Rise in the number of HNWIs in Saudi Arabia and Bahrain by 8.2% and 24% and the decline in the UAE

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According to a report «Global Wealth» prepared by the Bretton «Merrill Lynch Global Wealth Management» and «Capgemini» which reached Arabian Business press release him, the number of wealthy UAE record fell 3.5% to 52,600 wealthy, after he scored a significant decline by 18.8% in 2009.
In the Middle East, record and one of the highest growth rates, the number of wealthy rose wealthy region grew by 10.4% to 440 thousand wealthy, as well as their total wealth rose by 12.5% ​​to $ 1.7 trillion.


The number of HNWIs in Saudi Arabia and Bahrain by 8.2% and 24% respectively to 113300 thousand wealthy wealthy and 6700 thousand. In the UAE, have dropped by 3.5% to 52,600 wealthy, after he scored a significant decline by 18.8% in 2009. A report wealth Annual World XV issued by Merrill Lynch Global Wealth Management and Capgemini on the development of individual wealth globally today, that the volume of wealth The numbers of wealthy ¹ world in almost all regions of the world in 2010 rose to levels exceeded levels in 2007 before the outbreak of the global financial crisis.

The report pointed out that the growth of the wealth and numbers wealthy world reached levels more stable in 2010, with the number of wealthy rose by 8.3 per cent to $ 10.9 million wealthy and increased their wealth by 9.7 percent to 42.7 trillion U.S. dollars (compared with Artvallma by 17.1 per cent and 18. 9 per cent respectively in 2009), while the number of wealthy ² by 10.2 per cent and the size of their wealth rose by 11.5 per cent in 2010. The Middle East region has seen one of the highest growth rates after Africa, and the number of wealthy region grew by 10.4 per cent to 440 thousand wealthy, also increased their total wealth TONGS 12.5 per cent to reach 1.7 trillion U.S. dollars. ¹ individuals who are at least the value of the net assets of one million U.S. dollars, with the exception of main homes and belongings consumer. ² individuals who are at least the value of the net assets of U.S. $ 30 million, excluding main homes and belongings consumer. Said Tamer Rashad, head of Middle East at Merrill Lynch Wealth Management: "I have seen the past few years fluctuation in the number and size of the wealth of the rich world, and slowed growth rates in 2010 compared with growth rates of two decimal places in 2009, when many of the markets taking a breather quickly to get rid of the heavy losses incurred by the global financial crisis. " The number of wealthy in Saudi Arabia and Bahrain at the end of 2010, but decreased in the United Arab Emirates. The number of wealthy in Saudi Arabia 113.300 wealthy in 2010, an increase of 8.2 per cent compared with 2009. The number of HNWIs in Bahrain to 6,700 wealthy, an increase of 24.0 per cent compared with 2009. In contrast, the number of HNWIs in the United Arab Emirates by only 3.5 per cent to 52.600 wealthy, in contrast to the biggest drop of 18.8 percent in 2009. However, most of the world's richest and individual wealth remained concentrated largely in the United States, Japan, Germany, and by 53.0% of the total number of the world's richest men. As North America remained the largest individual strongholds of the world's richest men by 28.6% and by 3.1 million wealthy. For his part, said Carzquian Rajendran, Regional Sales Manager of the Department of Services Middle East global financial company Capgemini: "Although more than half of the world's richest men still living in the three largest citizen of wealth individual world, witnessing the concentration of those wealthy fragmented gradually over time. Will fragmentation continues in those areas if the wealthy continued developing and emerging markets grow faster than the speed of population growth in the developed markets. " Asia - Pacific Basin superior to Europe for the first time in the number and size of the wealth of wealthy locals recorded Asia - Pacific Basin highest regional growth rates in the number of HNWIs in 2010 between the three global markets. Although the size of the wealth of those wealthy had exceeded their counterparts in Europe since 2009, but the number exceeded the number of their counterparts in Europe now, where it increased by 9.7 per cent to 3.3 million wealthy, while the number of wealthy Europe rose 6.3 per cent to $ 3.1 million wealthy. Also increased the size of the wealth of the wealthy countries of Asia - Pacific Basin in 2010 by 12.1 per cent to $ 10.8 trillion U.S. dollars, surpassing the size of the wealth of the rich Europe, which rose by 7.2 per cent to $ 10.2 trillion U.S. dollars. Thus became the Asia - Pacific Basin, the second largest world's richest citizen after North America. It is worth mentioning in this region, that the number of wealthy India is ranked twelfth worldwide in 2010, joining a club the 12 largest state in terms of the number of the world's wealthy.


