Iraqi Oil surge to threaten the

Saudi Although no major schism on 12 December OPEC meeting in Vienna, there are signs that Saudi Arabia and Iraq is heading for the top of the face how much oil to pump. Before starting the meeting, Abdul Kareem al-Luaibi, Iraq's oil minister, told reporters that his country plans to produce as much oil as next year when Saddam Hussein was in power for more than three decades ago to a significant increase over its 2012 output. Saudi Arabia, by contrast, began to cut the output to limit the risk of price declines in 2013. The increase in Iraqi production, combined with oil shale boom in the U.S. and higher output in Libya and Nigeria, will test the position of Saudi Arabia as a swing producer countries have sufficient spare capacity to tap when shortages and rich enough to hold when the market is flooded. Day-to-day production when Iraq was not threatening the paper. But in Iraq to publicly establish optimal target more than 6 million barrels per day, Saudi latter may find it difficult to control their neighbors. "The problem is that while Saudi Arabia wants to cut back oil production to keep prices at the desired level OPEC key players, it also accepts the increased Iraqi production and market share," said Julius Walker , energy, global market strategist at UBS Securities (UBS) in New York. "Ultimately, there will need an agreement between the two how to balance ambition." Need Saudi Arabian Oil Minister Ali Al-Naimi to keep oil prices high enough to finance the country's $ 600 billion social spending plans accelerated by the Arab Spring, there is no reason for the anger of consumers around the world. Iraq is now the second largest supplier in OPEC, has different priorities: to rebuild after decades of war industry. With the help of foreign oil companies, the day-to-day production of Iraq rose 650,000 barrels to 3.35 million this year, the biggest annual increase in 14 years, according to data aggregated by Bloomberg. Countries plan to increase production to 3.7 million barrels per day in 2013 and at some point in the year 1979 a record 3.8 million suit. Libya, industry rebuild after last year's uprising against Muammar Qaddafi, is also planning to increase production next year, with 1.7 million barrels per day from 1.5 million raw now.Brent recently traded as high as $ 110.15 per barrel, but it can sink $ 88 in June if OPEC failed to prevent the supply, said Leo Drollas, chief economist at the Centre for Global Energy Studies. Although the Saudi foreign currency reserves sufficient to protect the country from the slide in prices, they can not tolerate crude below $ 90 barrel around a long time, according to Jamie Webster, a consultant with PFC Energy. Keeping prices high enough is more challenging in Saudi Iran should resolve standoff with the international community over its nuclear research and begin pumping oil to pre-crisis levels. Controlling against Iran, then the second-largest OPEC producer, has reduced export by 50 percent, according to the International Energy Agency.Demand OPEC crude will shrink to 29.7 million barrels per day in 2013, the secretariat of the association said in a statement at the end of a meeting in Vienna. That's 1.1 million barrels per day below the actual output of November, OPEC data showed. "OPEC is overproducing, and the Saudis have to cut," says Roy Mason, the founder of the movement of the Oil Tanker tracker. The big question is how much Saudis and their OPEC brethren willing to let Iraq go its own way. "It has always been assumed that Saudi Arabia will receive the early stages of the ramp-up of Iraq," said Greg Priddy, global oil director at consulting group geopolitics of Eurasia. "But we are approaching a point where Iraq makes enough that it is uncomfortable." Bottom line: While the Saudis need high oil prices to fund the $ 600 billion in social programs, the Iraqi People are committed to strengthening production.

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