The OPEC report of Friday gave us a first glimpse of Saudi production stats for February. According to the data, production increased by about 300kbd from January. But December and January data were also revised up, so the data (see above) now show a pretty noticeable increase of about 0.5mbd over the last few months. The IEA will release their version of this in a couple of weeks, so we will get confirmation then. And obviously, March will make clear both the degree of loss of Libyan production, and the extent of any Saudi response.
According to the Wikileaks' docs, the ex-chief geologist of Saudi Aramco claimed that the Saudis cannot produce over 9.8 mb/d in 2011.
ReplyDeleteAnd this is excluding the rising consumption of the last 6-7 years.
The net exports will really struggle to get up to their 9.1 mb/d peak in 2005.
And then the world needs an extra 10 mb/d in 2015 - according to the IEA. How this can materialise is beyond me, even accounting for Iraq(and discounting much of Libya the coming year).
Here is his graph. Actually it was from an oil conference, so it wasn't even a secret back then. But it was still mentioned in the leaked Wiki docs.
ReplyDeleteSee here:
http://www.crudeoilpeak.com/wp-content/uploads/2011/03/Saudi_Arabia_Crude_1980_2030_Husseini.jpg
If the ex-chief geologist of Saudi Aramco is correct, and Iraq cannot go much over 5.5-6 mb/d in 2020 in a realistic scenario(about double their current amount), then I don't see how this will end well unless there is a major crisis.
If he is right then the Saudis have about 1 mb/d in spare capacity left. How much longer can that be sustained?
Goldman Sachs recently went out and said they believe the current OPEC spare capacity is below 2 mb/d.
So, in short, for how long can this very fragile recovery continue?
Am I scaremongering? I hope so.