Oil Back to $50 a Barrel

Well, it's been a while since my last post. Oil is at $50 a barrel and looks like it will decline further.

What we have, in my opinion, is a case of demand destruction brought on by world economic recession kickstarted by the subprime mortgage bubble bursting in the United States.

With lower demand for oil, the price has come down.

The big question to ask is if the world is still using 86 million barrels a day. That is the more important question because it suggests that it is supply that is the key factor to world economic success and not price.

I still believe oil will hit $300 within a 2 to 5 years.

Oil Falls to $70

Oil has fallen to $70 ostensibly because of the demand destruction brought about by the collapse of world stock markets triggered by the bursting bubble of the U.S. housing market.

We will know we are at peak oil if consumption of oil remains at 86 million barrels a day.

Have we met the limits of growth?

Georgia: A Pipeline War

This recent coverage of the Georgian war on Fox News, suggests that oil and pipelines from the Caspian are a pivotel part of the conflict.

Oil and Georgia

The oil from the Caspian basis is transported in large measure by pipelines, some through Russia and another trough Georgia.

This video shows the aspect of oil in the conflict in Georgia.

Pipeline politics: South Ossetia

Matt Savinar culled a good article on the possibility of war damage to the Ceyhan-Tiblisi pipeline which runs from the Caspian Sea to the port of Ceyhan in Turkey through Azerbaijan and Georgia to Turkey.

If South Ossetia became independent from Georgia, the area could increase instability around the pipeline which runs to the south of Ossetia through Georgia. With one million barrels of oil flowing through this newly-completed pipeline, a disruption of the pipeline could put upward pressure on oil prices.

http://www.timesonline.co.uk/tol/news/world/europe/article4484849.ece

The Prize

Daniel Yergin's "The Prize" is a great series on the history of oil.

Here is episode 1.

Dutch Report on Peak Oil

The following is an excellent report on the future of oil supplies and prices.

http://www.clingendael.nl/publications/2008/20080700_ciep_energy_jesse.pdf

Simmons stands behind Peak Oil Theory

Today oil went down to about $120 per barrel.

Matt Simmons is sticking to his belief that crude prices will continue to rise.

Jimmy Carter called the effort to reduce energy use the Moral Equivalent of War

Jimmy Carter's calling the effort to reduce energy use the "moral equivalent of war" seems particularly prophetic in today's world.

Watch President's Carter's address to the nation from the Oval Office and ask yourself if he was right about the dilemmas expensive energy would create for the world down the road.

Oil Supplies key to Future Oil Prices

The big question is not whether there will be demand destruction caused by oil prices. This is probably happening right now.

The big question is supply going to start dropping.

Matt Simmons is probably right when he says when Saudi Arabia peaks, the world has peaked and is going into decline. When decline comes, prices will have to rise.

$600 Oil Possible for Matt Simmons

Matt Simmons makes a lot of sense to me and I think he knows what he's talking about.

He is now talking about the possibility of $600 Oil.

Wold Map of Oil

Check out this link to a map of the world according to where the oil is.

http://www.energybulletin.net/37329.html

Crude hits $135

I believe that crude oil will hit $200 by the end of the year.

No matter what the effects on economies, demand will, in my opinion, remain strong.

It is a vital fluid and people will pay what is required to use as much as they need.

Some alternative energies will prove more realistic than others. It now appears that corn ethanol takes more energy to produce than it does once burnt.

Will solar and wind energy also provide too expensive. I think not. I believe that both of these types of energy will be financial viable and produce more energy than they consume.

Oil could hit $300 says Matthew Simmons

Matthew Simmons recently suggested that oil could easily hit $300 a barrel and suggests that "liberating the workforce" from commuting could do a lot to lower demand for oil.

Oil has two potential futures, Shell strategist says

Jeremy Bentham, a Shell Strategist says that oil has two potential futures. Listen to this interesting radio interview.

http://www.npr.org/templates/story/story.php?storyId=89831088

Economic Impact of Peak Oil

Aaron Wisner has a simple but powerful video on his views about how peak oil may affect the world economy. In short, he says that most peak oilers believe that peak oil will cause recession or a series of recessions.

$400 oil price can be sustained

In the following interview, Matt Simmons argues that oil is still cheap at $100 a barrel and that $400 oil prices can be sustained.

Richard C. Duncan and the Olduvai Theory

I have seen few papers that are as good at explaining the potential problems humanity will face from peak oil than Richard C. Duncan's.

In my opinion, his thesis is that the age of oil created an unprecedented expansion of human population and industrial society that will require more energy that will not come from oil and gas in the future.

http://dieoff.org/page224.htm

Energy Policy TV

I've discovered a website devoted to bringing you videos, including those of policy makers of Congress, called Energy Policy TV. Enjoy learning by watching videos on this site.

http://www.energypolicytv.com

Oil hits $118 a barrel

Today oil exceeded $118 a barrel. In fact, it neared $120.

