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4 months left
Joined: 07 Feb 2003
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 Posted: Tue Nov 27, 2007 11:14 pm Post subject: Oil Prices don't match Fundamentals - Saudi Oil Minister |
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"No relationship between fundamentals and the current price. Anybody who tells you that is WRONG. Saudi has AMPLE spare capacity."
http://www.cnbc.com/id/15840232?video=600580474&play=1 |
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thepeel
Joined: 08 Aug 2004
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| Posted: Tue Nov 27, 2007 11:49 pm Post subject: |
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| Oil is priced in US dollars. If the dollar decreases in values, as it has been doing and will continue to do, the value of oil in USD goes up. Oil is not priced in banannas. |
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keane
Joined: 09 Jul 2007
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| Posted: Wed Nov 28, 2007 3:38 am Post subject: |
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1. http://forums.eslcafe.com/korea/viewtopic.php?p=1434340#1434340
2. Supply flat for three years, demand rising. How could the price NOT go up? This is BASIC economics.
3. al Huseini, IEA, CEO of TOTAL, Simmons, KIng of Saudi Arabia, Cheney, Bush... well, just go here:
Who is talking about Peak Oil?
Let's add the IMF.
Last edited by keane on Wed Nov 28, 2007 4:49 am; edited 1 time in total |
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keane
Joined: 09 Jul 2007
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| Posted: Wed Nov 28, 2007 4:28 am Post subject: |
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Peak Possibilities
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In July 2006, the world's oil rigs pumped out crude at a rate of nearly 85.5 million bbl. a day. They haven't come close since, even as prices have risen from $75 to $98 per bbl. Which raises a question of potentially epochal significance: Is it all downhill from here?
It's not as if nobody predicted this. ...and a lot of perfectly respectable geologists--have long cited the middle to end of this decade as a likely turning point.
In the oil industry and the government agencies that work with it, such talk is usually dismissed as premature... In most official scenarios, production will soon begin rising again, peaking at more than 110 million bbl. a day around 2030.
That's alarming enough in itself. Even the optimists think we have less than three decades to go? But at industry conferences this fall, the word from producers was far gloomier. The chief executives of ConocoPhillips and French oil giant Total both declared that they can't see oil production ever topping 100 million bbl. a day. The head of the oil importers' club that is the International Energy Agency warned that "new capacity additions will not keep up with declines at current fields and the projected increase in demand."
This isn't quite the same as saying that oil production has peaked and is about to start declining sharply--the view of the true peakists. In "peak lite," as some call it, the big issues are not so much geological as political, technical, financial and even human-resource-related (the world apparently suffers from a dearth of qualified petroleum engineers). These factors all delay the arrival of oil on the market, meaning that production would not so much peak as plateau. But with demand rising sharply, especially from China and India, even a plateau could be precarious.
...Almost everybody agrees that the pumping of conventionally sourced oil outside the Organization of Petroleum Exporting Countries (OPEC) has already peaked or will peak soon, a reality that even discoveries like the recent 8 billion-bbl. find off the coast of Brazil can't alter because production from so many existing fields is declining.
The big question mark is OPEC...
...If OPEC's members are not able to boost production in coming years, though, it will be impossible to keep blaming the traders as prices rise. What happens then?
...Either way, the beginning of the end of the oil era may be upon us, well ahead of schedule. |
Oil Officials See Limit Looming on Production
(It doesn't get more "fundamental" than that. Keep in mind the Saudi Oil Minister is a political animal.)
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By Russell Gold and Ann Davis
Word Count: 2,244
A growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day.
Some predict that, despite the world's fast-growing thirst for oil, producers could hit that ceiling as soon as 2012. This rough limit -- which two senior industry officials recently pegged at about 100 million barrels a day -- is well short of global demand projections over the next few decades. Current production is about 85 million barrels a day.
The world certainly won't run out of ... |
(The rest is behind a firewall.) |
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sojourner1
Joined: 17 Apr 2007
Location: Where meggi swim and 2 wheeled tractors go sput put chug alugg pug pug
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| Posted: Wed Nov 28, 2007 4:57 am Post subject: |
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| Oil companies and middle men are getting filthy rich off of over inflated prices who are manipulating the markets. |
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keane
Joined: 09 Jul 2007
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| Posted: Wed Nov 28, 2007 7:27 am Post subject: |
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| sojourner1 wrote: |
| Oil companies and middle men are getting filthy rich off of over inflated prices who are manipulating the markets. |
1. Yes, you are right. The fact that stocks of supply have been falling since summer - when they should be going up - means nothing.
2. The fact that production of all liquids has been flat for THREE YEARS while demand has risen means nothing.
3. The fact that the production of oil (the black stuff, as opposed to ALL petroleum liquids in #2 above) has been FALLING means nothing.
