Ferdinand E. Banks

From Subprime to Meltdown: Is Peak Oil Responsible?

More useful today than when it was published. Keep up the good work.

Energy Sector and the Price of Success

This is a genuinely valuable article, even though I disagree with certain things. The comment by Shiv Kapoor is also valuable, and I intend to quote some of it. Let's be clear though that Iraq is not going to produce what is listed about if they remain a loyal member of OPEC. Why is that? It is because it could mean less money as compared to more - particularly if the IEA CONSUMPTION estimates are correct (which is unlikely)..

I would also like to say something about Paul Samuelsson. He was more than a "colossus". Many of the people here in Sweden that I knew disagreed with him about certain things, but I will never forget when he walked into a reception at Wenner-Gren Center in Stockholm. The effect must have been the same as when Einstein visited a seminar at Priceton, because the oxygen content in the place dipped.

Samuelsson was the first American Nobel winner in economics, and today I attended another Nobel lecture. It was less than pathetic - it was a scandal - and more scandalous was the admiration of our ignorant PhD students. Makes me wonder why I waste my time rubbing elbows with dummies like those, and to make things worse, this saturday the 'old' gym at this university will close after almost 100 years.

Peak Oil Demand

Thanks for pointing out that the IEA forecast in 2004 (?) was 121 mb/d, and the same was true for the EIA. I discussed this in detail in my course on oil and gas economics in Bangkok in 2007, and assured my students that even the most ignorant researchers in the world probably wouldn't have made that kind of mistake. Why was I so certain? It was because - using linear approximations - that forecast would have meant production of at least 20 mb/d by Saudi Arabia, and THAT WILL NEVER TAKE PLACE.

Cooper: Turnaround Coming for Natural Gas

"Oil trading at the marginal cost of new supply". What is the point in making a nutty statement like that?

An Interesting Tidbit Regarding Oil Supply

What's the problem here? I've been telling people and publishing articles and books for X years pointing out that bad oil news is on the way, but nobody wanted to believe. That's groovy with me, because the key thing is the smile on my face that results from generally being right about oil.

As for the US and ALL the oil companies insisting that there is plenty of oil, and the oil peak may never arrive, that makes good sense to my good self, because when/if the TV audience discovers that a peak may be around the corner, there might be a panic.

That's right, ALL THE OIL COMPANIES!. Most of the students in my course on oil and gas economics in Bangkok last year worked for oil companies, and their bosses made it clear that it was a very bad career to run off at the mouth about peak oil.

Peak Oil: Caused by Geology, Politics or Infrastructure Issues?

Well author, I think that I am going to grade this one B-.

The oil supply is governed by economics. This is what I tell people. IF YOU WANT TO KNOW EVERYTHING ABOUT THE GLOBAL PEAK, STUDY THE PEAKING OF THE OIL SUPPLY IN THE U.S. That peak took place at 9.5 mb/d, and now - almost 40 years later . it has declined to 5.6 mb/d. Accordingly, had it not been for economics, the peak would have been much higher. Incidentally this is EXACTLY what you say when you said that there is not enough financial motivation to raise output, but even so you have missed the details, and in this case they are important..

Consumer Confidence Dips Due to Jobs - And the Price of Oil?

"Commodity speculation by hedge funds". What you should say is oil producers are not going to increase their supply, and as a result anybody who prefers more money to less money should start thinking about going long in oil. AND JACK, IT IS THE BEHAVIOR OF THE OIL PRODUCERS THAT IS THE BASIC REALITY IN THE OIL MARKET - especially the OPEC producers. Our good friend Monsieur de Margerie of Total made that point this week.

And yes, an oil price above $85/b is not just bad news, but VERY bad news. The present oil price is bad news.

Recent Oil Rally: Another Crowded Trade

What is this constant quoting of Michael Lynch. Dont you know that he has constantly been wrong about oil, especially the last few years.
Now he has oil coming down to 30 dollars. According to some moron in Forbes or Fortune early last year it was 20 dollars. And dont you and he and the other amateurs understand that when oil can touch $147/b, peak oil is irrelevant.

The Real Price of Crude Oil

Specks, I think his name is Verleger, and he don't know nothin' at all.

However, that isn't important. What is important is that thousands of people who have studied finacial economics know so _____ little about the futures market.

