Churchill’s assessment applies to the current oil situation: this is the beginning of the end of OPEC.  That much is obvious; the more interesting question is “why?”

OPEC was founded in 1960 to protect the interest of its members, major oil exporting nations.  That interest is to stabilize world oil prices at levels that balance their competing objectives to maximize both long term oil demand and the short term oil price.   The idea was to keep enough oil off the market during glut periods to elevate the price and insert enough …

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  Crunch Time     Time for Natural Gas         Current Oil Outlook             It IS the dollar! First the April numbers. The EIS portfolio was up 11% for the month, about the same amount as the oil and services indexes, a bit better than the S&P. Year to date being up 8% is good relative performance. About 3% of it was due to the options on futures strategy. I added an option on some late 2011 natural gas futures contracts. I also disposed of most …

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Saudi King’s Quiet Bombshell
By Steven Andrews & Randy Udall [Email address: editor #AT# evworld.com - replace #AT# with @ ]
Eight oil industry experts give their views on King Abdullah’s ‘keep ‘em capped’ announcement
Open Access Article Originally Published: April 21, 2008
Reprinted from the April 21, 2008 edition of Peak Oil Review, the weekly newsletter of the Association for the Study of Peak Oil, USA. Given the historic record price of oil last week touching near $117 and the admission by Russia that its own oil fields have peaked, the decision by the Saudi’s and other Middle East producers to essentially …

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And we thought the “mystery wrapped in an enigma” was Russia? Here is OPEC saying they are keeping production level because the world is well supplied just as their actual production declines each month of Q1 according to the IEA. It was down 300 kbpd in March and 200 kbpd in February compared with January. While this is another reason to explain high oil prices, it is anything but clear in terms of OPEC’s intentions. Of course, OPEC is a loose affiliation of independent countries and …

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Here are two European insights on current developments in the price of oil. One is from Barclays and the other by Chris Skrebowski who maintains a list of global oil fields under development (megaprojects) and edits Petroleum Review.  The reports are in close agreement.

The Oil and Gas Journal (2/11/08) reported that Barclays Capital, the investment banking arm of Barclays Bank, PLC has issued a report on the broad outlines of the current market for oil.  Their conclusion is that, “The rise in prices has been less about anything happening …

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Sometimes an analyst’s statements and the media’s interpretation of them seem like one of those curvy mirror images we used to see at carnivals.  Consider the following media report of a speech by oil analyst David Strahan. What he said was that non-OPEC crude production will peak in 2010.  That is somewhat similar to some other observer’s views, including Chris Skrebowski.  (Charlie Maxwell says those flows will peak in 2008.)  But then Strahan goes on to predict that all oil production will not peak until sometime …

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Mr. Maxwell, the Senior Energy Analyst at Weeden & Co, is one of the world’s  deepest thinkers and most eloquent writers on energy matters and has been for decades.  So it is worth paying attention when Charlie changes his assumptions about the future of oil for the first time in six years, as he discusses in this ASPO article, To summarize (which is nearly impossible to do) Charlie now believes as follows:     -  the peak in non-OPEC oil production will occur in 2008 instead of …

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According to Platt’s, OPEC crude oil production rose by nearly 400 kb/d in December primarily due to increased output by the UAE after the completion of its maintenance programs that had removed a larger amount from the market for several weeks.  Another report of increased global supply in December was noted by Gregor.   Output is estimated to have reached 87 mb/d, up from a previous plateau of about 85 mb/d that had been in place for nearly two years.  

Here is the report from Platt’s:

LONDON, Jan. 15 /PRNewswire/ — The members of the …

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The idea that many OPEC members cannot raise production from the current level has been put forward in other reports.  But it is interesting that an OPEC official has been reported as having said the same thing.   Here is the story:
Iran says many OPEC states can’t raise output - agency
Sat 5 Jan 2008, 10:31 GMT

TEHRAN (Reuters) - Many OPEC states are now producing as much oil as they can, limiting the ability of the cartel to raise output even if such a decision was made to help cool crude prices, …

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This is the first mainstream oil analyst I’ve read who thinks it is here. I do not agree since Peak Oil is a geological phenomenon and clearly there are geological options in Iraq, Nigeria, Venezuela, and Russia to increase oil production rapidly and substantially were it not for above ground considerations.

Nevertheless, the following appended news account contains a very intelligent discussion of some the well informed opinions on Peak Oil and some worthy insight on the current and foreseeable oil production environment.

Is oil supply at its peak?…

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click here.

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click here.

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Costs for non-OPEC producers several times that of OPEC for similar output of oil.  Click here.

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Saudi oil executive Sadad Al-Husseini: "There has been a paradigm shift in the energy world whereby oil producers are no longer inclined to rapidly exhaust their resource for the sake of accelerating the misuse of a precious and finite commodity. This sentiment prevails inside and outside of OPEC countries, but has yet to be appreciated among the major energy-consuming countries of the world." click here.

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Saudi spare capacity is somewhat of a mystery.  Megaprojects will add to capacity substantially in 2007 - 2009, then new oil thins out.  click here.

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