Posted on 04/17/2011 12:51:34 PM PDT by decimon
KUWAIT (Reuters) – Saudi Arabia's oil minister said on Sunday the market was oversupplied and the kingdom had reduced output, sending a the strongest signal yet that OPEC may not boost output in June to quell soaring oil prices.
Consumers have urged the exporters' group to add supply to halt the rally in oil prices that has taken crude to its highest level in 2 1/2 years amid unrest in North Africa and the Middle East, but OPEC members say there is little they can do to bring prices down.
"The market is overbalanced ... Our production in February was 9.125 million barrels per day (bpd), in March it was 8.292 million bpd. In April we don't know yet, probably a little higher than March. The reason I gave you these numbers is to show you that the market is oversupplied," Naimi told reporters.
Two Saudi-based industry sources told Reuters last week the kingdom had cut production.
Naimi's words, echoed later on Sunday by his counterpart from the United Arab Emirates, are the clearest indications yet that the group is unconvinced there is a need for more oil despite the civil war that has slashed Libyan output and expectations Japanese oil demand will rise as it scrambles to rebuild its earthquake-shattered electricity grid.
"These statements underscore the breadth of the security premium currently in (oil) prices. Overall supplies are sufficient," said John Kilduff of energy hedge fund Again Capital. "As we've seen in the past, however, a well-supplied market is not always a barrier to very high prices."
(Excerpt) Read more at news.yahoo.com ...
And why do we care what OPEC does? And why is our economy attached to what they charge per barrel?
Cushing is just about full. However, Cushing is not world oil. Problems with Cushing as a world benchmark: it is not indicative of world market prices [West Texas Intermediate is at a big discount to Brent as Cushing oil cannot be piped to a tanker port] and a lot of what is filling the tanks in Cushing is Canadian crud crude that many midwestern refiners have a problem processing.
Any spare capacity of the Saudis is likely Arab crud crude. What is not being produced due to the Libyan fiasco is the light sweet crude that Italian refineries are set up to process. Oil is only fungible to a point. Sleep well
Too many hands in this one, Goldman, Morgan Stanley, the CFTC. I honestly believe that all these entities are simply arms of the US government.
the nuts don’t like you pointing out to them that we have drilled thousands of wells in the last few years in ND, they think that is a foreign country.
You must be one of those free traders. Seriously, how do you intend to stop trading in London and elsewhere?
Beyond that are futures significantly higher a a few months out ... and if not, why hold the physical purely as a speculation ... particularly if a you describe there is already a huge overhang of supply? Sleep well.
Saudi king expresses support to Syrian president
King Abdullah expressed his stance via a phone call with the Syrian President Bashar al-Assad, in which the Saudi king stressed his country's standing along with Syria to "foil the plot".
While in other news: Obama condemns Syria violence
This is a dollar issue not an oil issue. There’s lots of oil but even more dollars.
Based on some things I'm hearing, the Saudi Oil Minister might be right: decreasing gasoline sales in the US and elsewhere, as well as plentiful supplies.
Yep, speculators do play a role in crude oil price fluctuations.
I would not mind seeing a tariff on imported oil (except oil from Canada) in order to maintain domestic supply. We need more nuke power, and we need to exploit ANWR, the Dakota supplies, Canadian oil sands, and coal-to-liquid technology.
AFRL has developed the technology to make fuel/gasoline from grass, flowers, algae, etc.
http://www.centerforabetterlife.com/eng/magazine/article_detail.lasso?id=175
That might backfire with Soros' position in Petrobras made more valuable by cutting production.
Drill here and drill now. Run Sarah run....
What would Donald do?
Sleep well? Why, thank you, kind sir. I did indeed just have a nice Sunday nap.
“Sleep well” Yes, I am sleeping much better as I am getting so much more exercise by not driving my car any more for short market trips. I did not know that Cushing was mostly Canadian crud. Is that Canadian tar sands? Where does the West Texas Intermediate go, or is it played out?
The US produces a lot of oil. We will continue to produce oil from mature provinces like West Texas for a very long time and are likely to get some good news as technology improves. We however, use a lot more than we produce and I believe this is unlikely to change.
There is some good news on the production rates for West Texas origin WTI and Mid continent light sweet crudes of late. There has also been quite a lot of very high quality oil from the Bakken [North Dakota mostly] added to supply lately — in fact several hundred thousand barrels per day in increased production.
There are a lot of ways crude makes its way to Cushing,and pipelines to take oil from Cushing to Midwest refiners ... but at this time no pipeline which flows from Cushing toward Houston. AS a result, whatever is in over supply tends to stay in Cushing creating a local glut. Hence the big discount in WTI over Brent when a two or three dollar premium in WTI over Brent has been the usual pricing structure over time.
Canadian oil sands crude can be upgraded, but is most economically goes into the crude supply as heavy oil [sometimes blended with lighter crude to get it up to some minimum] , which is in less demand than the lighter crudes. I am far from an expert on oil sands.
Finally, “yes” a little more exercise would probably be a very goos thing for many of us.
Hope the explanation helped.
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