Saudia Arabia: $200 Oil In 2 Years
According to CNNMoney.com:
Saudi Arabia warned oil prices could spike to beyond the near $150 record high of 2008 within two to three years, as energy leaders on Monday decried a blow to investment in expanding capacity due to the financial crisis.
Yes, this is a serious threat that I had been echoing for some time now. The lack of investment due to the current financial crisis may cause a serious oil shortage in the near future causing sudden spike much higher than the one we had experienced before.
Russia did mentioned it before last time when they declined to reduce their oil supply specifically predicting a future oil shortage if you can remember it.
This can be the REAL oil crisis that really have more demand then supply causing the market to correct the difference in terms of cost. That means a much higher oil prices in the future may be possible unless there is the following to happen...
- World population reduced by war, epidemic, disaster and birth controls.
- Economic Crisis to crash one more time...this time severely causing mass die off due to revelation that money is not that valuable after all...it's a piece of paper easily replaced by the government at a single press release.
- Global electronics suddenly malfunction due to a natural solar storm or EMP attack using high altitude nuclear explosion, this will cause at least half of the world population to go back to stone age hence using less oil.
- Mass suicides?
- Cannibalism becomes popular!?? Ahhh!
Popularity: 9% [?]
OPEC delays production projects
OPEC
According to Yahoo!News:
OPEC Secretary General Abdalla el-Badri said the group would postpone 35 of 150 new oil and gas projects and would likely fall short of its goal to raise production capacity by five million barrels per day by 2012, according to a research note by analyst Addison Armstrong.
el-Badri also said that OPEC is close to completing its previously announced cut of 4.2 million barrels per day, Armstrong said.
The announcement may boost crude prices, but "they're only hurting themselves," said Phil Flynn, an analyst at Alaron Trading Corp.
Read the full article at Yahoo!News:
- My previous article try to speculate what will be the next move by OPEC and they had currently announced that they will cut 4.2 million barrels a day and halt 35 out of 150 oil & gas projects!!
This means a higher percentage of oil & gas will be cut off from the world until 2012!!
My personal speculation is either of the following
- They had already reached peak oil production and now using the economic bubble weapon to cripple demand before cutting oil output artificially with a more subtle way instead of creating massive panic by telling the world that they can no longer boost output...
- They have no more money to continue...as expected of any well deserving company will do...going bankrupt soon hence risk causing more irreversible damages to existing oil fields by using cheap substandard equipment, cheap unqualified workers and more potential problems caused by overworked workers who are not retrenched.
The seriousness of this which I had reiterated again here is a potential for disaster in the near future if the oil price remain under their expected $75 per barrel to remain operational to at least maintain current oil supply.
There could be a sudden but temporary drop in oil demand now due to the economic crisis but that does not means the world population will drop together with the demand, more people will bound to be born and demand the use of OIL.
Oil is the feed stock for the world economy and basically EVERYTHING is associated with oil, even the food we eat are directly or indirectly the product of oil.
Without oil, the pesticides will never be used, transportation to deliver food & products will not be possible, plastic which makes all our modern equipment are no longer cheap to make, paints, roads and nearly everything we touch including clothes are made from oil.
The current demand destruction is purely the result of traders speculation and not the result of basic fudamental of actual usage of oil.
What we shall see more is sudden spike in cost of everything due to scarcity & inflation plainly caused by the money the Government printed out of thin air...
The value of our money will shrink to a point that the salary we get from current work will diminish the purchasing power rather quickly...
Imagine $2500 today can buy lot's of stuff and suddenly the value drop so much that it can only buy $10 worth of goods of today.
That happened in Zimbabwe where you need a stack of cash to buy anything in the country...
Imagine you had saved up $100,000 for retirement but only to find out the value drops to just $5,000 worth of today's value in a few months...what do you do? Do you starts to retire or continue to slave further to save up more money?
Or you invest in something to beat the inflation as per most sales people will try to convince you to...such as buying investment in Lehman Brothers minibonds, Madoff little investment basket or some multilevel marketing...?
All of the above became zero value overnight due to the economic crisis...
What makes you think what you are investing is actually worthless?
Is there an insurance to claim against the collapse of an insurance company?
Will the internet be available during the energy crisis where electricity may go off suddenly, can I get my money back then?
If there is a world wide disruption in electronic system due to some kind of weird extreme wheather phenomenal such as a serious EMP solar storm in 2012 to 2013 will the bank be able to use their computer to find out how much money you have left in the system?
Does physical gold or metals worth any value in the future if there is even a serious crisis such as a world war 3 or nuclear holocaust?
What is the value of anything to you considering the world now infront of you? Money that printed out of thin air? Oil pumped from mother nature that is not infinite? Air we breath?
Very simple...
Assets are things we consider to hold some form of value to that individual and the basic fundamental value is things that have demand...or a neccessity to survive.
Let's list a few.
- Water
- Air
- Food
- Shelter
- Energy
There may be many more to list according to different individual but let's talk more about the MOST basic sustainability requirements.
The things to invest in is your brain...skills to survive a bad economic crisis, food production, water desalination equipment, shelter building skills, renewable energy equipment or skills, clean air making plants and basic community defence against rioters & trouble makers.
Companies or individual that does the above will be the most valuble asset to invest in however do note that anything as intengible as electronic transaction via internet or ATM may not be 100% safe.
