Oil - Feb 22
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Revolutions could rob Opec of its ability to manipulate supply
Kiran Stacey, FT energy source blog
The news for Opec in the short term is bad, with Libya currently accounting for 1.6m barrels a day of oil production. In the long term, it could be even worse, however, especially if trouble spreads to Kuwait, with 2.3m b/d, Iran, with 3.7m, or even the big one – Saudi Arabia, with 8.3m.
For the moment, the cartel can only wait and watch what happens to production figures. But according to Fateh Al-Khayat, the former director of planning at the Iraqi oil ministry, the outlook is even worse in the long term. He has told an audience at the International Petroleum week in London:
Libya might go out of the market for a while. Algeria is a potential trouble spot. If we add Yemen and Egypt, troubled countries produce about 4m b/d. If that supply is disrupted, the other Opec countries cannot in my opinion compensate for that....
(22 February 2011)
IEA sees oil price danger, ready to use stockpiles
Neil Chatterjee and Alfian, Reuters
High oil prices pose a danger for a global economic recovery and industrialised countries stand ready to release oil from stockpiles to meet Middle East supply disruptions, the IEA's chief economist said on Tuesday...
The IEA has a mandate to ask its members, the nations that belong to the Organisation for Economic Cooperation and Development (OECD), to release oil stocks in the case of emergency supply disruption.
It rarely opens the taps but released oil product stocks in 2005 when Hurricane Katrina crippled U.S. Gulf oil operations.
"If they think there is a need to do so, they may well decide to release those stocks in order to cover the markets, if there is a physical disruption," Birol told Reuters in an interview, referring to 1.6 billion barrels of emergency oil stocks held by IEA members.
He said those stocks were sufficient to cover several supply disruptions....
(22 February 2011)
Saudi Denial Not What it Seems
David Strahan, davidstrahan.com
Sadad al-Husseini’s statement distancing himself from the Wikileaked cable written by US diplomats in Riyadh is most interesting for what it leaves out. While robustly denying claims that were not actually made in the original message – always a good tactic when you’re on the back foot – the former VP Exploration & Production for Saudi Aramco pointedly fails to deny the most important passage...
I strongly suspect the reason al-Husseini kept mum on this point was that he did say it and still believes it. That would certainly chime with the tone of his interview with me three years ago...
Reviewing the 2007 interview today, al-Husseini’s price forecast looks uncannily on track...
(21 February 2011)
Judge Tells Government to Resume Permits for Drilling
John M. Broder and Clifford Krauss, New York Times
A federal judge in New Orleans on Thursday ordered the Obama administration to move quickly on permits for new deepwater oil wells in the Gulf of Mexico, saying that the government could no longer justify long delays in allowing new projects to go forward.
Judge Martin Feldman, of the United States District Court for the Eastern District of Louisiana, said that the Interior Department was required to act on drilling applications “within a reasonable time.”
“Not acting at all is not a lawful option,” Judge Feldman wrote, adding that the delays are “increasingly inexcusable” and were causing drilling companies to relocate their rigs to foreign waters...
Ruling in favor of the British drilling company Ensco, Judge Feldman ordered the Interior Department to decide within 30 days whether to approve five drilling permits sought by the company over the last year...
(17 February 2011)
Gulf spill's effects 'may not be seen for a decade'
Jason Palmer, BBC Online
The 2010 Deepwater Horizon oil spill "devastated" life on and near the seafloor, a marine scientist has said.
Studies using a submersible found a layer, as much as 10cm thick in places, of dead animals and oil, said Samantha Joye of the University of Georgia.
Knocking these animals out of the food chain will, in time, affect species relevant to fisheries.
She disputed an assessment by BP's compensation fund that the Gulf of Mexico will recover by the end of 2012...
(21 February 2011)