you guys are silly.
if oil gets cheap too quick, investment in oil discovery will slow again, thus we'll be in the same dilemma we're in now within short time.
Look at EIA reports:
http://www.eia.doe.gov/pub/oil_gas/...etroleum_status_report/current/txt/table1.txt
Domestic production is down on average about 300k barrels/day for this year. If gulf of mexico discovery pans out by 2009, then perhaps we'll be pumping another 500k-1m/day by then.
in the intermediate, low oil prices will then mean demand growth won't slow much in US, China, etc. etc, thus in the long term prices will be kept high.
Venezuela's great Orinoco find is sands based as well, I believe. So it won't be profitable for them to pump at $30/barrel. Same with Canada sands, Indonesia, OPEC member, is importing oil. Mexico fields, a major oil source, are declining rapidly. Add this all up and even without hurricanes and geopolitical nightmares, there will be a price floor for oil (at least until we decide to build nuclear plants and go all electric cars (such a fantasy of mine)) -- probably between $55-$70 per barrel.
The only way I'm wrong is if Saudi Arabia and Russia can truly pump unlimited oil - ie another 5-10 million barrels a day within 10 years. Prove me wrong and I'll be happy to learn something new.
you faith based initiative $20-$30/barrel believers are really smoking something even better than Jim Rogers, because there's too much stacked against you. Read your EIA reports and remember temporary cheap oil = long term unimpeded continued demand increases. So if you are lucky enough to get a spike below mid-50s, buy all the contracts you can!!
if oil gets cheap too quick, investment in oil discovery will slow again, thus we'll be in the same dilemma we're in now within short time.
Look at EIA reports:
http://www.eia.doe.gov/pub/oil_gas/...etroleum_status_report/current/txt/table1.txt
Domestic production is down on average about 300k barrels/day for this year. If gulf of mexico discovery pans out by 2009, then perhaps we'll be pumping another 500k-1m/day by then.
in the intermediate, low oil prices will then mean demand growth won't slow much in US, China, etc. etc, thus in the long term prices will be kept high.
Venezuela's great Orinoco find is sands based as well, I believe. So it won't be profitable for them to pump at $30/barrel. Same with Canada sands, Indonesia, OPEC member, is importing oil. Mexico fields, a major oil source, are declining rapidly. Add this all up and even without hurricanes and geopolitical nightmares, there will be a price floor for oil (at least until we decide to build nuclear plants and go all electric cars (such a fantasy of mine)) -- probably between $55-$70 per barrel.
The only way I'm wrong is if Saudi Arabia and Russia can truly pump unlimited oil - ie another 5-10 million barrels a day within 10 years. Prove me wrong and I'll be happy to learn something new.
you faith based initiative $20-$30/barrel believers are really smoking something even better than Jim Rogers, because there's too much stacked against you. Read your EIA reports and remember temporary cheap oil = long term unimpeded continued demand increases. So if you are lucky enough to get a spike below mid-50s, buy all the contracts you can!!
