Therefore, the real issue is not reserve availability, but timely deliverability and here enhanced cooperation and dialogue among all parties to ensure security of demand, as well as security of supply.”
The report estimates that from 1995-2003, new discoveries had actually improved recoveries by almost 138 billion barrels. This was especially possible due to more advanced extraction techniques & management. By 2020, oil production is likely to cross 1600 billion barrels with reserves close to 3400 billion barrels! On the basis of OEPC’s own data, it can be logically concluded that the oil price dilemma is not necessarily dependent on consumption alone. Various analysts have contended that OPEC deliberately controls production in order to safeguard its own interests in order to maintain a high price point.
While the top ten oil extracting nations produce about 52 million barrels/day, the top ten oil consuming countries together use close to only 50 million barrels/ day. This means that that a good 2 million barrels of crude can be utilised in price stabilisation, especially when volatility is playing havoc with the global economy. It’s technically proven that the world currently produces more oil than it consumes, but uncertainty of oil prices remains. Production has increased by a salubrious 26% as compared to levels in the 1960s. In fact, oil price insecurity can easily be alleviated on the prospects of huge untapped reserves in Alaska, Latin America and Siberia.
“Oil prices are not determined by the ‘real’ supply-demand for oil, it is the ‘anticipated’ supply-demand, which ascertains the value of the product,” says Saikia. As far as the blame game is concerned, the supposedly new oil hungry nations putting pressure on global oil prices, are factually not the raison d etre’ for the anomaly. China, the nation taking up most of the blame, consumes close to 7.2 million barrels/ day however more than half of this (3.8 million) is met by domestic production. US, on the other hand, consumes a preposterous 20.5 million barrels every day, while contributing a miniscule 8.1 million. Even major oil producing countries like Indonesia cannot hold on to prevailing pressure. With the dangers of ‘galloping inflation’ looming, the country is all set to withdraw from OPEC. It’s the most stinging irony with power. Those that hold oil reserves are making life dificult for the rest by constraining production. The problem then is not shortage of oil per se, but rather the concentration of oil resources in a few hands, which are failing to see beyond their own interests towards the larger good of the planet.
The report estimates that from 1995-2003, new discoveries had actually improved recoveries by almost 138 billion barrels. This was especially possible due to more advanced extraction techniques & management. By 2020, oil production is likely to cross 1600 billion barrels with reserves close to 3400 billion barrels! On the basis of OEPC’s own data, it can be logically concluded that the oil price dilemma is not necessarily dependent on consumption alone. Various analysts have contended that OPEC deliberately controls production in order to safeguard its own interests in order to maintain a high price point.While the top ten oil extracting nations produce about 52 million barrels/day, the top ten oil consuming countries together use close to only 50 million barrels/ day. This means that that a good 2 million barrels of crude can be utilised in price stabilisation, especially when volatility is playing havoc with the global economy. It’s technically proven that the world currently produces more oil than it consumes, but uncertainty of oil prices remains. Production has increased by a salubrious 26% as compared to levels in the 1960s. In fact, oil price insecurity can easily be alleviated on the prospects of huge untapped reserves in Alaska, Latin America and Siberia.
“Oil prices are not determined by the ‘real’ supply-demand for oil, it is the ‘anticipated’ supply-demand, which ascertains the value of the product,” says Saikia. As far as the blame game is concerned, the supposedly new oil hungry nations putting pressure on global oil prices, are factually not the raison d etre’ for the anomaly. China, the nation taking up most of the blame, consumes close to 7.2 million barrels/ day however more than half of this (3.8 million) is met by domestic production. US, on the other hand, consumes a preposterous 20.5 million barrels every day, while contributing a miniscule 8.1 million. Even major oil producing countries like Indonesia cannot hold on to prevailing pressure. With the dangers of ‘galloping inflation’ looming, the country is all set to withdraw from OPEC. It’s the most stinging irony with power. Those that hold oil reserves are making life dificult for the rest by constraining production. The problem then is not shortage of oil per se, but rather the concentration of oil resources in a few hands, which are failing to see beyond their own interests towards the larger good of the planet.
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shrunk by a lamentable 7.92% to 7.25 million during FY2007-08; exactly the period when the CV sales rose by a commendable 4.07% to touch 486,817 units and PV segment sales rose by a healthy 12.17% to touch 1.55 million. Infact, during the same period, the LCV segment alone witnessed a walloping 12.29% growth to touch 215,823 units. So there you are, if we base our analysis on historical data, considering that with two-wheeler sales suffering, Hero and Bajaj couldn’t be making a better extension to their product mix. Confirming the same, Vaishali Jajoo, Auto Analyst, Angel Broking asserts, “The two-wheeler industry growth is expected to fall in the long run as per capita incomes increase. Further interest rate fluctuations and uncertain movement in inflation have put comparatively larger pressure on the two-wheeler industry as well...” Therefore, the move is positive in the long run as improving affordability is resulting in higher volumes for the four-wheeler segment compared to two-wheelers. Even when we consider the moves ordinally, they do look well-judged. No wonder the investment plans are also huge with Hero-Daimler’s JV plan to invest over €700 million over the next five years (of which Daimler will bring-in €220 million in the form of FDI). The JV expects to start production of CVs by 2010 and aims to achieve a localisation rate of up to 80% in order to optimally utilise cost synergies, with exports planned to commence a couple of years after production begins.
protagonist of Marvel comic series Iron Man, is in many ways similar to Laxmi Mittal, the steel empire builder. Both men were relentless empire builders even in the wake of adversity and reservations. Neither was ever affected by complacency. The moniker of Iron Man is best suited for a Marvel universe inspired socio-economic structure. But we may still conclude that the Iron Man of the real world is indeed living up to his name. Not satisfied by his multibillion dollar bid to merge the world’s largest steelmaker with his own company back in 2006, Mittal is back for more. Obviously when you have $105.2 billion worth of revenue, complacency is well just another impediment.