  The equity markets and commodities, as well as real estate (specifically in Asia - Pacific Basin) strong performance throughout the year 2010, in a relatively stable atmosphere and uneven economic recovery momentum. The world's richest reserve including 33 per cent of their investments in stocks by the end of 2010, an increase of 29 percent from 2009. And decreased their allocations to invest in assets cash / bank deposits from 17 per cent in 2009 to 14 percent in 2010, while investment in provisions fell fixed-income investment vehicles from 31 per cent to 29 per cent during the same period. And favored the wealthy to invest in commodities among the various types of alternative investments available in the market, accounting for their allocation in commodities accounted for 22 per cent of all their holdings of alternative investments in 2010, up markedly from which amounted to 16 per cent in 2009. Continued wealthy Asian countries - the Pacific Basin excluding Japan, Find superior returns in the real estate markets, which accounted for 31 per cent of the total assets of their portfolios by the end of 2010, up from 28 per cent in 2009, and a substantial increase from the global average, which amounted to 19 per percent. In addition, provided the investments in emerging markets are great opportunities for wealthy seeking a rewarding profits. Investors pumping huge amounts of money in stocks and bonds of emerging markets during the first eleven months of 2010, before they sell their holdings for a profit at the end of the year, and after that exceeded the value of investments in many emerging markets peaks attained before the crisis. He Tamer Rashad: "achieved global markets for capital and many of the most prominent asset classes other investment performed well in 2010, due to increasing investors' willingness to take risks. And body turned wealthy investors to stocks in 2010, searching for achieving superior returns on their investments and their desire to compensate more losses incurred during the crisis. and we have seen the continued preference for the wealthy to certain categories of investment assets such as stocks and commodities, according to market opportunities or preferences in the long term. " When we look ahead, we find that it is expected to enhance the wealthy allocations to invest in stocks and commodities more in 2012, in conjunction with the reduced allocations to invest in real estate assets and cash assets / bank deposits. And regional preferences seem less stable due to the adoption of the opportunities offered by emerging markets on its ability to reach new heights, in a time when governments reduce stimulus procedures aimed to revive the economies of their countries.

Equity Trader, are you Guilty?

While trading mistakes and losses are inevitable (and typically go hand-in-hand) in investing, understanding the human psyche and that the mistakes can be avoided with some forethought can help preserve your bottom line.

Falling in love with a stock. Remember Facebook (how could you not)? Everyone loved it and the hype over Facebook’s IPO was monumental. Everyone expected that it would not only meet but exceed its IPO price and it didn’t. Who’d have thought that the world’s foremost social media company couldn’t live up to expectations. Facebook has closed down on 46 of its 80 trading days and even now it is trading below $20 a share. You can love a stock all you want, but unless you are holding the stock for sentimental reasons (and not to make money) you should know when to its time to end the relationship.

Trying to get even. This mistake is the follow-up to #1 for those investors who insist on holding an underperforming stock. The problem here is two-fold, you have the potential to lose still more money and you have lost the opportunity to take the proceeds of the sale and invest it elsewhere.

Failure to thoroughly understand your investment choice. This trading mistake often follows the first; you fall in love with a stock even though you know nothing about it. Warren Buffett, who knows a thing or two about investing, will be the first to tell you don’t invest in a business or company that you don’t understand. A better option would be to invest in mutual funds or ETFs, so that your portfolio is more diversified.

