Report: Iraq may have world's second largest oil reserves

Originally posted by OBE1
I wanted to add that these stories always seem to surface, or recycle when prices are surging.

Thats what I noticed also, It seems that they try to put the breaks on the price hike by some new discovery at just the right time.

Let's face it, we are being helg hostage by the oil companies, our only hope is alternative fuel sources, just think what would happen if we didnt need foreign oil anymore, and we could get out of the middleast altogether. I know it will never happen, but it's nice to dream.

MAY? I always understood that it did. Why the hedging of bets now with a may?

Originally posted by grover
MAY? I always understood that it did. Why the hedging of bets now with a may?

I'm not suggesting there won't be buyers. I'm saying that by the time Iraq has achieved it's goal of 4MM b/d, global demand could offset the supply increase...to a degree that would limit the affect on OPEC revenue balances. This is what OPEC does. It's a cartel that controls almost 50% of world oil production, and it manages that production to insure, safeguard, and maximize the revenues of member states. Increased production/supply = less revenue.

Currently, with prices spiking, the IEA is leaning on OPEC to increase production. OPEC hasn't complied. They point the finger at US refinery issues, geopolitical instability and record spec buying in the markets.

Another issue with regard to oil/OPEC/supply is the anemic US Dollar. The Buck is bouncing off historical lows with a poor prognosis. Since oil sales are denominated in US Dollars, this has a negative impact on the revenues, and purchasing power of OPEC producers. This in my opinion, is why OPEC production is currently at a 3yr low...and prices at record highs.

Like I said earlier, I see these reports about untapped 'esoteric' oil reserves as an attempt to buffer escalating prices. Iraq has a lot of fish-to-fry before they'll be in a position to start proving-up another 100BB barrels of oil. Just reaching their stated goal of doubling current production would be a good start. Until the country stabilizes, and agreements on oil/petroleum laws are effected...they're years away from even doing that.