$100 A Barrel Oil is on the Way

#1,001
#1,001
hndog609 said:
I won't dismiss the idea that this might occur under those criteria but I simply can't imagine those prices ever coming to pass again, even at the top end.

The world has changed a bunch since the 70's.
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The more things change the more they stay the same. People haven't changed that much.
 
#1,002
#1,002
What is driving the price of oil up, is India and China. They are doubling the amount of oil they consume every 6-7 years. That is the problem. Oil companies cannot increase output at a rate to keep pace with consumption.

This problem will only get worse with the emergence of very cheap cars in India and China. What needs to happen is a cheap, affordable electric cars for these economies that is fueled by nuclear power plants.
 
#1,003
#1,003
oklavol said:
What is driving the price of oil up, is India and China. They are doubling the amount of oil they consume every 6-7 years. That is the problem. Oil companies cannot increase output at a rate to keep pace with consumption.

This problem will only get worse with the emergence of very cheap cars in India and China. What needs to happen is a cheap, affordable electric cars for these economies that is fueled by nuclear power plants.
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I'm not sure that first paragraph is right. I don't know the output potential for the world's oil fields, but I know OPEC controls output for a number of reasons and I've never heard they've been pushed to max capacity. Oil price has been a weak dollar issue.

I agree with your second paragraph in that we certainly need to diversify our energy resources (and not simply go to the cheapest). This helps minimize the impact of oil price volatility on our economy and each individual. on the other hand, cars are only one area of oil consumption. We use one barrel of oil to grow one bushel of corn. We are projected to grow almost 12 billion bushels of corn this year.
 
#1,004
#1,004
VolByBirth said:
I'm not sure that first paragraph is right. I don't know the output potential for the world's oil fields, but I know OPEC controls output for a number of reasons and I've never heard they've been pushed to max capacity. Oil price has been a weak dollar issue.

I agree with your second paragraph in that we certainly need to diversify our energy resources (and not simply go to the cheapest). This helps minimize the impact of oil price volatility on our economy and each individual. on the other hand, cars are only one area of oil consumption. We use one barrel of oil to grow one bushel of corn. We are projected to grow almost 12 billion bushels of corn this year.
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OPEC is pumping at max capacity

http://www.energybulletin.net/node/1602

CARACAS - The Organization of Petroleum Exporting Countries (OPEC) has reached its maximum production capacity, Venezuelan Energy Minister Rafael Ramirez said
Ramirez said the group's 11 member countries have no immediate way to respond to increased oil demand
"I don't see any possibilities of that situation changing much," he told reporters here
New York's main oil contract shot above 45 usd for the first time Tuesday, whipped higher by an uprising in Iraq, a crisis at Russian oil titan Yukos and a tropical storm nearing oil platforms in the Gulf of Mexico
Ramirez said the high price of oil was a surprise to all, and that he does not expect prices to drop in the coming months "because we are now entering a period of maximum demand"
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#1,008
#1,008
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#1,009
#1,009
emainvol said:
That article is from four years ago.
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OPEC has been at or near max capacity since that article was written (04).

There's some concern that not only is Saudi Arabia at max capacity but some of their major fields have peaked and are starting to decline in oil production.

OPEC is just as concerned as everyone else with growing demand.
 
#1,010
#1,010
oklavol said:
OPEC has been at or near max capacity since that article was written (04).

There's some concern that not only is Saudi Arabia at max capacity but some of their major fields have peaked and are starting to decline in oil production.

OPEC is just as concerned as everyone else with growing demand.
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If this concern really existed, I doubt oil would have dropped $30+ a barrel the past month.
 
#1,011
#1,011
oklavol said:
OPEC has been at or near max capacity since that article was written (04).

There's some concern that not only is Saudi Arabia at max capacity but some of their major fields have peaked and are starting to decline in oil production.

OPEC is just as concerned as everyone else with growing demand.
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Some quotes:

Iraq has 115 billion barrels of known oil reserves. That is more than five times the total in the United States. And, because of its long isolation, it is the least explored of the world’s oil-rich nations. A mere two thousand wells have been drilled across the entire country; in Texas alone there are a million. It has been estimated, by the Council on Foreign Relations, that Iraq may have a further 220 billion barrels of undiscovered oil; another study puts the figure at 300 billion. If these estimates are anywhere close to the mark, US forces are now sitting on one quarter of the world’s oil resources. The value of Iraqi oil, largely light crude with low production costs, would be of the order of $30 trillion at today’s prices. For purposes of comparison, the projected total cost of the US invasion/occupation is around $1 trillion.
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Iraq's massive oil reserves, the third-largest in the world, are about to be thrown open for large-scale exploitation by Western oil companies under a controversial law which is expected to come before the Iraqi parliament within days.
The US government has been involved in drawing up the law, a draft of which has been seen by The Independent on Sunday. It would give big oil companies such as BP, Shell and Exxon 30-year contracts to extract Iraqi crude and allow the first large-scale operation of foreign oil interests in the country since the industry was nationalised in 1972.
The huge potential prizes for Western firms will give ammunition to critics who say the Iraq war was fought for oil. They point to statements such as one from Vice-President Dick Cheney, who said in 1999, while he was still chief executive of the oil services company Halliburton, that the world would need an additional 50 million barrels of oil a day by 2010. "So where is the oil going to come from?... The Middle East, with two-thirds of the world's oil and the lowest cost, is still where the prize ultimately lies," he said.
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Again, not to get off topic, but this is why we are in Iraq. We don't need to drill offshore, we don't need to worry about the high prices (at least long-term). However, we should, as a country look for alternatives or oil wars will continue.
 
