Wednesday September 21, 2005

Is OPEC becoming irrelevant?

peakoil.com (thread) -> money.cnn.com :

While OPEC ministers met in Vienna Monday to discuss future production and price targets for oil, oil analysts and traders were instead focused on the waters off the Florida Keys. But even if Rita misses oil faculties, traders and economists say that the once all-powerful oil cartel's official pronouncements have no real impact on the market and the price of oil. "OPEC became powerless the moment it sold its last barrel of excess capacity, and that was maybe a year ago," said energy economist A. F. Alhajji, a professor at Northern Ohio University.

While most oil ministers from OPEC countries are bullish about future production levels, there are growing doubts about what OPEC can and will be able to do to increase production.

Bill Adams, chief energy and capital market strategist, LaSalle Futures, said that OPEC nations are limited in how much they can increase capacity because they could hurt the quality and quantity of oil they can extract from fields long-term if they try to remove too much, too quickly. "Overproduction can lead to a production collapse," he said. That makes promises of future production increases seem somewhat hollow, he said.

- When even the MSM (mainstream media) begins to question OPEC's credibility, it should make people sit up and pay attention. And once again, the peak oil community and the alternative news sources have been ahead of the current news by months. Check out the datestamps on the "see also" entries below for what the community has picked up on earlier.

See also :

1. Saudi Tosses Oil Production Cap
2. White House : "Saudi Near Capacity"
3. Saudi Arabia : Hubbert Peak arrived ...
4. Official : OPEC has reached limit
5. Peak Oil May Be Now : Matt Simmons

(2005-09-21 09:57:18 SGT) [Energy] Permalink

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