Goldman Sachs predicts oil to hit $105/barrel

Merrion

According to this article.

I'm not sure I agree as to the volatility of the Saudi political system being the main threat...to my mind the recent goings on in the former Soviet republics are more likely to be a trigger point but the long and short of it is that we may well see oil prices (and everything that causes) doubling in the next few years.

Captain Trips

Merrion wrote:

According to this article.

I'm not sure I agree as to the volatility of the Saudi political system being the main threat...to my mind the recent goings on in the former Soviet republics are more likely to be a trigger point but the long and short of it is that we may well see oil prices (and everything that causes) doubling in the next few years.

To be more accurate one should mention that OPEC prices could hit that high. An equal amount of oil is now pumped from non-OPEC sources. OPEC wants cash money, plus, the majority of OPEC countries are in the tax free zone and that relies on flogging expensive oil.

paulcr

If oil his $105/barrel Bush should be dragged out of the White House and slapped with Sadam's old sandal.

After what he's done there, not to mention the cost in lives and money. We should all get gas/petro for free.

alleepally

Anyone interested in reading all about the Oil trade and what an uncertain future we have if depending on oil should read The End of Oil by Paul Roberts. It's on a 3 for 2 offer in Waterstones or you can get it on online too.

Fascinating reading and worrying too.

lomb

alleepally wrote:

Anyone interested in reading all about the Oil trade and what an uncertain future we have if depending on oil should read The End of Oil by Paul Roberts. It's on a 3 for 2 offer in Waterstones or you can get it on online too.

Fascinating reading and worrying too.

theres nothing worrying about high oil prices quite frankly.
as the price of oil products get dear, the inevitability is that nuclear power stations producing electricity is inevitabe. cars will be dual powered by both electricity and petrol/diesel, or alternatively hydrogen which will be made by electricity.

why does this worry u? its inevitable. all these idiot greenpeace people dont realise the futility of temporarily closing nuclear plants.

Doper Than U

In all fairness lomb, Uranium is a finite resource and hydrogen is miles off being a replacement for anything. If the whole world turned to nuclear for energy, the uranium supplies would last 3 years, hydrogen currently takes more energy to produce than it gives, although the technology may improve soon. There will be a massive increase in Nuclear facilities though, it's true, and they will ease the problem for a good while I should hope. Incidentally, oil ain't just used for electricity and cars, food production in modern intensive agriculture is dependent on oil (for pesticides) and natural gas (for fertilisers). Every single thing we purchase today is dependent on oil in some way, whether it be plastics (made solely from oil) or foreign goods transported here using oil (big screen tv's anybody?)... we need oil to continue living the way we do, it shouldn't be dismissed so flippantly.

Keep an eye on GM motors (who it is said will be in trouble to the tune of $300 billion soon) and Airline companies (they depend upon cheap oil... there is no alternative to oil for commercial airline).

Keep an eye also on the new big players in the oil market, China and India. China just became the second largest importer of oil in the world, and it is estimated that it's industrial growth will continue by 3-10 % over the next year. While the US have been busy stealing Iraqs oil, China have just made deals with Mexico, Venezuela and Canada for their oil. China also have close ties with Iran... expect a US vs China pissing contest in the next few years over who can acquire and consume the most oil.


I recommend energybulletin.net for oil related news and the information in my post comes mostly from there.

lomb

i heard from someone reputable rhat there is enough nuclear fuel for about 1000 years at current useage. its alot more than 3 years anyway. hydrogen is made by the action of electricity on water so this can be made by nuclear power

whats really worrying is what will happen after nuclear fuel runs out, it will happen even if not in a thousand years maybe 5 thousand, then what? solar, wind and wave power dont produce alot of power but then everyone could have panels on their roofs etc, worrying but wont affect me

now wheres my 6.75 litre Bentley

Doper Than U

http://www.energybulletin.net/4094.html

http://www.energybulletin.net/4026.html

World demand will outpace supply by 11 percent in the decade ending in 2013 as inventories decline, the World Nuclear Association estimates.

The decline in stockpiles has been hastened by the decision of Russia, the world's biggest uranium exporter after Canada, in October 2003 to limit its exports to conserve fuel for 25 plants it wants to build by 2020.

