Merged: The Price of Oil
Thread Starter
Merged: The Price of Oil
Given the obvious importance of oil as an productive input in the airline industry, i am wondering where industry professionals think the price of oil is going....
Current factors seem to include:
- limited short term ability to increase supply
- limited short term ability to reduce demand
- long term development of technologies to increase efficiency and also switch to alternatives
- OPEC preparedness to defend the $60/barrrel with cuts to production
- China building huge storage facilities with a view to accumulating strategic reserves equivalent to 1 month consumption
- global inventories of only a few days consumption
- rapidly increasing per capita gdp in China and India especially leading to mass increases in consumer demand
- geo political instability in the middle east
- increasing costs of production and difficulty in extraction
- current seasonal softening in US demand
Long term average oil price is around $30 barrel, highest last 12 months around $100/barrel, currently settling around $60/barrel.
My crystal ball says this is as low as it gets, it will be more than $70 in 6 months $80 in 12 months and back over $100 within 2 years. What do you reckon???
Current factors seem to include:
- limited short term ability to increase supply
- limited short term ability to reduce demand
- long term development of technologies to increase efficiency and also switch to alternatives
- OPEC preparedness to defend the $60/barrrel with cuts to production
- China building huge storage facilities with a view to accumulating strategic reserves equivalent to 1 month consumption
- global inventories of only a few days consumption
- rapidly increasing per capita gdp in China and India especially leading to mass increases in consumer demand
- geo political instability in the middle east
- increasing costs of production and difficulty in extraction
- current seasonal softening in US demand
Long term average oil price is around $30 barrel, highest last 12 months around $100/barrel, currently settling around $60/barrel.
My crystal ball says this is as low as it gets, it will be more than $70 in 6 months $80 in 12 months and back over $100 within 2 years. What do you reckon???
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Whatever it will be, the price will be artificially inflated by short sighted (read political cycles) policies of governments who are in the clutches of the oil industry, and dependant upon the continued growth and success of a global economy that is inextricably linked to fossil fuels.
Poor economic growth = bad politics = getting voted out. However, the continued growth and demand from investors year after year is not resource sustainable. Unfortunately the policies to break away from this headlock are not politically palatable - they are considered too "courageous".
Hence stupid wars over the beliefs it will "secure" supply of a finite resource that is in a growing demand.
And stupid policies like globalisation, extending lines of supply to thousands of kilometres, when the local economy is able to provide at similar costs.
This all equals volatility in the market. Proven reserves after all are taken on trust from OPEC nations like Saudi, Iran etc. Independant verification of proven reserves is not permitted.
New drilling technolgies however are providing better new finds in the past couple of years - but still not enough to meet rising demand.
Oil sands are too energy hungry a process to be ling term viable - also their need for immense amounts of water in the processing creates a new problem with water becoming more and more valuable.
So what happens to the price?
It will be volatile - the highest peaks of late have been on speculation based on a lot of unrelated world events - the world stability premium. In the medium to long term of course it will rise, but too quick a rise makes alternative energies economically more viable and reduces demand - therefore cutting profits. The greed factor can be bad for the corporates if one is too greedy to quickly (and the governments who rake in the excise!).
US Politics is run by oil - have a look at the players and where they come from and where they go to after running the world (as they see it).
In some ways a new massive oil spike would be a very good thing - it would actually help wean us off the stuff quicker. Then the price will eventually come off - and possibly permanently, as new cleaner sustainable technologies gear up and reduce costs through economy of scale.
Poor economic growth = bad politics = getting voted out. However, the continued growth and demand from investors year after year is not resource sustainable. Unfortunately the policies to break away from this headlock are not politically palatable - they are considered too "courageous".
Hence stupid wars over the beliefs it will "secure" supply of a finite resource that is in a growing demand.
And stupid policies like globalisation, extending lines of supply to thousands of kilometres, when the local economy is able to provide at similar costs.
This all equals volatility in the market. Proven reserves after all are taken on trust from OPEC nations like Saudi, Iran etc. Independant verification of proven reserves is not permitted.
New drilling technolgies however are providing better new finds in the past couple of years - but still not enough to meet rising demand.
