{"id":38852,"date":"2018-10-08T07:09:22","date_gmt":"2018-10-08T12:09:22","guid":{"rendered":"http:\/\/olduvai.ca\/?p=38852"},"modified":"2018-10-08T07:09:22","modified_gmt":"2018-10-08T12:09:22","slug":"us-demands-for-more-oil-could-backfire","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=38852","title":{"rendered":"US Demands For More Oil Could Backfire"},"content":{"rendered":"

US Demands For More Oil Could Backfire<\/a><\/h3>\n\"drilling<\/picture>\n
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This week the State Department accused OPEC<\/a> of hiding spare capacity exceeding 1.4 million barrels daily. It urged the cartel to use it to stop the oil price rally that has continued uncomfortably close to midterm elections. The request\u2014or demand, depending on your interpretation\u2014is unprecedented and it might do more harm than good.<\/p>\n

Bloomberg quoted a veteran energy analyst from Jefferies, Jason Gammel, as saying, \u201cThis is the lowest level of spare capacity in the global system relative to demand that I\u2019ve ever seen. Spare capacity is moving to a precariously low point.\u201d The problem is, nobody seems to be certain exactly how much OPEC\u2019s spare capacity is.<\/p>\n

In its latest Short-Term Energy Outlook, the EIA estimated OPEC\u2019s spare production capacity at 1.66 million bpd<\/a>. But the International Energy Agency last month estimated OPEC\u2019s spare capacity at 2.7 million bpd<\/a> and is fast declining. What we do know, however, is how much spare capacity Saudi Arabia has: 1.3 million bpd, as revealed by the Energy Minister of the Kingdom during the Russian Energy Week in Moscow.<\/p>\n

This is bad news. Until now, various sources, including the Saudis themselves and the EIA, put the Kingdom\u2019s spare capacity at between 1.5 and 2 million bpd. In June, President Trump said the Saudis could pump 12 million bpd<\/a>. The IEA concurred. Saudi Arabia\u2019s September production rate rose to 10.7 million bpd.<\/p>\n

From this level of production, with 1.3 million bpd in spare capacity, we get a maximum production rate of 12 million bpd, indeed. However, Khalid al-Falih delivered a worrying message: Saudi Arabia will spend US$20 billion<\/a> on maintaining and boosting its spare capacity in the coming years. The news naturally cast doubt on whether the current capacity will be sufficient to cover demand.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

US Demands For More Oil Could Backfire This week the State Department accused OPEC of hiding spare capacity exceeding 1.4 million barrels daily. It urged the cartel to use it to stop the oil price rally that has continued uncomfortably close to midterm elections. The request\u2014or demand, depending on your interpretation\u2014is unprecedented and it might […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3,5],"tags":[251,267,416,433,13719,22185,595,20854,5332,600,694,701,827,2344],"class_list":["post-38852","post","type-post","status-publish","format-standard","hentry","category-energy-2","category-geopolitics","tag-eia","tag-energy-information-administration","tag-iea","tag-international-energy-agency","tag-irina-slav","tag-jason-gammel","tag-oil-production","tag-oil-spare-capacity","tag-oilprice-com","tag-opec","tag-russia","tag-saudi-arabia","tag-united-states","tag-us-state-department"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38852","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=38852"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38852\/revisions"}],"predecessor-version":[{"id":38853,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38852\/revisions\/38853"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=38852"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=38852"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=38852"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}