Oil Glut:light in the end of the tunnel

OPEC has decided not to cut output, despite record levels of crude in inventories and weak demand forecasts, with some cartel members believed to have ignored previous commitments to cut.
OPEC sees no need to change its guidance to oil exporters – even though oil prices are hovering around a six-month high of $63/bbl. At their meeting in Vienna members agreed stick to the current levels of output, despite oversupply, with OPEC Secretary General Abdalla Salem El-Badri, saying the organization is looking to foster economic recovery.
”The market is oversupplied, but we are seeing a light in the end of the tunnel. There is a slow recovery and we don’t want to send the wrong signal to the economy.”
With recent production cuts of 4.2 million barrels per day, OPEC members lost revenues totaling $400 million Al Badri says.
Some countries can’t withstand such losses and have exceeded their quotas – undermining OPEC’s authority,

There is plenty of oil

At the end of 2007 total remaining proved reserves stood at around 2.3 trillion barrels of oil equivalent. At today's consumption rates, we believe we have around 40 years of proven oil reserves, 60 years of natural gas, and 130 years of coal.
The task facing the world is to bring this oil and gas to market. These resources are found in increasingly challenging environments - in the deserts of the Middle East and North Africa; in the deepest waters of the Gulf of Mexico, West Africa and Brazil; and in the Alaskan and Russian Arctic.

Turning these resources into reserves and then production is going to require ingenuity, innovation and technology. Indeed I believe that capability is now the industry's greatest challenge. Many experienced people are retiring; there are fewer graduates with the right qualifications, and not enough of them are joining the industry. This is why we are increasing the scale of our graduate recruiting, and upskilling the capability of our current employees through the establishment of BP academies for operations and projects in partnership with leading universities. read

The world has 1.3 trillion barrels of proven reserves, enough for 40 years at current rates of consumption. “Peak oil is about geology,” notes Marianne Kah, chief economist at ConocoPhillips. “I don’t think we are running out of oil. We are running out of access to oil.”

Kah is right: there is plenty of oil. But it cannot be withdrawn at will like money from an A.T.M.; wells yield only so much liquid per day. And since the flow from aging wells declines by about 5 percent a year, producers that stand pat will shrink. To stay even requires investment — and usually, the incentive of a high price. It also takes time. read

World would rather have lower oil than bailouts

The world would rather have lower oil than all the bailout plans in the world

Driven by concerns a worsening financial crisis in the U.S. is crimping energy demand. U.S. oil use is declining faster than expected, while European consumption is falling and OPEC production capacity is increasing, Saudi Arabia, Qatar and elsewhere within OPEC are set to increase capacity within the exporting group by about 3 million barrels a day in the next 18 months Refinery expansions and new projects will add about 900,000 barrels a day of distillate and 700,000 barrels a day of gasoline production capacity. here