View Full Version : Forbes predicts oil prices will drop to $35 within a year!

2nd Sep 2005, 03:46
Interesting article in the Daily Telegraph:-

Oil Prices (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/08/31/cnoil31.xml)

If he is right this must surely be good news for the aviation industry!

2nd Sep 2005, 03:58
I don't know if Mr. Forbes is really the specialist here, there are others who predicted oil costs more than 100$ soon - and they said that before the hurricane.

Matthew Simmons, former Bush's energy consultant and engineer, predicts 250$ in a few years.

If Forbes is talking about a "bubble" and a neglection of the rules of demand and supply, then please go to Asia (Indonesia, China, India) and look how much bigger the demand is compared to the supply (although shortages also have political reasons).


2nd Sep 2005, 04:01
Julian Simon (http://www.overpopulation.com/faq/People/julian_simon.html) would likely agree with Forbes.

2nd Sep 2005, 07:42
He's wrong - it is not a bubble, but a lack of refining capacity to meet the demands of the global economy. If the global economy remains strong - or at least stagnates from this point - with no further refining capacity the price will rise or remain around today's levels.

Supply of oil coming from oilfields is not a problem - indeed stocks held are at all-time highs currently! There is no shortage of the crude product, just the refined products.

The chap at Goldman Sachs who predicted $100/bbl is not looking so stupid now...

2nd Sep 2005, 09:13
Surely a lack of refining capacity will shove the price of crude oil down rather than up, since once all the refineries are at full capacity there is no one left to buy the excess crude oil. Lack of refining capacity will cause a shortfall in the refinery products and so an increase in the cost of petrol and aviation fuel, but not the raw products used to make them.

Rwy in Sight
2nd Sep 2005, 09:42
But then why is the price of crude going up? If there is a bottleneck in the rafinary I understand that only finished product price would go up!

Rwy in Sight

2nd Sep 2005, 09:57
In the long term the price of oil will always go up on average. Within the next 10-15yrs there will not be enough oil produced to match the current economic expansion. This will lead to previously unviable oil wells being drilled and of course the price will rise further. Towards the end of this century the world will run out of most of its oil. The worrying part is that not enough is being done to bring in alternative technologies.

2nd Sep 2005, 10:51
With the shortage of refineries and corresponding high prices for refined products, refineries are currently very profitable, and most are running flat out. They are therefore prepared to pay whatever it takes to maintain their crude feedstocks. Ergo high crude prices.

Nerik the 10-15 year shortage you mentioned is the so-called peak-oil theory, and not one I subscribe to. You mentioned the viability of oilfields - BP are currently using $35/bbl as a test for viability of their wells. They're not often wrong.

2nd Sep 2005, 11:13
Yup - and it still only costs $5 a barrel to get the stuff out of the ground in Saudi.

My reading is that although there is very strong demand from Asia and China in particular, there is also a significant refining bottleneck - losing so much of the US Gulf Coast capacity is not helping the situation. I am also at a loss as to why crude is trading so high rather than refined product, but the consequence is that the margins on refining are too low to justify investment in furhter capacity and so the the problem does not go away.

2nd Sep 2005, 13:38
Price of scrap steel was $400/t a year ago, now it's only $237/t...

2nd Sep 2005, 19:50
Anyone want a nice electric car for when the oil runs out? Looks better than a Toyota Pryus... and a snip at 450,000 Euro (+tax)


0-100 KPH in 4.5 seconds
Top speed 170 KPH
250-350K range


2nd Sep 2005, 20:12
I'd say developing technology for plentiful energy independent of oil is the most crucial challenge facing the world today. Seems like so many problems have a tie-in to the quest for oil.

Onan the Clumsy
2nd Sep 2005, 22:21
If he is right this must surely be good news for the aviation industry! ...not for the ones that hedged :hmm:

3rd Sep 2005, 00:55
i will bet my house, that the cost at the bowser will take a lot longer to fall than the price of oil..

3rd Sep 2005, 07:01
We are burning off energy, that has been built up by the sun within 100 million years in maybe 200 years.

If energy prices rise, this will encourage a more delicate usage of our natural energy resources.

3rd Sep 2005, 10:43
Erm, think you will find the US are "borrowing" our oil, check this out


MOTORISTS ARE being warned petrol prices are now certain to pass 1 a litre over the next few days as Hurricane Katrina has wiped out many of the oil refineries on the US Gulf coast, reports the Guardian.

