BBC NEWS Brazil announces new oil reserves By Gary Duffy BBC News, Sao Paulo The Brazilian government says huge new oil reserves discovered off its coast could turn the country into one of the biggest oil producers in the world. Petrobras, Brazil's national oil company, says it believes the offshore Tupi field has between 5bn and 8bn barrels of recoverable light oil. A senior minister said Brazilian oil production had the potential to match that of Venezuela and Saudi Arabia. Petrobras delivered its estimate after analysing test results. 'New reality' The state-controlled company says the results show high productivity for gas and light oil - the best quality oil - which is more valuable and cheaper to refine. Petrobras says the find has the potential to move Brazil into a position where it is one of the top ten oil reserves in the world. Brazil currently has proven oil reserves of 14 billion barrels, over half of which have been discovered in the past five years. The news, which led to a sharp rise in company shares, was also given an enthusiastic welcome by the government. The senior minister in charge of the cabinet, Dilma Rousseff, said if the deposits turned out to be as significant as first thought, it would place Brazil in the same league as Venezuela and countries in the Arab world. With a reserve like this, the country could be transformed into an exporter of petroleum, she said. "This has changed our reality," she said. Most of Brazil's oil is heavy and found at great depth but even so its reserves have almost doubled in the last ten years, as has output. Some analysts say this latest find raises the interesting scenario of offering a new source of supply to the United States, reducing its dependence on Venezuela, a country with which it has such a fraught relationship. With the Tupi field potentially equal to 40% of all oil ever discovered here, it seems by any standards a significant moment for Brazil. "If the best-case scenario happens, this discovery would make Petrobras' reserves overcome those of Shell and Chevron," said Felipe Cunha, an analyst with brokers Brascan. Petrobras controls 65% of the firm which has the exclusive licence to explore and extract oil from the Tupi field in the Santos basin, about 180 miles south of Rio de Janeiro. British firm BG and Portugal's Galp Energia hold minority stakes in the business. Reserves have also been found in the more northerly Campos and Espirito Santo basins. Story from BBC NEWS: http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7086264.stm Published: 2007/11/09 12:15:58 GMT
It is my contention that the speculators are riding the wave, so to speak. Every time there is a geopolitical headline in the oil producing nations, they run it straight up, and considering where most of the oil is located, there are many such headlines. People need oil so they pay the price, but I don't think it would have gotten this high this fast without speculation, nor do I think it is likely to stay this high for the foreseeable future. The theory of peak oil may be valid, but we are nowhere close yet, in my opinion. You are entitled to your own opinion, but I would be sure to use a stop if you're trading from the long side, as this fucker can drop hard and fast--note yesterday's 2.00 drop in one minute on no news.
But the correct strategy in a bull market is to be long at over-extended prices, not short. Especially when sentiment remains sceptical of the move. In bull markets, "over-extended" prices usually end up trading significantly higher.
How then do you explain the huge bull run in all commodities in the last few years? And if it's factors unique to oil which make the difference, how come oil didn't have similar moves in the early 2000s, 1990s, or 1980s? Oil isn't really much different to any other commodity. It's pure supply & demand factors at work, just like wheat earlier this year, or industrial metals a couple of years ago.
BP Boss Hayward Bets Price of a Barrel Over Peak Oil (Update1) By Christian Schmollinger June 10 (Bloomberg) -- BP Plc Chief Executive Officer Tony Hayward is putting money on the line to dispute the theory of peak oil, according to his counterparty in the wager Kjell Aleklett, a professor at Sweden's Uppsala University. Hayward bet Aleklett the price of one barrel of oil in 2018 that global crude production will be greater than the current daily output of 85.5 million barrels, the professor said during his speech at the Asia Oil and Gas Conference in Kuala Lumpur. Total supply was 86.8 million barrels a day, including natural gas liquids such as propane. Aleklett heads the global energy systems department at Uppsala and is the chairman of the Association for the Study of Peak Oil & Gas. Peak oil theory holds that production will reach a zenith of 87 million barrels a day sometime around 2010 and then start declining, according the group's findings. ``I am upset that the bet is so low, only the price of one barrel of oil,'' Aleklett said to laughter from the audience. Crude oil futures reached a record $139.12 a barrel in New York on June 6 and have more than doubled in the past year. The July contract was trading at $133.86 a barrel at 9:38 a.m. in London. Hayward, who received a Ph.D. in geology from Edinburgh University, gave the keynote speech at the conference. The era of cheap energy is over as oil production isn't rising fast enough to meet demand amid a lack of spending,'' he said yesterday. ``Producers are being hampered by 25 years of low investments, because of low prices,'' Hayward said. ``The result is a supply chain being stretched to breaking point.'' To contact the reporter on this story: Christian Schmollinger in Kuala Lumpur at Christian.s@bloomberg.net. Last Updated: June 10, 2008 04:42 EDT
there is nothing like putting your pocket change where your mounth is. way to inspire confidence in your forecasts BP
The mkts are being held to ransom. This is nothing more than a holdup, with the 'free market' morons cheerleading the stickup. The public is being bent over and porked
I don't have an opinion on the oil market, just respecting the notion that the concept of "peak oil" might be correct. A $2 price change in oil is mere noise.
Some of the short positions may also be the result of the rapid influx of volume into the energy exchange in the past months. There may be too many speculators on the short side though the media would hardly ever try to perceive that notion.
Thank you Detective, That is the most original, useful, and concise statement I've hear on the oil market all year. Lucky for us, few people will hear you and the talking heads will keep on guessing.