Impatience. While every equity investor would love to make a killing in the stock market, and many of them do, very few of them make it overnight. It takes time, and that means patience and discipline on the investor’s part. First you need to have realistic expectations and understand that it is the slow and steady pace that prevails. Too many newbie investors give it “a couple of days to see what happens,” and expect at the end of it some monumental event to skyrocket their stock price. When that event fails to materialize they cash out and try their luck with another stock instead.

Of course there are plenty more “mistakes” that new equity traders are guilty of, and you may have fallen for a pitfall or two in your time, perhaps even as a seasoned investor. What advice would you give to a trader looking for his or her first foray into equity investing?

Daily Equity Prices and Market Overview 11.09.2012

European and U.S. indices fell, after posting largest weekly gains in several months, as China’s imports unexpectedly dropped, and concern over Greece’s debt crisis overshadowed speculation central banks will take action to ignite the economy.

In the upcoming week markets are waiting for the German constitutional court ruling on whether Germany may contribute to the euro zone’s rescue fund. The ruling is crucial to the ECB’s plan to contain the borrowing costs of Spain and Italy. Furthermore on Thursday the Fed’s decision at the end of its two-day policy meeting will shed light on whether or not QE3 will become a reality.

The DJ30 closed at 13,254.29, declining 52.35 points (-0.39%), SPX500 closed at 1,429.08, gaining 8.84 points (-0.61%) and the NASDAQ closed at 2,788.35, declining 36.76 points
(-1.30%) in today’s trading.

The CAC40 closed at 3,506.05, declining -13.00 points (-0.37%), FTSE100 closed at 5,793.20, declining -1.60 points (-0.30%) and DAX40 closed at 7,213.70, declining -0.80 points (-0.1%).

Apple Inc. (AAPL): According to rumors, new 13.3-inch MacBook Pros and updated version of all-in-one iMacs are currently being shipped by Apple’s upstream supply chain. The report suggested that the release of the new 13.3-inch MacBook Pro is scheduled to be introduced in September or October alongside three models of the new iMac. At the moment markets are awaiting the introduction of Apple’s new iPhone 5 on the 12 of September, which is expected to become the best-selling Iphone model, as “advance demand for the iPhone 5 is strikingly higher than seen for any previous iPhone”. Said Paul Carton, ChangeWave’s vice president of research. Today Apple Inc. (AAPL) closed at 662.74 declining -17.7 points (-2.60%).

Stocks Execution Prices:

Name	Sell	Buy	Closing Rate	Change %
Apple (AAPL)	666.21	667.83	662.74	-2.60
Google (GOOG)	700.23	701.83	700.77	-0.76
Facebook (FB)	18.71	18.76	18.81	-0.90
Microsoft (MSFT)	30.69	30.76	30.71	-0.78
Amazon (AMZN)	257.36	257.95	257.09	-0.79
Yahoo (YHOO)	15.14	15.19	15.11	-0.72
Zynga (ZNGA)

Have Oil Prices Topped Out?

Commodity traders are warily keeping their respective eyes on the Federal Reserve Bank, which is expected to announce another round of stimulus for the floundering U.S. economy. In the interim, profit takers took advantage of the recent rally in crude oil prices and sold off their holdings, bringing the price of crude futures lower for the first time in several days. The slide was also helped along by China’s weaker than expected economic data.

Analysts from Societe Generale said in a recent client note that they see oil prices near the top of their trading range, and believe that with the geopolitical risks from the Middle East traders can expect to see a drop in crude oil prices through the end of the year. West Texas Intermediate, which is traded on the New York Mercantile, is likely to drop to about $93.90 per barrel within the next few months and to $92.30 a barrel in 2013.

Nymex-traded crude oil is currently trading at $96.66 a barrel, after falling about $0.30 and one commodity analyst in Tokyo doesn’t see prices moving too much ahead of the Fed. On OpenBook sentiment among the oil traders is primarily bullish with 73% of traders opening long positions against 27% going short.

