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Oil prices have fallen 70% since hitting a record $147.27 a barrel in July, which means in just five months, crude has given up all the price gains it made in the past four years.
After such a wrenching plunge, many analysts believe the outlook for the "black gold" remains bleak - and in the short term it certainly is. In the long run, however, dwindling supplies, resurgent demand, and a lack of investment will cause crude oil to double, triple, or even quintuple in price over the next few years.
[…] The “Cheap Oil Era” is Ending Soon… By Jason Simpkins Oil prices have fallen 70% since hitting a record $147.27 a barrel in July, which means in just five months, crude has given up all the … See all stories on this topic […]
Jason Simkins article is supported by my scientific research.
The top story of the year is that global crude oil production peaked in 2008.
The media, governments, world leaders, and public should focus on this issue.
Global crude oil production had been rising briskly until 2004, then plateaued for four years. Because oil producers were extracting at maximum effort to profit from high oil prices, this plateau is a clear indication of Peak Oil.
Then in August and September of 2008 while oil prices were still very high, global crude oil production fell nearly one million barrels per day, clear evidence of Peak Oil (See Rembrandt Koppelaar, Editor of "Oil Watch Monthly,"
Peak Oil is now.
Credit for accurate Peak Oil predictions (within a few years) goes to the following (projected year for peak given in parentheses):
* Association for the Study of Peak Oil (2007)
* Rembrandt Koppelaar, Editor of “Oil Watch Monthly” (2008)
* Tony Eriksen, Oil stock analyst; Samuel Foucher, oil analyst; and Stuart Staniford, Physicist [Wikipedia Oil Megaprojects] (2008)
* Matthew Simmons, Energy investment banker, (2007)
* T. Boone Pickens, Oil and gas investor (2007)
* U.S. Army Corps of Engineers (2005)
* Kenneth S. Deffeyes, Princeton professor and retired shell geologist (2005)
* Sam Sam Bakhtiari, Retired Iranian National Oil Company geologist (2005)
* Chris Skrebowski, Editor of “Petroleum Review” (2010)
* Sadad Al Husseini, former head of production and exploration, Saudi Aramco (2008)
* Energy Watch Group in Germany (2006)
* Fredrik Robelius, Oil analyst and author of "Giant Oil Fields" (2008 to 2018)
Oil production will now begin to decline terminally.
Within a year or two, it is likely that oil prices will skyrocket as supply falls below demand. OPEC cuts could exacerbate the gap between supply and demand and drive prices even higher.
Independent studies indicate that global crude oil production will now decline from 74 million barrels per day to 60 million barrels per day by 2015. During the same time, demand will increase. Oil supplies will be even tighter for the U.S. As oil producing nations consume more and more oil domestically they will export less and less. Because demand is high in China, India, the Middle East, and other oil producing nations, once global oil production begins to decline, demand will always be higher than supply. And since the U.S. represents one fourth of global oil demand, whatever oil we conserve will be consumed elsewhere. Thus, conservation in the U.S. will not slow oil depletion rates significantly.
Alternatives will not even begin to fill the gap. There is no plan nor capital for a so-called electric economy. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment. The independent scientists of the Energy Watch Group conclude in a 2007 report titled: “Peak Oil Could Trigger Meltdown of Society:”
"By 2020, and even more by 2030, global oil supply will be dramatically lower. This will create a supply gap which can hardly be closed by growing contributions from other fossil, nuclear or alternative energy sources in this time frame."
With increasing costs for gasoline and diesel, along with declining taxes and declining gasoline tax revenues, states and local governments will eventually have to cut staff and curtail highway maintenance. Eventually, gasoline stations will close, and state and local highway workers won’t be able to get to work. We are facing the collapse of the highways that depend on diesel and gasoline powered trucks for bridge maintenance, culvert cleaning to avoid road washouts, snow plowing, and roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, large transformers, steel for pylons, and high tension cables from great distances. With the highways out, there will be no food coming from far away, and without the power grid virtually nothing modern works, including home heating, pumping of gasoline and diesel, airports, communications, and automated building systems.
