No argument from me (although I would argue that "difficult" is not the same as "impossible"), but we can also say that it is a near certainty that Saudi Arabia will show three straight years of annual production below their 2005 annual rate, at about the same stage of depletion that the prior swing producer, Texas, started declining.

Meanwhile, their consumption is currently going to "infinity and beyond," on track to double to 4 mbpd in 2015, from 2 mbpd in 2005, against a recent total liquids production rate of about 10 to 11 mbpd.

HO

This leads me to the most compelling reason for the oil price rise - the decline of light sweet. This is oft wrongly expressed in the MSM as a shortage of refinery capacity (It defies logic that the shortage of the ability to process a commodity would drive up the price of that commodity), so it is the shortage is of the "right" type of refining capacity.

Which then raises the question, how fast can "they" build/convert heavy sour capable refineries?

Because this in the medium term is going to be the driver of price, how fast the refining industry can adapt to the sweet/sour product mix. Of course this raises another issue, ie the refiners are not making any money as they are squeezed between supply misinformed govt/public, so why invest?

If as I suspect its will be an ongoing race and as the overall production cannot significantly rise (it will decline IMHO) one could characterize this behavior as "riding the submarine all the way to the bottom"

Neven

Well, since I--singlehandedly--have the power to kill entire movements, I was thinking of earning a living as a hired gun, a latter day Internet Paladin, so to speak, hired to kill Internet "movements."

You could at least use your vast powers to heal Ghawar. Or to give George Bush boils. Whichever is more convenient.

"On December 14, 2001, Bush had four noncancerous skin lesions removed from his face. The Press learned of this only when Bush appeared before cameras with dark red spots on his face.

Commment: These are most likely actinic keratoses, as were the lesions removed from his face in August 2001, or perhaps basal cell carcinomas. Bush's father, George H. W. Bush, had a similar procedure 8 months later." http://www.lilith-ezine.com/articles/bushpads.html

Hello Ace,

Huge thnxs for all your work!

http://www.bloomberg.com/apps/news?pid=20601087&sid=aMTWS1Pzs0Jc&refer=home
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Saudi to Raise Oil Output 2% in July, Al-Naimi Says (Update1)

June 21 (Bloomberg) -- Saudi Arabia, which convenes a meeting of government and business leaders tomorrow to discuss world energy markets, will raise its oil output by 2 percent in July, the country's oil minister said.

The kingdom will add 200,000 barrels of oil to its daily production next month, taking its total to 9.7 million barrels a day, Ali al-Naimi told reporters in Jeddah, Saudi Arabia today. State-owned Saudi Aramco will soon add 500,000 barrels, or 4.6 percent, to the kingdom's total production capacity with its Khursaniyah field.

Saudi Proposal

A Saudi proposal, to be discussed at the meeting in Jeddah tomorrow, will seek measures against market speculators, Prince Abdulaziz Bin Salman, the kingdom's deputy oil minister, said in an interview published today in the Saudi newspaper Asharq al-Awsat.

``The governments have a role to play in regulating and restructuring the markets so that the speculators are forbidden from actions that caused oil prices to reach the current level,'' bin Salman said.

Saudi Arabia will present at the meeting a work document that outlines the reasons for the surge in oil prices, prepared in cooperation with the Organization of Petroleum Exporting Countries and the International Energy Agency, the Saudi official said. ``It will be the only document that will be discussed.''
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I sure hope this document will be released to the general public! Could we be in for some shattering news?

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?