Oil Rises After Saudi Backs OPEC Cut

[Quetzal]

Oil Rises After Saudi Backs OPEC Cut

LONDON (Reuters) - Oil prices rose on Tuesday after OPEC (news - web sites)'s most influential member Saudi Arabia threw its weight behind imminent supply cuts, though divisions within the cartel prevented a steeper rally, analysts said.

U.S. light crude was trading 25 cents higher at $35.70, while London's Brent crude climbed to $31.97, up 23 cents.

U.S. prices had fallen to a session low of $35.25 a barrel, but rallied after Saudi Oil Minister Ali al-Naimi stated his opposition to relaxing supply curbs.

Naimi dismissed suggestions that the Organization of the Petroleum Exporting Countries, which meets in Vienna on Wednesday, was to blame for prices that earlier this month hit a 13-year high.

more...

Oil Rises After Saudi Backs OPEC Cut

There is absolutely no way I will be able to afford my gas. And I get it on discount!!!

[GCP]

1. Remember when candidate Shrub told us he'd work with OPEC

to get the "spigots turned full on" - or words to that effect.

Funny, they're turning them down - what a surprise for our uniter.

It's another gift for the Kerry campaign - just show that sound bite from the debates.

[Ilsa]

3. I saw a clip of that last night.

He was criticizing Clinton during Spring of 2000 for th ehigher gas prices.

What a simpleton. Texas oil man tells president to get our friends at OPEC to open up. Yeah. Right.

[SpiralHawk]

4. This is another fine mess BushCo has gotten us into

with it's Saudi cronies.

House of Bush - House of Saud

[mobuto]

8. Yes, one would think that the Saudis

would do their utmost to see their lackey reelected, after all he's done for them. Ungrateful sods.

[leesa]

15. But they are ALL making tons of money. What do they care?

That IS the point after all. The oil prices were sky high before the adjustments by OPEC because the Bush Crime Family was raking in their oil dough. This is just an easy, and predictable, way for them to blame it on another entity. So EASY to blame things on Muslims...Booga! Booga! That Saudis and Bush are partners.

[RamboLiberal]

19. I'm wondering if Bandar and the bunch are pissed at Bush

They were ready to wash their hands of him just prior to 9-11. Wonder if they're really ticked off again, maybe over Iraq, or most probably over what is happening in Israel and Bush not reining in Sharon.

[mobuto]

22. You joke!

Are you kidding, the Saudis love strife between the Israelis and the Palestinians! It distracts the public's attention from the very real problems Saudi subjects face at home. If there ever were a succesful peace between the Israelis and Palestinians, both they and Bashar al-Assad in Syria would be in serious political trouble.

[pacifictiger]

29. I've thought for some time

the Saudi's have been playing the Bushes for fools for a long time. Be friends when it's strategic to do so and when there is financial gain, take advantage when the timing is right. Self interest is the name of the game that the Bushes should understand.
Of course the fact that our dollar's purchasing power is so weak on the global stage is perhaps just as much to blame, but who in this administration is going to point out that small detail.

[The Backlash Cometh]

2. Maybe it's time for South American countries to bandy together and

undercut OPEC? We'll buy it from the cheapest seller.

Anyone know what oil rich countries are not involved with OPEC?

[Aquarian_Conspirator]

5. Nobody Comes Close To OPEC

There isn't much oil outside of OPEC.

[mobuto]

9. There isn't much oil outside OPEC? WTF?

Mexico? Russia? Canada? The United States? The United Kingdom? Norway? The Caspian?

OPEC produces a little more than half the world's oil, and that percentage has been falling as Russian production has soared.

[Petrodollar Warfare]

12. May I recommend a few books for you....

...either Richard Heinberg's "The Party's Over" (2003) or Colin Cmapbell's "The Essence of Oil Depletion (2003). Since 2001 it is an established fact that non-OPEC nations are now in a permenant decline in oil prodiuction, where OPEC states will not peak until around 2015, with the global peak production b/t 2007-2010.

Here's some factoids:
US - reached Peak oil in 1971, has been in permanent decline for 33 years, with now less than 2% of total world reserves.
Canada - Too much tar sand and not enough sweet crude
Mexico - Reached peak in either 1985 or 1995, can't recall.
UK - rearched Peak oil in 2000, annual depletion rate for past 3 years has been a highly disconcerting 6%
Russia - reached peak oil in 1987, but still have some reserves for another decade. They are the world's 2nd largest producer, but the oil is getting harder to extract, and their depletion rate over the last couple of years has accelerated somewhat.
Norway - seems to have peaked with the UK's roll-over in 2000, but depletion rate is much lower/bettter, around 2% per year.
Caspian - Only 10 to 30 billion barrels of oil according to recent studies (with 20% sulfur content - not good) and no completed pipelines...it ain't no panacea. The area does have a lot of natural gas though, hence the "strategic" issues re pipelines..

