The Return of High Oil

I could not help but wonder if alternative fuel soucres would provide any releif to this equasition?

Yo man...
Lis cet article. Je pense que c'est ce qui s'en vient. Tout mes placements sont basés là-dessus !
David

Nothing in China or India will come "roaring" back unless the economy in the U.S. turns around. The boom in these economies is based on the buying power of the American consumer, and that power is nil. The only thing that will re-start the fire under oil is doomsday criers like these idiots. $147 oil only reminded me of the Johnny Carson toilet paper scare in the early 80's.

Not enough credit is being given to the high gas prices this past year and it's serious damage on our economy and society. That one factor alone has caused serious stress in both individuals and businesses. A record number of homes and jobs have been lost as a direct result. And, while we are doing the happy dance around the lower prices at the pumps OPEC is announcing cuts to manipulate the prices upward again. We must get on with becoming energy independent.We can't take another year like this past. There is a wonderful new book out about the energy crisis and what it would take for America to become energy independent. It covers every aspect of oil, what it's uses are besides gasoline, our reserves, our depletion of it. Every type of alternative energy is covered and it's potential to replace oil. He even has proposed legislative agenda's that would be necessary to implement these changes along with time frames. This book is profoundly informative and our country needs to become more informed and move forward with becoming energy independent. Green technology would not only provide clean cheap energy it would create millions of badly needed new jobs. The Book is called The Manhattan Project of 2009 Energy Independence NOW. Our politicians all need to read this book. www.themanhattanprojectof2009.com

Although some alternative energy techniques, most notably corn/ethanol, have tanked with the drop in the oil price, the fundamental impulse to non-petroleum-based sources remains remarkably intact: it is nearly always a mistake to dismiss the tendency for technological change to appear when the time is right--and $150 oil is not a memory that will disappear soon. One of the assumptions of the article is that such technology, when it appears (and, indeed, has already begun to appear, as with hybrids), will not be transferred--or more likely, be acquired, by the large emerging economies such as China and India. To anyone familiar with the latter, this seems thoroughly dubious especially in the long term. In the short term, there may indeed be another bubble. In the long term, the picture for oil bears little resemblance today compared to what it was ten years ago.

Some of the price of oil this summer was because of supply and demand, but most of the price was because of manipulation by oil traders. I doubt that the public will buy this excuse next time; especially when the US will either be in a deep recession or will have the tools to reduce oil consumption from more efficient vehicles and changes in driving habits. Recently, Americans have shown that they will close their wallets when they know they are getting screwed. An Obama administration will regulate oil traders if they manipulate the market again instead of putting his head in the sand while completely oblivious to the price of gas like the Bush administration was.

Oil will rise in 09 but will not come close to the peak price in 2008. Why will oil price remain soft? 1.Less demand. We will have a world wide resession in 09. 2.India will cut its oil subsities after its 09 election cycle, thus causing the price to rise for india, but lowering word demand for oil. This will put further price pressure on oil. But in the long term (2010...)price of oil will remain high.

The United States will not run out of oil... just cheap oil. And, as technology progresses even this will be made cheaper...

"While oil shale is found in many places worldwide, by far the largest deposits in the world are found in the United States in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming. Estimates of the oil resource in place within the Green River Formation range from 1.2 to 1.8 trillion barrels. Not all resources in place are recoverable; however, even a moderate estimate of 800 billion barrels of recoverable oil from oil shale in the Green River Formation is three times greater than the proven oil reserves of Saudi Arabia. Present U.S. demand for petroleum products is about 20 million barrels per day. If oil shale could be used to meet a quarter of that demand, the estimated 800 billion barrels of recoverable oil from the Green River Formation would last for more than 400 years."

http://ostseis.anl.gov/guide/oilshale/index.cfm

Not only will China and India outstrip supply of crude oil but also supply of air,fresh water, fertilizers, toilet papers, and even commodity traders. Of course, Malthus prediction is coming true. The earth resources grow at linear rate while population grows at geometric rate. Thus, China and India will be the culprit behind the global shortages and hence, investors should buy into commodity traders' advice, invest into deriatives, hedgefunds, and default-swap instruments. Let's keep in mind the Nigerian rebels are kipnaping more foreign oil workers, Al-Queda is setting Basra oil terminal on fire, and Iran is launching missles again, Somalia pirates hijacked a oil tanker 400 miles from shore, Chavez is up to more no-good antics with oil nationalization.......Have we not heard this before from the likes of LehmanBros, BearnStearn, Merrillynch, AIG etc and etc who bet their farms on the commodities then all died happily on taxpayer's expense? With easy access to media via internet, TV, radio and press, everyone can now spread the hysteria for another oil feeding frenzy. With crude at a low $50/barrel, call your broker now before it's too late; it's never to early to go broke like the rest of the investment bankers.

