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| Africa North |
| Opinion: Is world on verge of oil price spiral? |
| 2011-03-09 |
| OPEC has been exceeding its quota for months and cannot easily raise production without cutting into global spare capacity. Recent attrition in old fields has largely offset new capacity. Libyan oil production has fallen by 1,000,000 bpd so far, with world production at 88,000,000 bpd. When supply is tight, oil prices hinge on spare capacity. Libyan losses have cut that capacity by 1/3. Plans for new Libyan production have stopped. The editor of Petroleum Review said, "We cling to the comfort blanket that spare capacity exists, but it is mostly fictional, or inoperable. If you take 2m bpd off the figure, the whole dynamic of global oil supply changes." What there was of Middle Eastern political order has disintegrated in the last month. The world's economic fate now hangs on the success of Wahabi repression. Any sign that the Saudis are losing their grip risks an oil shock large enough to derail the global recovery. Global recovery is itself a mirage. |
| Posted by:Anguper Hupomosing9418 |
| #1 |
| Posted by: JosephMendiola 2011-03-09 23:39 |