Oil at $200 a barrel a distinct possibility if anything bad happens
Photo by ^riza^. Licensed under Creative Commons license 2.0.
Now that we've all had a few months to get accustomed to crude oil prices hanging at $100 per barrel pretty steadily it's time to look ahead. The very real possibility of oil at $200 a barrel could be upon us if any unforeseen disruptions to the flow of oil occur, such as a terrorist attack, natural disaster or just some kind of mechanical failure or accident. The oil watchers at Goldman Sachs have boosted their projections for the minimum price of oil as well as the expected range over the next four years. Goldman's previous outlook called for a range or $50-105 per barrel. They now don't expect it to drop below $60 and the high end - if everything keeps rolling along without any shocks to the system - is up to $135. With little growth in supplies, if anything bad happens, all bets are off.
[Source: MarketWatch]
Reader Comments (Page 1 of 1)
steven 10:29PM (3/09/2008)
So at what point do more expensive methods of extracting crude become reasonable as these prices continue togo up? Is it possible that formely unprofitable methods of getting oil will add to the supply and help to slow this upward spiral?
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Dave 10:44PM (3/09/2008)
Our cars should be running on natural gas and our electricity should be produced by nukes and other renewables.
The technology for energy independence is already here.
Long term test of natural gas powered Civic GX:
http://www.edmunds.com/apps/vdpcontainers/do/vdp/articleId=122362
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Kardax 11:07PM (3/09/2008)
Dave: I wouldn't equate natural gas with energy independence. That supply is going to peak, also.
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A.Brien 11:14PM (3/09/2008)
I just spot a film on youtube that say that there is a lot of natural gas in north-america and there is deposits that are not used because there is no demand for it. With natural gas cars we can save a lot of pollution and the money stay here and the investment is low. Actual cars can be converted for few money to run on natural gas and/or gasoline. It's 10x more easy then batteries or fuelcells. I guess madmax will build himself a car with gasoline-natural gas-ethanol-diesel-pluguable and solar panels and switchgrass to methane reformer in the trunk, LOL.
http://www.youtube.com/watch?v=7ZBsZul601Q
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Chris M 11:15PM (3/09/2008)
Kardax: Fossil fuel supplies of natural gas will peak, but unlike petroleum and coal, we also have renewable sources of natural gas
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meme 11:31PM (3/09/2008)
Since when is there "little growth in supplies"? World liquids production has gone up 3 million bpd in the past six months.
Oil prices are high because of a combination of a weak dollar, higher growth than predicted a decade ago (which is when the choices that led to the size our current production infrastructure were made), half of Iraq's production offline, and because Katrina and Rita took out a ton of rigs.
Oil isn't disappearing. Oil that's relatively cheap and at all clean to produce is. Increasingly, we're going to be relying on deepwater fields, CO2 injection, bitumen, and coal liquefaction.
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meme 11:51PM (3/09/2008)
A large amount of natural gas is currently just flared away as a byproduct of oil production. With prices as high as they have been, recovery has been increasingly common.
Petroleum can be made, too, not just natural gas. Petroleum is most commonly made from town gas -- a mix of carbon monoxide and hydrogen, which you get from incomplete combustion of hydrocarbons. That's how coal liquefaction works. This is one of many types of "syncrude", which are making up a slowly increasing share of world oil production.
A lot of this "peak oil" stuff is really just wish fulfillment. I hate to break the news, but oil isn't going anywhere until we stop using it.
More on the subject here:
http://www.daughtersoftiresias.org/greenwiki/Peak_oil
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TG 12:21AM (3/10/2008)
India may have solved cheap energy question
By Amy Yee in New Delhi
http://tinyurl.com/2jbymw
Published: March 9 2008 19:12 | Last updated: March 9 2008 19:12
When police bring the traffic to an abrupt halt in Raipur, capital of the remote Indian state of Chhattisgarh, drivers know what to expect next.
Soon, flashing red lights atop speeding government vehicles come into view. Raman Singh, Chhattisgarh’s chief minister, is passing through.
Government motorcades are a common sight in Indian capitals. But what is different about this one is that all of Chhattisgarh’s official vehicles, including the chief minister’s Tata Safari jeep, are run on oil from the wrinkled black nut of a shrub-like tree called jatropha.
