OPEC minister repeats oil limit warning

Algerian minister echoes sentiment he expressed last August


Do the OPEC countries have enough capacity to manage swing production of oil into the future?

Chakib Khalil, minister for energy and mines, said today in Algiers

OPEC has reached its production limits. It doesn't have much production capacity...If it came to a crunch, it has capacity for one million barrels [more per day], and I don't think a production increase would influence the barrel price.

If this is so, then OPEC no longer has the ability to set the oil price or manage swing production. All producers will pump at 100%, despite their mysterious deliberations. Is now a time for OPEC equivalent to the moment in the spring of 1971 when the Texas Railroad Commission, at that point empowered to limit Texas oil well production, announced ``a 100 percent allowable for next month.'' (Quote from Kenneth S. Deffeyes)

What followed that announcement by the Texas Railroad Commission, of course, were the 1970s we remember: gas lines, threats of superpower war, invasions, the Carter years and the Carter Doctrine. To what future are we entering now?