The writer of this article admits she does not know how the EIA arrived at its conclusions but suggests that OPEC "spare capacity" could include:
- Iran (sanctions)
- Venezuela (imploding)
- Libya (exploding)
LOL.
The article:
The U.S. State Department has lashed out against OPEC, accusing the
cartel of hiding 1.42 million bpd in spare oil production capacity,
S&P Global Platts reports, citing a statement sent to it by the
State Department.
The State Department said figures from the
Energy Information Administration suggested that OPEC was withholding
1.42 million bpd of spare capacity and the department was working with
the cartel to “produce the spare capacity,” as S&P Global Platts put
it.
The way this “hidden” number of barrels was calculated was
not revealed.
In its latest Short-Term Energy Outlook, the EIA estimated
OPEC’s spare production capacity at 1.66 million bpd.
Most of this must be Saudi Arabia’s spare capacity, and one cannot
forget that the spare capacity of Venezuela is questionable, as is the
spare capacity of other troubled oil producers such as Libya and Iran.
To make matters more confusing still, the International Energy Agency last month estimated OPEC’s spare capacity at 2.7 million bpd
and is fast declining. Bloomberg quoted a warning from the
international agency that the producers who had promised to offset any
loss of supply from Iran would not be able to deliver on this promise.
So, the writer is suggesting that the US State Department could be including Iranian oil as a source of "spare capacity." LOL.
Iran is a "troubled producer." Okay.
Clearly, the US State Department does not want to call out "Saudi Arabia" by name so it blames OPEC.
Libya might be a "troubled producer," but I would consider Iran a "sanctioned producer."
By the way, with global demand/supply at 100 million bopd in round numbers, Libya at 1 million bopd in round numbers is irrelevant.
It
doesn't appear oil traders are particularly concerned: oil is down
across the board today, certainly not on its "relentless" march to $100
oil.
Interestingly, Iraq, #4 in world production is not even mentioned in the article (I might have missed it). My hunch is that where all the spare capacity is being hidden, along with weapons of mass destruction. LOL.
Somewhat old data, but instructive, from wiki, global production by country. One has to go all the way to #20, just above Great Britain, to get to Libya:
Seriously: you want to know where the "spare capacity" is hiding? Remove China from the list above; remove Iran from the list above, and #7 Canada moves to #5. Canada has huge amounts of "spare capacity" but no one can get to it because it's landlocked and four pipelines that could move Canadian oil have been killed, deferred, or delayed by Trudeau, Soros, Steyer, Sir Saint Obama, and other faux environmentalists.
In the out years, Colorado, by banning fracking, will be another country hiding "spare capacity." France has banned fracking forever, and is also hiding a lot of "spare capacity."
This whole "US State Department blaming OPEC for hiding spare capacity reminds me of the "
Little Red Hen" children's story.
