Saudi Output Growth Can Help Forestall Peak Oil, Bernstein Says

(Bloomberg) — Saudi Arabian oil output has the potential to rise, helping avoid a peak in world crude production, according to Sanford C. Bernstein & Co.

Oil prices may fall toward the end of this year as worsening economic conditions reduce demand, analysts Neil McMahon and Ben Dell forecast in a report today. Prices will probably rise later, beyond 2010, and reach $114 a barrel by 2015 as spare capacity declines, they wrote.


“Saudi and global oil production has the potential to grow slowly going forward,” the authors wrote. “We do not believe world oil production supply is peaking today.”

Proponents of peak-oil, the theory that global production has or is about to reach its zenith, say booming demand and dwindling supply are responsible for the rising price of oil. Analysts debate the extent and timing of a drop in crude production in Saudi Arabia, the world’s biggest oil exporter. Some argue Saudi Arabian Oil Co., known as Saudi Aramco, is downplaying reservoir declines and that the country may be forced to reduce output.

Bloomberg