Just two small articles highlighting the upcoming problems with Uranium supplies. And I did say that if the whole world changed to nuclear power for it's energy usage that it would last 3 years, not at current usage (which is what you were referring to). It was just to say that Nuclear power cannot replace all our energy needs.

lomb

heres a stanford university research paper, there is alot more than 3 years of power apparantly. im no expert so cant say of course
http://www-formal.stanford.edu/jmc/progress/nuclear-faq.html

leeroybrown

To the best of my knowledge the oil industry is predicting that oil reserve exploitation will reach it's peak at 2012/2013 and will steadily decline afterwards. There will still be very large reserves present but oil companies will have to focus on a new challenge of maximising their ability to deplete reserves fully - they can currently only extract just over 50% before it becomes economically unviable. Concurrently with that China's oil usage/demand will double every five (to ten) years for the foreseable future.

Based on demand steadily rising and supply reaching it's zenith in the medium term prices don't look like dropping and $105/barrel doesn't sound unrealistic.

Fortunately, gas supplies have some more shelf life as exploitation will only peak in 2025/2030.

Doper Than U

A. At present, the reserves of uranium that can be profitably sold at at $50 per pound are enough for at least a hundred years. Since the cost of uranium ore is only 0.04 cents per kilowatt-hour, at the 2001 price of $9 per pound, even large increases in ore cost are affordable without increasing the cost of nuclear generated electricity significantly. At somewhat larger prices than uranium now costs it can be extracted from the sea. Thorium, which is three times as abundant as uranium can also be used in reactors.

For how long will nuclear power be available? Present reactors that use only the U-235 in natural uranium are very likely good for some hundreds of years. Bernard Cohen has shown that with breeder reactors, we can have plenty of energy for some billions of year.

Again, these numbers refer to present usage. The billions of years quote is probably a little over ambitious I think, lol.

Another link that mentions the 3 years I was talking about. http://home.austarnet.com.au/davekimble/peakuranium.htm

I'm no expert on nuclear technology myself, so like you, I can only refer people to the articles I have read. I recommend www.energybulletin.net to people as they are like a "Readers Digest" for oil/energy. They take all the best articles from various sources (Reuters, CNN, IEA, NY Times etc etc) and put them all in one place to read. It means you're not biased by someone's opinions on their own website.

Doper Than U

Leeroybrown, spot on. Although some sources suggest that oil has already peaked. Indeed there is speculation at the moment as to whether Ghawar has peaked (Ghawar is the worlds biggest oilfield, located in Saudi Arabia).

Gas will peak sooner if it is used to pick up the slack from the reduced supplies of oil.

alleepally

lomb wrote:

theres nothing worrying about high oil prices quite frankly.
as the price of oil products get dear, the inevitability is that nuclear power stations producing electricity is inevitabe. cars will be dual powered by both electricity and petrol/diesel, or alternatively hydrogen which will be made by electricity.

why does this worry u? its inevitable. all these idiot greenpeace people dont realise the futility of temporarily closing nuclear plants.

Lomb, read the book I just mentioned and come back to me and we'll talk again.

lomb

wel im not going to read it so would appreciate if u give me the gist of it.
quite frankly i can aford 'energy' at several times what the current prices are comfortably, as can most of the developed world. other things might suffer ie discretionary spending etc.
also energy is a component of any businesses expenses, but i ask u even if oil doubled then that will add 10% or 20% to a flight ticket or 5% to a car tyre then so what?

there is of course the point that if oil is dear enuf, then the worlds food might be converted to alcohol instead of being used for food. however its supply and demand, as something essential becomes too dear an alternative product is substituted.
anyway, im not worried at all, why should i be?

Doper Than U

lomb, if you're interested, http://www.lifeaftertheoilcrash.net will explain alot about Peak Oil (What alleepallee is referring to). It's a little "doom and gloom", but it's not far off tbh. Roscoe Bartlett (a U.S. Congressman) gave a talk in Congress about peak oil just the other day, and it was the guy who made that site (Matt Savinar) that he quoted. Matt's information is accurate and well researched.

Captain Trips

Stone age didn't end because we ran out of stones you know.

There are what 5 hydrogen fuel stations for public use in Washington DC now I think.

CHange will happen and we'll all forget about oil and revving engines, etc., . The biggest problem with the change is the infrastructure for fuel delivery - it's simply set up for oil products not for hydrogen.

I wouldn't worry about lack of oil in relation to energy as we are well on the way to alternatives save we have to wait 10 years or so so the big oil corps can embed themselves in that (e.g., so you're 95c/litre for petrol becomes 95c/l for hydrogen fuel......it would be immediate economic chaos if the fuel was way cheaper as suddenly we have a massive rise in disposable income, etc., worldwide inflation would rocket and currency values would be impossible to predict).