Quite a few traders are also putting in orders to buy positions including OpenBook trader azrv13 from France who earlier put in two orders to buy oil at $94.85 and $96.46. OpenBook trader vitvereg from Hungary wrote recently on the Oil discussion wall that he suggests traders wait for the correction to finish and go long at $94.30; the trader has no open oil positions but closed a long recently with a 75% gain.

There are a lot of price-moving factors at play right now, including the Fed decision, the Middle East turmoil, OPEC, China and the prospect of rising demand as the winter months begin in the U.S. and Europe; do you agree with analysts that oil prices are headed lower?

Currency trading signals on Tuesday

EUR / USD intraday: the upside prevails.

Pivot (level of cancellation): 1.2745

Our preference : Long positions above 1.2745 with targets at 1.28 and 1.283. Alternative scenario : Below 1.2745 look for further downside with 1.2675 and 1.2625 as targets. Comment : the RSI is mixed to rackets on the ascent .

GBP / USD intraday: the upside prevails.

Pivot (level of cancellation): 1.5975

Our preference : Long positions above 1.5975 with targets at 1.6015 and 1.6035. Alternative scenario : Below 1.5975 look for further downside with 1.5945 and 1.591 as targets. Comment : the RSI is mixed to rackets on the ascent .

USD / JPY intraday: under pressure.

Pivot (level of cancellation): 78.50

Our preference : Short positions long maturity under 78.5 with targets at 78 and 77.75 in extension. Alternative scenario : Above 78.5 look for further upside with 78.8 and 79.05 as targets. Comment : the RSI Homokhtlt with bias to speculate on the landing.

EUR / JPY intraday: For short-term integration.

Pivot (level of cancellation): 100.15

Our preference : Short positions long maturity under 100.15 with targets at 99.5 and 99 in extension. Alternative scenario : Above 100.15 look for further upside with 100.45 and 100.8 as targets. Comment : the RSI is sloping uneven rackets on the landing.

GBP / JPY intraday: under pressure.

Pivot (level of cancellation): 125.50

Our preference : Short positions distant maturity 125.35 with targets at 124.9 and 124.55. Alternative scenario : Above 125.5, look for further upside with 125.8 and 126.15 as targets. Comment : the RSI is sloping uneven rackets landing.

AUD / USD intraday: For integration in the short term.

Pivot (level of cancellation): 1.0370

Our preference : Short positions long maturity under 1.037 with targets at 1.03 and 1.0275 in extension. Alternative scenario : Above 1.037 look for further upside with 1.0405 and 1.043 as targets. suspension technician : as long as 1.037 is the level of resistance Search for volatile share price with a bias to the conflicts on the landing.

Cac 40 Sep 12 in intraday: Aligned on speculation continues to climb.

Pivot (level cancellation): 3455.

Our preference : Long positions above 3455 with targets at 3525 and 3559. Alternative scenario : Below 3455 look for further downside with 3420 and 3390 Vkohdav. suspension technician : RSI negative but powered level strong support.

Dax Sep 12 in intraday: Aligned on speculation continues to climb.

Pivot (level cancellation): 7075.

Our preference : Long positions above 7075 with targets at 7245 and 7335. Alternative scenario : Below 7075 look for further downside with 7010 and 6945 Vkohdav. suspension technician : RSI negative but powered level strong support.

Facebook spying on users

Show analytical study published site "Business Insider" (BusinessInsider) that the social networking site famous "Facebook" that monitors all movements of users on the Internet with more than two hundred "Tracker" (Tracker), to monitor certain activities Kalmoaqa visited, and quality of purchases, and place Seen user, and many other details.


