Opinion: Security is everything in oil trade
It's amazing what six weeks of unrest in the Middle East can do for Canada's oilsands. Much like last April, in the aftermath of the BP blowout in the Gulf of Mexico, the ongoing unrest in the Middle East that has now spread to Libya has once again cast the spotlight on the oilsands, warts and all.
Unlike Egypt, Libya is a member of the Organization of Petroleum Exporting Countries, producing about 1.6 million barrels of light, sweet oil per day and accounts for little more than five per cent of OPEC's daily production.
For the sake of context, Libya's production is less than what Canada produces - about 2.1 mbbls/d - and its estimated 41 billion barrels of reserves are less than one quarter of what is contained in the oilsands.
The good news is that OPEC still has more than enough spare capacity to bring on production if the spigots in Libya are turned off entirely though there were signs on Monday that Saudi Arabia wasn't about to boost its production. That is unlikely to happen until higher oil prices begin to threaten the health of the global economy.
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