Oil to hit $100 a barrel
- Thread starter Peter 14.7
- Start date
matt simmons
All information is biased and numbers can be presented or interpreted in such a way to sway readers to particular arguments. Matt Simmons conducted a survey and based his interpretetations from information arising from the survey.
But he used other types of data. I thought it strange that oil reserves in Saudi Arabia remained constant for several decades, neither rising or declining - btw this was based on Saudi govt reports. He presents very powerful arguments.
If you have opposing arguments with evidence backing it up I would be happy to hear it. It is pointless to say that because he was an investment banker and that he raised billions of money for oil company then he must be biased. Where is your evidence that Saudi oil fields are not declining?
I however think it is not in Saudi Arabia's interest or oil company's interest for Simmons to come out and say that Saudi oil fields are declining. Look at the plummeting share price of Royal Dutch Shell who lied about their reserves. Lying about oil reserves is a criminal act - be they govt or oil companies.
http://www.smh.com.au/articles/2004/04/20/1082395856520.html?from=storyrhs
All information is biased and numbers can be presented or interpreted in such a way to sway readers to particular arguments. Matt Simmons conducted a survey and based his interpretetations from information arising from the survey.
But he used other types of data. I thought it strange that oil reserves in Saudi Arabia remained constant for several decades, neither rising or declining - btw this was based on Saudi govt reports. He presents very powerful arguments.
If you have opposing arguments with evidence backing it up I would be happy to hear it. It is pointless to say that because he was an investment banker and that he raised billions of money for oil company then he must be biased. Where is your evidence that Saudi oil fields are not declining?
I however think it is not in Saudi Arabia's interest or oil company's interest for Simmons to come out and say that Saudi oil fields are declining. Look at the plummeting share price of Royal Dutch Shell who lied about their reserves. Lying about oil reserves is a criminal act - be they govt or oil companies.
http://www.smh.com.au/articles/2004/04/20/1082395856520.html?from=storyrhs
keithj said:
I agree entirely Keith!
Matt Simmons has invested so much money in oil that he needs to know what is really the truth before being prepared to put more into the area.
Just like other investors at various levels of net worth he does his research - in depth.
Keith, remember that Simmons is not a stock broker selling blue sky to retail investors, he's got his money where his mouth is, followed by nine-zeros.
Many other investment groups trust him with their money. Any of them can easily afford the white collar equivalent of large people with baseball bats if Simmons tells them a porker.
So I agree totally with your statement that he has a bias, and it's this bias that is one of the main reasons I hold his views in such high regard.
Cheers,
Aceyducey
hmm I guess Keith has nothing to add.
BTW - Situation in Burma is also looking dicey for foreign oil companies according to a friend of mine working over there as a consultant. Lots of money is not changing hands where it should.
This is currently a relatively small market (but with some potential large fields), but they are considering all of their oil as a strategic reserve.
Equally Venezuela, the world's fifth largest exporter of oil, has just closed a deal to buy 100,000 barrels make-up oil from the Russians. BTW that's 100,000 barrels PER DAY for the rest of this year. And where's their oil gone you may ask? Well it's more likely internal issues than the oil being in decline, but still (refer: http://www.theoildrum.com to thread: http://www.theoildrum.com/story/2006/5/1/224137/4672).
Oh, and Bolivia is also in the process of nationalising it's oil industry, in an act that mirrors the Mexicans way back when.
Forget the events in Iran, Iraq - the fish are frying nicely elsewhere.
I LOVE the oil market atm.
And I'd like to increase Australian production (working on it)
Cheers,
Aceyducey
BTW - Situation in Burma is also looking dicey for foreign oil companies according to a friend of mine working over there as a consultant. Lots of money is not changing hands where it should.
This is currently a relatively small market (but with some potential large fields), but they are considering all of their oil as a strategic reserve.
Equally Venezuela, the world's fifth largest exporter of oil, has just closed a deal to buy 100,000 barrels make-up oil from the Russians. BTW that's 100,000 barrels PER DAY for the rest of this year. And where's their oil gone you may ask? Well it's more likely internal issues than the oil being in decline, but still (refer: http://www.theoildrum.com to thread: http://www.theoildrum.com/story/2006/5/1/224137/4672).
Oh, and Bolivia is also in the process of nationalising it's oil industry, in an act that mirrors the Mexicans way back when.
Forget the events in Iran, Iraq - the fish are frying nicely elsewhere.
I LOVE the oil market atm.
And I'd like to increase Australian production (working on it)
Cheers,
Aceyducey
There is an interview with Matt Simmons here:
http://www.netcastdaily.com/fsnewshour.htm
And if you're interested in inflation listen to Don Coxe:
http://www.bmoharrisprivatebanking.com/webcast.asp
http://www.netcastdaily.com/fsnewshour.htm
And if you're interested in inflation listen to Don Coxe:
http://www.bmoharrisprivatebanking.com/webcast.asp
Just bumping this back up with some news....
Matthew Simmons stated last week that he believes we have reached the peak in Oil production, thanks to field declines in large fields and lack of new supply.....
http://www.theoildrum.com/node/2239
I think this is big news - this guy is not some 'oil expert' that has sprouted up in recent years with the high oil price. His company has been around since the 70's....