Oil sands are too energy hungry a process to be ling term viable - also their need for immense amounts of water in the processing creates a new problem with water becoming more and more valuable.
So what happens to the price?
It will be volatile - the highest peaks of late have been on speculation based on a lot of unrelated world events - the world stability premium. In the medium to long term of course it will rise, but too quick a rise makes alternative energies economically more viable and reduces demand - therefore cutting profits. The greed factor can be bad for the corporates if one is too greedy to quickly (and the governments who rake in the excise!).
US Politics is run by oil - have a look at the players and where they come from and where they go to after running the world (as they see it).
In some ways a new massive oil spike would be a very good thing - it would actually help wean us off the stuff quicker. Then the price will eventually come off - and possibly permanently, as new cleaner sustainable technologies gear up and reduce costs through economy of scale.
Thread Starter
opec
Interesting that despite opec sabre rattling regards to reducing supply only the Saudis appear to be actually reducing their shipments and the committment/ability of the other opec nations to do the same is being questioned.
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Owen Stanley,
You may well be right, but like the speculators (read NYEX Traders) that punt on it, it's all a bit of a short term guessing game.
The long term outlook can only be an escalation before the market collapses all together (which could be 10-100 years away with the crap data we have).
Hence the potential volatitlity.
The hardest part of it IMHO is changing the whole infrastructure and it's political influence - oil companies, car manufacturers and their supply chains, globalised business and their supply lines, tourism / business travel, etc.etc.
Optimistically though, we have done it all before.
You may well be right, but like the speculators (read NYEX Traders) that punt on it, it's all a bit of a short term guessing game.
The long term outlook can only be an escalation before the market collapses all together (which could be 10-100 years away with the crap data we have).
Hence the potential volatitlity.
The hardest part of it IMHO is changing the whole infrastructure and it's political influence - oil companies, car manufacturers and their supply chains, globalised business and their supply lines, tourism / business travel, etc.etc.
Optimistically though, we have done it all before.
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Crude Oil Price Forecast
Just searched the web for some info regarding a forecast for crude oil prices. They are predicting the price of oil to fluctuate around US$60 / barrel for the next six months. I hope Owen Stanley's prediction is accurate ($42/barrel), however, I get the impression that these relatively low prices won't last for much longer...... 
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Don't be concerned about running out of fossil fuels at this stage. The big problem is all the global warming hype. If this gets out of control and causes problems extracting oil from oil sands etc then live as we know it is finished. There are two ways to go from this point. Forget the environment and bring on plenty of nuclear power. Continue consuming all the fossil fuels you can find including turning coal into fuel. The greeny choice to stop using fossil fuels and to ride bikes appears to be the best thing for the environment but does not factor in the economic shock and massive unemployment that would more than likely end in WW3.
I think all pilots should be vermently opposed to the green movement and the idea of global warming.
I think all pilots should be vermently opposed to the green movement and the idea of global warming.
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Just searched the web for some info regarding a forecast for crude oil prices. They are predicting the price of oil to fluctuate around US$60 / barrel for the next six months. I hope Owen Stanley's prediction is accurate ($42/barrel), however, I get the impression that these relatively low prices won't last for much longer......
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It's funny, this should be a topic that consumes us all. And yet we see observations on this thread that are so "short term" as to be almost incredible in their naivete. I am just as much to blame as to the state of the World that we are rapidly descending in to as many that read here. I drive a car, passenger (long distance) on aircraft probably 6 times a year, and for the past 40 odd years have earned my living from aviation. And yet I see short term statements like "$42 barrel in six months time" as if it's a joke. I guess that it will be an irony of the way things go, that many who can be so whimsical here will be amongst those most affected by the way things will go....including me!
It's got nothing to do with whether or not the Saudi's or OPEC or whoever raise/lower production etc to protect some silly mythical "Oil Price". It's the mere fact that we are hooked on a finite asset that is rapidly disappearing.
And before everyone jumps on me, I don't know the answer.
It's got nothing to do with whether or not the Saudi's or OPEC or whoever raise/lower production etc to protect some silly mythical "Oil Price". It's the mere fact that we are hooked on a finite asset that is rapidly disappearing.
And before everyone jumps on me, I don't know the answer.
