Heading Out

Seeking the winds that help to sail on Shakespeare's tide.

Monday, March 14, 2005

Oil policy explanation

Given that Reuters is reporting that the Saudi's want to raise production while most of the rest of OPEC does not, a quick visit to a table OPEC Oil Production which I list in my Oil Library, explains the differences. Most of OPEC are producing at full capacity, and thus if supply stays short, their price stays up. However Saudi with some reserve left to pump gains if they raise quotas, which allows them, along with Kuwait and UAE, to increase production. Remember demand is rising at around 150,000 bpd every month, and use that to gage the likely effects on oil prices.

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