WHEN GAZ EXCEED SUPPLY AND GASOLINE IS CHEAP

Dave Cohen, ASPO-USA

An earlier column, "Decline Rates and Non-OPEC Supply," investigated a likely peak (or plateau) in oil supplied by nations outside the Organzation of Petroleum Exporting Countries (OPEC) by 2010. The "call on OPEC" to satisfy growing world oil demand must inevitably increase thereafter. Will OPEC answer the call? The people running OPEC are businessmen. They will answer the call only if there is a financial incentive to do so.On April 16, 2007, the UAE's Mohamed Al Hamli stated that OPEC remains fully committed to providing a reliable oil supply for the consumer nations.
There should be no doubt that OPEC members are fully committed to ensure regular supplies to consumers and maintain market stability," said Mohamed Al Hamli, who also serves as UAE's energy minister.Al Hamli told an oil conference in Dubai that the organization's commitment has been proven "time and again, during crises brought about by severe weather conditions, geopolitical tensions, or disruption of supplies caused by unrest.OPEC's committment comes with conditions. Al Hamli emphasized the organization's view that efforts by the Organisation for Economic Co-Operation and Development (OECD) member nations to reduce their import dependencies through subsidies for alternative fuels "discriminate" against oil, thus undermining future OPEC investment in capacity expansion. OPEC's worry about sustained oil demand may be seen as an ordinary business concern; it may also be seen as blackmail - consume oil or suffer the consequences of future shortages.(2 May 2007)