Grandpa Aerotart
****su
No, on the basis that anthropogenic (caused by man) global warming is a load of BS.
The world might getting warmer...or cooler. One day it will get cooler..or warmer. There aint a fecking thing we can do to significantly effect this natural cycle. It has been happening for millions of years. I find it amazing that no one in the mainstream media ever thinks to ask the 'climate' scientists that predict man made disaster what caused the last three ice ages and warm periods when man was not around burning fossil fuels
On the rare occassion when they are actually pushed they admit the earth was an average 4 degrees warmer 3000 years ago...but the media 'professional' never then challenges the doomsayer predictions of ice cap melting and sea level rise. The scientist will say something like "We know from ice core samples that the world was as much as 4 degrees warmer 3500 years ago" and the next 3 logical questions don't get asked;
"Oh all the ice didn't melt?"
"And the polar bears weren't driven to extinction?"
"What caused it to get warmer...it wasn't us?"
No...much better to stick to the politically acceptable assumption that it is caused by us and then discuss doomsayer predictions that keep people on the edge of their seats.
As to oil. Anyone else been reading about the HUGE light sweet crude find in Utah that will rival Prudhoe Bay?
The last 4-5 years they have been drilling madly and FINDING oil.
The Saudis have been mumbling about over production and flooding the market for 12 mths...but it has mostly been lost in background noise and the speculator hype. Demand has been dropping and the inventories have been accumulating. One of the reasons they have to cut production is because the biggest market, the US, can't store the **** in enough places and need to sell the expensive stuff to make room for the cheaper stuff.
Now the Saudis have two choices...just cut back on production to match demand or make a big announcement and scare the price up into a little spike of a couple of $...or more likely just get a little slowing of the price slide...either way it's worth Billions to their bottom line...and all the other oil producing nations and companies.
Atomic power is on the adgenda in Australia for one reason and one reason alone...there is no better way to produce the VAST amounts of electricity required to make desalination of sea water feasible. There is also no cleaner way. You could do it with coal fired power stations or oil fired power stations...but why would you?
Australia is a dry continent...millions of years ago it was mostly rain forest, as was antartica btw..(what caused it to get drier? Fecking sure it wasn't Wayne driving his V8)...it cannot support a growing population from a water perspective. The population probably exceeded what the continents rainfall could sustain naturally 15+ years ago.
For 'the population' to keep growing so it can support 'the economy' Australia needs to start desalinating sea water on a large scale...so we need atomic power stations.
Personally I would like, like ****su, to see globalisation vastly reduced because it is innefficient. Localised production and distribution would be a good thing from very many points of view...just not the point of view of 'the economy'...which as we discussed some months ago is the small % of greedy Mofos at the top of the human food chain...'the market' multinationals, CEOs...abetted by Pollies
Given that they make the decisions and 'the population' gets no say in the matter that is less likely to happen.
The big problem is that the greenies have so captured the political adgenda that it is near impossible to do the things needed on a short enough time scale. Imagine how the luvvy, tree hugging feckwits are girding their loins on atomic power? Collating all the horror strories on atomic power...or at least the ones that showcase the technology of the 1950s and the political ignorance of it's safety or otherwise. I suppose there really is no possibility that nuclear technology has advance any in the last 1/2 a century
I hope the threatened Supreme Court actions against Govts on climate change actually happen...they will cost millions but if that gets the facts out about global warming rather than the hype it will be money VERY well 'wasted'. Much better than wasting trillions on Kyoto which cannot make any difference as to whether the world warms or cools...spending trillions on Kyoto is just feeding another self sustaining beaurocracy
Rant over
No, on the basis that anthropogenic (caused by man) global warming is a load of BS.
The world might getting warmer...or cooler. One day it will get cooler..or warmer. There aint a fecking thing we can do to significantly effect this natural cycle. It has been happening for millions of years. I find it amazing that no one in the mainstream media ever thinks to ask the 'climate' scientists that predict man made disaster what caused the last three ice ages and warm periods when man was not around burning fossil fuels
On the rare occassion when they are actually pushed they admit the earth was an average 4 degrees warmer 3000 years ago...but the media 'professional' never then challenges the doomsayer predictions of ice cap melting and sea level rise. The scientist will say something like "We know from ice core samples that the world was as much as 4 degrees warmer 3500 years ago" and the next 3 logical questions don't get asked;
"Oh all the ice didn't melt?"
