http://www.cnbc.com/id/15840232?video=3000009225&play=1
Kuwait Energy
Re: Kuwait Energy
Note that Kuwait Energy only produces 75,000 bopd.
My take;
> Oil prices were drifting higher before the violence in Egypt and Lbyia began due to increasing worldwide demand.
> Lbyia has taken a lot of high quality oil off the market
> The unrest will not be resolved soon.
> What happens after the violence stops? Nobody knows if new leadership will be friendly or not.
“Forecasting is notoriously difficult, particularly if it’s about the future.”
From my presentation that was made prior to violence in North Africa:
Oil Prices are going higher
> The International Energy Agency (IEA) now estimates that the world consumed 87.7 million bbls of crude oil and natural gas liquids in 2010
> 2.7 million bbls per day increase in just one year. Almost double their original forecast for 2010
> Chinese demand increased by 1 million bbls per day in 2010
Our world runs on oil:
> The IEA has now increased their estimated oil demand forecast for 2011 to 89.3 million bbls per day (up 1.8% YOY)
> IEA has increased the 2011 forecast 5 months in a row
> “World could run out of spare capacity by 2014” – Morgan Stanley
I will be speaking about this on Thursday at our luncheon. Sign up for the webcast. Starts at noon.
My take;
> Oil prices were drifting higher before the violence in Egypt and Lbyia began due to increasing worldwide demand.
> Lbyia has taken a lot of high quality oil off the market
> The unrest will not be resolved soon.
> What happens after the violence stops? Nobody knows if new leadership will be friendly or not.
“Forecasting is notoriously difficult, particularly if it’s about the future.”
From my presentation that was made prior to violence in North Africa:
Oil Prices are going higher
> The International Energy Agency (IEA) now estimates that the world consumed 87.7 million bbls of crude oil and natural gas liquids in 2010
> 2.7 million bbls per day increase in just one year. Almost double their original forecast for 2010
> Chinese demand increased by 1 million bbls per day in 2010
Our world runs on oil:
> The IEA has now increased their estimated oil demand forecast for 2011 to 89.3 million bbls per day (up 1.8% YOY)
> IEA has increased the 2011 forecast 5 months in a row
> “World could run out of spare capacity by 2014” – Morgan Stanley
I will be speaking about this on Thursday at our luncheon. Sign up for the webcast. Starts at noon.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Kuwait Energy
SAN FRANCISCO (MarketWatch) — A hike in output from the Organization of the Petroleum Exporting Countries may rattle energy markets, but it is unlikely to put much downward pressure on prices.
Member countries are debating whether to increase their production, Kuwait's oil minister told reporters in Kuwait City on Tuesday.
A rise would come as the cartel tries to make up for lost output from Libya and quell fears of other supply disruptions elsewhere in the Middle East and North Africa.
Tensions rise in BahrainTensions rise on the streets of Bahrain while hundreds of migrants continue to flee north Africa.
Such a move would help “allay concerns over Libya but on the other hand is not a quick fix,” said Jim Ritterbusch, president of Ritterbusch and Associates in Illinois.
Oil prices trading in New York have hit their highest in more than two years recently. They paused on Tuesday, with the April contract /quotes/comstock/21n!f:cl\j11 (CLJ11 104.81, -0.21, -0.20%) settling 42 cents lower at $105.02 a barrel on the New York Mercantile Exchange. Read more about crude futures.
For one, very few OPEC members have the capacity to increase production at the flip of a switch -- and the most important of them, Saudi Arabia, has already done so, analysts said.
OPEC says it holds around 6 million barrels a day of spare capacity, “which could quickly be made available to the market,” the organization said in a document recently posted on its website.
Several analysts, and even the U.S. Department of Energy, however, dispute that number.
Crude-oil futures
The DOE’s Energy Information Administration Tuesday estimated OPEC spare capacity will fall to 4.1 million barrels a day this year from 4.4 million barrels in 2010, followed by a further decline to 3.1 million barrels a day in 2012.
Analysts at Goldman Sachs said OPEC spare capacity is likely to have dropped below 2 million barrels a day given the developments in Libya, even accounting for Saudi Arabia’s recent boost in production.
Libya’s unrest may have “brought forward the drawdown of OPEC spare capacity by about six months,” they said in a report to clients released Tuesday.
“While the current loss of supply might turn out to be short-lived as production can be restored relatively quickly once the current civil unrest settles down, the real risk is that the remaining spare capacity cannot accommodate an escalation in disruption right now,” they added.
