OPEC needs clear demand signals for spare capacity

“We in OPEC do not subscribe to the peak-oil theory.”

Oil cartel OPEC scolded consuming nations on Tuesday for forcing it to spend billions on spare crude production capacity while sending confusing policy signals on future demand.

The Organization of the Petroleum Exporting Countries has an estimated 100 exploration and production projects with investment in the region of $100-billion to meet rising demand, but justifying spare capacity to calm oil market nerves was difficult, said acting secretary general Mohammed Barkindo.

“Energy security has to be seen from two sides of the coin – supply security and demand certainty,” Barkindo told a conference on fuel price risk in Singapore.

“Transparency on demand is more to do with the policy of consuming countries – it’s difficult to convince bankers to cough out large amounts of money when the market is not certain.”

Mining Weekly