OPEC president warns of possible oil capacity crisis

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OPEC president warns of possible oil capacity crisis

Updated 3:57 PM ET September 11, 2000

By Tom Ashby

VIENNA (Reuters) - OPEC President and Venezuelan Oil Minister Ali Rodriguez said Monday a possible world oil production crisis was approaching as producers in the cartel were nearing their capacity limits.

Oil prices, already at their highest level in a decade, could reach $40 per barrel by the end of the year, he added, if it is a harsh winter in the northern hemisphere.

"We are approaching a crisis of great proportions because oil production capacity is reaching its limit," he told a news briefing after cartel meeting in the Austrian capital.

"I don't think prices are going to get there now, but they could rise to $40 depending on the winter," he added.

Exploration for oil at ever-deeper levels below the earth's surface and seas was proof that the planet's petroleum supply is not infinite.

"These are signs that all is not right in production," he said.

U.S. benchmark crude oil West Texas Intermediate closed Monday $1.51 higher at $35.14 per barrel, driven by low heating oil stocks, despite OPEC's decision over the weekend to add another three percent of crude oil supply to world markets.

Saudi Arabia was one of the few countries remaining with spare capacity and Rodriguez said that the world's number one oil exporter could act as "a tuning producer" at times to avert a crisis.

He said there were many factors behind the current oil price spike that escaped OPEC's control such as refinery bottlenecks, transport restrictions, high taxes in oil importing countries and excessive speculation in financial markets.

"It's no good to put all the blame on OPEC when most of the factors are out of our hands: refining, distribution, taxes and speculation," he said.

The cartel remained committed to its price target of $22-$28 per barrel for its export basket, but requires support from importing countries instead of pressure from "imperial powers," the minister said.


-- Cave Man (caves@are.us), September 11, 2000


Wonder if TPTB are considering lowering the speed limits back to 55 mph again? Or is that just a silly idea?

-- Sam (wtrmkr52@aol.com), September 11, 2000.

Keep those SUVs, snowmobiles, monsters trucks, Humvees, and other gas guzzlers a jammin', bubba!

-- gilda (jess@listbot.com), September 11, 2000.

So, it's finally out in the mainstream press and the message is being delivered by the OPEC President himself. !!!CRISIS!!! In the making. Last week our illustrious rapist-in-chief mentioned the possibility of a recession due to oil prices. The market doesn't respond positively to OPECS 800,000 barrel ALLEDGED increase, it actually goes up! We are in the headwaters of a great world-wide energy crisis that will cascade into a depression that we as a nation may not have the character to handle. It might rip our matieralistic, pleasure-driven, self centered, instant gratification nation to the brink of chaos. PREP NOW!

-- Ultimate TEOTWAWKI (pain@thepump.com), September 12, 2000.

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