Note has been spiders "Facebook" by examining the new analytical software tool from the company "Lapin" competent protection of personal information to Internet users. And called this new free tool (DNT +) and scans Almtaatavat and blocked. And Almtaatavat (Trackers) are parts software small may be "cookies" (Cookies) or orders JavaScript mission to make Page Internet based application browser share certain data from the user's machine, for the purpose of storing or archiving or to see trends user activity on the Internet. Some call this technical espionage, while advertising professionals Vidonha target customers.

It is worth mentioning that the spiders Facebook were monitored in most locations. Where you gather data about the material read by the user, and the links that it visits. According to statistics based on this analysis, the spiders Facebook focused on three types of data about users, namely: 1. Quality materials read by the user, 2. Quality links, which are visited by social networking, 3. Quality purchases.

The fact that there this Almtaatavat not new news, search Vmhrkat like "Google" frequently used to classify the type of ads that appear to users according to their interests. But the important question is how to use this Almtaatavat and extent of the violation of user privacy.

Source: "Business Insider"

Today's oil price

$96.97 per barrel

Daily change of 0.43 ( 0.45% )

Oil Quote Updated Sep-11-12 12:00 AM

BP Sell Gulf of Mexico Oil Fields for $5.55 Billion

Following the Macondo Well oil spill in 2010 BP set itself the target of raising $38 billion in cash through divestitures before the end of 2013, they have just announced the sale of some of their Gulf of Mexico oil fields to Plains Exploration & Production Co. for $5.55 billion.
   
The purchase includes the Marlin, Dorado, King, and Horn Mountain fields, as well as part stakes in various other fields owned by Exxon Mobil and Shell. Plains purchased BP’s 50% stake in the Holstein field, and in a separate deal the other half of the field from Shell for $560 million.

The deal is part of Plains’ plan to increase its output of crude oil, and will provide an estimated 59,500 barrels of oil a day.

John White, and investment manager at Triple Double Advisors LLC in Houston, commented that the deal is “transformational for Plains. The price is in line with other oil deals and may be slightly favourable to Plains.”

He said that this deal now means that BP has raised more than $32 billion from asset sales since early 2010, a large contribution to the $38 billion that it set aside to pay for the spill, and the extra $20 billion trust fund it established for victims.

Jason Gammel, an analyst at Macquarie Capital Europe Ltd, believes that BP “got a good price. We were counting on them getting about $3.5 billion. They’re almost done with their asset sales now.”

Bulls Running for Canadian Crude

The top administrator at the Bank of Canada last week said high oil prices were good for the national economy. Crude oil prices were mixed in early trading this week as North Sea oil production declined because of maintenance. Operators in the Gulf of Mexico, meanwhile, moved slowly back to work following Hurricane Isaac. Against a backdrop of calls for emergency economic relief, however, the administration of Canadian Prime Minister Stephen Harper appears optimistic about the country's oil-driven potential.

Brent crude oil prices moved close to $115 in trading Monday as North Sea production declined because of maintenance.  About 14 percent of the oil output from the Gulf of Mexico remains shut in as operators continue their slow march back to work following Hurricane Isaac, a Category 1 storm that struck Louisiana in late August.

Crude oil prices have increased at a relatively steady pace since June. Brent prices have climbed more than 25 percent since then, prompting concerns from the Saudi oil minister, Ali al-Naimi. He said Monday the price of oil was "simply not supported by market fundamentals."

Bank of Canada Gov. Mark Carney, however, said higher energy prices were good for the national economy and no action would be taken to get in the way of increases in the value of the Canadian dollar. The Canadian dollar has added nearly 3 percent to its value since Aug. 1 when compared with the U.S. dollar.

"Most fundamentally, higher commodity prices are unambiguously good for Canada," he said.

He dismissed claims that higher oil prices, coupled with high currency values, could lead to declines in the country's manufacturing sector. This logic, he said, would lead to the shut down of oil sands production, thus forcing the country to "abandon our resource wealth."