A possible increase in European petrol prices is signalled as US oil companies yesterday bought up 20 shiploads of European petrol and the wholesale price of petrol on the Rotterdam spot market soared to a record of $855 a tonne or more than $100 a barrel climbing 20% in two days.

Prices yesterday stood at around 92p a litre for unleaded and 96p for diesel but the Petrol Retailers Association is predicting that will have risen at least another 10p by Monday.

Such comments also follow a speech by US president George W Bush in which he said residents would need to conserve energy as there is expected to be a shortage of petrol in the short-term while refineries are out of action.

Woof etc
3rd Sep 2005, 23:15
Something that has always intrigued me: Plenty of talk about fuel cells, natural gas, etc. to power vehicles when the oil runs out. What about airliners? Does airline travel just end in 50 years time? What are the alternatives - never heard any options discussed.

I figure an A380 would need a lot of batteries.

Maple 01
3rd Sep 2005, 23:51
The return of the nuclear powered aircraft!

4th Sep 2005, 00:47
The return of the nuclear powered aircraft!

... or clockwork technology. It would give the pax summat to do - pedalling like :mad: between them no expenses spared meals so generously supplied by the carriers.

Mind you - the freight boys/gurls might have to work a bit harder :}

Onan the Clumsy
4th Sep 2005, 05:11
...the return of the airship perhaps?

4th Sep 2005, 07:17
I've thought about that as well. If there is a will/need/demand for airliners, there should be a way. Hopefully the best and brightest are working on a solution.

And I will be very angry if we use up all the oil before I get a PPL :mad:

4th Sep 2005, 09:17
Plenty of talk about fuel cells, natural gas, etc. to power vehicles when the oil runs out. What about airliners? Does airline travel just end in 50 years time? What are the alternatives - never heard any options discussed.
It will never run out - it will just become more and more expensive as more complex means of extraction are required. It may just be the case the aircraft remain the only means of transport powered by oil.

A massive amount of oil - far more that 50% - is not even extracted from oilwells that are no longer used - it is simply not easy to remove it - we will simply return to those with better technology.

Trash Hauler
4th Sep 2005, 11:28
I have come to the view that it would be better for the oil prices to remain high. Oil is a finite resource and highly valuable in terms of the contribution it has made and will continue to make to our society (the world) as a whole. Unfortunately we are wasting so much of it supporting our 'comfortable' western life style. The only way we will realise it's worth is to make it more expensive.

From my travels in Europe I have seen the effect of high fuel pricing in practice. The refined product is far more expensive than in the US (or Australia where I come from). The result for Europe is far more use of mass people tansport and an abundance of smaller, more fuel efficent motor vehicles. If this principle is applied around the world we can curb our fuel consumption (or at least the rabid increase in fuel consumption) and encourage the development of alternative energy sources.

I believe the USA bears the responsibility to dramatically increase the price of it's refined product for domestic use. It has 5% of the worlds population yet it consumes 25% of the worlds oil each year. This is a direct result of the low cost of their refined product. This has promoted an over reliant use of the motor car and ensured the need to reduce fuel consumption is a kept a low priority.

Hopefully the current fuel price will encourage the US populace to question their excessive fuel consumption. It has to start quickly because it will take significant time (5+ years) to effect the required change. Events may overtake the US and cause the change to be fast and painfull. (I hope for the sake of the world this doesn't happen).

The search for viable alternative fuels to support the transport industry has not yet achieved effective solutions. For aviation the prospects on the horizon are bleak, therefore it will be critical that the oil reserves are well managed to ensure aviation can continue to be available for the masses, otherwise a lot of us will be looking for alternative employment over the next 10 years.

wheels up
4th Sep 2005, 16:40
At the moment we are just squandering the stuff. Do we really need to pop across to the Barcelona for the weekend just because we can pick up an airticket for 99p?

4th Sep 2005, 17:50
To all those who want to think that oil will never run out, I suggest reading up on the sibject. Try reading a book such as Geo-destinies (written by an oil man and not by a dreamer). The production of oil will peak in the next 10-15yrs and that will see a surge in prices. Oil will run out for most countries except parts of the middle east by the end of this century. It is a problem.

With regards to an alternative for airlines, I think that hydrogen (please read up before you start on the old house wife tales on this one) is a viable alternative if proper funding for research is allocated, especially on how to produce it in large quantities without burning fossil fuels in the process.