You have to consider the possibility that by 2011 or 2012 we might have found an alternative to Oil (or be sure of the viability of such a solution in the next decade), in which case the OPEC will want to dig out as much oil as possible lest the world need not need what lies beneath. This will control Oil prices.

Precisely on target. I have been following the global oil scence since the early 1970's when I was U.S. Navy Suppy Officer in the Arabian/Persian Gulf responsible for petroleum inspection and tanker scheduling for the Dept. of Defense in Saudi Arabia, Kuwait, Bahrain, and Iran. Current crude oil pricing is not sustainable for all of the points outlines in this piece. Slowing/curtailing exloration/development now is energy suicide.

'Google' this- GOVERNMENT UNCOVERS OIL PRICE MANIPULATION, and read it! 'Google' this- OIL SURGES ON GASOLINE SHORTFALL, and read it! It seems as though OIL is just another product for "some" to MANIPULATE, huh?!!! According to the President of OPEC there is enough OIL to supply the world's demand for another 50 years!!! P.S. Isn't it interesting how the price of OIL & Goldman Sachs' stock has declined together since September? Goldy's stock was trading at $160 a share on September 4th. Now it's under $80 a share. When OIL was high, so was Goldy's stock. WHAT A COINCIDENCE, huh?

Previous high prices as I understand it were trumpeted by those in the know to be due not to the short term future of oil but it's long term future. The present situation on prices proves otherwise, as it's long term future has not changed, and thus indicates to me it was a hedge fund and other private slush fund junket, which incidentally could happen just as easily again in the future because of the huge amounts of speculative money still in the global economy, until it either gets diminished by dollar devaluation either relative or real, which hopefully is happening now with the various property crashes and bank support loss covering injections being made throughout the global economy. From a real point of view if a price of $60-75 is required to make investment attractive that would also indicate that the $146 price was also a speculatively driven exercise, as otherwise if long term investment needs $60-75 to make it attractive at present currency relationships and economic futures, no one in his right mind would buy oil at a price that is supposed to reflect a long term supply level of $140, as that is something considerably at odds with an investment attraction price of $60-$75, to which prices would eventually fall in the long term.

I also understand oil prices for producers no longer seem to be the gold mine they once were, with producers needing the money not for skyscrapers but for national development, as well as to make actual oil production investment reasonably attractive as a business.

The question of course is this, when do you have to put prices up to encourage investment, and that really depends on lead times in relation to what level of "production extraction stock", not reserves, the world considers to be desirable.

Furthermore one person's idea of a reasonable return on oil investment may be different from that of another, depending upon how responsible economically a producing nation may be.

And finally of course, and it should be paricularly obvious now, there is no point again in pricing oil at a level that
makes it uneconomic for western nations to consume.

But for me what must be addressed world wide as a priority before absolutely anything else, is to make sure that never again does the world allow itself to be ruined by out of kilter privately owned capital, the cause of excessive speculation in commodities oil and property. That means making tax levels appropriate for assuaging needs of the poor at the same time as encouraging capital investment for all those involved in such. It does no good for there to be too much cash chasing too few assets, whether directly through hedge funds, or indirectly through mutual funds, insurance companies and such like, and especially through banks who call themselves by various categories, but are in fact one category in my mind, oafish stupid greedy-bags..

Most stupid article I've read in months.
Got one thing right, oil price is finally being corrected. But how?

1st. OPEC, Russia, etc. enjoyed working together with Exxon Mobil, BP, Shell, etc. in making record breaking profits even in 2008. Now prices are down, they are in for cutting back oil productions, but prices still falling. How?