Canada ranks third in the world in terms of oil reserves. Its 175.2 billion barrels represent 11 percent of the world's total reserves, just behind Venezuela and Saudi Arabia respectively. U.S. politicking and environmental concerns over the Keystone XL pipeline, planned for Canadian crude, in part prompted the Canadian government of Prime Minister Stephen Harper to look to Asian markets for a diversified consumer base. Two planned pipelines alone – Keystone XL and Northern Gateway – represent about $14 billion in Canadian infrastructure.

Most of Canada's oil helps feed the U.S. economy. Without major projects like Northern Gateway, that's likely to remain the case. Harper travelled to Beijing in February in order to encourage more foreign interest in his country's petroleum economy. Since then, the government has started a review of a $15.1 billion takeover bid for Canadian oil company Nexen Inc. by China National Offshore Oil Corp. With a growing consumer base, and higher oil prices to fund its ambitions, Canadian Natural Resources Minister Joe Oliver said his country was keen to expand even further.

The Implications of Saudi Arabia becoming a Net Oil Importer

Ambrose Evans-Pritchard, wrote last week in The Telegraph, Saudi oil well dries up. He presented the following chart of projected Saudi oil consumption, vertical bars, and production, dark blue line.

By these estimates, in 2022, Saudi Arabia will no longer be supplying oil into global demand but will be competing in global demand for foreign oil. Long before we reach the trade-off point, however, certain exigencies will emerge.

First consider the area on the chart between the two curves. This area is highly correlated to their balance of trade and their foreign exchange reserve acquisition. The website Suite 101 states that [t]he petroleum sector accounts for more than 90% of the Middle Eastern country’s exports. If the two curves are at all representational of what is to come, then it should be noted that they are exponential. The implication is the positive Saudi economic position is decreasing exponentially, doubly so between two diverging exponential trend lines. After 2022, their economic position will deteriorate at the same exponential rate.

But this is linear thinking. The strains of a deteriorating economic position will begin to manifest in the economy long before the crossover point is reached. The Saudi’s have been using a large part of their oil wealth to finance internal social programs to pacify a restive young population through subsidized employment. When these programs can no longer be supported the resulting social unrest may lead to revolution and the overthrow of the Saudi Monarchy.

The other aspect of the use of their wealth has been to support other countries and organizations against Iran and Shiite fundamentalism in the Middle East in the age-old Sunni/Shiite sectarian battle. As Saudi influence wanes through the loss of economic power, Iran with its huge oil reserves, may be just ramping up. The result will likely be a shift in the balance of power in the struggle, impacting the entire Middle East.

With respect to oil itself, if Saudi production is not replaced, then the Saudi supply/demand curve becomes global. Oil prices will respond accordingly and global economies will slow in relation to escalating oil prices. If Saudi production is replaced, then there will be a global shift of balance of trade from the existing failing producers to the new producers. This will have geopolitical implications as well.

OPEC has Probably Deceived Us About the Size of its Oil Reserves

Has OPEC misled us about the size of its oil reserves? The short answer is probably. The long answer is that currently, there is no way to know for sure.

The next question we should ask is: Does it matter? The answer is most definitely yes. OPEC, short for the Organization of Petroleum Exporting Countries, currently claims that its 12 members hold 81.3% of the world's oil reserves. And, with few exceptions the world believes them. Trouble is these reserves "are not verified by independent auditors," according to a study (PDF) done by the U.S. Government Accountability Office, the nonpartisan investigative arm of the U.S. Congress. OPEC reserves are simply self-reported by each country. Essentially, OPEC's members are asking us to take their word for it. But should we?

It ought to give us pause that the reserve numbers OPEC countries release are used in major reports produced by the U.S. Energy Information Administration (EIA); the Paris-based International Energy Agency (IEA), a consortium of 28 of the world's oil importing nations; oil giant BP which annually publishes the widely cited BP Statistical Review of World Energy; and myriad other organizations. Reports from the two agencies cited above and BP are frequently consulted by governments, industry, banks and investors around the world for policy formulation, long-term planning, and lending and investment decisions. Yet these groups seem blissfully unaware of the caveats surrounding the numbers in those reports and by extension surrounding more than 80 percent of the world's oil reserves.