#1,012
#1,012
allvol123 said:
If this concern really existed, I doubt oil would have dropped $30+ a barrel the past month.
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It's real and it's a concern:

Simmons analyzed 200 technical papers on Saudi reserves by the Society of Petroleum Engineers and his work was peer reviewed by a dozen senior technical experts. What he discovered tells a different story than the conventional wisdom.

Saudi Arabia has over 300 recognized reservoirs but 90% of its oil comes from the five super giant fields discovered between 1940 and 1965. Since the 1970s there haven't been new discoveries of giant fields. The most significant of the oil fields is Ghawar.

According to Simmons, Ghawar's northern regions are almost depleted. Two other giant fields, Abqaiq and Berri, also seem to have peaked in the 1970s.
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http://www.iags.org/n0331043.htm
 
#1,014
#1,014
VolByBirth said:
Some quotes:





Again, not to get off topic, but this is why we are in Iraq. We don't need to drill offshore, we don't need to worry about the high prices (at least long-term). However, we should, as a country look for alternatives or oil wars will continue.
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I don't think anyone is questioning that Iraq has huge oil reserves, I know I'm not. But asking people to go to war in Iraq, to provide cheap oil is not something I am comfortable with.

There are certain things worth dying for, I don't think cheap oil is one of them.
 
#1,015
#1,015
Environmental Capital - WSJ.com : Peak Oil: Simmons v. Saudis, Round Two

What he has found, he says, “is so unbelievably scary you can’t believe it.” He claims that there is mounting technical evidence that Aramco is struggling to deal with increasing volumes of water at its hugest fields. With water production going up, he says, oil production is going down.
“It is absolutely clear as a bell now that all of those fields are heading toward being another Cantarell,” referring to the massive Mexican offshore field, which is now in rapid decline

Simmons believes we may already have hit that peak. After his recent studies, he now fears he has “grossly underestimated how savage the post-peak oil reality will be.”
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#1,016
#1,016
oklavol said:
It's real and it's a concern:


http://www.iags.org/n0331043.htm
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oklavol said:
Energy Insights: Special Report: 57: Saudi's oil decline
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oklavol said:
Environmental Capital - WSJ.com : Peak Oil: Simmons v. Saudis, Round Two
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If true, all the more reason why we are in Iraq. To be clear, I'm in total disagreement with this war -- but facts are facts. We're there for oil, they have lots, and it will help prices (long-term).

The reasons given for the war were a sham...but this is an oil price thread.
 
#1,018
#1,018
allvol123 said:
Not enough of a concern to keep prices from dropping for almost 30 days in a row.
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Most people don't know this. They only will react when Saudi Oil production continues to decline. Then the market is impacted.

saudi_jun_08.gif


Econbrowser: Saudi oil production plans
 
#1,021
#1,021
BigPapaVol said:
good point. those professional traders and buyers just ignore the industry. They're just paying for sheets of paper.
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allvol123 said:
I see your point now. I bet you are right, the people that make money doing this for a living probably are not privy to the stuff you have access to.
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Apparently I have more information then both of you :p.

Oil prices aren't set based on only oil production in Saudi Arabia. Actually the U.S. gets more oil from Canada now.

Crude Oil and Total Petroleum Imports Top 15 Countries

Canada remained the largest exporter of total petroleum in June, exporting 2.319 million barrels per day to the United States, which is a decrease from last month (2.346 thousand barrels per day). The second largest exporter of total petroleum was Saudi Arabia with 1.490 million barrels per day.
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How would you explain the decline in oil production in Saudi Arabia during a time of peak demand?

Wouldn't they be trying to pump more oil? They've said themselves that $100 barrel wasn't good in the long term for OPEC.

I think the reality is they've been pumping at max capacity for a while (since 04). Some of their oil fields are declining in production and that was the reason for the drop-off in production.
 
#1,022
#1,022
oklavol said:
Apparently I have more information then both of you :p.

Oil prices aren't set based on only oil production in Saudi Arabia. Actually the U.S. gets more oil from Canada now.

Crude Oil and Total Petroleum Imports Top 15 Countries



How would you explain the decline in oil production in Saudi Arabia during a time of peak demand?

Wouldn't they be trying to pump more oil? They've said themselves that $100 barrel wasn't good in the long term for OPEC.

I think the reality is they've been pumping at max capacity for a while (since 04). Some of their oil fields are declining in production and that was the reason for the drop-off in production.
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that's oil exported TO THE US there Chicken Little. That's how I explain it. It's much easier and cheaper to export from Canada to US than from Saudi. Additionally, with current oil prices, I guarantee Canada is producing all they can.

Your diminishing theory is nothing close to the answer your trying to make it.
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#1,024
#1,024
oklavol said:
How would you explain the decline in oil production in Saudi Arabia during a time of peak demand?

Wouldn't they be trying to pump more oil? They've said themselves that $100 barrel wasn't good in the long term for OPEC.

I think the reality is they've been pumping at max capacity for a while (since 04). Some of their oil fields are declining in production and that was the reason for the drop-off in production.
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wow, first time I've seen the graphs since I was posting from my handheld. All of the cuts you see are 100% OPEC policy driven. If they were at capacity, how on earth would the recent spike have been possible? I know that's a tough concept, but they can't actually pump at over 100% of capacity.
 
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