Bottom Line: OPEC has about 2/3 of the world's oil reserves left(supposedly about 700 billion barrels, which I think is greatly overestimated/political, but that's another story...), but it is a fact that non-OPEC countries have reached PEAK production while OPEC oucntries have not...yet Just have fyi...

Good source of info if interested:
http://www.peakoil.net/

[mobuto]

13. Totally inaccurate

Soviet oil production was completely irresponsible and was designed to produce as much oil as possible in the short-term, without regard to the long term viability of oil wells. As a result, production peaked quickly and then dropped sharply. With the introduction of modern recovery techniques, production in the CIS has soared in recent years and most industry analysts expect it to continue its trajectory for the forseeable future.

Russian production is way up, Central Asian production is way up, and none are OPEC members.

Your business about "proven" oil reserves is largely bogus. OPEC rations production quotas on the basis of those reserves, so each OPEC country inflates its own proven figures rather substantially.

[Petrodollar Warfare]

35. Mobuto - you really should check your sources....

"Soviet oil production was completely irresponsible and was designed to produce as much oil as possible in the short-term, without regard to the long term viability of oil wells."

I recommend a study on macroeconomics re your assertion. I have read both CIA reports from 1977 (ER 77-1014) and later 1991 analysis regarding Russia oil production. Reagan and Casey knew what they were doing when thry got the Saudi to ehlp bring down the USSR's main export inflows - while they were engaged in a winlesss war in Afghanistan. You need to think more stratgically about these issues, as that is what oil is all about. In the meantime I recommend that you persue these 3 articles.

As for the non-OPEC to OPEC "crossover event" with respect to OPEC dominance, please double click the first gragh, but I suspect it we be 2006-7 instead of 2010...

http://wolf.readinglitho.co.uk/mainpages/oilwars.html#

(As for Central Asian production way up - what oil fields are you referring to and where are the facts to support that assertion?...)

http://www.peakoil.net/Newsletter/NL33/Newsletter33.html

(See article #244)

Smoking Gun: The CIA’s Interest in Peak Oil

"The American oil peak signalled the end of an era: from that point on, the US would become increasingly dependent on imports—and this dependence would entail serious costs, as became apparent with the Arab OPEC oil embargo of 1973, which sent the US economy into a tailspin. (2) Clearly, CIA analysts in 1977 understood the importance of the American oil peak and believed that a peak of petroleum production in the USSR would have similar or even graver consequences for that nation.

This much is clear and indisputable. Less clear is what was done with the information. Soon after assuming office in 1981, the Reagan Administration abandoned the established policy of pursuing détente with the Soviet Union and instead instituted a massive arms buildup; it also fomented proxy wars in areas of Soviet influence, while denying the Soviets desperately needed oil equipment and technology. Then, in the mid-1980s, Washington persuaded Saudi Arabia to flood the world market with cheap oil. Throughout the last decade of its existence, the USSR pumped and sold its oil at the maximum possible rate in order to earn foreign exchange income with which to keep up in the arms race and prosecute its war in Afghanistan. Yet with markets awash with cheap Saudi oil, the Soviets were earning less even as they pumped more. Two years after their oil production peaked, the economy of the USSR crumbled and its government collapsed.

Did the Reagan administration base its Cold War strategy on the CIA study, in the expectation that a Soviet Union economically weakened by oil depletion would collapse if pushed hard on other fronts?

That question is mostly of historical interest. But the Agency’s focus on the phenomenon of oil peaks has important implications for the present. For the past decade, oil experts have been debating when global oil production will peak...."

****Artilce #2*****


http://www.peakoil.net/Newsletter/NL31/Newsletter31.html

Country Assesment - Russia

(please see article #212 - current depletion rate of Russia is 3%, but a 2nd peak is quite possible, but I recommend you look at the graghs before you make wild claims no supported by geological findings.)

"....In fact, the Soviet explorers proved to be highly efficient being able to apply scientific methods, free of commercial constraints. Boreholes were drilled for geological information, and Russian explorers pioneered the geochemical breakthrough that identified the source rocks and generating belts. Accordingly, discovery at least in sub-Arctic Russia peaked around 1960, the corresponding peak of production following in 1987. Exactly how much was found is hard to know, because the Soviet classification of reserves ignored commercial constraints. Decline curve analysis shows that the reported reserves of most Russian fields have to be reduced by about 30% to obtain realistic estimates. Production crashed on the fall of the Soviets, but is now growing under the new capitalists, in part making good the production that would have already been secured but for the dislocations accompanying the fall of the Soviet regime. Accordingly, we may expect a second peak around 2010."