Keep in mind as we go along that the sometimes astronomical numbers thrown around for world oil reserves by the uninformed or by those who intend to mislead us either have no basis in fact or actually refer to "resources." Resources are only an estimate of oil thought to be in the ground based on rather sketchy evidence. And, most of that oil will never be recoverable. Reserves, however, are what can be produced at today's prices from known fields using existing technology. It turns out that reserves are only a tiny fraction of so-called resources.

Now here's the caveat from the International Energy Agency in its World Energy Outlook 2010:

Definitions of reserves and resources, and the methodologies for estimating them, vary considerably around the world, leading to confusion and inconsistencies. In addition, there is often a lack of transparency in the way reserves are reported: many national oil companies in both OPEC and non-OPEC countries do not use external auditors of reserves and do not publish detailed results.

"National oil companies" refers to government-owned companies which typically control all oil development within a country.

The BP Statistical Review of World Energy for 2012 provides this explanatory note under a table listing oil reserves by country:

The estimates in this table have been compiled using a combination of primary official sources, third-party data from the OPEC Secretariat, World Oil, Oil & Gas Journal and an independent estimate of Russian and Chinese reserves based on information in the public domain. Canadian oil sands 'under active development' are an official estimate. Venezuelan Orinoco Belt reserves are based on the OPEC Secretariat and government announcements.

The key words are "OPEC Secretariat" which refers to the OPEC staff located in an office in Vienna. That office is where BP presumably gets its information about OPEC reserves. The EIA lists the OPEC Annual Statistical Bulletin put out by--you guessed it--the OPEC Secretariat. Alas, the Annual Statistical Bulletin tells us under the heading "Questions on data" that "[a]lthough comments are welcome, OPEC regrets that it is unable to answer all enquiries concerning the data in the ASB." In other words, trust us. So, information about OPEC reserves comes either from the OPEC offices in Vienna or from member countries. Some analysts may adjust those figures based on the few shreds of evidence that are available outside of official government pronouncements. But, in reality, there are almost no hard facts when it comes to OPEC reserves.

Strangely, many of these countries say that a detailed audit of their fields by independent observers is out of the question because oil reserves are a state secret. And, yet those countries report their reserves to OPEC which publishes them for all to see. So, are oil reserves in many OPEC countries a state secret or not? Apparently, what's secret is the field-by-field data that would tell us whether the reserves claimed by these countries are actually there. Are there reasons to believe that if we saw this data it would contradict the official overall number provided by some countries? In a word, yes.

First, OPEC allocates production levels among its members. It does this to control the flow of oil to world markets and thus to manipulate the price. OPEC bases production quotas for its members in part on the size of each member's reserves. When this policy was first established in the 1980s, reported reserves for several OPEC members jumped between roughly 40 and 200 percent within one year--not always the same year--as each country jockeyed for a higher production quota.

Not every country participated in the free-for-all. But the countries with the largest exports participated with a vengeance. There was no drilling program in any of these countries that could have explained such jumps in reserves.

The competition continues to this day. In October 2010 Iraq announced an increase in its oil reserves from 115 billion barrels to 143.1 billion barrels. No attempt was made to hide the reason for the increase: "Falah al-Amri, the head of the country’s State Oil Marketing Company, suggested that future quota calculations might have been a factor in the revision." A week later Iran raised its reserves number from 136.6 billion barrels to 150.3 billion barrels, presumably in order to maintain its position within the OPEC production quota system. These numbers have been dutifully included in the latest statistical compilations of both EIA and BP, as if the two hadn't gotten the memo that Iraq's and Iran's increases were reported merely for quota reasons and not because of any particular discoveries.

Perhaps even more astounding is that some OPEC members don't even take the oil reserves reporting game seriously any more. Logic dictates that there should be at least small adjustments up or down in reserves each year as new fields are developed and old ones decline. The world of geology simply cannot yield precisely the new reserves needed to replace exactly the amount of oil extracted from existing fields each year.

