17 May 2007

Prayer for black gold

World's crude supply is adequate, says OPEC

Crude oil supply in the world is adequate and the Organization of Petroleum Exporting Countries doesn't plan to cut production, OPEC secretary general Abdalla el-Badri said. "The price that you see now is $62 to $65, that's fine," el-Badri told reporters in Jakarta Wednesday. "The shortage is not from production but from problems in refinery," he said without elaborating. El-Badri said OPEC members are producing 30 million barrels a day while world demand is for 80 million barrels a day. The comments come two weeks after el-Badri said he saw no need for OPEC to increase its production this year, despite repeated cries from consumer nations for more oil. The International Energy Agency, adviser to 26 industrialized nations, last week reiterated its call for OPEC to pump more oil ahead of summer, when the seasonal surge in US gasoline use causes global oil demand to rise and inventories to decline.

Royal Dutch Shell's Nigeria venture Tuesday said exports from its Bonny terminal will be delayed through June following an attack on an oil facility. A group of protesters known as K-Dere invaded the Bomu manifold, a gathering point for crude travelling along the Trans-Niger pipeline, halting about 170,000 barrels of daily shipments, Shell said. The Nigerian raid has halted 137,000 barrels a day from the Shell venture and another 33,000 barrels a day from third-parties, Shell said in a statement Tuesday. The attack, which began May 10, led the Shell venture to declare a force majeure, a legal clause that states deliveries won't be made because of circumstances beyond the seller's control. A growing world economy may push oil demand to as high as 94 million barrels a day in five years, Purnomo Yusgiantoro, Indonesia's energy minister, said. About 45% of the demand growth would come from East Asia, mainly from China and India, Yusgiantoro said.
(Calgary Herald 070517)

OPEC is 'satisfied' with present supply rates because they don't want to admit publicly that they can't pump any faster than they already are. They've been drilling like nuts on the Arabian Peninsula for the past decade and for some reason cannot increase their supply rate! Hmmm. Meanwhile China's demand has doubled in the past 10 years -- in 2004 the global supply rate was only a million barrels a day over demand. Keep in mind that the world economy consumes almost 90 million barrels of oil a day. Why are the consumer prices for refined oil products going through the roof? Why indeed.

The U.S. imports over 60% of their oil and they're not having public dialog that this may be a problem of national security? Madness. And the attack on Iraq wasn't about securing future import supplies, either.

If you're not religious, you'd better get Gob and hope that nothing, however minor, creates the environment to tumble this delicate house of cards called our energy supply chain.

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