[…] The “Cheap Oil Era” is Ending Soon… Money Morning – 3 hours ago The IEA predicts that, by 2015, a lack of investment and rising demand will create a “supply crunch” – that will once again send oil prices up into the triple digits. “There remains a real risk that under-investment will cause an oil supply crunch in … The problem with cheap oil Salon Oil set for rebound in 2009, analysts expect Calgary Herald Bloomberg – Boston Globe – Wall Street Journal Blogs – Wall Street Journal all 1,399 news articles » […]
[…] The “Cheap Oil Era” is Ending Soon… Oil prices have fallen 70% since hitting a record $147.27 a barrel in July, which means in just five months, crude has given up all the price gains it made in the past four years. After such a wrenching plunge, many analysts believe the outlook for the “black gold” remains bleak – and in the short term it certainly is. In the long run, however, dwindling supplies, resurgent demand, and a lack of investment will cause crude oil to double, triple, or even quintuple in price over the next few years. […]
[…] Read more here: The “Cheap Oil Era” is Ending Soon… […]
[…] The “Cheap Oil Era” is Ending Soon… Oil prices have fallen 70% since hitting a record $147.27 a barrel in July, which means in just five months, crude has given up all the price gains it made in the past four years. After such a wrenching plunge, many analysts believe the outlook for the “black gold” remains bleak – and in the short term it certainly is. In the long run, however, dwindling supplies, resurgent demand, and a lack of investment will cause crude oil to double, triple, or even quintuple in price over the next few years. […]
[…] The “Cheap Oil Era” is Ending Soon… […]
[…] Jason Simpkins Money Morning addthis_pub = 'jutiagroup'; addthis_logo = 'http://www.jutiagroup.com/favicon.ico'; addthis_brand […]
[…] The “Cheap Oil Era” is Ending Soon… Oil prices have fallen 70% since hitting a record $147.27 a barrel in July, which means in just five months, crude has given up all the price gains it made in the past four years. […]
funny how we beleive so much in our scientific methods and forget the most unpredictable factor : "human irrationality"
funny how we beleive so much in our scientific methods and forget the most unpredictable factors : "human irrationality" and the limitations of our scientific methods in the light of todays knowledge.
Wow. And we believe this stuff? Here is my prediction. The fall off from existing fields will escalate far beyond any "GURU's" predictions. They cannot get themselves to make a consolidated analysis of the obvious – meaning reported facts they can read. Have they taken into consideration unprecidented production losses and the underlying financial/banking confidence in the oil and gas industry? Has no one considered that THE PRODUCTION LIFTING COSTS PRICE POINT IS CRITICAL FOR ONGOING FINANCING OF EXPLOITATION of known resource. My estimate is based on reading what is being reported by by IEA etc. Bottom line? The world will loose approximately 6 million barrels of production delivery capability in the next 8 months, if oil remains below $80 per barrel. Don't believe it? Even with 100+ dollar oil, production from North Sea was off 9%, Mexico 9%, US to drop off 33% in the next 15 months, Russia continuing to drop off by another 7% this last year, Canadian and Venezuela Tar Sand Heavy oil to loose approxmately 1.6 million barrels per day due to lack of net income margins and NO INVESTMENT! If you were a bank would you lend to an oil company if a price collapse in a few months would decimate your borrower from news of the slightest building inventory report? The only answer is to establish and set a WW price base for crude oil so companies and banks can clearly understand what the lending parameters are and appropriately respond in determining risks. Engineers and bankers establishing lending parameters does not exist in the current environment. Unfortunitely we need a system of governments setting a WW base price for crude so investment is worst case predictable and the worlds energy demands can be given an honest shot at investment and demand accomodation. It is not a convenience but a issue of national security. If we dont see this happen, we will always be in a feast and famine cycle in an ongoing deteriorization of what used to be a quasi-predictable industry. The North American oil industry is completely decimated and that is a good thing? For who? Enemies who may one day shut off our ports and bomb a few installations and reduce our nation to bent knees trying to find oil because we didn't set a energy policy of self reliance? And the Americans wonder why they are spending trillions of dollars keeping "peace" in the middle east for a sure flow of oil? seems like we can spend $100 per barrel and could get it for 1/3rd the price as compared with the cost of financing wars. Not only that, we are sending trillions of dollars in national wealth to nut jobs that have an average population of 16 whose only objective is to spread their form of "Peace" We are in very deep trouble folks. It is time to be real and quit listening to day job analysts.
