OPEC Oil Production Rises; Oil Demand Suffering

OPEC oil production rises to a 3 year high

Production by Opec members rose by 1 per cent on the month to reach an average pumping volume of 31.405 million barrels per day (bpd), according to a Bloomberg survey of oil companies, producers and analysts.

Growth was driven by Saudi Arabia, resurgent Libyan output and rising Iraqi capacity, offsetting a decline in Iranian production, which slumped to a 20-year low.

Oil prices hit by economic gloom

Official data Monday showed Spain had tipped back into recession -- another dose of grim news for a cash-strapped economy that has been hobbled by rising sovereign debt, soaring unemployment and deeply troubled banks.

"Crude oil prices started the week in negative territory, following fairly disappointing economic data from Spain that confirmed that the Spanish economy is sliding into recession," said Sucden broker analyst Myrto Sokou.

"The data weighed on crude oil prices, confirming a slowdown in oil demand, especially from the European countries due to the lack of economic development."

Europe is being pommeled by problems with debt, demographic decline, and a growing sense of "only child" entitlement.

Meanwhile, nations from Asia to the Persian Gulf are being forced to re-evaluate unsustainable oil subsidies, which keep prices artificially low and demand artificially high from China to Dubai to Mexico to Venezuela.

Inflated oil prices are spurring innovation and substitution. Industrial societies do not run on oil -- they run on abundant energy that is easily usable. Oil is one form of energy that has qualified for a number of decades. If the price of oil enters bubble territory, free societies will find ways to substitute other forms of energy. Only fools fixate on outer appearances, instead of the deeper meanings and substance beneath.

Some analysts and journalists are even suggesting ways that one might profit from the era of artificially inflated oil costs.

But be careful. When prices are being manipulated by powerful players-behind-the-curtains, movements in prices can be unexpectedly rapid and potentially devastating.

Large new deposits of oil & gas are waiting to be found off the coasts of China, Africa, South America, and North America. Should the shackles ever be removed from the international oilcos by the energy starvationists of the west, and and corrupt nationalists of OPEC and the third world, significant downward pressure on global oil prices would result.