2nd. China(India, Mexico, Brazil...) did not cut back their orders but are ordering even more oils right now and certainly in 2009. Therefore there's no such thing as a "roar back in 2010-2011". Common sense is, why this article is trying to make us into thinking that these countries would order less when oil is cheap, but will order more when price goes up?

Things don't quite add up right.

Now think this, was it a coincidence that the oil price starts dropping after the collapse of the Wall St. and those investment banks?

As you learned first year in college, demand curve for oil is fixed. booming economies all over the world are ordering more oils during price drops, OPEC and Co. are cutting back productions, but price still droping?

The answer is the collapse of the Wall St. along with their oil speculators.

Seems that no newspaper in America would like to admit this was the real cause of abnormally high oil price early this year? Could the reason be their board members and executives are big investors in energy, stocks and 401K? they must be really mad right now, and can't wait to speculate the price up again.

We know the prices of scarce resources ought to rise at a certain pace over time, but we can't tell when we are locked in a fixed pie perception. Wall St. enjoyed at exploiting the selfishness out of us, and some us don't even realize who the real enemy is!

Thank God Barack Obama was elected the new President, and with a new vision at establishing good relationships with other countries and working on ways of expanding the pie(energy resources). We might earn back respect and trust from other countries again.

Fantastic article!

In doing some research as to what would happen to the price of oil in the future, I came across this post! Thanks for the information.

I'm not going to update my latest thesis on why gas prices are going up and down. Thanks again!

http://www.financialnut.com/why_gas_up_dow/

As long as THE DOCTRINE OF PERPETUAL GROWTH of the world population and the global economy is in play, we shall continue down the road toward calamity.

The DOCTRINE OF PERPETUAL GROWTH on Planet Over-Birth Earth, a host organism of FINITE space and FINITE resources (water, crude oil, forests, ocean fisheries, tillable soil, etc.) is NOT progress! IT IS CANCER!

Humankind (a.k.a.: ewe-man-unkind) will have to completely rethink its economic models, and also reverse and stabilize its population, or suffer the consequences: EXTINCTION!

Old Coyote Knose! Old Coyote Knose!

What of the committments made over the last oil spike. This idea holds true so long as the countries making the most money over the last summer didn't rush into spending that banks on the future price of oil being high. I imagine that if they made committments with future oil revenue, they will need to produce more oil at lower prices to make up for those committments, further driving down the price. Kind of like a supply-side giffen-type good where producers have to produce more as the price falls, increasing the supply and pushing down the price.

Jesse is a idiot. is everone forgetting the biggest oil field lies under the place america just took over? IRAQ? How about alaska. There is tons of oil in the earth. BUT using it will cause the destruction of the planet and then where will we humans go? Would you rather breathe or use oil to have electricity when you can use solar and wind to do the same thing? whats the point of using oil? let new car companies come out and you will have no need for oil. im sure the oil companies know about this.

use electricity to make hydrogen from water.

Here comes again, the very same bunch of "oil experts" who manipulated the market by spreading all kinds of scary speculations and made a nasty mess of the whole world start to behavior like an oil expert again ! I am pretty these people have felt being left alone now when the oil price plunged over 60% in just a few weeks. I would have to say that the world would be a lot better place without these people.

When will we learn?

The federal tax on gasoline should be increased over the next two years incrementally by $1.00.

This will help reduce the temptation to trade blood for oil.

www.lulu.com/dshollar

The article is right on the mark. For a more complete discussion of why oil and gas prices are going to rise steeply over the long term read Stephen Leeb's two landmark books: The "Oil Factor" and especially "The Coming Economic Collapse: How to Profit From $200 per Barrel Oil."

Jesse is making a good point. He is putting fear in the heart of reader, so that he will profit from it. Get over it.

JL

Some persons have thought about ocean current energy, and hybrid cars

Sounds to me like this report was written by somebody who is down a few bucks on oil stocks and wanting to make them jump. Gonna be a while before oil prices pick back up. No one has jobs so no one has to drive to work.

i think ,oil price will be rise,because the demand of human is so strong.every country needs oil.just people need food.

make it a national them to reduce gasuse by 25percent develop on crash basis clean coal wind nuclear power and last but not least no hummers crash manufacturing of electric cars.

