OPEC members’ domestic turmoil could cause oil crisis – analysts

The vigor of China’s demand for oil since 2004 has coincided with rising

consumption in the US and India and has shaken up the supply side of

the industry.

OPEC has increased production, but this has left it with little spare

production in reserve, leaving it vulnerable to a supply shock in a member

country.

This reserve capacity stands at 1.5 mln barrels per day (bpd), almost

all of it in Saudi Arabia, compared to between five and six mln bpd in 2002.

That shows ‘just how precarious is the supply-demand balance and how it

could easily swing from a situation of surplus to one of penury,’ said

Jean-Charles Lacoste, an analyst with Credit Agricole.

..The additional capacity of the world’s leading oil producers is very

limited at present.

Saudi Arabia is the only OPEC country with the ability to pump

significantly more fuel. But its crude is heavy and sulphurous and is unpopular

because it is difficult to refine.