Saudi Arabian Oil Capacity Reaches Limit

News today is that Saudi Arabia state they do not expect to increase oil production capacity as far and as fast as previously hoped. The Saudi Arabian Oil Minister said current production is around 9mbpd against a capacity of 12.5mbpd but he had no real intention to increase that capacity any further at least in the period upto 2020. Obviously this raises the possibility that Saudi Arabia is unable to increase production, even if it wanted to, because of the high decline rates of existing fields.

Something else: Late last week T Boone Pickens the respected Texan oilman also said he thought global oil supply has peaked and so prices are likely to go up rather than down: “There are only 85 million barrels of oil in the market every day,” Mr. Pickens added. “I don’t think you can get it above 85 million – lock that number in, and we’ll see if I’m right.”