Latest Updates: opec RSS

• Troubling Times for OPEC
  Srikant Rajan 05:36:01 am on September 12, 2008 | 2 | # |
  Tags: economic slowdown, oil price, oil production, opec, saudi arabia

  In what could be a significant development the biggest contributor of global oil supplies – Saudi Arabia walked out of the OPEC.This development came at the close of the negotiation session held by OPEC.The oil cartel is in midst of one of the biggest crisis in the recent times,which has been further aggravated by a fall in global prices(30 percent drop in prices since July).OPEC is trying to find a solution to a profitable oil price in midst of slowing demand , weakening economic progress and of course the development of alternative energy sources.

  OPEC feels that the present drop in prices could create a glut in the market leading to a downward spiral.Abdalla Salem el-Badri, the OPECs secretary general says “  We are oversupplying the market, and we are cutting that oversupply.We don’t want to see these prices decline dramatically   “ .Saudis however wisely opted out of such a policy as endorsing such a decision would essentially imply a negative public sentiment which might go a long way determining its geopolitical muscle.

   

• OPEC Says Excess Oil In Market
  Srikant Rajan 05:36:44 am on August 19, 2008 | 0 | # |
  Tags: biofuel, oil prices, oil speculation, oil supply, opec

  OPEC has managed to shoot itself in its feet with a new string of “  enlightening  ” statements.Just some time back OPEC, president Chakib Khelil had found biofuel use as contributing to rising oil prices in addition to “  geopolitical worries ”( rational behind this is anybody’s guess ! ). Now,with the recent easing in oil prices , the windfall profits being raked in by OPEC have taken a significant hit. Nobody likes less money  , certainly not the rich !  And thus OPEC has  highlighted that the market is seeing an excess of oil supply , an estimated million extra barrels a day, that is actually pushing down the prices. Thus in order to remove this surplus oil , OPEC wants to cut down production. This in turn would effectively mean that the prices may not come down any further .

   

• Costly Oil ? Biofuel To Blame Says OPEC
  Srikant Rajan 02:56:07 pm on July 17, 2008 | 1 | # |
  Tags: algae, biofuel, blended fuels, Chekib Khelil, ethanol, oil speculation, opec

  Oil price increase has been linked to numerous reasons ; speculation and increased demand being the most common. The reason being these  are easy to construct ,  subjective and to a certain extent non verifiable . However OPEC seems to think otherwise . OPEC, president Chakib Khelil has now found ethanol to be the reason for almost 40 % increase in oil prices. The remaining 60 % is apparently due to rising dollar and an essentially vague factor  – “ geopolitical worries “ ( fancy word for plain speculation ).  How Mr.Khelil has arrive on this conclusion is anybody’s guess as he refuses to explain the logic behind such rationalization

  Biofuels have been on the receiving side of criticism (sometimes fair !) for reduced food grain output. However the technology has been slowly maturing with the development of second generation and algae based biofuel. OPEC is undoubtedly worried as ethanol is a direct competitor to oil and also makes oil supplies “ stretch “ significantly ( bended fuels). OPEC’s attack, in my opinion signifies that this industry  is definitely on the road to commercialization.

   

• Oil Prices to Remain High
  Srikant Rajan 01:37:27 pm on June 23, 2008 | 0 | # |
  Tags: crude price, gazprom, goldman sachs, nigeria, opec

  The price of crude is unlikely to come down in the coming 2-3 years.Goldman Sachs has raised Brent Crude average oil prices for the coming years.The average for the year 2008 has been revised from $108/barrel to $117/barrel and is further expected to peak around $150/barrel by 2010.Also it is becoming more harder to find oil to despite the Saudi effort and promise to produce more.Nigeria,member of OPEC and Africas largest oil producer is plagued by terrorism which has adversely affected about a quarter of total oil production in Nigeria.Recently Royal Dutch Shell had to temporarily shutdown production from an offshore oil field in Nigeria that produces about 200,000 barrels per day.

  Alexi Miller ,head of Russian oil giant Gazprom has in fact predicted a $250 a barrel in the coming 18 months.This is surely a bit too high and too fast .Additionally since Miller is the only CEO of an oil company predicting such a rapid rise ,such a situation has a low probability of likelihood.However it definitely would galvanize efforts to find alternate fuels and that to quickly.