We cannot drill our way out of this oil crisis. Since 2000, oil companies working in the U.S. have doubled the number of wells drilled per year.
Although increased drilling has added new oil to the nation's supply, it has not done so fast enough to offset the terminal decline of existing fields.
We are going to have to import more of our oil. Period.
Posted: Thu May 15, 2008 10:49 am Post subject: Red Orbit article on effect of oil speculators
Mentions a couple new Saudi fields, one coming online now, and the consensus opinion among petroleum geologists at a recent meeting that oil prices are due to fall back, and significantly.
Quote:
The Reason Behind High Oil Prices
Posted on: Wednesday, 14 May 2008, 12:00 CDT
"One of the things I think is very important to realize is that the growth in the world oil consumption is not that strong." -- David Kelly, chief market strategist, J.P. Morgan Funds; The Washington Post, May 4, 2008
"...There is substantial evidence that the large amount of speculation in the current market has significantly increased [oil] prices." -- U.S. Senate Staff Report, The Role of Market Speculation in Rising Oil and Gas Prices, June 27, 2006
On May 13, the price of a barrel of oil briefly hit a record of $126.98 on the New York Mercantile Exchange The reason was ostensibly that Iran was cutting oil production. But there is no gas shortage. So why are prices still going up?
In late April the American Association of Petroleum Geologists held its annual invitation-only conference in Dallas for, as my source put it, "the bigwigs" of the energy industry. During this meeting, influential and knowledgeable CEOs reached the consensus that "oil prices will likely soon drop dramatically and the long-term price increases will be in natural gas." Of course, despite the pedigrees of those in attendance, their forming a consensus on the direction of energy prices does not mean that it's written in stone or is even going to happen. The group is clearly bullish on natural gas. But petroleum keeps getting more expensive.
The energy executives' prediction about the future price for crude oil had sound backing. Just a few days earlier, Lehman Brothers (LEH) investment bank had said that this current oil pricing boom was quickly coming to an end. Michael Waldron, the bank's chief oil strategist, was quoted in Britain's Daily Telegraph on Apr. 24 as saying: "[Oil supply] is outpacing demand growth." Waldron added, "Inventories have been building since the beginning of the year. The Saudi Khursaniya field has just opened, with 500,000 barrels a day of production, and the new Khurais field will start next year with a further 1.2 million b/d [barrels a day]."
No Lines at the Pump Waldron's assertion rang true. In the U.S. alone, stockpiles of oil climbed by 11.9 million barrels in the month preceding the Energy Information Agency's [EIA] May 7 inventory report; they were up by nearly 33 million barrels since Jan. 1. At the same time, MasterCard's (MA) May 7 gasoline report showed that gas demand has fallen by 5.8%, while the government suggested that gasoline consumption might have fallen by slightly over 6%.
...
Red Orbit _________________ “I'm completely in favor of the separation of Church and State. My idea is that these two institutions screw us up enough on their own, so both of them together is certain death.” George Carlin
Joined: Feb 27, 2008 Posts: 57 Location: Washington State (US)
Posted: Thu May 15, 2008 3:15 pm Post subject: Re: Red Orbit article on effect of oil speculators
Personally, I wouldn't be surprised to see some pull back -- there's always a drop after record setting highs. Just look at oil after Katrina -- set some records and then dropped down. Of course, wait a little while longer and look where we are at now. Katrina prices look cheap.
At some point, the "market" will start to price in peak oil -- it's inevitable (except for magical thinking abiogenesis types). Anyway, a near term decline potential notwithstanding, I'm betting on oil being more expensive in 5 years than it is today.
Posted: Thu May 15, 2008 3:22 pm Post subject: Re: Red Orbit article on effect of oil speculators
Novus wrote:
emersonbiggins wrote:
the consensus opinion among petroleum geologists at a recent meeting that oil prices are due to fall back, and significantly.
Sounds more like a consensus among paid shills to me.
Gotta be mindful of who writes the checks, no? _________________ “I'm completely in favor of the separation of Church and State. My idea is that these two institutions screw us up enough on their own, so both of them together is certain death.” George Carlin
Posted: Thu May 15, 2008 4:01 pm Post subject: Re: Red Orbit article on effect of oil speculators
I would dismiss the article entirely ,there are no quotes attributed to any oil industry executives in particular. Who does the author mean by "the bigwigs", David Yergin of CERA fame?
I could have written the same article too. Just by talking to someone who claims to work in the oil industry.
Also the I find some of the claims dubious:
Quote:
Khurais field will start next year with a further 1.2 million b/d
Its been years since the Saudis have produced anything near 9 million barrels a day.
If you ask me the article sounds like alot of unsubstantiated talk/rumor/gossip or innuendo something that can be found at any supermarket checkout stand.
Posted: Thu May 15, 2008 4:17 pm Post subject: Re: Red Orbit article on effect of oil speculators
mefistofeles wrote:
I would dismiss the article entirely ,there are no quotes attributed to any oil industry executives in particular. Who does the author mean by "the bigwigs", David Yergin of CERA fame?
I could have written the same article too. Just by talking to someone who claims to work in the oil industry.
Also the I find some of the claims dubious:
Quote:
Khurais field will start next year with a further 1.2 million b/d
Its been years since the Saudis have produced anything near 9 million barrels a day.
If you ask me the article sounds like alot of unsubstantiated talk/rumor/gossip or innuendo something that can be found at any supermarket checkout stand.
The Khurais quote is what initially caught my eye - surprising, to say the least. _________________ “I'm completely in favor of the separation of Church and State. My idea is that these two institutions screw us up enough on their own, so both of them together is certain death.” George Carlin
Posted: Thu May 15, 2008 7:33 pm Post subject: Re: Red Orbit article on effect of oil speculators
Quote:
The Khurais quote is what initially caught my eye - surprising, to say the least.
Even if they author is actually telling the truth it doesn't matter. declines in Venezeula,Mexico, North Sea, United and Russia would probably easily counterbalance such an increase.
From what I understand of Simmons/Campbell theory of oil fields they usually discovered in the following order Kings,Queens,Lords and Peasants(I made up the last term). In other words the largest fields are found first.
Thus according to the Simmons/Campbell theory this field should have been discovered a long time ago. With all the money the Saudis have spent on oil exploration its hard to believe the Saudis would have bypassed such a large field productive in order to work on smaller less productive fields.
I suppose it is possible that the Saudis have suddenly found a megafield in the middle of nowhere but I don't think its likely. Although the author could be right I think he's full of something and its not light sweet crude.
Posted: Sun May 18, 2008 5:47 pm Post subject: Re: Red Orbit article on effect of oil speculators
That article is total BS.
Among other equally retarded statements:
Quote:
At the same time, MasterCard's (MA) May 7 gasoline report showed that gas demand has fallen by 5.8%, while the government suggested that gasoline consumption might have fallen by slightly over 6%.
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