================================ Financial Times
A non-food ethanol source that require little water and less cultivation. = TG
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TG 12:36AM (3/10/2008)
Oil overvalued? [ ExxonMobile covering capital costs?] Yes, I think so = TG
** Many analysts believe oil is overvalued, arguing that oil supplies are at high levels and the demand is falling. In its latest inventory report, the Energy Department said overall demand for oil dropped 3.4 per cent over the last four weeks compared to the same period last year. **
http://tinyurl.com/3cghu9
Goldman Sachs, a widely watched oil price prognosticator, said oil could average $110 a barrel by 2010, up from a previous forecast of $80, and said a price spike as high as $200 a barrel is possible, according to Dow Jones Newswires.
Other energy futures were mixed Friday. April gasoline futures rose 4.11 cents to settle at $2.6943 a gallon, while April heating oil futures fell 2.63 cents to settle at $2.947 a gallon after earlier hitting a new trading record of $2.9863 a gallon.
April natural gas futures rose 2.7 cents to settle at $9.769 per 1,000 cubic feet.
===============================Financial Times
= TG
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TG 12:41AM (3/10/2008)
Canada warns US over oil sands
Ottawa fears new legislation would prohibit Americans buying fuel from Alberta’s vast oil sands, with *unintended consequences for both countries* - 22:12
* Read the Canadian ambassador’s oil sands letter in full*. . .
http://www.ft.com/home/europe
=============================== Financial Times
= TG
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Mike Z 2:37AM (3/10/2008)
The concept of 'peak' natural gas is just intellectually inaccurate. Natural gas wells don't 'peak' as they deplete in a linear fashion, as opposed to oil wells that deplete in a bell-curved pattern.
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BlackbirdHighway 5:59AM (3/10/2008)
Tesla says they will unveil their electric sedan in the second quarter. High oil prices will make this thing sell like crazy.
Wouldn't it be nice to have an electric car, and solar panels on the roof, and just say FU OPEC, FU Exxon!
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BlackbirdHighway 6:01AM (3/10/2008)
No, Monish, most of us despise people who spam the comments.
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rgseidl 6:12AM (3/10/2008)
@ BlackBirdHighway -
the groceries you pick up in your shiny new Tesla will still be delivered to market with ships and trucks running on dinojuice. same for every other product you buy. Don't fool yourself into thinking the oil age is over the minute you switch to an EV, though we do have to start somewhere.
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BGJ 6:24AM (3/10/2008)
"Oil at $200 a barrel a distinct possibility if anything bad happens"
You mean like another Big Oil executive, er, Republican getting elected president?
Just say "NO" to another 4 years of Bush via McCain.
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Furion 7:25AM (3/10/2008)
Okay, in the 90s it was something like 25 dollars per barrel, or something? For americans, oil price has quadrupled since 90s. Apparently it hasn't affected economy catastrophically (at least when compared to crazy lending practices and printing too much money).
For europeans it has gone from 25 euros per barrel to 60 euros per barrel. When it reaches 200 USD per barrel, USD has probably gone even weaker, meaning (approximately) a quadruple price for europeans when compared to 90s. Since quadrupling of oil prices didn't wreck US economy, it won't do that in Europe either.
So, as an European, I don't see the sky falling. People in the US should be more worried about the declining value of the dollar (some decline is good for americans, but if it goes too far.. one effect is very high oil prices in USD).
About natural gas cars: they have a lot of those in, for example, Thailand. Not much to complain about those - refueling is slow (some minutes), but since its cheaper... The ride is similar to a normal car, as far as I could tell, maybe lacking in power, but that might be because they use small engines there. The taxi I was in had dual mode, so if NG refueling isn't possible, it can switch to gasoline.
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BlackbirdHighway 9:29AM (3/10/2008)
@rgseidl, sorry, but I don't control how all those companies operate. I'll be glad to send them a letter, and ask them to change, but I doubt they will listen.
Your comment does remind me of the very typical, very f'ed up American attitude: "I can't change what I do because everyone else in the world has to change first." Screw that! I'm sick of hearing the naysayers everywhere! We need to start making changes NOW. It will take time for others to catch up, but that's no reason to play "wait-n-see".
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TG 2:22AM (3/11/2008)
#14 said, . . .
** the groceries you pick up in your shiny new Tesla will still be delivered to market with ships and trucks running on dinojuice. **
Hold it! Check again. . .
Safeway and Walmart are both going with green truck fleets.
GM has busses in 56 cities running on half the juice normal transit use.
We are well into ** starting somewhere. **= TG
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