Oil Hits $70+ a barrel!

[PCL_128]

Why can't you believe it? You yourself agree in principal when you claim,"...there's enough oil out there to last for 150 years." Based upon your research, we're to assume that peak oil will be reached in 75 years. You see, peak oil is simply an industry term used to describe a point when half the world's oil supply will be exhausted. So, you disagree on the timeframe.

If you're interested in some of the data, here's a good site to start with:

http://www.petroleumequities.com/OilSupplyReport.htm

Yes, there is a point that we reach peak-oil, but what so many people don't understand is that that point keeps moving forward on the time line. Peak oil is based on known oil reserves. Known reserves are reported by the oil companies themselves, and they only include reserves that are retrievable for a certain cost. Most oil companies only report reserves that a retrievable for about $20/bbl or less. If they were to report reserves based on oil that is retrievable for $40/bbl, then the reserves would be quite a bit higher. Also, as technology advances, the cost to drill for oil will constantly decrease which will also create higher reserves as more fields reach the point of being profitable at $20/bbl drilling costs.

The truth is, we have already reached so-called "peak oil" points several times in the last 3 decades. Self-appointed experts have proclaimed many peak oil dates ever since the 70s. We reach each date, and yet we still have more oil reserves than we did when they made their peak oil predictions years earlier. To be honest, 150 years might be conservative. We might have much more available as our technology increases. Getting all worked up about "peak oil" is ridiculous. It's just another kooky conspiracy theory.

 

[2LT]

Peak Oil Defined


RE: "...but what so many people don't understand is that that point keeps moving forward on the time line. Peak oil is based on known oil reserves..."


Reference #2 below. This was published in July of 2000.


Estimating When Oil Production Will Peak



A group of distinguished international petroleum consultants have built new mathematical models of oil discovery, production, and consumption which predict the point of global peak production and ensuing decline. (2)</SPAN>, (3) The models show oil production will peak when half the world's recoverable oil has been produced.


Estimating when peak production will occur therefore requires estimating when half the world's oil supply will be exhausted. This can be done by determining three factors:

1. How much of the oil that has already been discovered remains to be produced.
2. How much additional oil remains to be discovered.
3. How much oil is presently being consumed.



Factor 1 - Remaining Oil from Previous Discoveries:http://ogj.pennnet.com/cd_anchor_home Oil & Gas Journal, the most widely consulted publication on the subject of oil supply and demand, reports that 807 billion barrels were produced by 1998, with almost half of that amount since the supply shocks of the 1970s. Currently, the median estimate of remaining reserves in known fields is 830 billion barrels. (4)

Thus, a total of approximately 1.64 trillion barrels of oil have been discovered, and approximately 0.83 trillion barrels of this total remain to be produced.




Factor 2 - Additional Oil Discoveries: The earth has now been so extensively explored for petroleum that virtually all its prolific producing trends have been identified. Figure 1, which displays the amount of oil discovered per decade, shows discoveries peaked during the 1960s, verifying the advanced state of worldwide exploration.

http://www.petroleumequities.com/Figure1A.jpg

Extrapolating the historical pattern in Figure 1 suggests the ultimate discovery worldwide of about 1.8 trillion barrels, which is in line with the trend of some 25 published estimates over as many years. If so, about 165 billion barrels of oil remain to be found. Adding this amount to the 830 billion barrels of oil still in existing fields gives 995 billion barrels remaining to be produced.




Factor 3 - Oil Consumption Rate: Annual oil consumption worldwide is at present about 25 billion barrels a year. So if oil consumption remains constant with 995 billion barrels still remaining to be produced, the world's oil supplies will last another 40 years.

However, oil consumption is not constant, it is steadily rising. And oil production models show that production cannot remain constant until all oil reserves are exhausted — production rates begin to fall when half the reserves have been produced.

References​

[size=-1]

1. Campbell, C.J.: "Running Out of Gas: This Time the Wolf is Coming," The National Interest, Spring 1998.

2. Campbell, C.J.: "Depletion Patterns Show Change Due for Production of Conventional Oil," Oil & Gas Journal, December 29, 1997.

3. Laherrere, J.H.: "World Oil Supply -- What goes up must come down, but when will it peak?," Oil & Gas Journal, February 1, 1999. 4. "Worldwide Look at Reserves and Production," Oil & Gas Journal, December 28, 1998. [/size]

 

[PCL_128]

What was that post supposed to prove? Yes, I've read all of that along with dozens of other alarmist peak-oil websites, articles, and interviews. The point is still the same: basing peak-oil on known reserves is useless because known reserves are a subjective figure based on whatever criteria the oil companies are using at the time. To get an accurate figure on peak oil, you have to count all known oil in current fields plus estimates on future discoveries. As I've already said, that is not how known reserves are calculated. Known reserves are based more on economic considerations (oil that can be obtained for less than $20/bbl recovery costs) than actual geological considerations.

