Opec President Shaikh Ahmad Al Fahd Al Sabah said yesterday he will propose the cartel raise its output by 500,000 barrels per day when the group meets in September in an attempt to help cool oil prices at record highs. Posted on 08/31/2005 1:11:50 AM PDT by M. Espinola
Opec President Shaikh Ahmad Al Fahd Al Sabah said yesterday he will propose the cartel raise its output by 500,000 barrels per day when the group meets in September in an attempt to help cool oil prices at record highs.
Shaikh Ahmad, also Kuwaiti oil minister, said he will also propose a 500,000 bpd increase in the group's official output ceiling at the September 19th meeting.
"We hope that the resolution to the board to increase production and the ceiling, 500,000 (bpd) and 500,000 (bpd), and to refresh the dialogue with all the main consumers, I hope this will at least help the market and the prices to be more stable," Shaikh Ahmad said.
"The market is well supplied," Shaikh Ahmad said and added: "There is about or over one million bpd (oversupply) in the market. If we talk about demand and supply and other economic factors I don't think prices will reach $100 or even deserve to be near $70."
"But if we talk about other issues or realities which play a role in the price increases like geopolitics, refinery problems or psychological problems... then prices may cross $100."
The 10 Opec members subject to cartel quotas, excluding Iraq, are already pumping close to capacity.
"Opec 11 is producing over 30.4 million (bpd) and you can have two million for Iraq, then Opec 10 is at 28.4 million," Shaikh Ahmad said. Opec's official output ceiling is 28 million bpd.
Opec had some one million bpd of spare output capacity, mostly in the hand of its leading producer Saudi Arabia, which could supply the bulk of the proposed hike, the minister said.
"We are allowing the stocks to be build, and we are even allowing them to be build over 56 days (of forward cover) and even with that the prices are increasing," he said. "For that I think it is not Opec's responsibility although we have to work in close cooperation with consumers to solve the problem."
In PARIS: Oil prices shot past the 70-dollar-a-barrel level yesterday as a powerful hurricane bore down on crude-producing regions of the US, prompting concerns for the world economy, which until now has weathered the surge in oil rates.
Some analysts are now predicting that prices could aim for the once unthinkable $80 a barrel — a level economists fear could severely dent consumer demand and curb business activities.
New York's main contract, light sweet crude for delivery in October, touched a high of $70.80 in Asia yesterday morning on news that Hurricane Katrina was swirling close to the heart of US production and refining operations around New Orleans.
After the hurricane was downgraded a notch lower from a maximum category five storm, the benchmark futures contract was trading at $69.08 a barrel, up $2.95 from its close of $66.13 in the US market on Friday. The price was more than double levels at the end of 2003.
The effect on prices of the hurricane has been intensified by an unexpected fall in stocks of petrol in the US as well as anxiety in the wake of geopolitical friction between Iran and the west.
Market experts warn that the 80-dollar level could be approached because efforts to strike a balance between supply and demand have been complicated by sharply inadquate refining capacity, notably in the US.
The Organisation of Petroleum Exporting Countries, which accounts for about 40 per cent of global oil output, has launched an offensive to convince market players that there is in fact no supply squeeze. "We don't have a shortage today, what we have is concern, and also we have problems ... refining," said Adnan Shihab-Eldin, the acting Opec Secretary General and research director. "That has been the main problem in the last couple of years. Remember there has not been much expansion in the refining system for the past 20 years," he told the BBC.
"We expect again additional capacity from Opec and outside Opec to exceed demand growth. Therefore I expect prices sooner or later will begin to come down to levels that reflect fundamentals, not the levels that we are seeing today. I would be surprised to see prices to continue to go up."
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More than likely. Then, the Left would be in a quandary; their favorite people, the Communists, would be doing something environmentally repugnant to them. I can picture the wisps of steam coming out of tiny little liberal ears everywhere over that one.
The A-rabs can purchase American Companies and we would all be working for them.
Don't confuse light/heavy with sweet/sour. One is thickness, the other is sulfer content.