Of OPEC’s 12 member countries, likely only Saudi Arabia, the United Arab Emirates, and Kuwait would be able to increase their production quickly, said Sarah Emerson, managing director of Energy Security Analysis Inc. in Massachusetts.
“Almost no one else does” as big producers such as Nigeria and Iraq struggle to keep their own production flowing and others such as Venezuela are tapped out, she added.
An increase in OPEC output would also do little to stave off investors’ real concern behind the turmoil in Libya, said Michael Lynch, president of Strategic Energy & Economic Research in Massachusetts.
“The biggest problem right now is fear of trouble in some place else like Saudi Arabia,” said Lynch. Even if Gadhafi willingly steps down, prices are likely to moderate “only after people start to realize the Saudi regime is not in any trouble,” he said.
Saudi Arabia is the world’s No. 1 oil exporter and No. 2 oil producer after Russia.
OPEC last officially increased output in 2008, when oil futures prices neared $150 a barrel. It also agreed to boost supplies in early 2003, to make up for losses from a general strike in Venezuela and the war in Iraq.
The organization is scheduled to meet June 8 for their ordinary meeting in Vienna. Leaders have said they are not likely to call an extraordinary meeting before that.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Member countries are debating whether to increase their production, Kuwait's oil minister told reporters in Kuwait City on Tuesday.
A rise would come as the cartel tries to make up for lost output from Libya and quell fears of other supply disruptions elsewhere in the Middle East and North Africa.
Tensions rise in BahrainTensions rise on the streets of Bahrain while hundreds of migrants continue to flee north Africa.
Such a move would help “allay concerns over Libya but on the other hand is not a quick fix,” said Jim Ritterbusch, president of Ritterbusch and Associates in Illinois.
Oil prices trading in New York have hit their highest in more than two years recently. They paused on Tuesday, with the April contract /quotes/comstock/21n!f:cl\j11 (CLJ11 104.81, -0.21, -0.20%) settling 42 cents lower at $105.02 a barrel on the New York Mercantile Exchange. Read more about crude futures.
For one, very few OPEC members have the capacity to increase production at the flip of a switch -- and the most important of them, Saudi Arabia, has already done so, analysts said.
OPEC says it holds around 6 million barrels a day of spare capacity, “which could quickly be made available to the market,” the organization said in a document recently posted on its website.
Several analysts, and even the U.S. Department of Energy, however, dispute that number.
Crude-oil futures
The DOE’s Energy Information Administration Tuesday estimated OPEC spare capacity will fall to 4.1 million barrels a day this year from 4.4 million barrels in 2010, followed by a further decline to 3.1 million barrels a day in 2012.
Analysts at Goldman Sachs said OPEC spare capacity is likely to have dropped below 2 million barrels a day given the developments in Libya, even accounting for Saudi Arabia’s recent boost in production.
Libya’s unrest may have “brought forward the drawdown of OPEC spare capacity by about six months,” they said in a report to clients released Tuesday.
“While the current loss of supply might turn out to be short-lived as production can be restored relatively quickly once the current civil unrest settles down, the real risk is that the remaining spare capacity cannot accommodate an escalation in disruption right now,” they added.
Of OPEC’s 12 member countries, likely only Saudi Arabia, the United Arab Emirates, and Kuwait would be able to increase their production quickly, said Sarah Emerson, managing director of Energy Security Analysis Inc. in Massachusetts.
“Almost no one else does” as big producers such as Nigeria and Iraq struggle to keep their own production flowing and others such as Venezuela are tapped out, she added.
An increase in OPEC output would also do little to stave off investors’ real concern behind the turmoil in Libya, said Michael Lynch, president of Strategic Energy & Economic Research in Massachusetts.
“The biggest problem right now is fear of trouble in some place else like Saudi Arabia,” said Lynch. Even if Gadhafi willingly steps down, prices are likely to moderate “only after people start to realize the Saudi regime is not in any trouble,” he said.
Saudi Arabia is the world’s No. 1 oil exporter and No. 2 oil producer after Russia.
OPEC last officially increased output in 2008, when oil futures prices neared $150 a barrel. It also agreed to boost supplies in early 2003, to make up for losses from a general strike in Venezuela and the war in Iraq.
The organization is scheduled to meet June 8 for their ordinary meeting in Vienna. Leaders have said they are not likely to call an extraordinary meeting before that.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group