 

[SouthTex]

I see the light... Use more oil. Hey there is plenty out there why worry now when we can put it off for ten years. I just think we might want to consider tightening our belts and using less. Hey for those of you who need a patriotic reason to get motivated think about it as a way to cut off the money to people who bomb things. Those guys from Saudi problobly used a little oil money to learn to fly.

 

[Tim47SIP]

Wow!

Interesting that we get an administration run by ex oil executives and now we have 70/barrel oil with the oil companies making unprecedented profits.

What is more interesting is that there are people like you out there that really believe this stuff. MMoore would be proud of you. Keep the conspiracy theories going, they are quite comical.

 

[Immelman]

What is more interesting is that there are people like you out there that really believe this stuff. MMoore would be proud of you. Keep the conspiracy theories going, they are quite comical.

Hmm, so you're suggesting that government officials would NEVER be leveraged by private energy firms to allow prices to go through the roof? Never.. are you sure? Absolutely certain?

What about Enron?
What about shutting down power plants 5 yrs ago to artificially reduce power supply to jack up the rates?
What about coercing state gov't officials to enter into long-term contracts at these prices to get out of the high-cost spot market?

This isn't conspiracy, its recent history!

The only difference is that in the power industry, there does exist some regulation as to what the consumer directly pays; the state is now picking up the tab (in California anyways); the same cannot be said at the pump where we immediately feel it.

Lack of refinery capacity = excuse to gouge the prices.

That said, I am seriously considering a career switch to alternative energy engineering. I see a lot of $$ to be made in that field over the next 10+ yrs... I should start brushing up on my physics

 

[G4G5]

Fill up your cars!

Unleaded Gas is up, the NY Merc just halted unleaded gas futures after a .25c rise before noon! Up over 14% today. Was $2.06 now it's $2.35 per gal and climbing.

 

[Dangerkitty]

Forbes predicts bubble will burst

Oil bubble to burst: Forbes
From: Agence France-Presse
August 30, 2005

RECORD oil prices this week were evidence of a speculative market bubble that was set to burst in the next 12 months and make the hi-tech crash of 2000 "look like a picnic", US business publisher Steve Forbes said today.

The price of light sweet crude topped $US70 a barrel yesterday as Hurricane Katrina headed for the US Gulf Coast, which accounts for about a quarter of US oil output.
Mr Forbes, editor-in-chief of the influential Forbes business magazine, said inflation and increased demand from China and India only accounted for a small part of the price raise from $US25 to $US30 a barrel three years ago.

"The rest of it is sheer bubble speculation," Mr Forbes said in Sydney at the launch of a business conference.

"I'll be blunt, there's hardly a hedge fund in North America that hasn't speculated on oil futures.

"So I'll make a bold prediction ... in 12 months, you're going to see oil down to 35-40 US dollars a barrel.

"It's a huge bubble, I don't know what's going to pop it but eventually it will pop – you cannot go against supply and demand, you cannot go against the fundamentals forever."

Mr Forbes said the higher the oil price rose, the harder it would eventually crash.

"I don't think it's going to go to $US100 but if it does, the crash is going to be even more spectacular," he said.

"It will make the hi-tech bubble look like a picnic – this thing is not going to last."

Mr Forbes urged the US Government to stop adding to its Strategic Petroleum Reserve (SPR), a 700-million-barrel reserve that is meant to be used in emergencies.

"The speculators know now that no matter what happens to the price of oil, Uncle Sam is there buying almost every day," he said.

"Stop the buying and in fact throw some of that oil on the open market, boy that would throw it in turmoil and send the price down."

The US Government has said it could release some of the SPR to overcome any shortages caused by Katrina.

 

[xrated]

This is America if there was money to be made people would do it. The reason refineries haven't been built is because at a $.99 a gallon there wasn't a great margin... Now that will start to change. I know those crazy enviro pukes who have been saying for years we might want to consider using less fossel fuels... Yep they were waaaaaay Off!

Blah blah blah......ya, the Oil companies are making RECORD profits but no refinery building in sight. So what does Bush do? Well, the Oil industry isn't making enough money to build refineries so I got a great idea....give um a tax break! If he ain't in their back pocket, I don't know who is.

Screw giving them more money, I read an article that said the permit process in building a refinery alone takes five years. That's what has to change. By then, it will be WAY to late.

 

[BoilerUP]

DangerKitty hit the nail on the head with his most recent post. One would be foolish to not believe in Peak Oil, but you'd also be foolish to think the sky is falling in the next decade because of it.

