Sometimes a collective stance is necessary, yet individual national interests and capabilities have to be taken in account.
Jun 11, 2012

Bloomberg informed that Saudi Arabian Oil Minister Ali al- Naimi said "maybe" there is a need for higher group production from the Organization of Petroleum Exporting Countries. Al-Naimi responded to questions from reporters after the Gulf Oil Review published a report quoting him as saying in a June 2-3 interview that OPEC might need to enlarge its collective production ceiling of 30 million barrels a day.

"I didn't say it that way, I said maybe, be careful," he told reporters upon arriving at his hotel yesterday evening. "Maybe more, maybe it can be anything, it can be less."
Brent crude futures fell to $98 a barrel yesterday on al-Naimi's comments and amid concern that Europe's debt crisis will derail global growth, curbing energy demand.
OPEC's 12 members exceeded their quota by 1.9 million barrels a day in April, according to the International Energy Agency.

Now that OPEC agreed to reduce its production by 1.6 million barrels a day, it is still too early  to know how much  oil the market will receive , be that from oil in transit, withdrowal from floating invenories  or from continued increasing production potentials  for the rest of this  year as they had been announced in Iraq , Venezuela, Kuwait, UAE among others, let alone the expected growth in US shale oil production.

12. June 2012
Iraq is producing 3 million barrels of oil a day, and is targeting to raise its daily crude oil exports to 2.9 million barrels from 2.4 million barrels at present, the country's oil minister said... The increased production is coming from southern oil fields which are being upgraded by some of the oil majors such as Royal Dutch Shell   BP   Exxon Mobil Corp and Eni.

As the following article indicates, OPEC is already showing concerns about this issue. In other words, OPEC cannot just sit and watch how it’s price defence policy enables others to replace it’s low cost oil and gas.

April Yee
The National
Jun 18, 2012

How can OPEC deal with the threat of shale gas and oil?
There are certain countries in OPEC that are gas exporters, so they probably have more to worry about from the unconventional gas, like Qatar and Algeria.
The other issue is the shale oil, which should worry OPEC.
From the latest information we have this year; the United States basically increased its production to the equivalent of Algerian production from shale oil. So that tells you it's very important.
Let's assume United States becomes self-sufficient. That's good, in the sense it doesn't need to import what it's importing now. But at the same time you're going to have an expanding market in other countries like China, India, and Saudi Arabia.
Do you think there are threats to OPEC’s current market share?
No, I don't think so. All the forecasts show that OPEC will participate in the market by between 37 and 50 per cent, so if OPEC takes more and more share, that means other people are not able to do it. But the price is a function of what's going to happen in the Arctic, in the deep offshore. Unless you have that higher price those guys are not going to invest.

Defenders of high oil  price
June 07, 2012

"OPEC has all the means to prevent (crude) oil prices falling too low," Mr. de Margerie said . underscoring his compan's concerns about the sharp drop in crude.
A balanced price which supports long term investments is around one hundred dollars a barrel, Total   Chairman and Chief Executive Christophe de Margerie said , June 6th 2012 adding that Total has also estimated $80 a barrel as sustainable for short term investments. 
In addition, with a rather long period of high oil prices, renewables are increasing their shar in the energy mix.  So, U.S. SOLAR MARKET SEEN DOUBLING IN 2012 as reported on13 June 2012, Wall Street Journal. The U.S. market for solar panels is likely to double in 2012, thanks to government policies and falling prices, although new tariffs on panels imported from China could contribute to slower growth in 2013.

U.S. developers are likely to install about 3,300 megawatts of solar panels this year, nearly double the amount installed in 2011, according to the study   by the Solar Energy Industries Association and GTM Research.

The global solar-power market has been turbulent for manufacturers, as prices have plunged amid an oversupply of panels. But the falling prices, as well as faster development for large-scale solar power plants, have driven strong demand for solar in the U.S., the report found.

Now that MARGINAL OIL PRODUCTION COST  are  increasing, according to Peak Energy , June 19th., energy analysts at Bernstein say the marginal cost of oil production, already $92 per barrel, is nearing $100 per barrel. This includes  marginal costs for the 50 largest oil and gas producers could reach close to US$100/bbl, but their analysis does not include  large producers as OPEC or former Soviet Union producers. But this does not matter for  the followers of Peak Oil theory , because their assumption is that  the marginal cost of the other producers will determine at what price rising demand and market price will meet  growth  recovery This approach imply that OPEC would just observe  passively  it’s  diminishing  marketshare .

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