Hey heres a reason why oil could be so strong. If you knew saudi oil production was at the limit, and that during the second half of the year, it will show for the first timem saudi oil would start falling, wouldnt you be buying oil futures like crazy. This could be a huge explanation why oil is staying so high.
They said they had enough oil to pump 15m barrels a day for 50 years yesterday. Though,an american oil banker on Cheney's oil task force said there was a lot of water coming up with the oil he saw indicating they may be running out. What do you think you went in Iraq for? Plenty undiscovered there.
The Caspian area will slowly take over OPEC shortfall. Canadian tar sands extraction technology is getting better, the chinese already are busy making deals on future Canadian oil. Then you have the Russians, they can make a significant difference in global oil output if ever they can overcome their gross incompetence in managing their oil industry and massive levels of corruption . Then you have the Iraq factor, much of their oil technology is antiquated, which if modernized should improve their output. The question is not about the rate of oil production, but the rate of consumption. India and China have close to 2.5 Billion people, how many of those reach middle class standards with their growing economies will determine how much oil goes up in the future. Then again, as prices increase, alternative methods of energy become more affordable, thereby reducing demand for oil in the process.
last i heard, gawhar is pumping a lot of water. I think the saudi oil fields are at or near their peak
Iraq has the greatest upside capacity potential at this point. Their fields are so easy to tap it costs $.50 a barrel to pump, cheapest in the world. Shale oil cost $10 to extract a barrel on a high production capacity scale. Now if the insurgents would just get out of the way in Iraq.......... Come 2015, after Iraq is settled down and they gain relative stability, you can count on the presence of ground troops in Colombia, ostensibly to fight FARC, but with with the aim of containment of the Venezuelan Chavezistan socialists or an outright removal of them from power, under the guise of support for a democratic-capitalist insurgency. Then, the largest shale oil deposits on the planet will fall under the US led Pan-American security coalition.
Arabs know that the world will quit needing oil before they run out of it to sell. Why do you think they are pumping it so fast? Because every barrel not pumped now will someday never used. If we ever get political stablization in the middle east and if we can ever get the US to build more refineries then oil will be back to $20 bucks a barrel. John
You are correct in principle. In addition, the Saudi Family is pumping as fast as possible because they and the cartel they control have succeeded in moving price up to a level that makes them tremendous amounts of money on a per unit basis. What is more interesting to me is they way they were able to secure president Bush's assistance in this matter. I wonder how the public would react if they knew the extent of the Bush family's participation in the Saudi family's success? Those who might object (here in the US) might simply want to remember how the price of oil and unleaded gas moved DOWN just before the presidential election. Coincidence? I think not. In addition, there are other factors affecting price. Demand from China and India will continue to grow, and Russia will try to use oil as a way to increase their influence in world events (look at what they have done with Yukos, Russia's biggest (formely independent) oil producer. Lefty
I remember a Goldman Saks research report, showing that everytime the sauds said that they would increase oil prodution, they failed to increase, the chart was for a year and half, in fact production was left the same. if somebody has that chart please post. I think if the sauds fail to show adaquate increase in production by the fall, then we definately know that the sauds are at the limit of production. Its not bs, the sauds have been saying they would increase production by 500K, 1M, 250K, but they fail to produce that number. They keep saying they have a 1M in reserve production. You can say that they are only speaking it to push oil down, but why the stagnant production. If they arent at the limit. Even the russians are saying they are producing at the limit and most major producers. If this is all true, isnt this a logical reason why oils so strong. If it became public and the sauds admits they are at the limit, what would happen to the price of oil.
Forget all this stupid oil talk, for $800 odd, you can convert your engine to run on vegetable oil which would cost 1/4th of what gas at $50/barrel would. With genetic engineering and process efficiencies, the prices of vegetable oils will never get out of hand or peak production scenarios will never occur. www.greasecar.com/ Screw the Arabs and Venenzulian Commies! They are only putting an impediment to the progress of the human soceities.