"And the polar bears weren't driven to extinction?"
"What caused it to get warmer...it wasn't us?"
No...much better to stick to the politically acceptable assumption that it is caused by us and then discuss doomsayer predictions that keep people on the edge of their seats.
As to oil. Anyone else been reading about the HUGE light sweet crude find in Utah that will rival Prudhoe Bay?
The last 4-5 years they have been drilling madly and FINDING oil.
The Saudis have been mumbling about over production and flooding the market for 12 mths...but it has mostly been lost in background noise and the speculator hype. Demand has been dropping and the inventories have been accumulating. One of the reasons they have to cut production is because the biggest market, the US, can't store the **** in enough places and need to sell the expensive stuff to make room for the cheaper stuff.
Now the Saudis have two choices...just cut back on production to match demand or make a big announcement and scare the price up into a little spike of a couple of $...or more likely just get a little slowing of the price slide...either way it's worth Billions to their bottom line...and all the other oil producing nations and companies.
Atomic power is on the adgenda in Australia for one reason and one reason alone...there is no better way to produce the VAST amounts of electricity required to make desalination of sea water feasible. There is also no cleaner way. You could do it with coal fired power stations or oil fired power stations...but why would you?
Australia is a dry continent...millions of years ago it was mostly rain forest, as was antartica btw..(what caused it to get drier? Fecking sure it wasn't Wayne driving his V8)...it cannot support a growing population from a water perspective. The population probably exceeded what the continents rainfall could sustain naturally 15+ years ago.
For 'the population' to keep growing so it can support 'the economy' Australia needs to start desalinating sea water on a large scale...so we need atomic power stations.
Personally I would like, like ****su, to see globalisation vastly reduced because it is innefficient. Localised production and distribution would be a good thing from very many points of view...just not the point of view of 'the economy'...which as we discussed some months ago is the small % of greedy Mofos at the top of the human food chain...'the market' multinationals, CEOs...abetted by Pollies
Given that they make the decisions and 'the population' gets no say in the matter that is less likely to happen.
The big problem is that the greenies have so captured the political adgenda that it is near impossible to do the things needed on a short enough time scale. Imagine how the luvvy, tree hugging feckwits are girding their loins on atomic power? Collating all the horror strories on atomic power...or at least the ones that showcase the technology of the 1950s and the political ignorance of it's safety or otherwise. I suppose there really is no possibility that nuclear technology has advance any in the last 1/2 a century
I hope the threatened Supreme Court actions against Govts on climate change actually happen...they will cost millions but if that gets the facts out about global warming rather than the hype it will be money VERY well 'wasted'. Much better than wasting trillions on Kyoto which cannot make any difference as to whether the world warms or cools...spending trillions on Kyoto is just feeding another self sustaining beaurocracy
Rant over
Last edited by Chimbu chuckles; 4th Nov 2006 at 03:01.
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Hey Chimbu, our threads/posts must have crossed. Having poled 185's and 206's into places like Omkali, Pindiu and Mindik in the '60's with two 44gal drums of "benzene" strapped in the back, maybe we do have something in common...or do we?
The changes that have undoubtedly happened to the Earth in the past are generally accepted to have happened over many hundred's of thousands (if not millions) of years, and the natural environment adapted. Not the temp fluctuations that are being seen now in a very short space of time. Sure there have been "natural" interruptions to the place such as the Santorini and Krakatoa eruptions in recent past that have temporarily upset the balance.
If you have ever passed a group of rubbish bins and consciously made the effort to throw your used "South Pacific Post" into the "Papers only" bin and not the "Bottles only" bin, then you to have just a bit of a green streak in you to.
Well might you be correct to let us know that they "have been finding oil" and I am sure that there is quite a bit more "oil" still to be found. However, one day, and it won't be too far away, the well will run dry. It might be beyond our life times, but it will happen.
