Don’t worry, just a little bump - $70 is just around the corner. Short traders just keep making those margin calls, mortgage the house if you have to. Fortunes await you! PO is for pansies and doomers. At $70 short some more ..... it is going back to $22 .... the world is awash with oil ........ reality has nothing to do with it, its all in those charts!!!!!!!!!!
Posted: Wed Oct 31, 2007 1:23 pm Post subject: Re: Is Opec at Peak Production
From the Saudi Production thread:
seahorse2 wrote:
Nice to see Sadad is either clarifying more or continuing to coming clean. It doesn't matter which. Its simply nice that we get closer to the truth. However, the truth seems to be closer to what the pessimist like ASPO have been saying for years.
Quote:
The world’s proved reserves have been have been falsely puffed up by the inclusion of 300 billion barrels of speculative resources, according to the former head of exploration and production at Saudi Aramco, and this explains the industry’s inability to raise output despite soaring prices.
Sadad al-Huseini’s presentation to the Oil and Money conference in London went substantially as previewed by lastoilshock.com, but the analysis he delivered may also throw light on the infamous OPEC reserve additions of the 1980s.
Mr al-Huseini began by noting the obvious inconvenient truth of the oil market of recent years: that production has barely increased despite a soaring crude price and massive investment by the industry. “It’s telling us something. We should be listening to what the numbers are telling us, not what the politicians say… It’s not about economics alone, you can increase prices, but you will not necessarily drive production up”
He also noted that 400 billion barrels of reserve replacement has been reported over the last decade, and asked why this had not been translated into new capacity. The answer, he suggested, was that a quarter of the world’s claimed proved reserves are no such thing: not production-ready oil, but speculative sources. “Reserves are confused and in fact inflated. Many of the so called reserves are in fact resources. They’re not delineated, they’re not acessible, they’re not available for production”. By his estimate 300 billion of the world’s 1200 barrels of proved reserves should be recategorized as speculative resources.
Mr al-Huseini did not specify which countries had inflated their reserves in this fashion, but the number is strikingly similar to the size of reserve additions recorded by OPEC members in the mid-1980s when countries were vying for quota share, although no new discoveries had been made.
Posted: Wed Nov 14, 2007 10:44 am Post subject: Re: Is Opec at Peak Production
West Texas over at the Oildrum has long argued that oil for export by the Opec and Russia is decreasing bc internal oil consumption in those countries is rising, thus, a problem for everyone else that needs more an more oil to sustain and grow their economies.
There seems to be more evidence that West's "export" model is true, and will cause a problem. For example, it is reported today that Saudi Arabia will be reducing diesel exports next year because of rising internal demand.
Singapore: Saudi Aramco will cut gas oil (diesel) exports to 880,000 tonnes next year from 2.2 million tonnes in 2007, and will not renew any of its annual term deals, as domestic demand grows swiftly, industry sources said yesterday.
Saudi Arabia is expected to keep term jet fuel exports steady at one million tonnes. Saudi Aramco did not issue a tender to sell term middle distillates this year but short-listed players for price discussions for the upcoming weekend.
"Gas oil exports will be reduced because domestic demand is very strong," said one source involved in supply discussions, adding that all shipments will be sold on a spot basis. The grades will be a mix of 0.05 per cent and 0.5 per cent sulphur. Another source said: "Domestic diesel demand has already caught up with production."
Booming demand
Oil demand is booming in the kingdom, thanks to petrodollar-fuelled econ-omic growth and low domestic prices, forcing it at times to import extra supplies. The economy grew 4.3 per cent last year.
Aramco, which owns around 1.8 million barrels per day (bpd) of refining capacity in the country, imported 250,000 tonnes of diesel from August to October, as plant maintenance coincided with peak summer demand.
Exports also fell, as some Saudi cities have already moved on to cleaner diesel of 0.05 per cent sulphur from 0.2 per cent, which requires a greater level of secondary refining.
The supply cut followed on the 2007 term contract which saw diesel shipments being reduced to two million tonnes from four million tonnes in 2006.
Joined: Oct 27, 2007 Posts: 4 Location: middle east
Posted: Wed Nov 14, 2007 11:23 am Post subject: Re: Is Opec at Peak Production
Just out of curiosity why do any of you put put any faith whatsoever in what the OPEC producers spokesmen say? I work in Kuwait in the 'bidness' and from what I have seen firsthand the folks here lie to themselves about what their production and reserve numbers are let alone the rest of the world.
