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Oil price could hit $150 a barrel

Terry Macalister, Guardian Unlimited
Oil could reach $150 a barrel and needs a new system of pricing that would take the power out of the hands of financial speculators, Opec delegates at a special summit in Saudi Arabia were told today.

While no one wanted to feed further fear into the market, industry players spoke behind the scenes about prices going up to $125 or even $150, said Kuwait-based consultant Usameh Jamali.

“People in the market believe that $100 is sustainable and there is continued upward pressure … we should be expecting some downward pressure in a couple of years [only],” added Jamali, who said he had taken private soundings from key figures at the World Energy Congress in Rome earlier this week.

Whereas, in the past, a $20 change in the price of oil could be attributed to political uncertainties, that figure had risen to at least $30, he said. “If President Bush changes the rhetoric and says the old [oil consuming countries] and the new [producers] should work jointly together to find a solution, then prices would fall by $30,” he added.
(15 November 2007)

President Bush to Veto Anti-OPEC Legislation

Spencer Swartz and James Herron, Dow Jones Newswires via Rigzone
U.S. President George Bush would still veto legislation allowing U.S. institutions to sue the Organization of Petroleum Exporting Countries for what some lawmakers claim are its actions in pushing up oil prices, the U.S. energy attache in Saudi Arabia said Friday.

“We don’t think this legislation has a high likelihood of passage and President
Bush has indicated that he will veto it if it is passed by Congress,” Shannon Ross told OPEC delegates and officials at the Heads of State meeting here.
(16 November 2007)

Oil leaders’ private debate televised by mistake

Tim Webb, The Observer
‘Kill the cable, kill the cable,’ shouted the security guard as he burst through the double doors into the media room at the Intercontinental Hotel in Riyadh, followed by Saudi police. It was too late.

A private meeting of Opec leaders, gathered this weekend in Riyadh for the cartel’s third meeting in its 47-year history, had just been broadcast to the world’s media for more than half an hour after a technician had mistakenly plugged the TV feed into the wrong socket. The facade of unity that the cartel so carefully cultivates to a world spooked by soaring oil prices was shattered.

Sometimes, such innocent mistakes can have far-reaching economic and political consequences. Commodity and currency traders said this weekend that oil prices would surge again tomorrow – possibly breaking the $101 per barrel record set in the late 1970s – while the already battered dollar would fall further on the back of the unintentional broadcast.
(18 November 2007)

Chavez Blasts U.S. At OPEC Summit

Venezuelan President Urges OPEC To Drop Dollar As Standard And Warns Iran Attack Could Double Oil Prices

Venezuelan President Hugo Chavez warned the Unites States on Saturday that oil prices could more than double if Washington attacked his country or Iran – part of a provocative opening address here to a rare OPEC summit.

The Venezuelan leader also appealed to fellow members of the Organization of Petroleum Countries to join his crusade for social justice, saying the group should be “at the vanguard in the fight against poverty.”

After Chavez’s speech, Saudi Arabia’s King Abdullah, the conservative head of the world’s largest oil exporter, appeared to rebuke the leftist president by insisting “OPEC has always acted moderately and wisely.”
(17 November 2007)

Saudi, Venezuela Leaders Differ on Politicizing OPEC

Maher Chmaytelli and Ayesha Daya, Bloomberg
King Abdullah of Saudi Arabia said OPEC shouldn’t make oil a source of conflict, contradicting Venezuelan President Hugo Chavez who wants the oil exporter group to become an active “political agent.”

“Oil is an energy for building and prosperity, it shouldn’t become a means of conflict,” King Abdullah said at the start of the group’s heads of state summit in Riyadh today. “Those who want OPEC to become an organization of monopoly and exploitation ignore the truth.”

The Organization of Petroleum Exporting Countries, provider of more than 40 percent of the world’s oil, is holding its third heads of state summit since it was founded in 1960. The Saudi foreign minister clashed yesterday with a push by Iran and Venezuela to debate pricing oil in currencies other than the U.S. dollar.

“OPEC was born as a geopolitical force and not only as a technical or economic one in the ’60s,” Chavez said, speaking before King Abdullah. “We should continue to strengthen OPEC, but beyond that, OPEC should set itself up as an active political agent.”
(17 November 2007)

Can Saudi square the oil circle?

Tim Webb, The Observer
The dusty sign next to the landing strip reads ‘Welcome to the City of Golden Sand’. This ‘city’ of 700 oil workers and their families is one of the most remote outposts on earth. Shaybah is on the edge of the aptly named Rub’ al-Khali (’empty quarter’) desert region in southern Saudi Arabia, hundreds of miles from the nearest town. Underneath the rolling red sand dunes lies one of Saudi Arabia’s largest oilfields. It pumps 500,000 barrels of oil per day (bpd)- about 5 per cent of Saudi Arabia’s total. Production will rise to 750,000bpd by late 2008, and according to its state owned-operator, Saudi Aramco, the field has 19bn barrels of proven reserves.

An Opec summit – only the third in the cartel’s history – concludes in the kingdom today, and the Saudi government is keen to show off the flagship project to the world. Last week, it flew in more than 100 foreign journalists.

Yet in the heart of the empty quarter to the south, Shell and other oil majors are searching in vain for new deposits.

…The trip to Shaybah is part of a carefully choreographed public relations offensive to convince the world the Saudis can keep it supplied. ‘Saudi Arabia is desperate to say they have things under control,’ says Ciszuk.

A lot is resting on their shoulders. Saudi Arabia is responsible for about a third of Opec’s output.

…One of the big concerns is whether Opec, and in particular Saudi Arabia, can – or will – increase production by the level needed.

Ciszuk says: ‘How much they have is kept very tightly under wraps.’ Opec countries have traditionally been extremely secretive.

…It is also in members’ interests to overstate their reserves. Opec introduced mandatory quotas to limit supply and prop up prices. These quotas were based on the size of reserves, so that gave an incentive to exaggerate them. Advocates of peak oil – who say that production is in terminal decline – severely dispute these reserve figures. The trouble is, no one knows for sure.
(18 November 2007)