PEAK OIL HAS ARRIVED!!!
OPEC says it's lost control of oil prices
Cartel producers say they can't keep up with strong global demand
MSNBC Updated: 4:51 p.m. ET March 15, 2005
With world oil prices north of $50 a barrel and rising, OPEC ministers meeting in Iran Wednesday will be grappling with a problem they haven’t confronted in the cartel’s 45-year history. In the past, OPEC tried to cool overheated prices by pumping more when supplies got too tight. But most OPEC producers say they’re already pumping as fast as they can. And despite the high cost of a barrel of crude, world demand shows no signs of slowing.
As a result, some OPEC ministers say, they’ve run out of options in trying to rein in the price of crude. Global oil demand has taken up most of the slack in extra OPEC capacity. Consumption is now believed by many analysts to be pressing up against the limits of what the world can produce. Saudi Arabia is the only country believed to have any surplus production left, and even then the Saudis are pumping close to 90 percent of capacity, according to the U.S. Department of Energy.
"There is not much we can do,” Algerian Oil Minister Chakib Khelil told reporters Tuesday in Isfahan, Iran, the site of Wednesday’s meeting.
"OPEC has done all it can do.” Qatar Oil Minister Abdullah al-Attiyah said. “This is out of the control of OPEC."
But that hasn’t eased political pressure on the cartel. On Tuesday, several oil ministers said they had received calls from U.S. Energy Secretary Sam Bodman. Sen. Ron Wyden (D Ore.) said Tuesday he’s not convinced that OPEC’s hands are tied by global demand reaching the limits of production capacity.
‘This is their claim. But the fact of the matter is that nobody knows what their capacity is.’ — Sen. Ron Wyden
Dem. - Oregon
“This is their claim,” said Wyden. “But the fact of the matter is that nobody knows what their capacity is.”
Though data on OPEC’s oil production capacity have always been hard to come by, there’s little disagreement on the rapid growth of global consumption -- especially in China and India. With worldwide demand this year rising by roughly 2 million barrels per day, whatever excess capacity is out there will be gone soon, according to Marshal Adkins, an oil industry analyst at Raymond James
“Maybe this year, but certainly in ‘06 there won’t be any excess capacity,” he said. “We haven’t been in that kind of market in our lifetime. You’ve always have more capacity than demand.”
That’s little solace to energy consumers, who are watching rising crude oil prices push pump prices to record levels. Though U.S. economy has yet to show signs of slowing and inflation remains low, a continued rise in oil prices will eventually slow growth, analysts say.
“We will find the price level that will slow demand,” said Adkins. “It may be $60; it may be $100. I think it’s fair to say its going to be in that price band.”
msnbc.msn.com
Rock_nj: Mark this day. It is an historic day March, 15, 2005. The day that OPEC acknowledged that peak oil has arrived. They are signalling that they can't keep up with demand. Peak oil is here. Look for $100/barrel oil in the next few years. |
