OPEC signals it wants high oil prices

Sify ^ | Sunday, 27 February , 2005,

[M. Espinola]

Paris: OPEC is sending out signals to the global market that the cartel wants oil prices, at near-record highs, to remain there this year.

Ali al-Nuaimi, oil minister for Saudi Arabia, OPEC’s largest producer, made it clear on Thursday where he expects the US price of a barrel of crude to be: "The price today is between 40 to 50 dollars, and that’s where it will probably stay during 2005."

These statements appear to confirm what analysts have predicted for several months: Riyadh has been changing its views on pricing, after having for a long time defended a price of 25 dollars a barrel.

At present, the price of crude based on OPEC calculations has increased to about the level indicated by the Saudi minister -- it closed Friday in New York at 51.49 dollars, while in London it sold for 49.61 dollars.

Several ministers in the Organization of Petroleum Exporting Countries have hinted at an increase in the past few months, but it was not clear where Saudi Arabia stood. For that reason, analysts have taken note of al-Nuaimis recent remarks.

"I think it’s a signal to the market that there is going to be a big increase in the OPEC price band," said Kevin Norrish, an analyst at Barclays Capital in London.

The Saudis "have certainly laid out that there is going to be further discussions at the next (OPEC) meeting and I think its possible that it will be unveiled."

The 11-nation cartel, which represents 40 per cent of the world’s crude oil production, will next meet on March 16th in Isfahan, Iran.

All graphics added

[oceanview]

what energy policy, we don't have one. who is going to develop these "alternate energy sources"? unless it comes from government via another "Manhattan Project", there isn't enough of a source of capital for any significant effort from the private sector. We need major technological breakthroughs. We should have had a balanced increase in the CAFE standards over the last 20 years, 2MPG every 5 years, to force the auto makers to invest in R&D to improve auto mileage. We couldn't even do that.

[M. Espinola]

Points well taken.

How much do The OPEC Boys pay at the pump?

[carl in alaska]

I think a ping list is just a text file that you create in an application such as Notepad or MS Word. You just type in all the user names on the ping list with a semicolon in between, just as they're listed in the "To:" line on replies to posts. Then open the file, click on page 1 and type Ctrl + A simultaneously to select the entire ping list. Then you paste it into the reply with a Ctrl + V. Well you probably knew all of that but that's all there is to a ping list as far as I know...lol.

[Truth666]

LOL

[Freebird Forever]

I see a potential win-win for the US on this matter

Not if this is ratified.

Law Of the Sea Treaty

[q_an_a]

very interesting grapic. Thanks.

[July 4th]

What is the cost to build an offshore rig?

[M. Espinola]

I found the following information:

'The average offshore rig cost $24,000 per day to rent in 2003, and today the same 30 year-old-rig costs $40,000 per day to rent due to rig availability. Yes, most of our rigs are 30 or more years old – would you rent a cabin on a 30 year-old cruise ship? Yet this is what we drill oil wells with in the new millennium…

Multiply that times the average 45 days to drill a “second tier” oil or gas well, you get $1,800,000 just for renting the drilling rig! No other mining industry or industry I know of has such tremendous up-front costs. The average price for a typical offshore well is around 3.7-4 million dollars. A production platform to bring the oil to is easily in excess of $10 million…….and these prices will escalate with energy costs!