The changes that have undoubtedly happened to the Earth in the past are generally accepted to have happened over many hundred's of thousands (if not millions) of years, and the natural environment adapted. Not the temp fluctuations that are being seen now in a very short space of time. Sure there have been "natural" interruptions to the place such as the Santorini and Krakatoa eruptions in recent past that have temporarily upset the balance.
If you have ever passed a group of rubbish bins and consciously made the effort to throw your used "South Pacific Post" into the "Papers only" bin and not the "Bottles only" bin, then you to have just a bit of a green streak in you to.
Well might you be correct to let us know that they "have been finding oil" and I am sure that there is quite a bit more "oil" still to be found. However, one day, and it won't be too far away, the well will run dry. It might be beyond our life times, but it will happen.
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Chuck,
Deep down behind my lefty facade I am actually an optimist.
In that light, I indeed hope you are right.
I say hope, becasue I could trawl all around and find conflicting bodies of opinion vociferously, and often effectively, arguing both sides of the debate.
I will not agree with you however that getting legal challenges to theory is a good answer. Have witnessed it in the US with the legal gag on teaching the theory of evolution vice creationism or intelligent design. Lawyers are good at dumbing down the general populus.
Deep down behind my lefty facade I am actually an optimist.
In that light, I indeed hope you are right.
I say hope, becasue I could trawl all around and find conflicting bodies of opinion vociferously, and often effectively, arguing both sides of the debate.
I will not agree with you however that getting legal challenges to theory is a good answer. Have witnessed it in the US with the legal gag on teaching the theory of evolution vice creationism or intelligent design. Lawyers are good at dumbing down the general populus.
Grandpa Aerotart
We certainly have 185s Omkali, Pindiu and Mindik in common...
I am greener than I may, at times, sound...that doesn't mean I believe in anthropogenic global warming. Certainly a cleaner environment is preferable from many perspectives. I don't want to see mercury killing fish or pollution turning pretty rivers and countryside into ugly useless areas...I don't like seeing Malaysian logging companies clear felling forests and turning rivers brown with silt and clogging inshore reefs with sludge. But those are different issues and don't impact global warming or cooling...they didn't have an effect over millenia and they don't have a measurable effect now or in the future.
The earth has been evolving and CHANGING since day 1. All of a sudden it is 'our fault' and some think we can stop that evolution.
Show me some imperical data that proves anthrogenic global warming...and I don't mean quote David Suzuki...show me some proof that what you believe to be true is actually happening.
I certainly believe the world is getting a little warmer...I just don't accept that man is causing it or that it will be catastrophic.
As to oil running out?
Possibly. But when, as quoted above somewhere, only a single digit % of oil use is air travel that means to me that 90% of the rest of the transport modes we rely on can be driven by alternatives.
We don't need oil (or coal) to drive cars, trains or power stations. With the alternative technologies being refined we can reduce our dependance on oil by 75+% if the will is there.
Think of it this way. What would a barrel of oil be worth if 75% of the worlds cars were hybrid/bio diesel? What would that do to Govt tax revenues? Remember that close to 50% of the cost of every liter goes to the Govt in fuel excise and GST...and GST on fuel excise
What would happen to the price of a barrel of oil if that C change could be effected in the next few years?
It would hit about $5/barrel!
That would leave those technologies that cannot be transfered easily away from oil...like aeroplanes, shipping etc to use a product, oil, that has a life extended by thousands of years.
It won't be that spectacular of course. These things will happen over time...as demand varies oil production will vary in an effort to maintain it at a price that everyone can live with. The result will be the same in the end however...affordable oil lasting many generations beyond the point where I cease to give a ****.
I am greener than I may, at times, sound...that doesn't mean I believe in anthropogenic global warming. Certainly a cleaner environment is preferable from many perspectives. I don't want to see mercury killing fish or pollution turning pretty rivers and countryside into ugly useless areas...I don't like seeing Malaysian logging companies clear felling forests and turning rivers brown with silt and clogging inshore reefs with sludge. But those are different issues and don't impact global warming or cooling...they didn't have an effect over millenia and they don't have a measurable effect now or in the future.
The earth has been evolving and CHANGING since day 1. All of a sudden it is 'our fault' and some think we can stop that evolution.