My prediction on price? 60 – 80 by year end; provided we have the first signs of coming out of a recession by December 30th. Price in 2010? About $200 per barrel. Hard to imagine? Go do your own homework and just watch. The first indications of a recovery and the price will move $20 dollars in the first 5 days. That doesnt take into consideration the issue of a flare-up in the middle east. It won't be fair but other nations are prepared to live with this price and we wont because we will still be driving cars and not scooters in Asia and rail systems in Europe.
I think that these analysts think is ok if you leave out the prospect of alternative fuels .Our cars don't need to run on petroleum based product.Also believe that is about to happen faster with oil prices rising.You will see more so called hybrid cars being fueled by other means.Slowly leaving the era of oil behind.I would only consider a short term investment in oil.
I spent over 55 years of my life in the Oil Ind, & retired @ 50
years old from Chevron Oil Co, only to stay in the IND. I have read your piece on Cheep Oil , & I disagree with this assumption 100% , We have more OIL & Natural Gas still left in
the USA than we have taken out . I am 68 years old now & I still live & work in the oil fields of SE NM & West Texas .
Back in 2005 when OIL started to the $150.00 a bbl, we started to DRILL in the Permian Basin again & right where I drilled over 50 years ago & in less than one year we had drilled over 500 wells & that put the US back on top & @ the same time we put in over 200 very big wind Generators along the rim of what we call the CAP ROCK & that will help to relieve the Pressure on our two old Electric Plants that supply
this part of the Nation .
We have plenty of Energy to take care of the United States ,but we must learn how to use what we have like using the wind along with the Oil & Gas . Putting higher prices on Gasoline is not the way to help the Nation ,but only to make the American People very made, WE can keep the price down & the American worker busey ,but we must work @ this
& we must start now & not look back or it will sneak up on us
& we will be right back where we were …
A NEW ENGINE THAT USES TAP WATER FOR FUEL IS BEING DEVELOPED. THE INVENTOR WILL INTRODUCE THAT ENGINE TO THE PUBLIC IN 2010.
ENERGY FROM THE ENGINE WASTE HEAT IS USED TO "CRACK" THE WATER INTO HYDROGEN AND OXYGEN TO FUEL THE ENGINE ON-DEMAND. WHILE MANY ACADEMICS SAY SUCH AN ENGINE CANNOT WORK, THE INVENTOR IS BUSY PLANNING PRODUCTION FOR 2011.
THE PROTOTYPES HAVE BEEN RUNNING FOR 3 YEARS TO TEST THE DESIGN FEATURES. ONLY ONE FILM CREW HAS BEEN ALLOWED TO FILM AT THE LABORATORY WHERE THE WORK IS BEING DONE. SELF FINANCING BY THE WEALTHY INVENTOR MEANS THERE ARE NO OUTSIDERS TO DERAIL THE PROJECT.
SUCCESSFUL RESULTS WITH FUEL TANK DESIGNS, CYLINDER HEADS, BLOCKS AND OTHER ESSENTIALS FOR AN OTTO CYCLE ENGINE SPELL AN END TO HIGH OIL PRICES. WHO WILL WANT CARBON FUELS WHEN PENNY A GALLON TAP WATER WILL DO?
EMISSIONS ARE SO CLEAN THEY ARE HARD TO FIND IN A TEST. IS IT TIME FOR PEOPLE TO SELL THEIR OIL STOCKS?
Book Writer's Corporation
Middletown, CT 06457
Dearest Concerned Individual,
A joke to think oil has any value. It is all political and the use of oil is not needed or necessary. There was technology to use water for fuel in 1938 and before. Even the use of oxygen pure oxygen is possible. The oil companies buy out the right of way of producing other forms of use of energy sources. A John Deere tractor in 1938 the one tank of fuel for kerosene another tank of fuel for water. Many years ago it was possible to use water for fuel. Also it is possible to use oxygen for fuel.
This article Cheap Oil Era is ending soon is a joke. It is all political and the use of policy to increase prices. It is a joke to make money. The whole economy is the bases for use of oil or gas— WE NEED NO Gas or OIL>
Sincerely,
Clifford M. Skinner Jr.