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Low Oil Prices Curing Low Oil Prices
The third observation is that decline rates could curtail supply quickly. Past oil-price collapses have been associated with a sharp increase in the decline rates observed in mature basins. Using past production curves as a proxy, Deutsche Bank estimates that as much as 1.5 million b/d of supply could be lost to accelerated decline over the next 2 years within the US onshore, Alaska, Canada, UK, Norway, and Russia.
Finally, the analysts see that new supply projects are being postponed. Within the growth regions, the rise in costs and taxes in recent years suggests that the average oil…
3Mar2009 | The Real Deal | 0 comments | ContinuedCould Oil Supply Fall 20 Million BPD Over Next Three Years?
Randy Ollenberger, managing director of oil and gas research at BMO Capital Markets, said global oil supply could decline by as much as 20 million barrels a day over the next three years if the oil industry stops investing new capital, whether by building new projects or sustaining existing ones, because oil prices are too low. This would dwarf a decline in demand of about 2.25 million barrels a day over the same period.
"The market is fixated on the demand side and ignoring the supply side, and if oil prices remain at these levels, what we will see is…
29Jan2009 | The Real Deal | 0 comments | ContinuedSupply not demand is the issue
Our planet is facing a severe energy crisis, however not many are paying attention. I find it amazing that rather than focus on the very real threat of ‘Peak Oil’, the majority of investors seem to be worrying about the ongoing credit crisis.
My comment: I’m not surprised as the sheeple media overload and lack of critical thinking by "analysts" is nothing new.
Over the past few months, the price of crude oil has dropped sharply due to forced liquidation in every asset-class. Unfortunately, this decline has convinced everyone that the oil ‘bubble’ has burst. Every day, we hear about the…
18Nov2008 | The Real Deal | Comments Off | ContinuedWorld needs 64million barrels per day of new production by 2030
The energy watchdog is warning for the first time that oil output could pass its peak as power shifts from "super-majors" to national companies controlled by producer states. It highlights a potential oil-supply crunch.
The unprecedented wake-up call comes as the European commission says in a report due out tomorrow that while oilfields decline, the balance of supply and demand will become "increasingly tight, possibly critically so".
The IEA’s latest World Energy Outlook predicts that global energy demand will increase 45% between now and 2030 and oil prices will rise to $200 a barrel by then – or $120 at…
IEA report says global oil supply and consumption unsustainable
Oil prices will rebound to more than $100 a barrel as soon as the world economy recovers, and will exceed $200 by 2030, the International Energy Agency will say in its flagship report to be published next week.
While market imbalanOil prices will rebound to more than $100 a barrel as soon as the world economy recovers, and will exceed $200 by 2030, the International Energy Agency will say in its flagship report to be published next week.
While market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is…
Supply and Demand Shape Commodity Markets
The commodity bull market has a long way to go. This bull market is not magic. It’s not some crazy “cycle theory†I have. It does not fall out of the sky. It’s supply and demand. It’s simple stuff.
In the 80s and 90s, when people were calling you to buy mutual fund and stocks, no one called to say, “Let’s invest in a sugar plantation.†No one called and said, “Let’s invest in a lead mine.†Commodities were in a bear market and in bear markets people do not invest in a productive capacity. They never have. Perhaps they should…
25Aug2008 | Whiskey and Gunpowder | Comments Off | ContinuedHow Low Will Oil Go?
A few weeks ago, I wrote a column commenting that the price of oil had outstripped fundamentals and was running on fumes. So count me unsurprised that oil has plunged $32 from its high of $147.27 on July 11.
A reader recently wrote to ask just how low will oil go? Unfortunately, my crystal ball is in the shop this week. (And next week isn’t looking good either.)
But let’s take a dispassionate look at what’s happening with oil, beginning with the obvious: No one from Ben Bernanke to T. Boone Pickens can tell you how high or how low oil is…
13Aug2008 | Investment U | Comments Off | ContinuedOne Sure-Fire Sign That Gas Prices are Heading Higher
The U.S. Energy Department said earlier this week that it expects average monthly gasoline prices to peak at $3.60 a gallon this spring, since the high prices will serve to curb demand.
For investors who are tired of feeling like they’ve been mugged every time they fill up at the corner gas station, this forecast had to nurture a feeling of relief – as well as a belief that pump prices will finally start to decline.
That may well happen in the short term (although even the Energy Department report said that before prices level off there could be interim price spikes…
11Apr2008 | Money Morning | Comments Off | Continued
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