****article #3******

http://www.peakoil.net/Newsletter/NL35/Newsletter35.html

Country Assessment - Mexico

"Mexico is here assessed to be capable of producing a total of 50 Gb to 2075, giving a midpoint of depletion in 1999, some fourteen years after what appears to be a premature actual peak in 1985. Production now stands at about 3.2 Mb/d, being subject to a fairly high depletion rate of 5% a year.

Oil consumption is running at about 1.8 Mb/d meaning that the country will become a net importer by around 2010, assuming no increase in demand. By 2050, production will have fallen to about 400 kb/d, which may imply a massive reduction in population, given the central role of oil in an already fragile economy and the dependency of urban dwellers on food transport. The Rio Grande threatens to be tough frontier."

*******

"Your business about "proven" oil reserves is largely bogus."

I know all about what Kuwait did in 1986, and what happened with other OPEC members over the next 4 years. OPEC reserves are Enron- like "politcal" numbers, with many experts suggesting they are 50% inflated, including Saudi Arabia (google search for Matthew Simmons - who has done the best research on Saudi issues). However, I study technical data (I have read Colin Campbell's latest book which may not yet avaliable in the US), and here's a sampling of my ressearch on these subjects...which will be my own upcoming book...

http://www.ratical.org/ratville/CAH/RRiraqWar.html#p2b

(the Peak Oil gragh should prove useful, enjoy!)

[mobuto]

48. Yes

Soviet oil production maximized short-term capacity at the expense of long-term recoverability. Modern oil field service techniques maximize recoverability. Its hard to know where to begin citing something like that - its pretty much universally accepted - but I can say that my direct source is one of the best respected energy consultants in the business. I won't drop the name on the public board, but I will if you want to PM me.

(As for Central Asian production way up - what oil fields are you referring to and where are the facts to support that assertion?...)

Caspian production is up 70% since independence in 1992, as per the DoE. Production increases have been centered in the Tengiz and Azeri, Chirag, and deepwater Gunashli in Kazakstan and Azerbaijan, respectively.

Oil consumption is running at about 1.8 Mb/d meaning that the country will become a net importer by around 2010, assuming no increase in demand.

That assumes more than that. It also assumes no new discoveries, no improvements in oil field services, no improvements in conservation and all the other assumptions convenient to straight-line projectionists that never seem to mesh with reality.

. OPEC reserves are Enron- like "politcal" numbers, with many experts suggesting they are 50% inflated, including Saudi Arabia

Then we agree.

However, I study technical data (I have read Colin Campbell's latest book which may not yet avaliable in the US), and here's a sampling of my ressearch on these subjects...which will be my own upcoming book...

http://www.ratical.org/ratville/CAH/RRiraqWar.html#p2b

I will check it out and report back.

[kalian]

38. Inaccurate...? And your sources are....?

:shrug:

Hmmm...maybe "denial"...right?

[muriel_volestrangler]

24. Actually:

OPEC production peaked in 1977 at 31,340,000 barrels per day, and in 2002 was 28,239,000 bpd;
(former) Soviet Union production did peak in 1987 at 12,655,000 bpd; in 2002 it was 9,481,000 bpd (which has increased every year since 1996);
the rest of the world's production was at an all time high in 2002, at 36,214,000 bpd.

All figures from BP: http://production.investis.com/bp/ia/stat/#

[mikey_1962]

25. Non OPEC Out Produces OPEC 2 to 1

http://www.eia.doe.gov/emeu/cabs/nonopec.html

[comerpatrick]

26. That may be true but...

From the same HTML page. Non-OPEC does out produce but: "Most non-OPEC countries are net oil importers. Of the 203 non-OPEC countries and territories for which EIA keeps data, 174 (86%) were net oil importers in 2002. Even large producers can also be large (net) importers. In 2002, the eight largest non-OPEC oil producers were, as a group, net importers."

Non-OPEC countries produce MORE oil but LITTLE is for sale. OPEC however is a net exporter of oil and controls the majority of oil that is for international trade.

Patrick

[mobuto]

27. Totally meaningless

Of course most non-OPEC countries are net oil importers. Because almost every country is a net oil importer. And its not true to say that little is for sale. Do you have any idea how much oil the former Soviet Union is exporting? Mexico?

[mikey_1962]

28. Mexico 2million bbl/day ;Russia 5 Million bbl/day

Russia is more of a guess because so much of it goes to the black market that nobody is sure about "actual" production and export.

