|
London: Oil at $100 a barrel should give exporters every incentive to pump more, but their difficulty in doing so shows the world is struggling to sustain production.
A growing number of leading industry figures - the CEOs of Total and ConocoPhillips among them - now question mainstream forecasts for supply, suggesting the era of "plateau oil" is nearer than many in the business have admitted.
While global oil demand is projected to grow to more than 100 million barrels per day later this century, some argue it may not be possible to boost flows beyond the current rate of some 86 million barrels.
Supply still falls short even after so-called unconventional oils extracted from tar sands and converted from natural gas are taken into account, said Sadad Al Husseini, a former top official at state oil giant Saudi Aramco.
"Today's oil prices are high because there are limited new supplies," Husseini, who ran exploration and production at the Saudi state oil company from 1986-2002, told Reuters. "There's a history now. We're several years into level production."
In 1980, when crude first hit an inflation-adjusted high of $100, the pace of drilling by producing countries and major oil companies became fast and furious, leading to rising output and a price collapse in 1986.
It remains to be seen whether they will respond the same way this time, even after a six-year price rally that sent crude through $100 for the first time last week.
Conventional supply from outside the Organisation of Petroleum Exporting Countries (Opec) has missed forecasts in recent years and appears for now to have hit an "effective plateau", according to the International Energy Agency (IEA), adviser to industrialised countries.
Non-Opec countries pump about 60 per cent of the world's oil and the 13 members of Opec make up the balance. Opec sets output limits for 12 of its 13 members.
Many countries within the Opec - whether for reasons of war or sanctions, lack of investment or falling supply at ageing fields - are unable to raise output.
"Opec can do little," Shokri Ganem, the top oil official for Opec member Libya, said. "Most Opec countries are producing at capacity."
Many analysts expect prices to rise further unless demand crumbles as a result of a recession - a gain that believers in peak oil put down to supply constraints.
"Every place is more or less running flat out," said Colin Campbell, a former exploration geologist.
|