And another curveball is that some of the posters here assume that the OPEC producers will automatically choose to pump at maximum capacity. Why the heck would they? looking at your only natural resource that has been going up in value every week why would you be in a hurry to produce when your product might be worth 10% more next month??? Oh , I get it, to "help our western friends." I would look for them to say whatever is politically convenient... do you really expect the SA's to tell GWB, "screw you we're throttling back production..I don't care if it hurts your economy--- it helps ours."
I personally believe that they are struggling to maintain production but wouldn't waste a lot of time trying to decipher the truth, we'll know they've peaked five years or so after the fact.
Joined: Oct 15, 2004 Posts: 2081 Location: Arkansas
Posted: Sat Jan 05, 2008 9:09 am Post subject: Re: Is Opec at Peak Production
Iran says Opec can't raise production bc they are at max production.
Quote:
Iran says many OPEC states can't raise output - agency
Sat 5 Jan 2008, 10:39 GMT
[-] Text [+] TEHRAN (Reuters) - Many OPEC states are now producing as much oil as they can, limiting the ability of the cartel to raise output even if such a decision was made to help cool crude prices, an Iranian oil official was quoted on Saturday as saying.
Mohammad Ali Khatibi, deputy director of international affairs at the National Iranian Oil Company, also said in comments to ISNA news agency that any decision to hike OPEC output would only help if the market faced a crude shortage.
Iran has previously said there was no shortage in crude supply and has blamed other factors for surging oil prices, which hit a lifetime high of $100 a barrel this week. "Because most members are currently producing at full capacity it seems that even if there is a decision to increase the output ceiling, not all members would be able to increase their production capacity," Khatibi said, when asked if OPEC would hold an emergency meeting to discuss surging prices. "First it should be clear whether the market's current problem is a shortage of crude oil or not, because in many instances in winter and summer a shortage of crude products is the main factor behind the rise in prices," he said. "In that case, increasing crude oil will not help balance the market because there is no significant possibility to increase the capacities of refineries and refineries are faced with limitations," he added.
Joined: Oct 15, 2004 Posts: 2081 Location: Arkansas
Posted: Sat Jan 05, 2008 9:11 am Post subject: Re: Is Opec at Peak Production
DantesPeak wrote:
Saudi Aramco repeatedly stated over the last year that its long planned Khursaniyah field would start up in December 2007, although later they said about January 1, 2008. As recently as November 15, 2007, the Saudis made very public statements stating that the new oil field would provide additional ‘capacity’ to relieve tightening supplies for crude.
The development of this field has literally been discussed in this forum for years. I haven’t found any explanation as to why the delay occurred.
Quote:
Saudi Aramco Delays Production Start From Khursaniyah
By Glen Carey
Jan. 3 (Bloomberg) -- Saudi Aramco, the world's largest state- owned oil company, delayed the start of production from the 500,000 barrel-a-day Khursaniyah field and said it will meet market demand with existing spare capacity.
``Should the need arise prior to the completion of the project, Saudi Aramco stands ready to meet market demands with ample spare capacity, including 1 million barrels of Arab Light crude,'' the company said in an e-mailed statement today.
Khursaniyah will commence ``upon completion of commissioning activities,'' Saudi Aramco said.
The project, which was scheduled to start in December, will produce and process 500,000 barrels a day of Arabian Light crude and 300 million square cubic feet a day of natural gas, according to Saudi Aramco. The program covers the onshore Abu Hadriya, Fadhili and Khursaniyah oil fields near the city of Jubail on Saudi Arabia's Persian Gulf coast and a gas plant.
Joined: Oct 15, 2004 Posts: 2081 Location: Arkansas
Posted: Sun Jan 06, 2008 5:08 pm Post subject: Re: Is Opec at Peak Production
Venezuelan oil production down.
Quote:
than 5 percent in 2007, according to the Venezuelan National Bank, raising concerns the Venezuelan government is not investing enough of its petroleum wealth in the sector.
Oil production was off 5.3 percent in 2007 from the previous year and contributed $3.14 billion to the country's gross domestic product, down from both 2006 and 2005 when the sector accounted for a reported $3.38 billion.
The reduction in oil output in South America's No. 1 petroleum producer coincided with a marked increase in the price per barrel produced by Venezuela in 2007, up to $65.13 per barrel last year from $56.35 per barrel in 2006.
While analysts and critics of Venezuelan President Hugo Chavez consider the bank's news a harbinger of hard times to come for the country's state-owned PDVSA, the national bank did note the country's economy grew significantly in 2007.
Posted: Fri Feb 15, 2008 11:07 am Post subject: Re: Is Opec at Peak Production
Latest Oildrum article forecasting a decline in oil production beginning about 2009. It has good summaries of current Opec production, new fields, etc.
Joined: Jan 14, 2008 Posts: 321 Location: The Yukon
Posted: Fri Feb 15, 2008 1:30 pm Post subject: Re: Is Opec at Peak Production
seahorse2 wrote:
Latest Oildrum article forecasting a decline in oil production beginning about 2009. It has good summaries of current Opec production, new fields, etc.
These oildrum forecasts are a pathetic hoax that unfortunately gave credence to the $9/barrel depletion fear premium in oil prices last year.
In April, as a followup to Stuart Sandiford's failed call for Saudi crude production to fall to 7.75-mbd by Jan 1st 2008, Ace set a Saudi target of 8.2-mbd.
Well, Saudi crude supply is back up to 9.1-mbd after dealing with the 2006 inventory crisis. All the doomster forecasts over there are based on KSA going down the tubes. Like Simmon's failed questioning of saudi potential in his infamous 2004 forecast, it just ain't happening...
theoildrum pundits don't understand the role of a swing producer. That's what the 2006 bump was all about. KSA has since publicly relinquished that status, but its 2006 bump in production was necessary at the time and was never presumed by any analyst worth salt to be sustained. It served its purpose. Their normal supply targets have been in the public domain forever.
Posted: Fri Feb 15, 2008 3:19 pm Post subject: Re: Is Opec at Peak Production
Ready Freddie, you're right, the guys at the Oildrum are much too pessimistic. I prefer to take the advice of the Saudis.
seahorse wrote:
Though this article doesn't address Opec directly, when the former head of Saudi Aramco says the world is at peak production and prices should rise, it deserves to be posted here and everywhere.
Quote:
Oil production has peaked, prices to soar - Sadad al-Huseini
Sadad al-Huseini says that global production has reached its maximum sustainable plateau and that output will start to fall within 15 years, by which time the world’s oil resources will be “very severely depleted”.
In an exclusive interview with lastoilshock.com, the former head of exploration and production at Saudi Aramco, said that oil production had reached a structural ceiling determined by geology rather than geopolitics, and that the technical floor for the oil price will rise by $12 annually for the next 4 to 5 years as new fields become increasingly costly to exploit.
According to al-Huseini the technical floor - the basic cost of producing oil excluding factors such as geopolitical risk and hedge fund speculation - is currently about $70 per barrel, meaning the minimum oil price could hit $106 in 2010 and $130 by 2012. Actual crude prices, including financial market factors, could be be as much as $125 by as early as 2010.
Al-Huseini said that Saudi Arabia’s plans to raise production capacity to 12 million barrels per day by 2012 represented “an achievable number”, as the country had announced oil investments of $55 billion between 2003 and 2011. But he cautioned that since some of the new production will come from entirely new fields “how the reservoirs will respond will be determined as they start producing”.
However, al-Huseini disparaged Western expectations that the Kingdom would produce significantly more than 12 mb/d. It was unfair, he said, to expect Saudi to “pull everybody’s chestnuts out of the fire”.
Joined: Oct 15, 2004 Posts: 2081 Location: Arkansas
Posted: Fri Feb 15, 2008 7:29 pm Post subject: Re: Is Opec at Peak Production
DantesPeak wrote:
“We're over the hill and headed down.”
The oil tanker tracker firm, Oil Movements, says OPEC oil exports will begin their first significant drop since last fall around the time March begins. This follows their earlier reports that in the January/February period where exports were more or less fairly steady after rising somewhat in December.
One week ago Roy Mason, head of the consultancy, said "It's a bad time to make predictions. We're on the cusp of a change one way or another".
The drop in exports is attributed entirely to Mideast exporters.
Caution: Oil Movements tries to measures actual shipments, not production, and there is no seasonal adjustment factor in their reports.
Quote:
2/14/08 Oster Dow Jones 16:30:01
February 14, 2008
DJ OPEC Exports In 4 Weeks To March 1 Seen -0.14 M B/D-Tracker
LONDON, Feb 14, 2008 (Dow Jones Commodities News via Comtex) -- Seaborne Organization of Petroleum Exporting Countries' crude oil shipments are expected to fall by 140,000 barrels a day in the four-week period to March 1 as producing nations pullback deliveries due to winter coming to an end next month in the main consuming nations, U.K.-based tanker tracker Oil Movements said Thursday.
