The Coming Oil Shock?

Article Submitted by: JRodgers
Economics and Currencies


Tags: Oil prices.

Just watching Matt Simmons in TV. He published a book 3 years ago when oil was at $30 saying that oil is going much higher. Hiss views on peak oil are not completely absurd.

 

Submitted: May 29, 2008    Views: 118    Comments: 2    Likes: 2   


I don't know where oil is going, but here are the reasons why it may be going higher:

1) Saudi Arabia is running out of oil.  They have been convinced by the big oil companies for 40 years that their supplies are unlimited as they are extracting less and less oil every day.  Their supplies are not indefinite - in fact they are running out.

2) There is rising resource nationalism in Venezuala, Russia, China, India and Brazil.

3) There may be endless supplies of oil under the ocean, but we cannot access it.  There are a limited number of rigs and limits to the depths that technology can go.  Petrobras has tied up all of the big rigs for years. 

4) We are not yet becoming more efficiencies.  Even if we were to create dramatic efficiencies quickly, Chinese demand alone would soak up these efficiencies overnight.

I am not an expert.  Like most, I hope that all of those professing doom and gloom are wrong.  I am no longer sure they are.

 

 




Related Articles:



2

Email this story Email to someone | Print Story Print Content | Add to reading list

Comments Received:

OilWillGoDown
(Unregistered)

Oil up to $130 is pure speculation. The energy department just came out today with reports that oil supplies are up at the same time that demand was down in Q1 from a year earlier. This is a classic bubble. The only difference is that there is plenty of supply but the speculators have convinced everyone we are running out of oil. Here are three reasons we won't:

1. There is more oil locked in oil shale in Canada than in all of Saudi Arabia. It costs $30 per barrel to extract this.

2. Higher prices will increase efficiency. Efficiency projects that were marginally profitable before are now much more so and watch them get done.

3. Watch nuclear power and other alternatives thrive in this high price environment.

Oil will be below $100 per barrel in six months - guaranteed.

Posted: May 29, 2008

Sol Nasisi
Sol_Nasisi

Oil has started to fall and according to the Wall St Journal and Reuters the government is looking into possible market manipulation. I also believe oil will come down significantly in price shortly.

Posted: May 30, 2008



Add Your Comments:

Your Name:

Spam protection control:


© Copyright 2008 JRodgers All rights reserved. JRodgers has granted BestCashCow.com, LLC non-exclusive rights to display this work on Bestcashcow.com.

Financial products of all nature bear inherent risks and this website is not a financial advisory service; it is a forum for users to share and to compare notes and observations on financial publications. The website provides, free of charge, the technical and logistical apparatus and the medium for users to share and to publish financial information and to comment on publications. As such, the website’s operator can not and does not take responsibility for information, observations or opinions of any sort or nature provided by third parties with whom it is not affiliated who use the website to publish, to comment or as a means of solicitation. Users are specifically warned against following any advice related to specific instruments, including, but not limited to, equity securities, that may be provided by other users directly on this site or on web pages to which other users have provided links on this site. BestCashCow.com can not and does not check or verify the qualifications and credentials of users who publish or comment on this site or on linked pages. Users should seek personalized advice from qualified professionals regarding all personal financial issues and evaluate the risks and applicability to their own circumstances of each financial product discussed regardless of who the publisher is or purports to be. Should you, through your use of this site, identify an individual or organization purporting to offer personalized advice, you bear all responsibility to ensure that the individual or organization has the qualifications that they may represent on the website, and that their advice is appropriate for your circumstances. On certain webpages, BestCashCow.com provides information related to rates on US-based savings accounts, CDs, short-term government bonds, and other US cash equivalent securities, also free of charge to internet users for their independent use. The accuracy of this information is not guaranteed, and the information, like all other information on this website, should not be construed to provide investment advice, nor to endorse a financial product of any sort.

© 2007 BestCashCow.com, LLC. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy.