Surplus OPEC Capacity: How Long Will It Last?

Posted on August 18, 2010 by Mike Markes

Rune Likvern has a very interesting article on The Oil Drum: Europe concerning OPEC's surplus capacity, how long it's likely to last, and the potential impact of oil prices. 

For those of us who are in the energy A&D business predicting the future of oil and gas prices is both very important and yet next to impossible to get correct.  The information reported in this article can help support a bullish outlook for oil prices in the near term despite the relatively flat NYMEX strip.

"Based on this analysis, it is probable that demand for OPEC supplies could grow by approximately 2 Mb/d between 2010 and the end of 2011. Putting the estimated current OPEC spare capacity of 2 Mb/d together with the expected increase in demand for OPEC oil supplies of 2 Mb/d suggests that during 2011, OPEC's spare capacity may be completely eroded--a very serious situation."

Read the entire article here

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