I talked with Deffeyes duuring a conference this May where he gave the same talk he gave in Paris later that month, inculding the queing theory comment. His basis for calling 2000 as the peak comes from the article below. He likens this to an article in 1970 when Texas Railroad Commission put out a press release indicating in a cryptic way that US had passed its peak.
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Dow Jones Business News
EIA: OPEC-10 Mar Output Seen 25.26MB/D; Saudi At 9.2MB/D
Thursday March 6, 3:51 pm ET
By David Bird, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- OPEC's (News - Websites) 10 members, excluding Iraq, are expected to boost oil output to 25.26 million barrels a day this month, up from 24.47 million b/d in February, the Energy Information Administration said in a report Thursday.
Saudi Arabia, the world's largest oil producer and exporter, is expected to make up 500,000 b/d of the expected 790,000 b/d rise during the month, with the remainder of the increase coming from Venezuela, which is recovering for a crippling oil-workers' strike.
The expected rise would put the spare output capacity of the Organization of Petroleum Exporting Countries, excluding Iraq, at the second-lowest level in 30 years, at only 1.5 million to 2 million b/d.
EIA, the independent, analytical and statistical wing of the Department of Energy, projects that the Saudis will pump 9.2 million b/d this month, up from 8.7 million b/d in February.
Dow Jones Newswires reported earlier Thursday that Saudi Arabia has told Western government and oil officials that the kingdom's crude oil output has reached its limit at around 9.2 million barrels a day and won't rise further, even with a war looming in Iraq.
According to the Western officials, who have spoken with Saudi officials in recent days, there is an understanding that because Saudi output can't rise further, a release of oil from consumer governments' emergency stockpiles is inevitable, if and when, a U.S.-led war is launched on Iraq.
Saudi Arabia has maintained that it has about 10.5 million b/d of oil production capacity and that output could be raised to that level within weeks or months, after considerable investment. The Saudis haven't pumped at that level in more than 20 years.
But top Saudi officials have let it be known in recent days that they don't intend to take steps to push output to that level, because they don't think the oil will be needed.
The Western officials said the Saudis have expressed the view that the release of oil from consumer stockpiles held by member nations of the International Energy Agency, and already high output from other OPEC members will be sufficient to cool soaring oil prices, meet demand and add to low global inventories.
EIA said it estimated that Venezuela's oil output will rise to 1.8 million b/d by the end of this month, up from 1.4 million b/d in February and well-above the low of 300,000 b/d in December at the height of the strike.
EIA said Venezuela isn't expected to recover much further in the near term. It assumes that 2.3 million b/d would be hit by the end of June, if the strike is completely resolved by the end of April.
"However, it's possible that several hundred thousand barrels per day of production capacity will be lost on a long-term basis because of the shut-down, and that Venezuela will not be able to attain its pre-strike production level of 2.9 million barrels per day," EIA said.
OPEC boosted its production ceiling by 1.5 million b/d, to 24.5 million b/d from Feb. 1 and increased output above the new cap to more than cover the shortfall from Venezuela.
EIA noted that its March production projection is 700,000 b/d higher than OPEC pumped in November, before the Venezuela strike started, as it increased the flow "in advance of any possible deterioration of the situation in Iraq."
At estimated March output levels, OPEC's spare capacity will be no more than 2.1 million to 2.6 million b/d, or 1.5 million to 2 million b/d, excluding Iraq, EIA said.
"This is the second lowest spare capacity level in the past three decades, trailing only the low reached in 1991 after the loss of Iraqi and Kuwaiti production. This low level of capacity is of concern in light of Kuwait's statement that it could have to curtail output in its northern and western fields if the Iraqi situation worsens. Still, the estimated March production levels suggest that 700,000 b/d of OPEC's spare capacity has already been tapped and is on its way to markets in advance of any possible need for it."
UAE spare capacity is seen at 350,000 b/d above a March expected level of 2.150 million b/d. Qatar has 110,000 b/d spare capacity, on top of 740,000 b/d expected March output, EIA said.
Nigeria has 100,000 b/d spare capacity, on top of March output seen at 2.2 million b/d; Libya has a token 30,000 b/d on top of 1.37 million b/d, while Algeria and Iran have 50,000 b/d spare capacity. Algeria is expected to pump 1.05 million b/d in March, with Iran at 3.7 million b/d.
- By David Bird, Dow Jones Newswire; 201-938-4423; david.bird@dowjones.com |
