MEES Sees Only 300,000 bpd Net New Oil From OPEC Hike
November 7, 2000 - 0:0
NICOSIA OPEC's recent 500,000 barrels per day (bpd) output hike will yield about 300,000 bpd of net new supplies due to production capacity constraints in the 10 members subject to quotas, the Middle East Economic Survey reported on Monday.
"The actual increase in crude supply to the market from the OPEC 10 is likely to be in the region of 300,000 bpd, bringing the November-December output up to 26.94 million bpd and the fourth quarter average to 26.84 million bpd," MEES estimated.
MEES pegged October output from the OPEC 10 at 26.64 million bpd. The 10 members' official production ceiling was lifted by 500,000 bpd under OPEC's price mechanism to 26.7 million bpd from October 31.
Projected production of 2.9 million bpd from Iraq in the fourth quarter would lift OPEC's total output to about 29.7 million bpd, MEES said.
MEES said OPEC's spare production capacity has "fallen to an extremely low point", currently standing at below one million bpd.
About two thirds of the spare capacity is in the hands of OPEC power Saudi Arabia, with the remainder in Venezuela (with some time lag), Kuwait and the UAE, MEES said.
But with the completion of remedial and maintenance work on the oil fields in progress in a number of OPEC producers Saudi Arabia and Venezuela in particular spare output capacity is likely to be raised in the near future to a more comfortable level of about 2.3 million bpd, MEES said.
In Saudi Arabia, work is under way to consolidate the kingdom's sustainable output capacity at 10.5 million bpd mainly through in fill drilling and tying in new wells within 90 days (from mid September), said MEES.
Meanwhile, Kuwait's oil minister said on Monday he did not expect OPEC to discuss a further increase in production to ease high oil prices at its November 12 meeting.
"No Way. I do not think so," Sheikh Saud Nasser al-Sabah told Reuters when asked whether the cartel would boost output again at its extraordinary session in Vienna.
"The meeting will be only for an exchange of views on market conditions and what is happening," Sheikh saud added.
The Organization of the Petroleum Exporting Countries increased output by 500,000 barrels per day (bpd) on October 31 in its fourth bid this year to cool relentlessly high oil prices.
But oil prices have remained above $30 a barrel as oil markets are skeptical OPEC can deliver the extra barrels since most members except Saudi Arabia are pumping close to flat out.
The Kuwaiti oil minister, whose country is believed to be pumping almost at capacity, said the market reaction to OPEC's latest output hike was expected.
"This is an indication of stabilization of prices. Prices are stable around what we see right now ... but they might come down a little bit after the winter months," said Sheikh Saud.
Kuwait's OPEC quota was raised by 40,000 bpd to 2.141 million bpd under OPEC's price mechanism, which raised the group's ceiling by 500,000 bpd after its basket of crudes remained above $28 for 20 consecutive working days.
Sheikh Saud, without disclosing his country's production level, had said earlier that Kuwait would be unable to raise its production much further.
(Reuter)
"The actual increase in crude supply to the market from the OPEC 10 is likely to be in the region of 300,000 bpd, bringing the November-December output up to 26.94 million bpd and the fourth quarter average to 26.84 million bpd," MEES estimated.
MEES pegged October output from the OPEC 10 at 26.64 million bpd. The 10 members' official production ceiling was lifted by 500,000 bpd under OPEC's price mechanism to 26.7 million bpd from October 31.
Projected production of 2.9 million bpd from Iraq in the fourth quarter would lift OPEC's total output to about 29.7 million bpd, MEES said.
MEES said OPEC's spare production capacity has "fallen to an extremely low point", currently standing at below one million bpd.
About two thirds of the spare capacity is in the hands of OPEC power Saudi Arabia, with the remainder in Venezuela (with some time lag), Kuwait and the UAE, MEES said.
But with the completion of remedial and maintenance work on the oil fields in progress in a number of OPEC producers Saudi Arabia and Venezuela in particular spare output capacity is likely to be raised in the near future to a more comfortable level of about 2.3 million bpd, MEES said.
In Saudi Arabia, work is under way to consolidate the kingdom's sustainable output capacity at 10.5 million bpd mainly through in fill drilling and tying in new wells within 90 days (from mid September), said MEES.
Meanwhile, Kuwait's oil minister said on Monday he did not expect OPEC to discuss a further increase in production to ease high oil prices at its November 12 meeting.
"No Way. I do not think so," Sheikh Saud Nasser al-Sabah told Reuters when asked whether the cartel would boost output again at its extraordinary session in Vienna.
"The meeting will be only for an exchange of views on market conditions and what is happening," Sheikh saud added.
The Organization of the Petroleum Exporting Countries increased output by 500,000 barrels per day (bpd) on October 31 in its fourth bid this year to cool relentlessly high oil prices.
But oil prices have remained above $30 a barrel as oil markets are skeptical OPEC can deliver the extra barrels since most members except Saudi Arabia are pumping close to flat out.
The Kuwaiti oil minister, whose country is believed to be pumping almost at capacity, said the market reaction to OPEC's latest output hike was expected.
"This is an indication of stabilization of prices. Prices are stable around what we see right now ... but they might come down a little bit after the winter months," said Sheikh Saud.
Kuwait's OPEC quota was raised by 40,000 bpd to 2.141 million bpd under OPEC's price mechanism, which raised the group's ceiling by 500,000 bpd after its basket of crudes remained above $28 for 20 consecutive working days.
Sheikh Saud, without disclosing his country's production level, had said earlier that Kuwait would be unable to raise its production much further.
(Reuter)