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Iraqi Oil Renaissance Hits The Skids


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Iraqi Oil Renaissance Hits The Skids

 

 

 

By Sarah Kent
OB-YM835_0812oi_E_20130812052505.jpg The shale oil boom continues in the U.S., but Iraqi crude supply falls Reuters

Two major developments were meant to dominate increases in oil supply this decade: the shale oil boom in the U.S. and the renaissance of Iraq’s oil sector.

While business in the oil fields of North Dakota is booming and production figures exceed expectations month on month, the picture in Iraq is quite different as infrastructure bottlenecks, political quarrels and an unnerving resurgence in violence saw the country’s production fall below three million barrels a day in July for the first time in six months.

Despite a pronouncement this month by the head of petroleum contracts at Iraq’s oil ministry that it aims to boost its production by 360,000 barrels a day by the end of the year, production is expected to fall still further before this happens.

The International Energy Agency Friday warned that planned work on the country’s southern infrastructure exports, necessary to accommodate this increase in production, could cut output by a further 500,000 barrels a day for five to six months from September. Assuming supply remains stable in August, that would see Iraq’s production fall to its lowest in more than two years in the fall.

Meanwhile, in a note also published on Friday, Goldman Sachs highlighted the country’s disappointing rate of production growth so far this year. The latest figures published by the IEA suggest Iraqi output grew 246,000 barrels a day so far this year compared with the same period last year. That’s not an unreasonable amount, but it’s well under the 400,000 barrels a day production growth the U.S. banking giant forecast for 2013.

“This shortfall in production becomes of increasing concern given the expected Iraq production growth accounts for the vast majority of total OPEC production growth in 2013 and 2014,” Goldman Sachs said.

That said, Iraq’s stumblings will likely cheer members of the Organization of Petroleum Exporting Countries who at some point will face a difficult and contentious discussion over how to accommodate rising Iraqi supply as demand for the group’s oil falls. That, however, is cold comfort for consumers hoping that all the news of booming oil supply might translate into lower prices at the pump.

http://blogs.wsj.com/moneybeat/2013/08/12/iraqi-oil-renaissance-hits-the-skids/

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They say "demand for the group's oil fails" and blame it on our domestic oil shale development, infrastructure bottlenecks, political quarrels and resurgence of violence while arguing over how "to accommodate rising Iraqi supply".  Folks, they don't have enough oil to augment OPEC quotas and this is their dirty little secret.  If an RV is dependent on an Iraqi oil boom - then, we face a long, long wait for an opportunity worth cashing in for.  They may be planning to pump sea water inland to boost production but this, of course, will be the definitive sign of depletion.  I've mentioned this numerous times since joining this site three years ago and I still believe this as the main problem in delaying our hoped for blessing.  They've been good at keeping secrets but now - evidence supports a limited Iraqi supply.   

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If you have ver been in Iraq and seen the pools of oil that bubble up to the surface because there is so much of it below ground you would realize how silly that standment is.

The only problem Iraq has is getting the oil drawn up and transported to ports.

Trust me when I say that there is NO SHORTAGE of oil in Iraq. :)

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I might add that 'lower gasoline prices' to be a thing of the past.  As long as crude is priced at $100/barrel - shale oil production will continue.  Easily accessible oil is all but gone in North America and leaves us with new, costly exploration/extraction methodologies supported by the above price.  If crude prices drop below the $85 dollar mark - we will witness cutbacks in domestic production and an increase in OPEC output.  It's catch 22.  Eventually, OPEC will not be able to keep up with demand (they struggle even now to meet quotas) and we will face continual high energy costs from domestic oil field development.  We may not be at the mercy of the foreign oil despots but we will still pay more for what is produced here.  

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