Exports from OPEC are forecast to fall to a total of 24.42 million barrels a day in the four-week period to March 1, down from 24.56 million barrels a day in the previous four-week period to Feb. 2, Oil Movements said. The expected drop is the first since late autumn, said Oil Movements head, Roy Mason.
Emblematic of the downturn in OPEC shipments, deliveries from core OPEC producers in the Middle East are seen dropping 210,000 barrels a day to 17.51 million barrels a day in the one-month period to March 1.
"The message is that deliveries are going down and I think this continues in the weeks ahead. We're over the hill and headed down," said Mason.
OPEC shipments are still at relatively healthy levels even with the expected drop in this week's report, Mason said. The expected fall in shipments to a total of 24.42 million barrels a day in the four-week period to March 1 is still almost 400,000 barrels a day higher versus delivery totals in the one-month period to Dec. 1 when winter was underway in the Asia, Europe and the U.S.
(END) Dow Jones Newswires
[no link]
Quote:
Exports from oil cartel OPEC were expected to begin sliding seasonally as well, with consultancy Oil Movements forecasting a 140,000-barrels-per-day (bpd) drop in the four weeks to March 1. Lloyd's Marine Intelligence Unit reported OPEC seaborne exports down 279,000 bpd in January versus December.
Joined: Oct 15, 2004 Posts: 2081 Location: Arkansas
Posted: Tue Feb 19, 2008 8:17 am Post subject: Re: Is Opec at Peak Production
DantesPeak wrote:
pup55 wrote:
Was the temporary increase in OPEC exports between December and now "real" or were they just shipping a little extra out of inventory?
I went back and found that there is an answer to this question, but not the one those thinking the price of oil should fall want to hear.
Quote:
January 29, 2008
DJ OPEC Jan Output Trickles Up To 33M B/D, Enough For 2Q -Tracker
DUBAI, Jan 29, 2008 (Dow Jones Commodities News via Comtex) -- Crude oil production from the Organization of Petroleum Exporting Countries trickled higher in January, with the group's present output sufficient to meet its share of global oil demand in the seasonally weaker April-June period, tanker tracker Petrologistics said Tuesday.
Production from the group's 13 members was expected at 32.9 million barrels a day, 100,000 barrels a day higher than seen in December, the Geneva-based consultancy firm said.
Revised figures for Saudi Arabia show that OPEC's largest producer pumped 9.4 million barrels a day in January, 100,000 barrels a day below a revised December figure, Gerber said.
Saudi Arabia's sharply increased output since November is largely the result of the release of crude oil from stocks rather than an increase in production, he added.
"The Saudis have a lot of crude that's already been produced. December was the first time last year where they actually redirected from stocks," Gerber said.
Now, compare the above figures to Opec figures from the past contained in this previous post:
seahorse wrote:
Pup,
You said above the Saudi Arabia has increased its production over the last 10 months. However, according to Opec, that's not true. According to the Opec Monthly Oil Reports, SA is producing less now than in even back in 2004. So, I will go with the Opec numbers.
seahorse2 wrote:
I checked the OPEC Monthly Oil report to see the numbers Opec is reporting. Interesting, here's what it reports about Saudi Arabia (most current report is data for Feb 06):
SA produced 9.394 mbpd oil, total Opec = 29,713 mbpd
SA operating rigs are 52 (contrasted with 160 give to Rockdoc at his meeting)
Compare the above to 04 Opec numbers, and you see SA and Opec are producing slightly less now than in 04:
In October 04, SA pumped 9508 mbpd total OPEC 30,228
In November 04, SA pumped 9,450 mbpd, total Opec 29,067 according to the Opec 04 Annual Review OPEC 04 Annual Review
Here's the numbers again in chonological order:
October 04: SA production = 9508 mbpd, Opec = 30228;
November 04: SA = 9450 mbpd, Opec = 29067 mbpd;
November 05: SA = 9.458 mbpd oil, Opec = 29,965 mbpd;
February 06: SA =9.394 mbpd oil, Opec = 29,713 mbpd
SUM UP THE ABOVE TABLES
SA production 2004 = 9450
SA production 2005 = 9458
SA production 2006 = 9.394
SA production 2007 = 8975
Oops! Where's all that extra oil SA has? We've waited three years now. If you've read all the posts here, they admit:
(1) Their decline rates in existing fields are 8%, meaning they have to produce an extra 720,000 barrels to keep up with declines in existing fields.