The big question is not if long-term prices will go up, but will short-term prices continue to go up.

I believe that there is a perfect storm of economic conditions to support short-term prices hikes to $150 per barrel.

If interest rates are lowered by central banks around the world to soften the blow of the sub-prime mortgage implosion, that would tend to counter the inflationary effects of higher oil prices.

Chandramouli Mahadevan on Peak Oil

Listen to a great interview of Chandramouli Mahadevan by Sundar Rajan on the effects of peak oil on India and the world.

Mahadevan suggests how peak oil may effect various parts of the world and what economic conditions it will create.

http://coffeewithsundar.com/podcast-peak-oil-crisis-with-chandramouli-mahadevan/

Are you new to peak oil?

If you are just beginning to learn about peak oil, I strongly recommend this half-hour video of Dr. Colin Campbell which will explain peak oil to you.

Oil Hits $115

Today oil hit $115 per barrel on news of a large draw in U.S. stocks.

As long as demand for oil remains strong, we can expect oil prices to go up.

This oberserver believes that oil prices will continue to rise as oil makes up a smaller portion of production than it did in the 1970s and as 3 billion people who have never before used oil are starting to use it around the world.

Population pressure alone, suggests that oil consumption will increase regardless of cost. The population of the world has doubled since 1965, leaving us with over 6 billion people today.

Also recent news on the Internet suggests that charts based on oil production statistics for Russia are correct and that oil production in Russia has definitely peaked. This should also drive up cost.

For a very effective and simple analysis of the possible ramifications in increased prices, you should look at this very good video.

Oil hits $112 a barrel

Yesterday, oil hit $112 per barrel. Will we see $200 or $300 oil within a couple of years? It all depends on the real amount of reserves, the speed at which they can be brought to market, and the effect of higher oil prices on economic growth.

In a lecture in 2006 to ASPO USA, Matt Simmons advised that 80% of the world is now just beginning to use oil and gas so one can see how increased use by these people may continue to drive demand regardless of price increases.

Barack Obama and Peak Oil

It should come as no surprise that Barack Obama tapped Gov. Bill Richardson for support in Senator Obama's bid for the Democratic Nomination for President. As a former Energy Secretary in the Clinton Administration, he can bring insights into American use of oil and its role in international relations. It will be interesting to see if and how John McCain, Republican Nominee, will tap expertise on the matter of oil.

Carbon Emissions: Peak Oil Sidestep

We are bombarded with political messaging from governments around the world about global warming and the possible linkage between carbon emissions and global warming. When it comes to peak oil, the issue is not mainstream in most countries, although some people in government are talking about the issue.

This observer believes that all the talk about carbon emissions and the need to reduce them is a ruse to cover for the fact that the amount of hydrocarbons the earth is going to burn from now on will decline owing to peak oil and declining supply. When carbon emissions come down because less oil is being burned, they will claim success and also claim that it was their policies on emission reductions that brought about lower consumption of oil when the supply is really in decline.

Peak oil and its implications are just too big and uncontrollable a political issue for governments to deal with so they sidestep the issue and talk about the Kyoto Protocol and carbon emissions. Governments are not prepared to deal with the changes that rising fuel prices will bring to domestic and international markets. They will deal with the phenomenon on an ad hoc basis.

Oil Hits $103

Today, oil hit $103 a barrel. Cited, in many sources, as the reason for the increase in price was a pipeline fire and a refinery fire. This could be the case, but until energy intelligence reaches a level where the effects of accidents and market forces can be separated, we will have hard time telling what the real causes are for fluctuations in price.

Condoleezza Rice Appoints Energy Official

In the news recently was Secretary of State Condoleezza Rice's appointment of a special official of some sort on energy issues. This is, in my opinion, yet more proof of the increasing centrality of oil and energy prices in international affairs and domestic politics. There is little doubt that the effects of energy markets and its politics can have alchemical effects on markets and international relations of a high magnitude.

We should continue to watch oil markets with interest. Some serious number-crunching should be done on what are the real amount of useable reserves available as well as on the real effects of rising energy prices on world economies. Only, in this way, will we be better able to see our future and how to respond to it.

Oil Hits $100

There should be little surprise that oil hit $100 recently. The question is, how high will oil prices go and how will economies respond to higher oil prices? A review of international reports suggests that countries and economies are responding in various ways to deal with rising fuel costs. The most important question arising from higher oil costs is what business opportunities will it create? It would be worth establishing a news feed or news-culling service to post articles that will point readers toward the economic opportunities arising from higher oil prices.