How does he think we solve the problem;
"Start from the ground - how did we get to 85mmb/day of consumption, and what would we do if supply went to 70, when we thought it was going to 100"
TJ
Matthew Simmons stated last week that he believes we have reached the peak in Oil production, thanks to field declines in large fields and lack of new supply.....
http://www.theoildrum.com/node/2239
I think this is big news - this guy is not some 'oil expert' that has sprouted up in recent years with the high oil price. His company has been around since the 70's....
How does he think we solve the problem;
"Start from the ground - how did we get to 85mmb/day of consumption, and what would we do if supply went to 70, when we thought it was going to 100"
TJ
Well since some else wishs to resurrect my thread, as of today:
Oil (West-Texas) $US59.65
A lot less than predictions of $100 a barrel by Christmas.
What changed?
Why?
What happened we did not expect?
Did $100 have any logic?
or
Supply and Demand?
Peter 14.7
Oil (West-Texas) $US59.65
A lot less than predictions of $100 a barrel by Christmas.
What changed?
Why?
What happened we did not expect?
Did $100 have any logic?
or
Supply and Demand?
Peter 14.7
From what I have read from the situation, US has had a much warmer winter than normal which has led to lower than anticipated demand.
There may have been some hedge funds etc that have been exposed long on the price during the american winter - and the market being what it is, can punish the over-exposed.... (ie Amaranth collapse on being exposed long natural gas prices, market moved them down to around $4mmbtu.... now gas prices are back to $7.76mmbtu... almost 100% increase since Amaranth collapsed).
Add to this a lack of geopolitical disruption, no hurricane Katrina, lack of direction at OPEC etc
But these are all short term issues that have affected the oil price over the short term. If Simmons is correct, (and it is interesting he has made his comment while oil is well off its highs) then $50-60 will be seen as a time of 'cheap oil' in years to come. His comments relate to supply issues with the decline of large fields in Mexico and North Sea, he obviously has no confidence in OPEC and particularly Saudi Arabia being able to plug this supply gap as it widens....
So he claims - we are at Peak Oil! Production is peeking now
This is really a massive call...
I don't know the true picture about oil, and I doubt many do. How much is really left in the Saudi oil fields?
I have been overweight oil in my portfolio. It has been hard the last 8 months, however I am way ahead in the long run. Oil will get scarce one day, so I plan on staying overweight oil. I own BHP, WPL, BPT, AWE, ROC.
There is some really good value in oil stocks just as the moment, as the sector was sold off with the drop in oil prices, and the big rush into the high yield stocks for super portfolios. Just my opinion of course.
I have a financial interest in oil staying high as well with my farm. Biofuels have put a rocket under grain prices. The US will soon be turning half their corn crop to ethanol. That could be 120 million tonnes. It's all good if you grow grain.
See ya's.
I have been overweight oil in my portfolio. It has been hard the last 8 months, however I am way ahead in the long run. Oil will get scarce one day, so I plan on staying overweight oil. I own BHP, WPL, BPT, AWE, ROC.
There is some really good value in oil stocks just as the moment, as the sector was sold off with the drop in oil prices, and the big rush into the high yield stocks for super portfolios. Just my opinion of course.
I have a financial interest in oil staying high as well with my farm. Biofuels have put a rocket under grain prices. The US will soon be turning half their corn crop to ethanol. That could be 120 million tonnes. It's all good if you grow grain.
See ya's.
Yes it is very interesting. The simple fact is new technology such as hydrogen or bio-fuels are years away from being main stream. Both have storage issues to fix. That is, from what I have read, evaporate after a while. And unless someone develops a very efficient and buildable engine that saves fuel, demand is there.
So petroleum is with us for the foreseeable future and the demand cannot go down overnight.
The very warm summer in the US this year is a freak occurrence not repeated since the 1800's and this has stopped the usual spike in demand.
And as the cheap oil, that is oil easy to get and hence cheap, is running out what remains is costing more to get so assuming we are half way (peak oil) empty the remaining half will cost more than the first half regardless of demand.
I am no share trader but I understand the fundamentals of oil.
Peter 14.7
So petroleum is with us for the foreseeable future and the demand cannot go down overnight.
The very warm summer in the US this year is a freak occurrence not repeated since the 1800's and this has stopped the usual spike in demand.
And as the cheap oil, that is oil easy to get and hence cheap, is running out what remains is costing more to get so assuming we are half way (peak oil) empty the remaining half will cost more than the first half regardless of demand.
I am no share trader but I understand the fundamentals of oil.
Peter 14.7
The difficulty in thinking of alternatives is to grasp the SIZE of the problem.
Look at this tanker:
The United States needs to import thirty times the amount of oil on this ship every day, and they produce 40% of their consumption, ergo, they USE X45 of this amount of oil every day. (Figures are rough but not wildly inacurate. I doubt I misplaced a point when I did this calc a while back)
Now that's one hell of a lot of coconuts to fill one such ship every day, or meet 2% of US consumption. Think of the death toll from people being hit on the head with falling coconuts? (I'm only half joking, it's the "free lunch" story again) Again to bring things to scale, the US is expanding corn and ethinol production and in a few years they will be using 50% of an important world source of food to replace 3% of oil consumption. The cost of the staple corn food in Mexico (tortillas?) is rising markedly and when poor people starve there is the seeds of unreast.
