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2007-11-14 Home Front Economy

No need for more oil now, OPEC tells U.S

Blames in part, weak U.S. dollar. Without sufficient U.S. product and refinery capacity and if the U.S. economy starts tanking, perhaps this will be the clarion call to change U.S. policy on oil dependency and improve domestic production and maybe start looking at alternative sources of electrical and transporation fuels.

I read somewhere that Cuba can drill for oil off of it's north coast in the Gulf of Mexico to it's hearts content, but the U.S. is limited due to environmental concerns. Has anyone recall seeing the same story?
OPEC sees no need to increase oil production at the moment, Secretary-General Abdullah al-Badri said on Wednesday, rejecting a U.S. appeal to boost output sooner than the producer group's meeting next month.

U.S. Energy Secretary Samuel Bodman said on Tuesday he had asked the Organization of the Petroleum Exporting Countries to agree as early as this week to increase oil production to tackle falling inventory levels and high crude prices.

But OPEC officials have said they will not act on policy at this week's heads of state summit in Riyadh, reserving discussion until they meet formally in Abu Dhabi on December 5. "I would like to say to the Energy Secretary... that we don't want to see any shortage in supply, that this question will be raised in our meeting in Abu Dhabi," Badri told a news conference ahead of an OPEC heads of state summit in the Saudi capital. "At this time, frankly, we don't see that we should add more oil, but this is up to the ministers to decide."

Badri said there was no reason for oil to reach $100, as it almost did last week, and continued to blame refinery bottlenecks, geopolitical issues and the weak U.S. dollar for oil's ascent from below $70 a barrel in mid-August. "As far as we are concerned, as far as fundamentals are concerned, there is really no reason for prices to go to $100."

"We don't want to interfere with consumer countries' policy. If there is a shortage we want to see if we can supply that shortage," he said. "We are frustrated with the idea that we have something to do with this (high oil prices)."

Posted by Delphi 2007-11-14 08:27|| || Front Page|| [9 views ] Top

#1 Delphi, your recollection regarding Cuban oil drilling is correct. The countries bordering the Gulf of Mexico each have exclusionary economic zones extending hundreds of miles offshore or until they reach a point equidistant from another country (IIRC there is a small donut hole in the middle of the Gulf that is not clearly subject to anyone.) So Cuba can drill for oil, subject to Cuban state and federal laws, to within about 45 miles of Florida (in places) but on the American side of that line, subject to Florida and US rules (mostly environmental - and mostly bogus) nobody can drill even 500 miles offshore of Florida (in a different direction).

Interesting rhetoric out of Kalifornia today with similarly contorted logic. Because some ship ran into a bridge pier and leaked a bunch of oil into San Francisco Bay they want to ban tankers from bringing oil into the Bay. 1. I think it was fuel oil for powering the ship, not crude, that spilled - are they asking that all ship traffic be banned? 2. Several critical oil refineries are located on the Bay - and cannot be supplied fully except via ships through the Bay: If they think gas prices there are high now, just watch what happens when they cut half their supply. 3) I think a bunch of that oil comes from Alaska and is not legally allowed to be diverted to other markets, so those ships would have to go all the way around the continent to unload for refining in Texas or Louisiana - adding a substantial shipping cost increase, which of course is passed on to the user. All demagoguery for the ignorant masses.

Posted by Glenmore">Glenmore 2007-11-14 13:10|| 2007-11-14 13:10|| Front Page Top

#2 Glenmore, you are correct that it was bunker oil from a container ship...about 2 - 3 swimming pool's worth. Nasty but not a catastrophe.

Every tanker that comes into the Bay has a tug escorting it. While there may be enviro-crazies that say we should have no tanker traffic, that just is not going to happen, for the reasons you state.

Posted by remoteman 2007-11-14 15:48|| 2007-11-14 15:48|| Front Page Top

#3 (IIRC there is a small donut hole in the middle of the Gulf that is not clearly subject to anyone.)

Subject to the whims of the USN. There's also one in the Gulf of Alaska.

Posted by Thomas Woof 2007-11-14 16:48|| 2007-11-14 16:48|| Front Page Top

#4 I thought the Saudis, at least, had been pumping at maximum capacity for a while? And Venzuelan production, due to the neglected state of their equipment, has been falling for a while, Iranian ditto... While Iraqi production has been increasing, it's not as quickly as planned because of vandalism, and it will take a while for the newly discovered oil fields around the world to come on line, as I understand it.

It may be that OPEC cannot provide more oil. What say you, O Rantburg Experts?

Posted by trailing wife">trailing wife 2007-11-14 19:50|| 2007-11-14 19:50|| Front Page Top

#5 TOPIX > Saudis in favor of keeping prices at US$60.00 a barrel.

Posted by JosephMendiola 2007-11-14 23:30|| 2007-11-14 23:30|| Front Page Top

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