] westexas on Thursday June 01, 2006 at 9:20 AM EST
Interesting that a senior geologist with Chevon casually says that the Middle East has peaked. Note the comment by the author of the article that worldwide supplies are threatening to decline.
New York Times:
For Venezuela, a Treasure in Oil Sludge
Excerpts:
"We do know that the Orinoco is underdeveloped," said Mr. Nelson, 49, a geologist from California with 27 years' experience developing heavy-grade oil. "And the resources in the Middle East are at their midpoint."
With demand rising, worldwide supplies threatening to decline and oil prices near record levels, the struggle in this country underscores the growing debate between governments and oil companies worldwide over profits from technologically challenging but potentially lucrative oil fields -- whether in the Caspian Sea, the Arctic tundra or here in the Orinoco region.
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[new] westexas on Thursday June 01, 2006 at 9:24 AM EST
BTW, as has been referenced earlier, an interesting item from the Energy Bulletin on Saudi oil production: "Saudi output since April stood at 9.1 million barrels per day (bpd), Petrologistics said. That was down from around 9.42 million bpd in March." tradearabia.com
The article claims that the production decline was due to voluntary cutbacks because of lower demand, but what is odd is that oil prices don't seem to reflect the lower demand. Also, if I interpret the numbers in the article correctly, the Saudis have not increased their production back up to the 9.4 range.
As I pointed out in our (Khebab & Brown) Energy Bulletin article, Saudi Arabia is now at about the same point at which Texas started its permanent decline. The Oil & Gas Journal recently published an article that had an even lower reserve estimate for Saudi Arabia than our work indicated.
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[new] westexas on Thursday June 01, 2006 at 10:58 AM EST
The four week running average of total US petroleum imports has rebounded back to the same level we saw in later December, 2005, after a 15% to 25% increase in crude oil prices. The price/import discrepancy was what I though was so odd. Why were US importers paying more for less crude oil and product? My conclusion was that we are seeing the early stages of a bidding war for available net oil export capacity.
What is impossible to quantify is what happened to total petroleum imports into poorer countries. We do have lots of news reports of cutbacks in consumption in places like Thailland and Senegal and news reports of riots over fuel prices and fuel supplies in India and Pakistan.
IMO, we are (temporarily) outbidding poorer importers. The recent news from Saudi Arabia doesn't offer much reason for optimism on net export capacity.
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