A more serious worry is where the flipping casings for mediations and utsensils, etc., is going to come from. Liek using that plastic insulin injector? What are going to use instead? It's back to glass!!

Doper Than U

Stone age didn't end because we ran out of stones you know.

It sure didn't. We found something better. The stones became obsolete even thought they were still plentiful. The opposite may be true for oil.

I hope you're right about finding something better. I haven't seen any reports about hydrogen fuel, nuclear fuel or biodiesel to suggest that these are going to be viable alternatives for the entire planet. At the moment they hydrogen works at a net energy loss of about 9:1 (at conservative estimates), hardly a good option.

http://www.energybulletin.net/4541.html A good article as to why hydrogen is not an option for the near future.. or even the long term.

lomb

Captain Trips wrote:

Stone age didn't end because we ran out of stones you know.

There are what 5 hydrogen fuel stations for public use in Washington DC now I think.

where does the hydrogen come from? it comes from electricity breaking the bonds of water. where does most of the electricity come from? oil and gas.

so the key is to make electricity using a plentiful resourse and im afraid for all the greenpeacers that resource is nuclear fuel- the future.

dearg_doom

I agree about nuclear power, done right it will have to be the future of electricity production.

But, iirc all of this talk about oil being used up by 2080 was only estimates on 'affordable' stocks. There is lots of it down there but it's just(or was thought to be) too expensive to dig up.

All of these estimates done in the 80's and 90's would have been mindful of the old highest oil price(mid $40's?) of the oil crash.

But if they can sell the oil for twice that, surely they will be able to afford to spend more to drill up some of the harder to reach stocks that were once thought to be unrecoverable?

Captain Trips

Doper Than U wrote:

I haven't seen any reports about hydrogen fuel, nuclear fuel or biodiesel to suggest that these are going to be viable alternatives for the entire planet. At the moment they hydrogen works at a net energy loss of about 9:1 (at conservative estimates), hardly a good option.

Perhaps because the large multibillion dollar industry that has developed on oil energy doesn't want to simply stop being large and multibillion dollar? It's in their own interest that we keep buying oil as long as possible. There are reports of it being an alternative. To get that alternative affordable and efficient - well, it used to take 12 cyclinder 10 litre engines in the 1920s to get a car to 30mph you know. We didn't always have even the current level of efficiency (think of US cars in 1950s, or even the V16s of the 1920s).

So it took the industries built up around oil like cars DECADES to make it useful and efficient. Hopefully it will take not decades but maybe 5-10 years to get a similar level of efficiency from alternative sources given modern technology. The oil industry doesn't really give a **** about oil - they want to simply remain rich, and that means we should keep buying OPEC oil and they look for alternatives and make it viable.

Heck, you have BMW touring around with a fleet of 7-series running fuel cells. It's just a start and that's enough. Such a thing wasn't even thinkable 10 years ago.

dearg_doom wrote:

I agree about nuclear power, done right it will have to be the future of electricity production.

But, iirc all of this talk about oil being used up by 2080 was only estimates on 'affordable' stocks. There is lots of it down there but it's just(or was thought to be) too expensive to dig up.

All of these estimates done in the 80's and 90's would have been mindful of the old highest oil price(mid $40's?) of the oil crash.

But if they can sell the oil for twice that, surely they will be able to afford to spend more to drill up some of the harder to reach stocks that were once thought to be unrecoverable?

Also, as time has gone by over the past decades, older studies that showed say a certain amount of estimated oil has been much smaller as technology to retrieve the oil has improved. This meant that previously low retriveable estimates has gone up.

As an aside: if there is some worldwide Mad Maxification of everything, I'll eat my dog food.

Doper Than U

I agree about OPEC wanting to keep people buying oil, it's good for their stockholders to keep the status quo. I find it especially amusing that countries with such massive amounts of oil are now building nuclear plants, solar plants and wind farms if they are supposed to have an infinite supply of oil.

All of the estimates in the 80's and 90's were overestimated. Shell recently had to admit that it had overstated it's reserves by a huge amount. They were fined for it.

http://www.energybulletin.net/4235.html

Shell today reduced its estimate of 2003 reserves by 1.4 billion barrels, or 9.8 percent, to 12.95 billion and said its investigation of the figures is complete. Reserves probably fell further in 2004 and will decline this year before recovering, Shell said. The shares of Europe's second-largest oil company lost 1.7 percent, the biggest drop since Sept. 23.