The Real Price of Crude Oil

One thing my students must know if they prefer passing to failing: is that futures that go out longer than 6 months are not to be discussed in my presence. There is no or insufficient liquidity for those assets. In fact 6 months might be too much. And backwardation does NOT indicate that a tight market is going to ease in a few months. Maybe it will and maybe it wont.

But I really like the last paragraph in your article. It suggests that the article might be worth some serious study...if I could just forget that part about futures with a maturity of 3 years. By the way, Dr Bernanke once talked about the wonderful message he got from oil
futures with that maturity, and I thought that he had lost his mind.

Peak Oil: A Reality or a Lie?

Marc, have you ever heard me tell people that I am the leading academic energy economist in the world. I do it all the time, and when there is nobody around I tell myself. Anyway, today I was sitting in marvelous Stockholm, whatching the animals go by, and also putting together the lecture on peak oil that I plan to give soon, in which I crush doubters.

Well, this great article of yours will be referred to, although in the first chapter of my new book (or the chapter on oil) I'm afraid that I will use the word brilliant to describe it. Your article is what we need to give the fools their comeuppance.

Is it really so, is it really and truly so, that people are so dumb that they can look at the frequency plots (of outputs) for hundreds of fields, and a dozen regions (like the US, UK and Norwegian North Sea, Russia) and come to the conclusion that there will not be a global peak. Of course, who gives a damn. When the oil price starts to escalate again nobody is going to ask about peak oil.

Oil Prices: Higher or Lower in 2010?

'The greatest' has the right idea. OPEC should be satisfied with oil at what it is now. They are making plenty of money, and if the oil price keeps rising they will lose because they will...excuse the expression...destroy the demand for oil because they will destroy the recoveery..

And by the way Dr Conerly, when or if you peep in my new energy economics book, what you will find out is that the key to the oil price is not demand, but OPEC discipline, and since they have started to practice 'resource nationalism', that is going to be stronger than ever.

Top IEA Economist: Peak Oil by 2020

About 8 years ago, at a conference in Rome, I told Mr Birol and perhaps some of his ignorant friends that the IEA was wrong about the world oil supply. A year ago I also told my class in oil and gas economics at the Asian Institute of Technology that the IEA estimate of world oil supply in 2020 of 121 mb/d was crazy.

Now this man comes with a prediction that the world oil supply will peak in 2020. But Total - the French 'major' - says that more than 100 mb/d will never be produced. Exactly who in the ____ are we to believe? Total has also said that the peak will come in 2013.

Well for starters I would never believe Birol, and so I guess that means that I believe Total. Matthew Simmons doesn't believe that we will reach 100 mb/d, and the peak might be just around the corner. Of course, the leading academic energy economist in the world - MY GOOD SELF - claims that that the peak is no longer important. If the oil price continues to move up after this macroeconomic mess is cleaned up, and can exceed $100/b, then what difference does it make where the peak is.

Apparently there are some oil people who do not believe in the peak. One of my students in Bangkok mentioned one of them, and I told him that if he wanted a failing grade he should mention that gentleman again. But I don't blame these oil 'people' for trying to retail nonsense. For instance, OPEC developed their 'speculator' argument because they - like the oil people - know that if the decision makers in the importing countries come to believe that the oil price can go into orbit, they will stop fooling around and find a replacement for oil.

A Tale of Two Banking Worlds

A few more articles like this and I might have to forget about energy and start reading my finance book again. This is really an excellent article, and I just hope that I find time to read it a couple of more times.

Remember $20 Oil? Looks Like It's Coming Back

I remember oil at $20/b very clearly. People who have gone out of the forecasting business were claiming that it would go to $10/b, and the OPEC people were hoping and praying that it would reach $28/b, which was the upper position of their desired price range. Although I was teaching in Hong Kong then, about 2001, and I was still inclined to call myself the leading academic energy economist in the world, I mostly kept my trap shut, because I could not understand an oil price in the low 20s. I can also mention that BP and the Norwegians were thinking in terms of oil at $23/b. People who want to know something about oil should remember these numbers.

If the figure that Verleger gives for the future oil price is $20/b then let me announce that it will be strictly ignored by my good self. The reason is that if he had been so successful with his forecasts, he would be making the present one from California instead of Calgary.