[comerpatrick]

32. New Importers vs. Net Exporters

I'm just an oil novice but how's this for logic.

If a country is a net importer, then it doesn't export much oil. For example in 2002, the United States was the world's LARGEST producer of oil but it was also the world's largest importer. My assumption is that countries that import more oil than they produce don't sell much oil to other countries.

<http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.html>

In 2002, the eight largest non-OPEC oil producers were, as a group, net importers.

So looking at net exporters of oil, rather than aggregate oil production in 2002, OPEC produces 73.9% of all net oil exports.

It's control of net oil exports that matters.

[mobuto]

33. Not necessarily

The US is a net importer of oil and its exports large quantities of oil - mostly from Alaska and mostly to the Far East.

[comerpatrick]

34. How much?

How much oil did the US export to other nations in terms of overall oil production and export?

[mikey_1962]

37. US produces 8 million bbl/day

US consumes 19 million bbl/day

US Imports 11 million bbl/day

[gbwarming]

45. US imports 9.8 million bbl/day, exports 0.3million

Your right that there are precious few large net exporters AND that the US is not a large exporter.

http://www.eia.doe.gov/emeu/security/topexp.htmlTop Petroleum Net Exporters, 2000
(Million Barrels per Day)

Rank Country Production Consumption Net Exports
Prod Cons Net Exp
1. Saudi Arabia 9.1 1.3 7.8
2. Russia 6.7 2.4 4.3
3. Norway 3.3 0.2 3.1
4. Venezuela 3.1 0.5 2.7
5. Iran 3.8 1.2 2.6
6. UAE 2.5 0.3 2.2
7. Iraq 2.6 0.5 2.1
8. Kuwait 2.2 0.2 2.1
9. Nigeria 2.1 0.3 1.9
10. Mexico 3.5 2.0 1.4
11. Libya 1.5 0.2 1.3
12. Algeria 1.4 0.2 1.2
13. United Kingdom 2.8 1.7 1.1
** US 9.0 19.5 0.3 (imports 9.8)

**US exports less than 1 million bbl/day. Do the math from the table below (9.0+9.8-19.5) = 0.3

http://www.eia.doe.gov/emeu/security/topimp.html
Top Petroleum Net Importers, 2000
(Million Barrels per Day)

Rank Country Consumption Production Net Imports
1. United States 19.5 9.0 9.8
2. Japan 5.6 0.1 5.6
3. Germany 2.8 0.1 2.7
4. South Korea 2.1 0.1 2.0
5. France 2.0 0.1 2.0
6. Italy 2.0 0.1 1.8
7. Spain 1.5 0.0 1.5
8. India 1.8 0.7 1.1
9. China 4.6 3.2 1.4
10. Taiwan 0.8 0.0 0.8

[mikey_1962]

36. These are net export numbers for Mexico & Russia

Russia produces 7.5 million bbl/day consumes 2.5 Million and exports 5 million

Mexico produces 3.5 Millions bbl/day
consumes 1.5 million bbl/day

and exports the rest

[kalian]

39. Producer and exporter are different things.....

the US is the largest CONSUMER of oil (energy) than any other nation.
The US consumes approximately 25% (!!!) of the world's annual energy
production. The US does NOT produce oil...it converts it to useable
products, including gasoline. The US oil extraction PEAKED in 77...and
has been in DECLINE ever since.

[mobuto]

43. The US does not produce oil?

You've never been to Alaska, Lousiana, Texas, California? The US has 500,000 oil wells which produce 7.9 million barrels/day of oil.

We have the world's 12th largest proven oil reserves.

We still consume more than we produce, but we produce a lot.

[kalian]

49. Nobody "produces" oil....

nations EXTRACT oil... ;)

[kalian]

7. Ummm...Venezuela is member of OPEC....

and good for them!
The US has no "right" to cheap oil. It should suffer the consequences
for relying on the resource.
Peak oil....here we come!

[readmylips]

6. Saudis control OPEC...

even if we get 16% of our oil from the Saudis. Everytime Americans point out what a bunch of criminals the Saudis are, they squeeze our butts with high oil prices.

With the bushie criminals in control and in bed with the Saudis, they'll squeeze us even more. King George, Prince daDick Cheney, Queen Condisleeza, Rumbutt the ignoratious old elephant.

[mobuto]

10. The Saudis don't control OPEC

In fact, the Saudis have long been fighting the smaller countries, particularly the Gulf states, which want more production and a higher percentage.

[robbedvoter]

11. "If we traded blood for oil, we got ripped off" Jon Stewart

"We should have traded blood for blood"

[keithyboy]

14. So Bush admin arrogance responsible for rising gasoline prices.

That's a fact!!

