[Cid_Yama]

As Saudi Arabia pledged Sunday to lift oil output next month by 200,000 barrels a day to a 27-year high of 9.7 million barrels a day, consider a chilling set of numbers that speak to why oil prices are near $140 a barrel.

Oil output in four of the top five suppliers to the U.S. - the world's biggest oil consumer - dropped by nearly 1 million barrels a day last year.

Among the top suppliers, Nigeria has been wracked by civil unrest in its oil producing region, while fields in Venezuela and non-OPEC Mexico are showing strains of age and under-investment. Even Canada eyes lower long-term output amid regulatory scrutiny of its vast oil sands production.

A senior Nigerian oil official on Sunday said Nigeria's output now stands at a 25-year low, between 1.2 million and 1.5 million barrels a day, with 900,000 to 1 million barrels a day shut in due to attacks in the Delta region.

The numbers underscore the notion that even if the Saudis agree to crank up output, there's a deeper long-term supply issue to overcome. With escalating geopolitical tensions surrounding Iran - OPEC's number two producer – oil output declines and unrest in key corners of the oil patch, prices may stay at extremely lofty levels for a long time.

Figures from BP's annual statistical review, which include crude oil, shale oil, oil sands and natural gas liquids in their count, show output from Saudi Arabia, Mexico, Nigeria and Venezuela dropped by 959,000 barrels a day in 2007.

Amid the latest unrest, Shell declared force majeure on deliveries of 225,000 barrels a day of Bonga crude for June and July. Chevron confirmed a production shut-in in recent days and French news agency AFP quoted industry sources saying the company declared force majeure on deliveries of 120,000 barrels a day of crude.

Even though the U.S. gasoline market is slumping amid record high retail prices above $4 a gallon, U.S. refiners are strongly reliant on supplies of Nigerian light, sweet crude oil, which is easy to refine and yields high gasoline volumes.

In April, latest data show, the U.S. imported 1.1 million barrels of Nigerian crude, making it the fourth largest crude supplier, with 11.2% of imports.

Nigeria has pushed ahead of Venezuela as a top supplier to the U.S. Volumes from Caracas have dropped even before the country cut off oil sales to Exxon Mobil in a dispute over the nationalization of oil facilities in Venezuela.

In the first five months of the year, Mexico's output averaged 2.86 million barrels a day, down 9.3% from a year ago.

U.S. Energy Information Administration data show that <b>crude imports from Mexico have dropped by 16.4% in the first four months of the year</b> from January-April 2008. Mexico dropped to third place from second so far this year in the table of top suppliers to the U.S., trading places with Saudi Arabia, the world's largest oil exporter.

http://www.cattlenetwork.com/Content.as ... tID=231276

<i>Current Top 5 US Suppliers

1. Canada

2. Saudi Arabia

3. Mexico

4. Nigeria

5. Venezuela</i>