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Page added on May 4, 2012
OPEC says supply ample, speculation driving price
– Oil supply will be more than sufficient to meet demand this year and beyond, OPEC’s Secretary General said on Thursday, but added the price of fuel is being driven higher by speculation.
“There has been no shortage of oil in the market. Producers have been able to meet consumer needs,” Abdullah al-Badri told an energy conference. “We also see this as being the case for the rest of 2012 and the foreseeable future.”
Oil prices surged in March to $128 a barrel, the highest level since 2008, because of concern about possible supply shortages. Prices have since fallen back and Brent crude was trading around $118 on Thursday.
“Today the price continues to be driven by excessive speculation,” Badri said.
OPEC at a meeting in December set a target to produce 30 million barrels per day, settling an argument which broke out in 2011 after Iran and other members opposed a Saudi-led plan to raise OPEC’s production ceiling.
Output has remained above the target all year as Libyan supply recovered after being virtually shut down during the 2011 uprising against Muammar Gaddafi’s rule.
The extra oil is filling gaps caused by an unusually large number of supply outages globally, which have also helped support prices. Supply breaks were running at nearly 1.3 million bpd as of early April.
The additional supply has also offset a decline in exports from Iran, which is facing stiffening western sanctions over its disputed nuclear energy programme.
Iranian oil exports were running at between 200,000 and 300,000 barrels per day below last year’s level, Maria van der Hoeven, head of the International Energy Agency, told Thursday’s conference.
Iranian officials have said the country exported an average of 2.2 million barrels a day last year.
April supply from the 12-member Organization of the Petroleum Exporting Countries ran at 31.75 million barrels per day (bpd), the highest since September 2008, which was shortly before it agreed to a series of supply curbs to combat recession and collapsing demand, based on Reuters surveys.
12 Comments on "OPEC says supply ample, speculation driving price"
BillT on Fri, 4th May 2012 3:00 pm
More corporate propaganda disguised as news. OPEC doesn’t have any idea what is happening, or if it does, it is covering it’s collective ass as always. But then this is on a corporate ‘news’ site. lol.
Ah yes, Brent has fallen for a few days and next week when it is back to $128 what will be the excuse? And how does the public actually know what oil is selling for? It depends on the quality and source as much as quantity.
mike on Fri, 4th May 2012 3:39 pm
So speculators have just dropped the price by $8 since the last time I looked at oil price then? I thought it was the evil speculators that were pushing the prices higher and higher. Why do speculators get such a bad rap? they bring future shortages forward to the current time so we can plan ahead. How is that in anyway a bad thing?
It’s no good looking at how high prices go, what’s important is how low they go when they collapse and begin the cycle again. That low has been getting consistently higher with every cycle. Brent Crude is probably worth around $90 a barrel at the moment. Once it gets down to that level we will see another climb back up to around $140. Then a collapse to say $100 and then a climb to $160. The problem is this cycle is going to go exponential at some point and the prices will fluctuate like a muther.
Max Reid on Fri, 4th May 2012 5:34 pm
OPEC is bloughing (lying). Why the speculators were not able to increase the price of Natgas & Coal. Because the supply is plenty. But with Oil, its not. These big companies like Exxon, Chevron, Conoco produced lesser oil, since their oil fields were depleted.
In the last 1 week, the prices declined, because UK and Spain landed in recession. Many more countries will land in recession. Instead of blindly believing in OPEC, its high time we switch over to alternative fuels, hybrids, fuel efficient vehicles, etc.
Cabra1080 on Fri, 4th May 2012 5:40 pm
Yes, speculators are driving the price high because they know most of the cheap oil is gone and from here on out the price is trending up as this [finite] resource continues to be depleted. The price fluctuates a little higher and lower from day to day, however, the long-term trend line is leading to the stratosphere [or to the breaking point where everything including oil price collapses]. It’s not if but when.
Speculators are doing what they do best and that is to speculate. I mean, a few years ago the price of a good ole’ barrel of Texas tea was fetching twenty bucks on the market now it is going for north of a hundred (well, right now around 98 bucks) but a honking lot higher than in the nineties.
Now I am SPECULATING that it is time to be making preparations for a totally different world.
DC on Fri, 4th May 2012 9:15 pm
I speculate that SA is pushing giga-gallons sea-water into its depleteing oil-fields in order to sqeeze every last drop of SUV and bomber-fuel they can for there amerikan over-lords. Why does opec keep saying crap like this? No one in PO community is saying were running out of oil, much less that we dont have enough now, we all know that there is ‘enough’, for now. The permanent recession has seen to that. SA must know that even in a never-ending recession, and even with higher prices, growing populations and car-dependent traps like North America, Aus, NZ etc, will ensure that demand will keep growing even as economies contract. Oil is like food, everyone wants and needs it, regardless of what the ‘economy’ is doing or not doing, or what the price is. Everyones gota eat, and consumer industrial civilization has to waste fuel.
Simple eh…
Kenz300 on Fri, 4th May 2012 9:21 pm
China is growing by 8% a year and using more oil every day. Can the worlds oil producers keep up with the rise in demand from China and India and their billion plus populations? Tar sands, oil shale and deep water drilling are all more expensive to produce. Biofuels are already 10% of transportation fuel in the US helping to reduce the demand for oil. 40+ mpg vehicles are replacing 9 mpg trucks and SUV’s also reducing demand. The US level of imports have dropped from 60% to 45% of daily use in the past few years. China’s growth exceeds the drop in US demand keeping pressure on the supply.
SOS on Fri, 4th May 2012 9:30 pm
OPEC is making an observation that is correct. They are betting on politics contraining supply and keeping prices high. The problems with supply are political.
Rick on Fri, 4th May 2012 11:46 pm
This article is pure propaganda! Speculators have always been a scape goat. The truth is, oil is in decline, aka Peak Oil.
Hugh Culliton on Sat, 5th May 2012 3:32 am
One thing OPEC will never run out of is bullshit.
Hugh Culliton on Sat, 5th May 2012 3:32 am
One thing OPEC will never run out of is bullshit.
Keith_McClary on Sat, 5th May 2012 4:44 am
“We also see this as being the case for the rest of 2012 and the foreseeable future.”
That implies that the rest of 2012 is included in the foreseeable future.
So we have at least months to party.
Kenz300 on Sat, 5th May 2012 9:06 pm
Oil producers and oil companies love it when oil prices spike. They make huge windfall profits. We need to end the oil monopoly on transportation fuels. Bring on the electric, flex fuel, hybrid, CNG, LNG and hydrogen fueled vehicles. Monopolies are only good for the monopoly and not the consumer.