And yet, the United Arab Emirates has been reporting 97.8 billion barrels of oil reserves every year since 1997. Kuwait has been reporting 104 billion barrels each year since 2008. Iraq shows long periods from 1980 onward when reserves don't change, the latest running from 2004 to 2011 during which reserves supposedly held absolutely steady at 115 billion barrels. Algeria has reported 12.2 billion barrels from 2008 onward. At least Saudi Arabia has demonstrated a certain sensitivity to appearances and has adjusted its reserves number slightly from year to year. And yet, that number has remained within a narrow range of 260 to 267 billion barrels from 1991 to the present. All of these numbers suggest that depletion from existing fields is taking absolutely no toll on OPEC's reserves. Even if that's true, we have no way of verifying it.

The second reason to doubt OPEC's official oil reserve numbers is that two insiders have told us not to trust those numbers. The now deceased A. M. Samsam Bakhtiari, an executive for the National Iranian Oil Company, told the Oil & Gas Journal all the way back in 2003 the following: "I know from experience how 'reserves' are estimated in major Middle Eastern (and OPEC) countries...And the methods used are usually far from scientific, as the basic knowledge for such a complex exercise is not at hand." He estimated that Iranian reserves were about 37 billion barrels, not the 90 billion that were being cited at the time.

Back in 2007 Sadad al-Husseini, former executive vice president for exploration and production at Saudi Aramco, the state oil company that controls all oil development in Saudi Arabia, told a conference in London that world oil reserves had been inflated by 300 billion barrels. That number almost matches the increases in OPEC members' reserves for quota reasons in the 1980s, and it represented about a quarter of all reported reserves in 2007. As a result, to this day al-Husseini remains skeptical of claims that world oil production will rise much from here.

Another piece of evidence that casts doubt on OPEC members' reserve claims came to light in 2005. That year Petroleum Intelligence Weekly, an industry newsletter with worldwide reach, obtained internal documents from the state-owned Kuwait Oil Co. The documents revealed that Kuwaiti reserves were only half the official number, 48 billion barrels versus 99 billion. Since then policymakers and the public seemed to have ignored the entire incident. The BP Statistical Review lists Kuwait's reserves as 101.5 billion barrels as of 2011. The EIA shows them as 104 billion. Skepticism apparently is taking an extended holiday at BP and EIA.

Measuring oil reserves remains something of an art. Even large publicly traded oil companies with armies of petroleum geologists and engineers who operate under strict U.S. Securities and Exchange Commission rules for estimating reserves--even these companies don't always get it right. In 2004 Royal Dutch Shell had to lower its reserves number by 20 percent, a huge and costly blunder for such a sophisticated company. If Shell can bungle its reserves estimate, then how much more likely are OPEC countries which are subject to virtually no public scrutiny to bungle or perhaps manipulate theirs.

I said in a previous piece that the rate of production is the key metric when evaluating the success of the world's oil production and delivery system. But sustained production of oil depends on the size and quality of reserves. If the world does indeed have 300 billion fewer barrels of reserves than it thinks it does, that has implications for how long the current rate of production can be maintained. (It has been stuck between 71 and 76 million barrels per day since 2005.) And, that is why the mystery surrounding OPEC's reserves, which supposedly constitute 80 percent of the world's reserves, is so disturbing. Even more disturbing is how much this mystery is ignored or perhaps not understood by policymakers, industry and the public.

We shouldn't be the least bit exultant over claims that we have more oil reserves than we've ever had before. First, we are using up that oil at a faster rate than ever before. Second, much of what is currently parading as reserves may not be. Third, the plateau in worldwide oil production since 2005 is actually consistent with a smaller reserve base.

Given all this I think we can safely say that when it comes to the official statistics on oil reserves, there is likely to be less than meets the eye. And that begs the question: Does it really make sense for the world to chart its energy future based on such dubious information?