posted on Jun, 3 2004 @ 05:13 PM
OPEC appears powerless to have any effect on
the current rising oil prices. Despite their decision to raise oil production by 2 million barrels a day (m b/d) in July, and an increase of 500,000
b/d in August, the price has remained relatively flat. Oil is still at the $40 a barrel price that was unheard of before this year. The problem is
that OPEC has little spare capacity, and most of that is in Saudi Arabia. Saudi Arabia has been in the news several times recently after attacks were
made on oil companies there.
business.iafrica.com - OPEC powerless to rein in prices
OPEC oil producers, already pumping near to full capacity, appear powerless to calm markets nervous about rampant demand and the risk of terrorist
disruption to supplies, analysts say.
Oil prices have surged in the wake of a weekend attack by suspected al-Qaeda militants on oil workers in Saudi Arabia which stoked fears that
terrorists could disrupt supplies from the world's biggest exporter. Please visit the link provided for the complete story.
Once OPEC implements this latest surge in oil production, their spare capacity will be fully used. This means that if anything disrupts the production
there would be no way to make up the supply from other sources. Even if no shortage occurs, China's growing demand will eventually create a larger
demand. The U.S. continues to fill it's strategic reserves, and the EU is calling for it's own similar reserve. Don't expect prices to fall anytime
[Edited on 3-6-2004 by dbates]