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No Easing of Global Oil Prices

Rainer Hermann, Frankfurter Allgemeine Zeitung I June 24, 2008

The global energy summit meeting in Jidda (Saudi Arabia) had no easing effect on skyrocketing oil prices. ++ The oil exporting countries did not promise to increase oil output as only Saudi Arabia disposes of free capacities. ++ Yet the major consuming countries fear that oil price will lead to global economic recession. ++ A feeling of helplessness becomes evident as each party tries to pass the buck to the other. ++ Consumers demand higher oil production, while oil producers blame the financial markets for rising oil prices.

 

 
Tags: | oil price | Saudi Arabia | consumers |
 
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Donald Wellington Strickland

Mon, Jul 7th 2008, 22:19

Donald Wellington Strickland, North Carolina Society of Engineers, (2)

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I like this comment! What's this?
The OPEC countries cannot significantly increase production as they are at or near to the point of diminishing reserves. Look at their reports. Since 1985 they have pumped 6 to 10 billion barrels per year, while at the same time pencil whipping their reserve estimates upward by 300 billion barrels. Do they have the oil reserves they claim? A lot of people think not.

Another thought. Until last year there were oil wells around the globe that were sitting idle as the cost of obtaining their oil was too high for profitability. At today's prices these wells are likely being brought back into production and are providing the small output surge we are witnessing. How long will this surge last?
 

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