[goforit]

16. Buy a hybrid or start using a Bike!!!!

Hybrids are awesome!!!

They drive as fast(0-60)as any other machine!!!

[tabasco]

20. Good advice.

I would recommend a hybrid and a bike. It is high time that fatass, lazy Americans stopped burning fuel to go one block to the quikie mart.

[mac56]

30. Hybrids nice for those who can afford them.

The other 95% of us are stuck driving beaters.

[htuttle]

31. If you live within 10-20 miles of your workplace...

Try one of these:


Bajaj Chetak
$2,000 brand new (for 2002 model)
80-100 miles per gallon
Top speed: about 52-55 mph
Four speed manual transmission -- big fun!

And about the weather: I rode one of these nearly every day to work in Wisconsin this last winter. Bundle up, buy some rain pants -- no problem.

I am literally spending less than $1 on gas every TWO weeks.

Main US importer:
http://www.bajajusa.com

[Wells]

40. Hybrids always most superior technologies

Buy the coming Hybrid SUVs for their drive train alone. The Next Generation of Hybrids will utilize more battery weight, low-slung. Drive trains, (non-computerized), are hot.
It can be shown how GM KNOWS Hydrogen is 2nd best. Why?

[Wells]

41. Hybrid battery weight stability safety + industrial applicability +

The IC on Hybrid drives can be of any number of cylinders and burn any available fuel, while charging a battery set; on or off the grid.

Hybrids ONLY offer this advantage.

"It's Another Lie They Told The Governator"

[Wells]

42. Hydrogen Car - Another Lie they told the Governator

The hydrogen fuel cell car requires lightweight. It's a pure electric vehicle with small batteries. It will not convert to most vehicle fleet standards.

[Victimerican]

47. Wow...

I've been looking over their site, and some reviews of these things. I am impressed. How do they work in the snow, might I ask?

[htuttle]

50. Get better tires

The tires that come with it, 'Nylogrip' specials straight out of India, are nearly indestructible, but they are so hard that they get slippery. Put a pair of Zippy 3's on there, and you're good to go.

I only rode in an actual snowstorm two or three times, and one icy slush storm. Snow isn't too bad if you don't try to lean into turns too much (slow down!), and you leave plenty of stopping distance (slow down!). I was more worried about other drivers sliding into me, than me sliding into other drivers. Once they plow and some traffic dries the road off, it's fine.

The biting wind is the worst part. I got a mask, and that was a big help. Rain pants help with this too. Plus decent gloves or a windscreen that covers your hands. It's warmer than a motorcycle, however, since the front 'cowl' does block a lot of the wind from your legs.

Glaze ice sucks! No way around it. After the first ice storm I rode in, I took a taxicab to and from work any other time the roads were glazed with ice (3 times).

If you live in a slightly more moderate climate than central Wisconsin, it should almost be a no brainer driving one of these if you're looking for inexpensive transportation. They do everywhere else in the world but North America.

A basket on a rack on the back fits two bags of groceries.
Gas cost to and from the store? Probably about a nickel.

[goforit]

17. Cheney is OPEC!!!!........His demise to control the masses!!!!

:puke:

[PROGRESSIVE1]

18. Good, it will piss of the SUVers and slow the economy enough...

to hurt * this fall!!!

[mobuto]

21. Um

It doesn't look too good to be rooting for the economy to fall. A lot of DUers are being hurt enough as it is by Mr. Bush's policies.

[NNN0LHI]

23. Why are these guys laughing?

http://www.whitehouse.gov/news/releases/2003/06/images/20030603-1_jordan-p30712-28-515h.html

President George W. Bush meets with Prince Abdullah Bin Abd Al Aziz of Saudi Arabia (center, left) and King Abdullah Bin Al Hussein of Jordan (center, right) at the Four Seasons Resort in Sharm El Sheikl, Egypt, June 3, 2003. White House photo by Eric Draper.

[maxsolomon]

44. TAKING PROFITS NOW

OPEC & the american oil corporations will back off the price in late august/labor day to help the bush campaign. watch it fall under $1.50/gallon. he'll trot it out as a gift to the peons from their dear leader.

[Chicago Democrat]

46. We should invade Saudi Arabia, They need "democracy" right?

They attacked us on 9/11, they espouse a radical ideology, they finance terrorists. Lets get them before they get us again.

(irony)

[kalian]

51. Don't worry....

that'll be the last "terrorist bastion"...when the timing is right.
Sharon first wants the US to invade Syria and then Iran...and then
Saudi Arabia when the time comes.

Come on man...we have a script to follow.