SubscribeExactly the Point on Oil
If crude oil can double in value with the world in recession, just imagine what will happen when demand picks up. Prepare yourself.
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Don’t believe the barrage of short-term noisemakers. Some experts believe supply is running far ahead of demand–but this is an extremely short-sighted view that fluctuates fast and seems to be ending as oil and gasoline inventories begin to get tighter. Understand that the oil producers don’t want prices to soften.
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We asked our own version of "Deep Throat," a gentleman who has devoted his career to making a fortune in the energy markets, and we want you to know that in his view (he requested anonymity), "We have a growing medium- and long-term problem."
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"The biggest oil fields are past peak production. Truth is these fields are declining in reserves by some 6% to 7% a year. We have to find 3 million to 4 million more barrels a year just to offset this decline in the oil that exists," he says. Exxon Mobil, for example, has proven reserves 21% less than what was reported in 2007.
My comment: This is exactly the point I have been making even as the oil price collapsed last year. Unfortunately the collapse in the oil price caused oil companies to further reduce spending on exploration and infrastructure which just makes the problem worse in the long run.
John Polomny
The Real Deal
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Comment by Loans Guide on 12 June 2009:
There are only two scenarios that don’t have a third !!
First scenario :
….
Recent Crisis + $150 per barrel (again) = 100 X recent crisis (Imagine)..
It is very clear, those stupid Brokers are playing the final game in their lifes (career lifes
Second scenario :
The brokers will be clever enough to figure the first scenario out, and they will start paying their bonds just a little before the big crisis begins… so we can expect the price to be $100 today…. $50 tomorrow $75 the day after ….
it is very clear…no doubt