASHINGTON (AFP) - Concerned that skyrocketing oil prices might induce a worldwide economic slump, Saudi Arabia is planning to increase oil production next month by about a half-million barrels a day, The New York Times reported on its website late Friday.

biffvernon · Post by **biffvernon** » 14 Jun 2008, 17:11

But will the extra be light and sweet?

RevdTess · Post by **RevdTess** » 14 Jun 2008, 17:50

I guess we'll soon get the answer to the debate about whether the Saudis had peaked when their supply dropped below 9mbd last year, or if they were simply cutting supply to manage inventory levels...

Personally I felt those who thought the Saudis had peaked and were already experiencing a very sharp decline were over-egging their evidence somewhat. I don't believe in the Saudi reserve numbers, but the production data was too consistent with their stated motive of preventing global crude inventories getting too high in Spring 07 to make a cry of 'peak' convincing.

Why did I believe the Saudis? Simply because they did what I would have done if I'd been in al-Naimi's shoes with his stated goals, and they did it exactly at the right time. It *could* have been coincidence, but with the jury still out, the risk of calling 'peak' at the wrong time was too high. Now if the Saudis post production of 10mbd in the next few months, cornucopians of all descriptions will have ammunition for years to come.

Vortex · Post by **Vortex** » 14 Jun 2008, 18:03

Surely the damage - both physical & psychological - has been done?

Even if prices come down to say $70 again (hah!) people have been laid off, governments have been rocked, the population has been scared witless, energy issues have (at last) been discussed in depth.

Saudi can pump a LOAD more oil - but we now live in a different world.

Pip · Post by **Pip** » 14 Jun 2008, 18:48

Hmm, I'm not convinced we live in a different world yet. People have short memories. Sure, energy is on peoples radar at the moment due to the prices, but I think that if the price were to drop for some reason, a lot of people would breath a collective sigh of relief, think 'phew, thank heavens thats over,' and it would rapidly slip from their conciousness until prices rose again, as we know they would begin to again at some point.

All of this is hypothetical of course, because it would require quite a big slip in prices to achieve that, and personally I don't think we're in for that in the near future.

oilslick · Post by **oilslick** » 15 Jun 2008, 06:27

Half a million...does that take supply above demand (with the latest figures)? By the time it comes on stream will demand have added another half a million anyway?

Totally_Baffled · Post by **Totally_Baffled** » 15 Jun 2008, 08:33

oilslick wrote:Half a million...does that take supply above demand (with the latest figures)? By the time it comes on stream will demand have added another half a million anyway?

That is what I was thinking.

Annual demand growth at 1% would be 850,000 barrels per day.

So this is a drop in the bucket even if light sweet crude.

Bean · Post by **Bean** » 15 Jun 2008, 10:27

Half a million barrels....thats what, 1/16th of the UK's daily need.

So thats going to go far...................

biffvernon · Post by **biffvernon** » 15 Jun 2008, 11:02

Bean wrote:So thats going to go far...................

Yeah, all the way to China.

PS_RalphW · Post by **PS_RalphW** » 15 Jun 2008, 18:10

At $135 /barrel , US stocks have been falling at 750,000 barrels a day. So an extra 500,000 should slow rate of fall to 250,000 barrels a day. That will delay the intorduction of panic measures by about 2 months...

biffvernon · Post by **biffvernon** » 15 Jun 2008, 19:09

UN chief says Saudi Arabia to raise oil output by 200,000 barrels in July

So that's all right then. Let's watch the oil price crash.

Totally_Baffled · Post by **Totally_Baffled** » 15 Jun 2008, 20:45

biffvernon wrote:
UN chief says Saudi Arabia to raise oil output by 200,000 barrels in July
So that's all right then. Let's watch the oil price crash.

It is truely amazing that such insignicant numbers can be banded around in the media completely unchallenged.

This 200,000 barrels is about as much to the oil market, as a couple of extra sacks of grain to the food crisis in Africa.

Ridiculous and very frustrating.

And then is the complete contradiction with Browns Co2 reduction plans, and Bush's less reliance on foreign oil plan.

If they meant it , they wouldnt give a stuff what OPEC could do!

danza · Post by **danza** » 15 Jun 2008, 20:56

Totally baffled wrote;

And then is the complete contradiction with Browns Co2 reduction plans, and Bush's less reliance on foreign oil plan.

If they meant it , they wouldnt give a stuff what OPEC could do!

They will never mean it as there is too much at stake for BAU. Only once forced to do something will governments have to change and that will be geology, not climate change.

NB It will not affect Bush or Brown, neither will be in power for much longer. [/quote]

biffvernon · Post by **biffvernon** » 15 Jun 2008, 21:17

Totally_Baffled wrote: It is truely amazing that such insignicant numbers can be banded around in the media completely unchallenged.

This 200,000 barrels is about as much to the oil market, as a couple of extra sacks of grain to the food crisis in Africa.

Yes, I guess most folk have no idea what 200 000 means. It is a number larger than can fit into a football stadium therefore totally beyond the experience of most. One quite often seen million and billion muddled up. Maybe our natural counting system goes one, two, three, many.

UndercoverElephant · Post by **UndercoverElephant** » 15 Jun 2008, 23:47

danza wrote:Totally baffled wrote;

And then is the complete contradiction with Browns Co2 reduction plans, and Bush's less reliance on foreign oil plan.

If they meant it , they wouldnt give a stuff what OPEC could do!
They will never mean it as there is too much at stake for BAU. Only once forced to do something will governments have to change and that will be geology, not climate change.

NB It will not affect Bush or Brown, neither will be in power for much longer.

Brown has two years before the election. They are going to be an exceptionally tough two years, but a large chunk of the public will understand that he is not the cause of the problem. This actually gives him an opportunity to redeem himself. Whether he is capable of taking that opportunity I do not know.