OPEC works to stabilize market despite easing of oil prices

.. While we continue to hold an agnostic position on the “Peak Oil” philosophy, reports that the supermajors are increasing investment and seeing production decline does support their argument. Of course, some of this trend is due to the fact that the firms have been denied access to the best fields. Still, this does suggest that geopolitically safe and accessible oil is becoming difficult to acquire.

Energy Intelligence reports that the U.S. inspector-general’s report to Congress shows that Iraq is not building production, despite high levels of funding, mostly due to security problems. However, the report also says that field maintenance is poor and is likely damaging reservoirs.

…Energy Intelligence reports that Kirsten Parker, an analyst for Exclusive Analysis, worries that the likelihood of an attack on a major energy facility in the Middle East is increasing. She reports an increase in “chatter” with al Qaeda linked groups discussing an attack on energy assets, especially in Saudi Arabia. It is worth noting that, on February 24, 2006, al Qaeda attacked the Saudi oil facility at Abqaiq. While that attack failed, the terrorist group has a habit of marking anniversary days with new “events.”

If al-Qaida in Saudi Arabia is becoming active again, it could be due to their “Iraqi alumni” returning home. That could become a problem. It is worth noting that a number of private sources have suggested that the 2006 attack on Abqaiq was nearly successful. At the time, it appeared the terrorists failed miserably in their assault. However, these unconfirmed reports suggested that a couple of mistakes — wrong turns, old maps — were all that separated a failed attack from a disaster for the oil markets.

Midland Reporter-Telegram