(2) They have also admitted the world is at peak oil, but go on to suggest they can increase to 12mbpd? They haven't produced that much since the late 70s.
Posted: Thu Feb 21, 2008 2:35 pm Post subject: Re: Is Opec at Peak Production
Quote:
(2) They have also admitted the world is at peak oil, but go on to suggest they can increase to 12mbpd? They haven't produced that much since the late 70s.
Once again they are talking about spare capacity...the ability to produce at that level. Actual production rates are are product of market conditions, spare capacity is a product of resource at hand. So far there has not been demand on Saudi to produce at higher rates, everything I have read coming from Opec is they believe the current market price has nothing to do with fundamentals, they believe there is plenty of oil in the market. This is supported by their montly projections for demand on Opec production which appears on the Opec website.
Whether they are right or wrong about the fundamentals, if that is their opinion they would in their own minds be commiting economic suicide by producing at higher levels.
Posted: Thu Feb 21, 2008 3:19 pm Post subject: Re: Is Opec at Peak Production
Rockdoc, what about Sadad al-Huseini statement that the world is at peak oil? Please comment on that.
Here's the post:
[quote]Though this article doesn't address Opec directly, when the former head of Saudi Aramco says the world is at peak production and prices should rise, it deserves to be posted here and everywhere.
Oil production has peaked, prices to soar - Sadad al-Huseini
Sadad al-Huseini says that global production has reached its maximum sustainable plateau and that output will start to fall within 15 years, by which time the world’s oil resources will be “very severely depleted”.
In an exclusive interview with lastoilshock.com, the former head of exploration and production at Saudi Aramco, said that oil production had reached a structural ceiling determined by geology rather than geopolitics, and that the technical floor for the oil price will rise by $12 annually for the next 4 to 5 years as new fields become increasingly costly to exploit.
Quote:
According to al-Huseini the technical floor - the basic cost of producing oil excluding factors such as geopolitical risk and hedge fund speculation - is currently about $70 per barrel, meaning the minimum oil price could hit $106 in 2010 and $130 by 2012. Actual crude prices, including financial market factors, could be be as much as $125 by as early as 2010.
Al-Huseini said that Saudi Arabia’s plans to raise production capacity to 12 million barrels per day by 2012 represented “an achievable number”, as the country had announced oil investments of $55 billion between 2003 and 2011. But he cautioned that since some of the new production will come from entirely new fields “how the reservoirs will respond will be determined as they start producing”.
However, al-Huseini disparaged Western expectations that the Kingdom would produce significantly more than 12 mb/d. It was unfair, he said, to expect Saudi to “pull everybody’s chestnuts out of the fire”.
Joined: Jan 14, 2008 Posts: 321 Location: The Yukon
Posted: Thu Feb 21, 2008 5:46 pm Post subject: Re: Is Opec at Peak Production
seahorse2 wrote:
Oops! Where's all that extra oil SA has? We've waited three years now. If you've read all the posts here, they admit:
(1) Their decline rates in existing fields are 8%, meaning they have to produce an extra 720,000 barrels to keep up with declines in existing fields.
(2) They have also admitted the world is at peak oil, but go on to suggest they can increase to 12mbpd? They haven't produced that much since the late 70s.
Re: (1) - Their overall Underlying Decline Rate is all that matters. It is only 2.7% or 0.25-mbd/yr. Quite manageable.
Re: (2) - Before announcing their stepping down as designated swing producers last year, a planned 2.5-mbd was built into their biz plan. Today only 1.75-mbd is so designated. It costs far too much to carry such an immense magnitude of surplus capacity. And they realize that while their sparc/cap at one time was 10% of world production ... it is now a mere 2%. They have come to realize that no one country can push the marketplace any longer.
As my chart shows, their target for 2008 is 9.5-mbd and 10.5 for 2012. The latter is a revision from 11.2-mbd and was a public acknowledgement that Underlying Decline must be factored into their future Outlooks.
The last time that Aramco bowed to public pressure to bump production, prices fell 30% (from $69 to $49 by Feb 2007). They do not wish to revisit that episode, while it did prove that Demand does not yet exceed Supply (as purported by the pundits). _________________ www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits)
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