Alaskan Crude has less sulfer than Saudi Crude, but much more than Texas sweet.
The light/heavy affects pumping, but we've licked this problem in alaska by heating the oil prior to putting it in the pipe. (Using gas that otherwise would be flared).
According to this guy, it could be because bananas are yellow, or because water is wet...
"But if we talk about other issues or realities which play a role in the price increases like geopolitics, refinery problems or psychological problems... then prices may cross $100."
Well, the A-rabs are buying up thousands upon thousands of convenience store/gas stations...So they're raping us on the crude and at the retail end as well...
It great news for stocks such as Valero & others jolting upward.
Nigeria is another OPEC nation we can not afford to fall into civil war, since they produce the very grade of oil in such high demand.
I'd say it's about time to try out some alternative fuels, whatever the concequences to the economy may be. The technology is available, but is being withheld from us by those who think they can put a price on freedom and independance.
Those miserable bastards. How much of that massive revenue is funneled to their global, Anti-Western jihadic cause?
"And there's 'nothing George can do' (according to George) except count his money...The Bushs have massive dollar interests in Mid East oil, as well as most members of Congress..."
I know. It's just if we start screaming about it this only further fuels the leftist rabble with more ammo. You are right through.
"I'd feel better if the station attendant held a gun on me while I pay for the gas...I hate being robbed willingly..."
You don't even want to know where I believe energy prices are heading once nuclear Iran is finally confronted, and or, there are serious oil supply problems in Arabia - try E.U. style pump prices in the U.S. Not good!
But is the leadership there to kick start the various projects, as was undertaken in 1942 when we were threatened with our very survival as a nation?
You have heard of a little thing called CONGRESS right? Just what exactly is "George" suppose to be doing about a Hurricane that just hit our major oil refining area?
Please tell us what specific actions you want Bush to do?
A lot should have been done after the first Gulf war, and all through Clinton's two terms - and now we pay.
Even if that happend tomorrow, we wouldn't see the affects of the drilling in about a decade.
Of course, thanks to the environmentalists in the back pockets of Clinton and Gore.
Maybe you think we will just sit here until the Iranian's nuke a few cities before reacting?
"You did know that the second largest oil reserves in the world, after Saudi, is in Canada? Right?"
I am well aware of that fact.
"I mean all you "oil experts" with your ability to see the future do know about Sand Oil? How about Shale oil?"
I would like to meet all the other "oil experts" with the ability to see the future" and compair notes.
"Do realize the only reason we buy so much oil from the Mid East is because it is CHEAP? Guess what happens when you raise the demand for an item? Basic, simple economics."
I never would have never dreamed such a thing, being that I just got off a boat...
Since you are the only oil expert on here please inform me and everyone else how to deal with OPEC's number two oil exporter and their little nuclear bombs. Iran just happens to be right across the street from Saudi Arabia, the ones that currently export crude from the largest oil field in the world, well within Tehran's missile range.
If that "Elephant" goes up in smoke you will see not $100, but $200 for a barrel of oil.
"Could China drill 12 miles out in
international waters off the coast of California?"
There is an exclusive economic zone that extends 200 miles from every country's shoreline.
Well when the environmentalists pull up to the pump with their little Volvo's plastered with left-wing stickers, they too will be paying over $3 a gallon.
The point is Washington must act now before this thing becomes worse. The hurricane season has a few months to destroy more cities.
Of course, but drilling in the ANWR is a long term solution. In the short term, we'll all still be paying $3 a gallon at the pump tomorrow and next week. Had the drilling started a decade ago in the Clinton administration, we wouldn't be talking about $3 gasoline today. But, since Democrats don't like capitalism and the free markets and energy alternatives such as domestic oil production, clean coal, and ramping up nuclear production, we're having to listen to the media talk about "pain at the pump" every summer, and tightening budgets during the winter fuel oil season.
And then $60 a barrel Colorado oil shale or Albertan oil sands comes to the market.
That's if the envirowhackos don't put up obstacles.
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