The reason oil hit $70/barrel is pure, unadulterated, American-style speculative GREED. Hedge funds and the futures market are putting the hurt on your wallet today, with lack of refining capibility a near to medium-term problem and supply a long-term issue to deal with.

And no, I'm not a stock broker or a petroleum enginner, but I did stay at a Holiday Inn Express last night...

 

[wheelsup]

Oil bubble to burst: Forbes

I've got 4 words for mr forbes:

Don't hold your breath.

Oil prices are here to stay, and increase. Can jets be run on biodiesel?

~wheelsup

 

[miles otoole]

I've got 4 words for mr forbes:

Don't hold your breath.

Oil prices are here to stay, and increase. Can jets be run on biodiesel?

~wheelsup

Did you graduate from 5th grade?

 

[bugchaser]

What everyone fails to realize is that the disaster factor was already built into the price of oil. One of the reasons for the high price lately has been the hype of a possible dissaster or interuption in the flow of oil. These fears have led to the buying frenzy fed on by speculators and fund managers. Now that we have had the disaster, the price of oil has not changed that much since it was already overpriced. Gasoline and Heating oil/JetA is a different story because of the lack of refinery capacity. If you spend much time looking at the supply/demand fundamentals, it is my opinion that oil should be valued in the 40-45 dollar range. Don't get me wrong, I firmly believe that we should be pursuing alternative as soon as we can, but this doomsday scenario of peak oil is not all that realistic. I think that these high prices will actually serve to stimulate the switch to alternatives and will further help to stabilize the oil prices in the future. I actually fell for some of the hype and had decided that I was going to get rich on some futures contracts until I thought about it a little more. No matter how crazy and emotional the markets sometimes become, in the end the old economic principles always come back into play. At least I hope so.

Just some observations, take it or leave it.

 

[jetflyer]

Peak Oil is a natural geological event and is coming in 2007-2008. HERE IS A LIST of resources for anyone interested in learning more about PEAK OIL:

1)From Financial Sense Newshour with Jim Puplava:
a)Select an Audio Format below to LISTEN TO Matthew Simmons talk about OIL SUPPLY Problems (PEAK OIL) HERE IS AUDIO:
Select an Audio Format to listen:
RealPlayer l WinAmp l Windows Media l mp3

b)LISTEN TO THE continuation of the show after Matthew Simmons left. They continue to talk about Peak Oil and the effects it will have on the economy. It talks about how to profit from it.

RealPlayer l WinAmp l Windows Media l mp3​

2)Roscoe Bartlett, Republican Congressman from Maryland just gave a new speech to Congress, broadcast on C-SPAN on July 19, 2005 about COMING OIL SUPPLY PROBLEMS(PEAK OIL).
Here is the transcript.:
a)http://www.xecu.net/thorn/PO/PO-July19-2005.html

April 19th Bartlett gave this speech to congress. This is a good speech to read,
b)http://www.bartlett.house.gov/SupportingFiles/documents/energyspeech.pdf

Roscoe Bartlett met with Bush about Peak Oil on June 29th. So Bush, no doubt knows about the coming oil supply problems. Here is the press release:
c)http://www.bartlett.house.gov/latestnews.asp?ARTICLE2900=7308

3) Here is a recent Associated press article:
http://www.usatoday.com/news/world/2005-05-28-oil-shortage_x.htm?csp=34

4) A great site for PEAK OIL introduction:
www.yubanet.com/cgi-bin/artman/exec/view.cgi/8/15426

5) Article about Peak Oil coming around 2007-2008:
http://www.globalpublicmedia.com/articles/196

6) http://www.financialsense.com/energy/main.htm
Read as many of the articles here especially the Peak Oil ones
a) Peak Oil and what it means to you: http://www.financialsense.com/fsu/editorials/petch/2005/0703.html
b) Crude Awakening: http://www.financialsense.com/fsu/editorials/saxena/2005/0617.html

7) An investment firm that specializes in ENERGY, 321Energy, has daily news articles on PEAK OIL and OIL in general here: http://www.321energy.com/archives.php?c=oil
Canadian Economist talks about imminent Peak oil Problem: http://www.321energy.com/editorials/sprott/sprott070505.html

8) A GREAT BLOG with news updates daily all about PEAK OIL: http://www.theoildrum.com/

9) Great Chat Group, look at Current Events, Peak Oil Discussion, Energy Technology, and Economics of Peak Oil: http://www.peakoil.com/forums.html

10) Iraq and the Problem of Peak Oil: http://globalresearch.ca/articles/ENG408A.html

11) The Association for the Study of Peak Oil and Gas (ASPO) has their website at: www.peakoil.net They have a new newsletter every month I believe, which talks about the newest developments on peak oil. They have done analysis on Peak Oil and predict 2007-2008 for Peak Oil.