Several posters have hit this on the head. The downfall of oil prices coincided with the fall of Wall Street. Why? because the big financial houses, many of which are now being sold off piece by piece on the court house steps, knew their stock investments were toxic. They knew their books were filled with smoke and mirrors. BUT, a limited supply commodity that the entire world needed? Now that's a guaranteed money-maker. When the markets tanked, margin calls rose their ugly heads, and quick cash was needed. Dump the oil, pay off the calls. Oil is low because there are fewer hedge-fund games being played, but it will come back again, and it will be all market driven. Now is the time to get off oil, while it's cheap. Emphasis is waning on alternative energy while it should still be at the top of the list.

Regarding oil shale, and other new potential oil sources: do some digging to find out the projected daily flow rates. Also ask when will these flow rates be realized?

Basically, oil shale, sand, deepwater etc. can't replace the fast flowing Saudi oil we rely on today. That's the problem.

The last of the article states the "West" must find alternative solutions to the Energy crunch?/high prices. It is not just the west's problem. It is everyone's problem. China and the other users (whether big or small) need to help in finding an althernative to oil and efficiency in its use.

We should of had our energy years ago we have the know how and had money. NO U.S. government deside to send all our money over seas to line there pockets and not ours.
When in the hell are they going to wakeup to real meaning for the people by the people U.S. tax payers not politicans interest?
WE CAN DO IT.

This article is spot on. AS LONG AS WE DON'T go into a depression, and the world economy recovers by 2011, the price of oil will go through the roof again. It's also quiet obvious that oil prices will fall as the world economy is going into a recession (and possibly a depression). With the credit crisis and the housing meltdown, the world is a poorer place, so the price of oil HAS to come down. No secret there. What we saw in the summer of 2008 is NOT the 1970's all over again. US oil production peaking in 1970 with over 9 million barrels of oil per day. Today it's less than 5 mbpd. There will be a point (Hubberts peak for US oil production was correctly predicted for 1970) where the WORLD will reach peak oil (it's a moving target, but current figures seems we might have hit peak oil in 2008). Off course recession and the accompanying fall in demand of energy use will prolong this day, but remember oil is a finite resource. We are running out of CHEAP oil (there's plenty of $100+ oil in the world), so get ready for the price to skyrocket as the economy recovers. Ignore at your peril.

Oil prices have fallen due to demand destruction, exacerbated by speculators liquidating their holdings.

Prices will rise again, possibly very steeply, due to investment destruction.

The duration and severity of these phenomena are difficult to predict.

Thanks everyone for the robust debate over the holiday weekend.

Mark, Robert Bott and the rest who pointed out the role of speculation in the rise and fall of crude oil prices are correct. The plunge is almost entirely a combination of demand destruction and the flight of traders and hedge funds from the oil market.

To be clear -- speculation did create an oil bubble. But that is not the same as saying that traders manipulated prices. In an analogous way to the U.S. housing market, most traders simply saw oil going only one way, and that was up. So they continued to pile in to long-term positions.

Four-dollar-a-gallon gasoline appears to have been the break point for U.S. consumers, the point at which demand plummeted. The financial collapse then kicked in, and traders unwound their positions.

One question I've wondered about is whether traders have overshot. That is, are they so risk-averse now they have in effect depressed the oil price?

Some commenters see a general conspiracy in oil. Perhaps it's generated by the beginnings of oil -- the machinations of Rockefeller and later the Seven Sisters seem to be bred into the public perception.

For those who did not see, I have a piece in this week's magazine on the cuts in Big Oil's spending. Here is the link: http://www.businessweek.com/magazine/content/08_49/b4111060891971.htm?chan=magazine+channel_what%27s+next

Petroleum oil is organic and the earth replenishes it -

http://peswiki.com/index.php/Directory:Abiotic_Oil

There is plenty of petroleum under North America -

http://peswiki.com/index.php/Directory:North_American_Oil_Fields

There are plenty of alternatives -

http://peswiki.com/index.php/Directory:Fuel_Efficiency_Alternative_Fuels

We can make real petroleum in a matter of minutes from solid waste -

http://peswiki.com/index.php/Directory:Green_Power_Inc%27s_NanoDiesel:Catalytic_Pressureless_Depolymerization_%28Oiling%29