Arguments on Sustainable Oil Supply Gone Haywire

With conflicting and contradictory signals all around, the blame game has already begun. Global dependence on Middle Eastern oil is being questioned once again.

While many in OPEC feel it could not do much to restrain the bull, and tame a market, they say, defies logic, many others seem to differ. Most OPEC oil ministers currently share consumers’ concern over prices at its current peak, yet some in the 12-member group say pumping more will not contain a rally driven by speculators, a weak dollar and political tension in the Middle East. “The oil market is getting out of control. Investment funds are driving the price more than the basic fundamentals,” a senior OPEC insider was quoted as saying by Reuters. “There is little producers can do. Adding more oil won’t make much of a difference.”


But can OPEC really add much – is a question adding to the confusion.

The German-based Energy Watch Group is sending shivers down the spine, claiming the global oil production has already peaked in 2006. The study predicts oil production to fall by 7 percent a year, saying it will be half by 2030, causing acute fossil fuel shortage. Critics of peak-oil assertions, however, say it’s impossible to know when petroleum production has peaked given the uncertainties, and point out those previous theories pegging a specific date for peak oil output has been wrong.

MENAFN