Hey Peak Oilers...

[morphball]

Is the black gold still going to run out? In spite of the price slide, OPEC sees no need to cut production. I wonder why.

Could it be that they know 1) Higher prices will just bring new resevoirs on-line sooner; 2) alternative sources were catching up fast; and 3) there's still a lot of oil around and high prices now will destroy the demand before they can sell it?

[HeavilyArmed]

[ QUOTE ]
Is the black gold still going to run out?

[/ QUOTE ]

Nothing, not one resourse, is going to 'run out'. And in situations where anything begins to get really pricey and scarce, technology will provide some alternative.

[wacki]

As far as peak oil goes, my money is on whatever Robert Rapier (big oil), the Army Core of Engineers, Chevron (yes, a big oil company), and any assessment report from academic (Exxon-money-free) institutions. The vast majority of those people think we have a few years left before we hit the peak. But the real danger isn't the "peak" it's peak-lite where demand outstrips supply. That is supposed to happen within a few short years. Read rapiers blog or Rapiers posts on the oil-drum. He says "in my opinion Peak Oil is at least 3 years out."

http://www.theoildrum.com/story/2006/12/8/223354/987

That guy really knows his stuff. BTW Rapier != oildrum, he just posts on the oildrum. There is a big difference.

[Mickey Brausch]

[ QUOTE ]
Is the black gold still going to run out? In spite of the price slide, OPEC sees no need to cut production. I wonder why.

[/ QUOTE ]
Very briefly:

The price of (crude) oil is not down but still hovers around relatively high levels. Oil producers are making out like bandits. (No pun intended; don't sue.) Which is why oil companies are concentraring their focus on exploration and production, and giving hell to their hapless downstream divisions. Refineries are temporarily off the hook but in retail a lot of heads rest uneasy, if they have not been already chopped off.

The prices of oil products ha indeed slipped, in general, because a relative equilibrium has been achieved, between supply and demand. Not that demand, especially from Eastern Asia has lessened in any way, but the supply patterns, though strained, have been established to cover those needs. It remains a very tense situation, overall, so the adage about the disporoportionate effect that news have on the prices (local troubles such as Nigeria, an upset like BP's, etc) remains more valid than ever.

OPEC: Whenever it is announced that OPEC cuts production, this has to come to mean Saudi Arabia. And the Saudis are not tooo keen on driving prices upwards much, despite the comradely posture they adopt in the OPEC meetings. They don't want prices to go too high, and the other producerers know it - and the Saudis know they know it. The Saudis are the regime which is, financially and politically, the most closely connected to the West among Middle East OPEC countries (closely followed by Dubai, etc), so when the western economies suffer, their investments there are affected as well. Google "petrodollars".

Mickey Brausch

[The once and future king]

What is the technological solution to Allah fans with bombs?

[morphball]

[ QUOTE ]
Very briefly:

The price of (crude) oil is not down but still hovers around relatively high levels. Oil producers are making out like bandits. (No pun intended; don't sue.) Which is why oil companies are concentraring their focus on exploration and production, and giving hell to their hapless downstream divisions. Refineries are temporarily off the hook but in retail a lot of heads rest uneasy, if they have not been already chopped off.


[/ QUOTE ]

Last summer, Crude oil approached $80/barrel and yesterday it was $51. $50 is a major support area, so if it drops below that, the prices could foreseeably trend back to the last support areas, which were $40.

Actually, I recall when the prices went above $55 or $60 a while back that the Saudi's said they foresee oil going back to $40, which was what they believed it was worth.

So what is the high price, $40, $50 or $80?

[Felix_Nietzsche]

A petroleum expert was ask "When will we run out of oil?". His answer was....NEVER.
You may not like the price but oil will always be available. The tar sands of Canada, oil shale, coal-to-oil-production, vast untap reserves that are currently too expensive to pump, etc...

The coal and oil shale alone can supply oil for a LONG LONG LONG time.
<Insert eye-rolling devil advocates remarks of the problems of harvesting oil from coal and oil shale. Blah-Blah-Blah>
<Insert answer: we can easily implement this WW2 technology and if the price of oil is high enough, all technical problems can be dealt with...>

[adios]

Also the value of the US $ has declined a great deal over the past 5 years and since oil is fungible, it stands to reason that the price of a barrel of oil has increased in kind in terms of US $. How much has oil increased against the Euro over the last 5 years?

[Stu Pidasso]

[ QUOTE ]
Actually, I recall when the prices went above $55 or $60 a while back that the Saudi's said they foresee oil going back to $40, which was what they believed it was worth.

[/ QUOTE ]

I've read/heard that when oil goes over $60 lots of alternatives become economically viable. If this is true it would not surprise me if oil bounced between $50 and $70 for quite a long time.

Stu

[Felix_Nietzsche]

[ QUOTE ]
I've read/heard that when oil goes over $60 lots of alternatives become economically viable. If this is true it would not surprise me if oil bounced between $50 and $70 for quite a long time.

[/ QUOTE ]
Yep....the Saudis have a brain and try to keep the price from going too high. In North Dakota they built a coal-to-methane(natural gas) plant. This plant is now making money hand-over-fist. And once these plants get built, there are economically forced to run 365-24 forever. The Saudis realize this and they try VERY HARD to keep the price low enough where a coal-to-oil plant can't be economically built. Many Jihadist groups are calling for the Saudis to manipulate the price of oil to $100/b. If this ever happens, coal-to-oil plants will start being built by entrepreneurs who have the cash... Then the Saudis lose a lot of leverage....