Show me some imperical data that proves anthrogenic global warming...and I don't mean quote David Suzuki...show me some proof that what you believe to be true is actually happening.
I certainly believe the world is getting a little warmer...I just don't accept that man is causing it or that it will be catastrophic.
As to oil running out?
Possibly. But when, as quoted above somewhere, only a single digit % of oil use is air travel that means to me that 90% of the rest of the transport modes we rely on can be driven by alternatives.
We don't need oil (or coal) to drive cars, trains or power stations. With the alternative technologies being refined we can reduce our dependance on oil by 75+% if the will is there.
Think of it this way. What would a barrel of oil be worth if 75% of the worlds cars were hybrid/bio diesel? What would that do to Govt tax revenues? Remember that close to 50% of the cost of every liter goes to the Govt in fuel excise and GST...and GST on fuel excise
What would happen to the price of a barrel of oil if that C change could be effected in the next few years?
It would hit about $5/barrel!
That would leave those technologies that cannot be transfered easily away from oil...like aeroplanes, shipping etc to use a product, oil, that has a life extended by thousands of years.
It won't be that spectacular of course. These things will happen over time...as demand varies oil production will vary in an effort to maintain it at a price that everyone can live with. The result will be the same in the end however...affordable oil lasting many generations beyond the point where I cease to give a ****.
Last edited by Chimbu chuckles; 4th Nov 2006 at 03:59.
Grandpa Aerotart
I don't want to hijack this thread into a GW one but as it already has been, to some extent, and the Peak Oilers and GW doomsayers seem to want to link the two I will just post this.
http://mclean.ch/climate/Eye_opening.htm
And challenge you guys, in the friendliest manner, to think about this stuff in a slightly more open minded manner...rather than just listening to greeny, left wing media shouting the greenie, left wing mantra of "We're all doomed!!"
And think also about this. If the miniscule overall reduction in CFCs of the last 10-15 years in the southern hemisphere has managed to start the ozone hole closing back up again, according to NASA, NOAA etc, how come the massive use of CFCs in the northern hemisphere never caused a hole in the ozone over the artic the way 'we' in the southern hemisphere managed to damage the ozone over the antarctic? Given that the vast majority of the southern hemisphere is open water and the remainder sparsely populated continents...as opposed to the situation in the northern hemisphere.
Maybe it was all just a natural cycle?
http://mclean.ch/climate/Eye_opening.htm
And challenge you guys, in the friendliest manner, to think about this stuff in a slightly more open minded manner...rather than just listening to greeny, left wing media shouting the greenie, left wing mantra of "We're all doomed!!"
And think also about this. If the miniscule overall reduction in CFCs of the last 10-15 years in the southern hemisphere has managed to start the ozone hole closing back up again, according to NASA, NOAA etc, how come the massive use of CFCs in the northern hemisphere never caused a hole in the ozone over the artic the way 'we' in the southern hemisphere managed to damage the ozone over the antarctic? Given that the vast majority of the southern hemisphere is open water and the remainder sparsely populated continents...as opposed to the situation in the northern hemisphere.
Maybe it was all just a natural cycle?
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Kundiawa Kakkles:
You're right that other modes of transport (road vehicles, trains, shipping) can use other forms of energy, and it stuffs me that this isn't being jumped on. Of course I only look at the simple picture. However, it all comes down to how we as a people select those that will govern (?) us. Whilst we have - as at the moment - "oil" people running the World's largest economy, I don't have a lot of faith. And then of course it will be interesting to see how China and India start to soak up assets. Will they give a toss if a few "whitey's" have to lower their standards.
As for your "show me proof", well I can't, I just have to take in what I see and read around me. As you say, the Earth has been evolving and changing since day 1, but we humans are a part of that change, and evolution. Whilst we were all "bush kanaka's" at one stage and impacting little on anything other than our immediate environment, I am sure that this is no longer the case, and we are changing the earth with the way we utilise resources, for good or bad.
I wish us all luck with your $5 a bbl oil prediction, and once again you are correct, if cars etc could be magically transformed to hybrid/bio-diesel, then this would help a lot. However the projections I read is that this won't happen for another 20 years, and then for only about 20% of vehicles....Might be too late by then!!
Far Canard alluded to WW3 in his post...far canal!
