OPEC Has Less Surplus Than They Say

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ewilkerson's picture
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Joined: Jul 18 2010
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OPEC Has Less Surplus Than They Say

I took this from a newsletter I get about OPEC:

Apparently, the oil cartel pumped 26.78 million barrels per day (mmbd) this year. Yet they have a production limit of only 24.845 mmbd, set at the end of 2008 in response to the recession.

So your friendly neighborhood fuel gang has been breaking its output limit by 1.934 million barrels — everyday, all year long.

With crude at its highest price in two years, overproduction allows OPEC members to boost profits without formally changing output targets.

An extra 1.934 mmbd at $80 works out to a nice “informal” $56.47 billion boost.

This means that production worlwide has been 2m b/d higher than thought.  It, also, would mean that OPEC may not have nearly the spare capacity many think!!!!

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