Spanktron9 wrote:During the height of the oil rally when Matt Simmons was on CNBC several times, he was asked to give a worst case scenario for oil. After saying they didn't want to hear his worst case (DOOM!), he responded that he felt a precipitous drop in oil pricing would lead to a back-burnering of energy policy and research (paraphrase). It seems to me that we are witnessing this now. Has Simmons or other PO leaders offered any further analysis on this situation? Thoughts?
DoomWarrior wrote:Spanktron: Do you have a link for this CNBC interview? I vaguely recall it.
ROCKMAN wrote:It could hinge on two variables. First, OPEC finally establishing itself as a true cartel.
ROCKMAN wrote:You're right girl. That's why I offer it as a possibility and not a prediction. But over the years I've heard things from expats that worked over there. How much is was true (and still is) I can't be sure. But there are strong forces within the KSA always vying for control. But it is clear that the ruling family has used the oil revenue to subdue internal discontent.
And they certainly must consider those political/military reactions you mentioned. But the KSA doesn't live in a vacuum. With the US a hop, skip and jump away in Iraq and Iran right across the gulf I can imagine they are constantly looking over both shoulders. But there are also some hard biz considerations: I'm not sure of the current status but there was a time 6 or 8 years ago that the KSA was so deeply in debt that there was quit chatter about a possible default. But I doubt we can get a clear picture of their current financial situation any better then their reserve numbers.
The main reason I offer that scenario as a possibility is because of the volatility of the situation on so many fronts at the moment. And such uncertain times can lead to unpredictably, even unimaginable, consequences.
vtsnowedin wrote:We spend a lot of time contemplating conditions here in North America post peak oil but imagine for a minute if you will KSA after the last barrel is pumped. That last barrel will probably sell for $1000 but who will be running the pump and where will it get shipped? Will the country revert to a pile of sand crisscrossed with rusting plumbing? Wonder what their plan to keep the oil wealth is?
Spanktron9 wrote:It seems to me that we are witnessing this now. Has Simmons or other PO leaders offered any further analysis on this situation? Thoughts?
The Financial Times has leaked the results of the International Energy Agency's long-awaited study of the depletion profiles of the world's 400 largest oilfields, indicating that, "Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent." This is a stunning figure.... Investment capital is being vaporized almost daily in a global deflationary bonfire of unprecedented ferocity. Oil production projects are being mothballed left and right."
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