You're right that other modes of transport (road vehicles, trains, shipping) can use other forms of energy, and it stuffs me that this isn't being jumped on. Of course I only look at the simple picture. However, it all comes down to how we as a people select those that will govern (?) us. Whilst we have - as at the moment - "oil" people running the World's largest economy, I don't have a lot of faith. And then of course it will be interesting to see how China and India start to soak up assets. Will they give a toss if a few "whitey's" have to lower their standards.
As for your "show me proof", well I can't, I just have to take in what I see and read around me. As you say, the Earth has been evolving and changing since day 1, but we humans are a part of that change, and evolution. Whilst we were all "bush kanaka's" at one stage and impacting little on anything other than our immediate environment, I am sure that this is no longer the case, and we are changing the earth with the way we utilise resources, for good or bad.
I wish us all luck with your $5 a bbl oil prediction, and once again you are correct, if cars etc could be magically transformed to hybrid/bio-diesel, then this would help a lot. However the projections I read is that this won't happen for another 20 years, and then for only about 20% of vehicles....Might be too late by then!!
Far Canard alluded to WW3 in his post...far canal!
Grandpa Aerotart
I just have to take in what I see and read around me
I wish us all luck with your $5 a bbl oil prediction
That hyperthetical can't actually happen for a bunch of reasons;
1/. It would take a lot longer than 'several years' for the market to roll over old technology with newer technology...1/2 the population just aint gonna trade their 3 year old vehicles in on hydrids in the next few years...nor should they.
2/. Govts and massively cashed up oil companies would never let demand desert oil at such a rate....it would bankrupt too many developing countries and a few enormous companies. They will manage the oil price so demand is maintained and prices held reasonable stable over time...the odd 'oil shock' not withstanding. That is ok too...if we reduce car dependance on oil by 20% in 20 years that will be more than enough to see oil prices depressed and reserves a non issue. Cars use, BY FAR, most of the oil...there are multitudinous option for driving cars besides oil...I recently saw a thing on CNBC about 'game changing' technologies. Those technologies that come along every generation or so that really force huge changes...oil was one..otherwise we would be knee deep in horse **** and our lungs would be clogged with coal dust....remember oil and it's associated transformation of the way humanity functions is the main reason we are living in a world as clean as we are. Compare any European city now to 100 years ago if you doubt that.
The particularly interesting technology, among the 4 or 5 mentioned, was new electric car technologies that will transform electric cars into truly viable alternatives to oil powered ones...i.e they will drive like our current cars in terms of speed, acceleration and range. I cannot remember the nuts and bolts of it now but it was huge...and not just pie in the sky theory...it was proven to work and all that was needed was to scale it up...that being the case you can bet Exxon, Mobil or BP will be looking to buy it and bury it...lets hope the owners of the technology patent will take a longer view and not go for being instant multi millionaires but rather let time turn them into billionaires.
Peak Oil doomsayer predictions just do not stand up to basic logic let alone fundamental cause and effect...and neither does anthropogenic global warming.
As an example given the current high profile, bordering on all pervasive, peak oil doomsayer BS is it not logical to suggest economies on the cusp of hugeness, like China, won't structure themselves in suc a way as to be far less reliant on oil than the west has been...the population is starting virtually from scratch in the car ownership area...if 30% of the new cars sold in China are latest technology hybrid etc vehicles over the next 20 years will their demand for oil ever approach what it has been in the US in the last 20? On top of that 30% of Chinese vehicles you can be absolutely certain that the remaining 70% will be made up of small, efficient vehicles, diesels, LPG or just your average modern 4 cylinder that runs on the smell of an oily rag.
They will do that just out of basic economic self interest.
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Hell Kundiawa, you're making me feel better already....now Desmotronic, if you wanna start another poser thread, could you please make it something like "Does anybody know where the next CWA meeting is?". Mind you, you did ask for "Industry professionals" to opine, and I guess you got what you asked for.
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OIL ABOVE $94 A Barrel
Wonder how many $10.00 tickets Tiger can sell before they turn into a pussy catOct. 31 (Bloomberg) -- Crude oil rose to a record $94.74 barrel in New York after an Energy Department report showed that U.S. inventories fell to a two-year low. Today's 4.6 percent gain was the biggest since Jan. 30.