12) Here is the Oil Depletion Analysis Center (ODAC) site. They also have done analysis on Peak Oil and predict 2007-2008 for Peak Oil.They have new articles about peak oil all the time:
http://www.odac-info.org/

13) New York Times Magazine article on coming Peak Oil. They interview Matthew Simmons and the ex-President of Saudi Arabia's Oil company ARAMCO:
http://www.nytimes.com/2005/08/21/magazine/21OIL.html

14) The Ultimate Doomer Site-He basically thinks we're screwed no matter what: www.lifeaftertheoilcrash.net -- Everything UNDERLINED is a link and you can explore almost all his sources. I recommend looking at as many links as you have time for. READ THE INFORMATION ABOUT THE WARS THAT ARE BEING PLANNED BY THE GOVT TO GO "GET OUR OIL" SERIOUS WARS ARE COMING.

15) Here is a site that has new articles on Peak Oil and ALL THE ALTERNATIVES and their progress:
http://www.energybulletin.net/


I think the U.S. will liquefy coal, use the Oil-shale of the Rocky Mountains, and adjust using every alternative imaginable. I think we'll have a very bad recession before things get better. How long will it take? I don't know. I'm not really sure how long it will take to get the alternatives going. Some DOOMERS say total collapse is unavoidable. I think we'll transition after a really hard recession, but really I don't know what to think. I do SERIOUSLY think we'll probably enter more Natural Resource Wars like we did in IRAQ to secure more oil for ourselves. If we win the wars, we'll probably not have anything to worry about Well if we lose, uh we're screwed.

See ya,
Jet

 

[Focus]

Anyone that says they have taken their profits and oil is going to come down must be a genious. Oil is spiking high now due to the storm...This is a good time to short it but only for the short term, meaning perhaps the next month. To be honest I would just let it ride but I definately would not be buying at this level. Labor Day Weekend is coming and that will drive it up some after it falls back to 64...Anyhow, Ive been providing you guys with a roadmap of Oil Prices.

From now on Im charging $500.00 for my Oil Price Map. This is a nominal fee for anyone wanting my advice.

 

[Focus]

This is a post I made back in June. Here it is...

So here we are at the end of June. Oil, at its all time high pushin 60/bbl....Anyone care to speculate where Oil will be by Jan 1, 2006....Let me start by saying once again...I am not an EXPERT, only an investor....With that in mind I predict oil to run up to 63-70bbl by Aug 31st and the US Economy to go into a major recession within the next three months...I hate to sound so pessimistic but the writing is on the wall to me...My money is still in OIL albeit my job is in aviation..

Warning to all...If your in stocks get out NOW!!!!!B/F you loose what you've worked so hard for.. Talk with your company and make sure their hedged BIG TIME...OIL will drop some from here and perhaps IMHO as low as 48 but that would be way low....A Hedge at 50-55 would still be profitable next year.....Oil to 85 by June 06.......See my previous Post on this subject and hopefully you will see that I am spending a great amount of time studying the upcoming WORLD CRISIS in OIL which were now fully into.....FDJ2/CHperplt Good Luck Guys

 

[h25b]

If prices at the pump reach $3.00 sooner or later the rest of the economy IS GOING to slow down, PERIOD... The bull in the market has been the unwavering consumer and the good economy has been characterized at least in the early stages by a "jobless" recovery. I can't imagine how we could sustain the current economy if the consumer is stressed out too much...

Wait till the winter heating bills start coming in.

 

[Dangerkitty]

I've got 4 words for mr forbes:

Don't hold your breath.

Oil prices are here to stay, and increase. Can jets be run on biodiesel?

~wheelsup

Yeah, becuase Forbes is a real moron.

What info do you have to back up your claims? How can you justify the statement that Oil prices are here to stay?

 

[BoilerUP]

After looking briefly at some Peak Oil information, I seem to think those most hardcore into this theory have already made their run at purple veils and black Nike shoes

Since Iraq was a "natural resource war", why aren't we getting oil for $20/bbl from there? Isn't Iraq one of the largest oil exporting countries in the world? If the United States is so hard-up for crude I'd imagine the government or private corporations would have invested billions by now in multiple pipelines, pumping stations, and extra security to protect their arabian 'cash cow'. I'd also expect we'd have tapped ANWR yesterday if supply was getting so short, environmentalists be danged. When are we invading Alberta for their shale and sandy oil deposits?

Lack of supply is not driving this spike - Wall Street greed is.

 

[G100driver]

Do guys on "oiltradingfutures.com" debate how to perform the perfect ILS?