OilFinder2 wrote:K, your own chart shows OPEC producing over its quota ... eyeballing it, probably 90% of the time.
I already mentioned they cheat on the quota. But actual production still goes up and down with the quotas. Actual production is pretty consistently several percentage points above quota. That's the cheating. Sometimes they crack down on cheating and the spread narrows, sometimes it gets wider. But actual production is constantly going up and down. You earlier claimed that productions cuts were rare and largely ignored the quota. It looks to me like the 2 move in tandem, or at least pretty close to it most of the time.
OilFinder2 wrote:And other official government documents back up the reserve figures. In fact they say the reserves could be much greater than the official figures. I don't see much point in pointing to OPEC Official X as saying the reserves are exaggerated, because for every one you can find saying the figures are exaggerated, I can find one who says the figures are just fine, and maybe even understated.
Fine, forget the expert quotes. Lets just look at the facts:
1. Quota system is introduced based on members reserves. Larger reserves = larger amounts of oil allowed to be pumped
2. Shortly there after, nearly every member nation announces huge increases to it's reserves. No corresponding discoveries occur to account for these revisions.
What conclusions would you draw from these facts?
OilFinder2 wrote:Do you honestly believe that OPEC supply (conventional or otherwise) is going to be over-run by demand in 2 years? Especially with Iraq coming online.
Met demand can never exceed supply. Demand destruction will occur when the price rises too high, as as been happening in the OECD countries for the past several years.
OilFinder2 wrote:Maybe in the 80's when they first devised the quota/reserve system, most members were naive enough to think it would actually *do* something, and maybe some of them panicked. But as your chart shows, history since then has proven the quotas to be largely irrelevant, and I'm sure all OPEC members know this by now, and act upon it.
The last 2 dips in that chart were in the early 2000's and around 2008-09, both of which were recessions. Of course oil demand is going to go down during a recession, and consequently, OPEC is going to pump less oil. So even without a quota, they would have pumped less oil anyway. Which demonstrates, once again, that their quotas are irrelevant. Or at the very least, they've become irrelevant since somewhere in the early 90's.
Perhaps. But the original question was: Are the reserve estimates accurate, or have they been fluffed up by political shenanigans like the quota/reserve system? Even if the quota system is largely irrelevant as you claim, that doesn't convince me that the reserve figures haven't been puffed up.
The oil barrel is half-full.