Stockpiles dropped 3.89 million barrels to 312.7 million barrels last week, the department said. It was the lowest since October 2005. A 400,000 barrel gain was expected, according to a Bloomberg News survey. Supplies at Cushing, Oklahoma, the delivery point for New York futures, fell 17 percent.
``We've lost a lot of oil at a time when we should be building supply for winter,'' said Phil Flynn, a senior trader at Alaron Trading Corp. in Chicago. ``Nearly all the analysts expected inventories to rise, making this an extremely bullish number.''
Crude oil for December delivery rose $4.15 to settle at $94.53 barrel at 2:50 p.m. on the New York Mercantile Exchange. Futures touched $94.74 the highest since trading began in 1983. The exchange reported a high of $94.80 during the session and subsequently canceled the trade.
Oil rose 16 percent in October, the biggest one-month gain since September 2004. Prices are up 61 percent from a year ago.
The futures plunged 3.4 percent yesterday after Goldman Sachs Group Inc., which said in July oil may reach $95 a barrel, told clients it was ``time to take profits.''
``The DOE report was the catalyst for this breakout,'' said John Kilduff, vice president of risk management at MF Global Ltd. in New York. ``Prices are also up because of the falling dollar and strong GDP number, which is a sign that demand will pick up. Economic growth both here and abroad are leaving us vulnerable to the myriad of supply threats out there.''
Economic Growth
Economic growth in the U.S. unexpectedly accelerated in the third quarter as increases in exports, consumer spending and investment made up for another plunge in home construction, a government report today showed. Gross domestic product grew at an annual rate of 3.9 percent in the quarter, the most since the first three months of 2006.
Oil inventories at Cushing, where West Texas Intermediate and other sweet, or low-sulfur, grades of oil are delivered for the futures market, dropped to 15.1 million barrels, the lowest since October 2005. Today's decline was the biggest since November 2004, Energy Department data show.
``There is no reason I can think of for a refiner to buy a single barrel to put a barrel in inventories,'' said Tim Evans, an analyst with Citigroup Global Markets Inc. in New York. ``Crude oil is expensive, refinery margins are weak, product inventories are rising anyway and backwardation makes it very dangerous to hold into oil.''
Backwardation
New York crude oil futures closest to delivery are more expensive than the prices for contracts for later delivery, a condition known as backwardation. During the first half of the year the market was in contango, where oil for future delivery is higher than near-month prices. Contango trading encourages companies to increase stockpiles.
``The bottom line is that there isn't enough sweet crude to meet demand,'' said Ric Navy, a broker at BNP Paribas SA in New York. ``We've almost erased yesterday's correction and may get another leg up if the Fed makes an interest rate cut.''
The Federal Reserve today announced a quarter-point interest rate reduction to bolster economic growth. Crude-oil surged and the dollar plunged after the Federal Reserve cut its benchmark interest rate by half a percentage point on Sept. 18, more than economists had predicted.
Weak Dollar
``When the dollar is weak, a lot of overseas investors seek a safe haven in commodities, such as gold and oil,'' said James Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. ``Falling interest rates also have bullish implications for demand because it may boost economic growth. A weak dollar also cushions European consumers somewhat against higher prices.''
Brent crude oil for December settlement rose $3.19, or 3.7 percent, to $90.63 a barrel on the London-based ICE Futures Europe exchange, a record close. Brent reached $90.94 a barrel during today's session, a record intraday price.
The Organization of Petroleum Exporting Countries agreed last month to raise output by 500,000 barrels a day starting tomorrow to help ease prices that threaten economic growth. The move failed and prices have jumped 17 percent since the Sept. 11 announcement of the increase.
``Global demand for oil largely exceeds the production of non-OPEC countries and the difference is not matched by OPEC, so there is tension on the market,'' said Harry Tchilinguirian, an analyst at BNP Paribas in London. ``Oil-consuming countries will certainly be putting pressure on OPEC to increase output, but in the short term we don't anticipate a production increase above 500,000 barrels a day.''
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Wonder how many $10.00 tickets Tiger can sell before they turn into a pussy cat