Good luck with that. |
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Leavingkorea
Joined: 27 Apr 2007
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| Posted: Wed Nov 28, 2007 7:30 am Post subject: Re: Oil Prices don't match Fundamentals - Saudi Oil Minister |
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You are exactly right. Supply has met demand needs and the U.S. dollar can only explain part of the increase. Most of the value is due to irrational behaviour and speculation over the war in the Middle East and Chavez's insane rants. Despite the fact that it has had no real impact on oil delivery. Fear is driving prices over the $70 mark not supply. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Nov 28, 2007 11:49 am Post subject: Re: Oil Prices don't match Fundamentals - Saudi Oil Minister |
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| Leavingkorea wrote: |
You are exactly right. Supply has met demand needs and the U.S. dollar can only explain part of the increase. Most of the value is due to irrational behaviour and speculation over the war in the Middle East and Chavez's insane rants. Despite the fact that it has had no real impact on oil delivery. Fear is driving prices over the $70 mark not supply. |
Add in the fact that new refineries are not being built. |
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Leavingkorea
Joined: 27 Apr 2007
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| Posted: Wed Nov 28, 2007 12:21 pm Post subject: Re: Oil Prices don't match Fundamentals - Saudi Oil Minister |
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| Kuros wrote: |
| Leavingkorea wrote: |
You are exactly right. Supply has met demand needs and the U.S. dollar can only explain part of the increase. Most of the value is due to irrational behaviour and speculation over the war in the Middle East and Chavez's insane rants. Despite the fact that it has had no real impact on oil delivery. Fear is driving prices over the $70 mark not supply. |
Add in the fact that new refineries are not being built. |
Good point. Refineries are a major long term issue. The oil is there, we simply lack sufficient refineries for long term growth now. They are a major bottle neck for us. |
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4 months left
Joined: 07 Feb 2003
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| Posted: Wed Nov 28, 2007 1:15 pm Post subject: |
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| thepeel wrote: |
| Oil is priced in US dollars. If the dollar decreases in values, as it has been doing and will continue to do, the value of oil in USD goes up. Oil is not priced in banannas. |
The Saudi Oil Minister knows very well oil is priced in US dollars. Even with the large decline in the dollar he said oil was overpriced. He said this yesterday (11/29) not 6 months ago. |
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keane
Joined: 09 Jul 2007
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| Posted: Wed Nov 28, 2007 2:19 pm Post subject: |
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Finally, an intelligent observation from the ostrich set. Yes, refining capacity is an issue. It is PART of the Peak Oil issue. However, it is commentary such as this that acts as if that is not a consideration for those concerned about supply that makesone wonder if you people read anythign posted here. It is. And is discussed a lot. I posted about this yesterday. It's a phenomenon termed Peak Lite. I.e., there are geological factors, and there are above-ground factors.
Does Saudi have spare capacity? Yes. This is well-understood. They can go as high as 3,000,000 - 3,500,000,000 b/d higher. the questions are two: how long will it take and will they? That doesn't change the fact that that will only equal 1 to 2 years of increased demand without demand destruction. Cheney himself said we were losing 3% to depletion every year. And that was back in the late 90's. It can only have gotten worse since then. That was before Cantarell and the massive decline in the North Sea.
It is expected new highs in all liquids will be reached this quarter. We shall see. But that doesn't change the fact that production has been flat, and that new high would not change that as the difference in the lows and highs over the last three years are small... it's essentially a plateau. Unless you can get up to 87 or 88 million barrels a day, you're doing nothing but extending the plateau. Even then, that's probably all you will be doing.
Now, with that flat supply and rising demand (again, reserves in the US have been falling since summer at a time when they don't normally do so) for three years, basic economics tells you price should rise.
Why do you think there are shortages in areas around the globe? Have you factored that in? No.
Are there factors such as stock trading affecting price? Of course. But to claim supply has nothing to do with it is to pretend the Earth is flat. The numbers don't lie.
So, deal with the flat production with rising demand and shortages that currently exist. And depletion, now running at at least 4% a year. |
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Leavingkorea
Joined: 27 Apr 2007
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| Posted: Thu Nov 29, 2007 8:45 am Post subject: |
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| keane wrote: |
A bunch of stuff |
Wow look how fast those little Hamsters go  |
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keane
Joined: 09 Jul 2007
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| Posted: Sun Dec 02, 2007 3:34 am Post subject: Re: Oil Prices don't match Fundamentals - Saudi Oil Minister |
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| Kuros wrote: |
| Add in the fact that new refineries are not being built. |
I should add here that this is a bit of a misnomer. Capacity has been built. I posted the numbers on the PO thread, so you can browse there or use the search function if interested because I don't recall, but while little has been done in building refineries, a good bit of additional capacity has been built into existing refineries. If memory serves, capacity is actually higher now than ten or twenty years ago. |
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