They are just digital data at any computer that have the potential for failures & in the event of a prolong war or disaster unable to liquidate your assets regardless of their performance.
Just imagine you stuck in a country or town where there are absolutely no access to a working ATM machine...or no telephone or internet network access for even the credit card machine cannot be used in stalls.
What then can you do?
Do you
- Pluck leaves out of public trees and eat?
- Carve some tree bark out to eat?
- Hunt some animals using your unskilled bare hands?
- Start to scavenge for food together with millions of looters against hundreds of police...?
- Hunt humans?
- Eat the tasty mushroom & vegetables that you had grown in your back yard, drinking water from a solar distill water device you had bought previously, ride that solar powered car around town and hide in that well protected underground basement that you had stock up 5 years supply of food?
Yes, survival is at stake here...anything is possible when the oil shortages comes...or planet x pass by causing grave climate changes...or any kind of nuclear disasters.
Make your decisions clear, greed will never give you 100% survival but it's your instincts to prepare will.
Popularity: 6% [?]
Energy execs debate whether oil crisis looms
According to Yahoo!UK Ireland News:
HOUSTON (Reuters) - Are the lacklustre production and reserve replacement rates reported by the largest oil companies precursors to a looming oil crisis?
The largest oil companies have had increased difficulty meeting a range of challenges to increase their production, including mature oil fields with declining production rates and restrictive regimes that have tightened their hold on their resources as commodity prices have.
The issue was much debated by oil executives and industry watchers at the CERA energy conference this week.
"An oil crisis is coming in the next 10 years," said John Hess, chief executive of Hess Corp . He said that he believes oil producing companies and countries are not investing enough to ensure sufficient production capacity to meet growing demand.
"While recent discoveries ... are promising, we need to find a new production basin like the Alaska North Slope or Angola every year to ensure that we can grow our oil resource base to support increases in production for future generations. We stopped making such meaningful discoveries during the late 1990s," he said.
As their coffers have swelled in recent years from record oil prices, many oil companies have spent more on dividends and share repurchases than on capital projects.
Earlier this year, Chevron and Royal Dutch Shell indicated that their replacement levels of produced oil and gas for 2007 would disappoint investors, and even Exxon's first-quarter production was lighter than many analysts had hoped.
"There is an urgent need to strengthen the flow of capital into upstream oil," said Nobuo Tanaka, executive director of the International Energy Agency. "We remain comfortable with the adequacy of the world's hydrocarbon reserves, but we are anxious to mitigate the above ground risks that complicate today's markets."
PEAK APPROACHING?
Ironically, StatoilHydro CEO Helge Lund said the shortage of industry spending is due in part to the high oil prices that have brought in that windfall to the companies.
Oil companies could be hesitant to spend money to pick up new exploration and production projects because they will have to pay for these assets based on an oil price that they believe is inflated.
"It is a question of whether you can make efficient investment decisions and be at the right cost level in the current environment," he said.
Cambridge Energy Research Associates, the conference's host organization, believes that adequate oil supply should be available in the near term.
According to a study released last month, CERA estimates that the global decline rate of fields currently in production is 4.5 percent -- a lower number than previously believed. The group says this means that the oil supply won't hit a peak and start to contract in the short term.
Even those who don't see a peak approaching still expect challenges.
"The supply of easy oil will not keep up," said Linda Cook, executive director of gas and power at Royal Dutch Shell, noting that unconventional resources like oil sands and oil shale, as well as liquefied natural gas, will have to pick up the slack
- They all talking like they know what they are talking about, mostly just want more money to spend to "discover" more oil, improve the "technology" of extraction and other "projects" to harvest "unconventional" natural "resources". The price tag for oil will continue it's bullish run until someone either found a super mega oil fields or discovered abundance of cheap alternative energy somewhere, both unlikely to happen so soon.
Political tension in the middle east plus substantial rise in global demand for "energy" will be making oil prices generally high and fluctuating wildly. Gold, platinum, wheat, and palm oil are few commodities that many had switch their funds into wishing for more bullish run. Seriously, the higher the cost of these "commodities" the more unlikely that human can survive the destruction force of hyper inflation and stagnant growth - stagflation.
Economic recession + high inflation will create a situation that money means absolutely nothing when cost of bread for example, increase to a certain point of being "unavailable" on the shelves and buying from the black market will be result in even more unreasonable prices. By then nobody can afford anything even when they used to be considered well off with "high" salary.
If you earn 3k and above, you are pretty well off for now but in the future when food cost 10 times more...then you will not have enough to survive on plus additional security cost (body guards and locks etc) to protect from the looters and robbers formed by the poor and desperate.
Of course most people will ask me to "deal with it" as inflation had been always there and nothing is going to change that but they don't realize the solutions to "deal with it" might not be everyone taste and those who are not mentally prepared or never wanted to prepare anything like super spike in cost of living including food, electricity, transportation, medical and more.
Maybe I am the only one fearing for the worst...maybe it's better to pretend I don't know about peak oil and carry on living as normal. Using the movie "The Matrix" comparison, "Peak Oil" is the blue pill that waken me up to the "real world" and it's hard to take back the "red pill" and go back into the matrix forgetting all my research...and throw away my solar panels and renewable energy experiments. It's hard to understand majority of the population still thinks it's business as usual.
"The wake up call is here, follow the white rabbit, Neo...knock knock"
Popularity: 14% [?]