That fellow "Fred L" from Bear Sterns was on Moneyline this evening and in Bold Caption I read about the Wall of Oil Coming this way. He looked quite serious but did I also sense that he was a bit unsure. Of course Stuart V. with his usual style tries to make you feel that every utterance is earth shaking. Well this would be, were it true. Trying to find anything that would support this claim I can only point to statements by the Middle East producers that there is plenty of supply. Still the tanker issue speaks against him and so does the normal growth in consumption (2% of 76Mbd = 1.52Mbd). This is about how much Opec has increased production since the March meeting. My notes are not very good on what the increases have been outside Opec, but they appear to be either insignificant or actually non-existent.
I think Rob Shilling was referring to the global production peak that according to Colin Cambell might be taking place right now. Big Bull's post on Canadian NG confirms also what Campbell is telling us.
Message 14345743
Some other thoughts:
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OPEC's Actions Irrelevant: Weak U.S. Infrastructure Can't Handle Increased Oil Production Claims Int'l Oil Experts
cnniw.yellowbrix.com
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September 5 , 2000. For the first time in years, refiner's estimated costs of acquisition in th US exceeded $33/bbl. If these prices continue, not only gasoline, diesel and heating oil, but ALL product prices across the US will be increasing significantly. An economic slowdown is virtually certain. Extra OPEC production may not push prices lower. Unlike the situation in 1997-98, when excess crude oil could actually be moved internationally into vacant storage, this year tanker capacity is already fully utilized and operating at full speed. Even if OPEC produces more crude oil, it may not be able to move it out of its own tanks into markets unless it purposely discounts prices. By discounting prices, OPEC can regain market shares lost to non-OPEC producers over the past few months. from oil-gasoline.com
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As I keep rambling here, those who have read Colin Campbell's book, recall that he has a chapter in which he is very hard on Norway for selling its oil endowment in such a short time. Clearly the same logic applies to SA.
With its population being 3 times what it was in 1970, they sure need that oil revenue for a long time, if they have any chance of becoming a modern state. I for one do not think their prospects are very bright however. To establish a modern industrial state, and the attitudes that go with it, would in my estimation take at least 100 years. By then their oil endowment is long gone.
best, Seppo
EDIT: Just saw this.
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