Free lunch anyone?
The Pix which doesn't want to show is available @
http://www.ayrshirescotland.com/ships/jahre/image005.jpg
A "Whiskey and Gunpowder" report I get dropped in my box says in part
.....mankind has generally located, if not discovered, most of the conventional crude oil that there is to find in the crust of the Earth, and has produced and consumed something near half of it. That is, out of a conventional, worldwide resource base of conventional oil that is estimated by some knowledgeable commentators at about 2.2 trillion barrels, about 90% has been discovered and about 1 trillion barrels have been extracted and consumed over the past 150 years or so. At the present time the global oil industry is pumping the world’s known oil reserves at a rate of about 1,000 barrels per second, or 85 million barrels per day (mbd), or about 31 billion barrels per year. And the global economy is, as frequent readers of this column know, consuming or otherwise burning up almost every drop of that oil. And not to get too preachy, but watch what happens if just a couple of hundred thousand barrels per day of production (near a rounding error from a production base of 85 mbd) go off line, such as occurred last August when BP closed the Alaska pipeline.
ie We (the world) empty out one of those tankers every one or two minutes. (Sorry, I have trouble remembering/converting barrels, gallons, litres and tonnes.) and our stupid Gov. wants to ban incandesent bulbs. Big deal!!!!!
.....mankind has generally located, if not discovered, most of the conventional crude oil that there is to find in the crust of the Earth, and has produced and consumed something near half of it. That is, out of a conventional, worldwide resource base of conventional oil that is estimated by some knowledgeable commentators at about 2.2 trillion barrels, about 90% has been discovered and about 1 trillion barrels have been extracted and consumed over the past 150 years or so. At the present time the global oil industry is pumping the world’s known oil reserves at a rate of about 1,000 barrels per second, or 85 million barrels per day (mbd), or about 31 billion barrels per year. And the global economy is, as frequent readers of this column know, consuming or otherwise burning up almost every drop of that oil. And not to get too preachy, but watch what happens if just a couple of hundred thousand barrels per day of production (near a rounding error from a production base of 85 mbd) go off line, such as occurred last August when BP closed the Alaska pipeline.
ie We (the world) empty out one of those tankers every one or two minutes. (Sorry, I have trouble remembering/converting barrels, gallons, litres and tonnes.) and our stupid Gov. wants to ban incandesent bulbs. Big deal!!!!!
I think the higher the price of oil goes, the more profitable to produce biofuel. When oil was $10 a barrel, it was not profitable at all. Six months ago when oil was nearly $80 a barrel, and before grain prices took of, US ethanol producers were paying off new plants in 2 years. It is not so lucrative now that grain prices have shot up and oil prices dropped a bit.
George Dubya has pretty much committed the US to making heaps of biofuel now to reduce Middle East oil imports. The plants are in or started. It's all good if you grow grain. Higher grain prices will soon flow through the rest of the food chain.
See ya's.
Hi All
Good points.
Again we see that when you scratch the surface what seems to clean, green and smart is not.
It would appear Hydrogen has the best future being non-polluting and able, in theory, to be made from power via solar so renewable.
So for hydrogen to be effective we need cheap power. But then, if we had that, why not plug your car in the socket each night.
Because that only gets 200km a day and who wants a commuter car only. What about that trip to the Country.
So we need better batteries. It goes on.....
What we do know is if fuel gets too high then other sources have a chance. Which leads logically to the belief the Arabs are running out but dont want to tell until the only have the last drop left.
If they panic the market now and alternatives get a look in then they lose market share and would end up with something no one wants, oil.
As the saying goes:
"The Stone Age didnt end because they run out of Stones.
Something better came along."
Peter 14.7
Good points.
Again we see that when you scratch the surface what seems to clean, green and smart is not.
It would appear Hydrogen has the best future being non-polluting and able, in theory, to be made from power via solar so renewable.
So for hydrogen to be effective we need cheap power. But then, if we had that, why not plug your car in the socket each night.
Because that only gets 200km a day and who wants a commuter car only. What about that trip to the Country.
So we need better batteries. It goes on.....
What we do know is if fuel gets too high then other sources have a chance. Which leads logically to the belief the Arabs are running out but dont want to tell until the only have the last drop left.
If they panic the market now and alternatives get a look in then they lose market share and would end up with something no one wants, oil.
As the saying goes:
"The Stone Age didnt end because they run out of Stones.
Something better came along."
Peter 14.7
Slight hijack but anyway...
Yes, with electric vehicles its a case of; decent power/decent range/decent price - pick any two.
However I have seen some backyard electric vehicles that can work around the problem by having a short range (~100-200km) battery that can be charged overnight, but for longer trips you attach a small trailer with a diesel generator that can recharge the battery in ~20 minutes.
Haha classic diesel generator on a trailer I know you were probably been serious but good damn cant you see the irony?
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