Skip to comments.Russian Oil Slump Stirs Supply Jitters
Posted on 04/15/2008 2:52:50 AM PDT by Fred
Russian oil production, for years a vital source of new supplies for world markets, is showing signs of a slump, adding to uncertainties that have helped push oil prices to record highs.
Russian output fell for the first time in a decade in the first three months of this year, according to the International Energy Agency, which represents industrialized oil-consuming countries. It said Russian production averaged about 10 million barrels a day, a 1% drop from the first-quarter of 2007.
New developments so far are failing to offset the decline. Sakhalin 1, a huge project off Russia's east coast led by Exxon Mobil Corp., accounted for much of Russia's production growth in 2007. But output there will drop by more than 25% this year, according to OAO Rosneft, the state-run oil giant that is a partner in the project. In a statement, Exxon said it "has met and continues to meet or exceed the project production targets approved by the Russian authorities."
Most forecasts predict that liquid-fuel demand world-wide will hit 100 million barrels a day by 2015. To meet that, producers will first have to make up for steep declines in existing fields. That decline rate now subtracts an estimated 4.5 million barrels a day from annual output.
Former big producers like the U.K., Norway and Mexico are also fighting to squeeze oil from once mighty but now increasingly old and tired fields. In Canada, where output is increasing thanks to massive investments in Alberta's oil sands, production costs now top $65 a barrel by some estimates. Mexico last week pushed a plan to allow its state oil company to enter into service agreements with foreign oil companies, but observers said it may not be enough to attract big investment.
(Excerpt) Read more at online.wsj.com ...
Let's see now, a drop in world supply caused by the cut in production of one of the biggest suppliers would cause the price of oil to...anyone? Right, it would GO UP!! Imagine that!! Russia cuts back production, the price of a barrel of oil goes up and they make as much money as before but sell less oil.
Whoulda thunk it!!
even though environmentalists and democrats still stupidly oppose drilling for oil in the u.s., even though they hate capitalist enterprise (someone else’s), even though the love high, high taxes....the “american electorate” will still vote for them in droves because they love “social justice” and the emotional rush they get when they see god-like demagogues speaking of G-d as if He were an opiate. (uncle adolf and comrade lenin promised and said the very same things.)
The Russian thugs screwed over investors. So, the money and talent they need isn’t coming on to build, extract, pipe more.
Anyways, let the Europeans deal with their friends, Putin and Company.
OPEC's output climbed by about 1,500 MBPD from last 1Q.
World oil supply is up about 1,400 MBPD from last 1Q.
OPEC, Monthly Oil Market Report
Huh? What's going on?.
Inquiring minds want to know.
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