The Observer: Fear of global slowdown as oil price soars
$this->bbcode_second_pass_quote('The Observer', 'C')rude prices have smashed a series of records in recent weeks, as the producers' cartel, Opec, gambles that oil-consuming countries can withstand a fresh jump in costs.
Opec has announced it will increase production by 500,000 barrels a day from 1 November, but Haque [senior commodities editor at the Economist Intelligence Unit] said that was 'nowhere near enough'. Alistair Darling, the Chancellor, has added his voice to calls for the cartel to open the taps.
Policymakers are becoming increasingly alarmed about Opec's refusal to act. Julian Lee of the Centre for Global Energy Studies in London, said it was playing 'an extremely dangerous game'.
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The Observer on oil
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The Observer on oil
by Twilight » Sun 21 Oct 2007, 21:09:18
They appear to believe the supply constraint is voluntary.
The Observer: BP strives to drill itself out of a hole
$this->bbcode_second_pass_quote('The Observer', '[')b]Most companies have pumped less oil this year than last. Dresdner Kleinwort estimates the sector has produced 4.4 per cent less year-on-year. This is partly a long-term trend as mature fields run down. Morgan Stanley analysts say that the average rate of production decline for companies' existing fields is 8 to 12 per cent a year. To offset this, companies have to find new fields quickly, which are often in more technically challenging - and expensive - places, such as in very deep water or the icy wastes of Siberia. As production methods become more complex, so the scope for things to go wrong increases.
Declining mature fields, higher costs, tougher tax regimes and unforeseen technical problems have conspired to take huge chunks out of the production targets companies set at the beginning of the decade. Morgan Stanley reckons that BP will produce almost a third less oil this year than it thought it would in 2000, with Shell pumping an estimated quarter less than it expected.
BP says its two refineries should be back to full capacity by the middle of next year. Its Whiting refinery will also be refitted so that it can refine heavy oil.
Morgan Stanley thinks will allow the company to increase production by just over 2 per cent between 2006 and 2009, twice the rate of Shell.
Really nothing to celebrate there. We get a rough idea of what the world production decline rate may be. Back in 1997, Campbell assumed 3.25% in his model. We don't see rates that low mentioned very often.
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Re: The Observer on oil
by DantesPeak » Sun 21 Oct 2007, 21:23:44
$this->bbcode_second_pass_quote('', 'B')P says its two refineries should be back to full capacity by the middle of next year. Its Whiting refinery will also be refitted so that it can refine heavy oil.
This heavy oil being Canadian tar sands or oil sands, if you like.
New pipeline hookups for Canadian oil are being constructed for some other refineries, along with some refineries that will primary 'upgrade' low quality oil sands oil before it transported to the US refineries.
So in sum, total oil output may increase, but more oil is being consumed in the infrastructure and refining process. No surprise to PO.com readers, but it doesn't appear to even get a passing mention in the press. On the other hand, unsubstantiated accusations against OPEC by CERA are printed.
It's already over, now it's just a matter of adjusting.
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Re: The Observer on oil
by cipi604 » Mon 22 Oct 2007, 00:01:56
with that rate of decline how long do you think the economy is going to stay up? 2 year? 4? 10? forever?
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Re: The Observer on oil
by phaeryen » Mon 22 Oct 2007, 07:12:28
$this->bbcode_second_pass_quote('cipi604', 'w')ith that rate of decline how long do you think the economy is going to stay up? 2 year? 4? 10? forever?
Why, forever of course.
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