OPEC's Production Capacity Lags Growth In Demand Since 2000 - Bloomberg

[hatrack]

LONDON - "OPEC's capacity to produce oil has lagged growth in demand since 2000, signaling that oil prices already close to a record may rise further as consumption nears its annual peak next quarter, the Centre for Global Energy Studies said.

The 11-nation Organization of Petroleum Exporting Countries can produce as much as 31.5 million barrels a day, about the same as during the fourth quarter of 2000, the CGES said. Since then, global demand has risen by 6 million barrels a day.

Saudi Arabia and the rest of OPEC are producing oil close to the limit as demand rises at the fastest pace in decades amid threats to supply in producing countries such as Iraq and Russia. Rising OPEC output has left the group with limited capacity to meet a further rise in demand or meet unexpected shortfalls.

"OPEC does not have enough spare capacity to help ease the situation," the CGES, a London-based forecaster founded by former Saudi Oil Minister Sheikh Zaki Yamani, said in its August Monthly Oil Report. "A colder-than expected winter could also cause a spike in prices from already soaring levels."

EDIT

[Inland]

1. Actually the problem is that no oil is produced at all

its simply pumped, therefore demand always outpaces production, and Kerry's focus on freeing the US from oil makes sense.

[Merlin]

2. This is the first solid statistical evidence of Peak Oil.

It is hard to imagine that at least some OPEC producers would not be increasing production if it were possible.

Thus the only rational interpretation is that we have reached Peak Oil. From now on, extraction and refining quanitities can only decline, relative to demand, or -- if they increase, can only do so at higher prices.