Is, 'Oil's perfect storm,' nearly over?

The perfect storm that has swept oil prices to $132 a barrel may subside over the coming months as rising crude supply from unexpected corners of the world finally comes on stream, just as the global economic downturn begins to bite.

The forces behind the meteoric price rise this spring are slowly receding. Nigeria has boosted output by 200,000 barrels a day (BPD) this month, making up most of the shortfall caused by rebel attacks on pipelines in April.

The Geneva consultancy PetroLogistics says Iraq has added 300,000 bpd to a total of 2.57m as security is beefed up in the northern Kirkuk region.

"There is a strong rebound in supply," said the group's president Conrad Gerber.

This is a must read about the causes and recent changes in oil production. Including charts of non-OPEC oil producing nations.

DKK

Telegraph UK -- Oil's perfect storm may blow over

Manzullo Statement On OPEC

Washington, May 20 -

Congressman Don Manzullo (R-Egan) today voted for legislation to reduce gasoline prices in America by allowing the U.S. government to sue OPEC countries that conspire to keep oil prices high by limiting production in their nations.

The Gas Price Relief for Consumers Act (HR 6074) would make it illegal under U.S. law for foreign countries to collectively manipulate energy prices or supplies and permit the federal government to sue foreign countries for any such actions that directly affect the United States. The bill passed the House 324-84 this afternoon.

“For too long, the OPEC criminal conspiracy has wreaked havoc on gasoline prices in the United States,” Manzullo said. “This legislation will make them think twice before turning off the spigot and continuing to manipulate oil supplies to suit their needs. The threat of lawsuits should deter any efforts by the OPEC cartel to continue to raise gasoline prices in America.”

In a separate move, Manzullo, a Republican leader on the House Foreign Affairs Committee, sent a letter today to the Ambassador of Saudi Arabia, Adel Al-Judbeir, urging the country to immediately increase oil production up to 1.9 million barrels a day to increase the supply of oil in the world and reduce gas prices in America. Manzullo, lead Republican on the Foreign Affairs Subcommittee on Asia, the Pacific and the Global Environment, pointed out in the attached letter that Saudi Arabia has the capability to produce 11.3 million barrels of oil a day but is only extracting 9.4 million barrels daily.

“The constituents I represent in northern Illinois are facing record gas prices exceeding $4 a gallon and need immediate relief before the summer starts or else our economic turmoil could spread more deeply around the world,” Manzullo said. “I believe it is in the interests of both our countries for Saudi Arabia to increase production beyond the 300,000 barrels a day already promised to commercial customers.”

Urging OPEC nations to increase the production of oil is part of the 12-point plan Manzullo unveiled earlier this month to reduce gas prices in America. The comprehensive plan includes short- and long-term strategies to lower American gas prices by combining increased domestic production of oil and gasoline with conservation, tax relief and incentives to encourage development and commercialization of alternative and renewable energies. The comprehensive plan is attached

Manzullo has a 12 point plan (word documentlink to my post on the 12 point plan May 5, 2008 -- who puts a word document online anymore, they couldn't just convert it to a pdf like they did the letter to the Saudi Ambassador pdf?) that if he and the rest of the Republicans, had any chance in hell of getting passed would go a long way toward getting elected this fall.

Unfortunately this OPEC legislation is just about 48 years too late (OPEC formed September 14, 1960) and is the most ineffective part of his plan, which is probably why the Democratically controlled congress passed it.

Oil is going to be a major political tool this fall. I have said before that if the American people knew who was keeping oil at such a high price (hint, OPEC has nothing to do with it) they would vote for a completely new congress.

DKK