Comments on Rabinder Sekhon's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/rabinder-sekhon/articles http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-213705 213705 Thu, 24 Jul 2008 16:05:41 -0400 Crude oil inventories are actually below avg for this time of year.
Brazil's "Tupi" field although huge is still 8-10 years away from meaningful production levels.
Any similarities between now and the last oil shock are meaningless. simply because the world has added almost one billion people since 1970. China and India have embraced a Western-style economy with autos, refrigerators, and other conveniences. The cutbacks in subsidies will not make a dent in oil consumption as the "new" pump price is still well below G7 pump prices. scimitar's comments are valid. US oil consumption no longer determines the direction of crude prices. Unfortunately oil is headed higher after a much needed "consolidation" period in the $120s.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-202703 202703 Fri, 11 Jul 2008 00:41:08 -0400 http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-202533 202533 Thu, 10 Jul 2008 16:43:33 -0400
I can't wait for when a 'scientist' can prove that some of our other great commodities are also made in the mantle. I'm sure that there's some corn and hog bellies down there besides all that 'naturally replenishing' crude. This despite the fact that all the geologists that actually work on extracting the stuff from the earth think Gold and the abiogenic theory is a loon.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201861 201861 Wed, 09 Jul 2008 19:07:34 -0400 http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201816 201816 Wed, 09 Jul 2008 18:04:54 -0400
Saudi Arabia will peak soon if they haven't already, and the era of abundant light sweet crude will be over for good. Russia has already overtaken the Saudis as the world's number one producer. Once climate change starts to melt that Siberian permafrost and the Arctic Ocean is free of ice for half the year, Russia will become a superpower again. Gazprom already supplies 25% of Europe's gas, its subsidiary Gazprom Neft is sitting on loads of oil, and the company has close ties to the Russian government (Dimitri Medvedev used to be the head of Gazprom).

The US may reduce its demand, but it will be too little, too late. The time to get serious about conservation and a sound dollar policy was years ago, and we now have to live with the consequences of Alan Greenspan's liquidity idiocy. Furthermore, any reductions in US demand will be offset by China and India, which are both unfortunately following in the footsteps of our failed transportation policies and adding thousands of gas-guzzling cars to their roads every day. Gas prices are going to stay high, too - a new refinery is scheduled to be built in South Dakota, but it's the first one in 40 years. Again, too little, too late.

Crude oil is going to be harder to find, it's going to continue to be in the hands of hostile foreign governments (with a resurgent, nationalistic Russia at the forefront), and light sweet crude is going to be replaced by heavier, dirtier stuff.

Oil has nowhere to go but up. ]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201810 201810 Wed, 09 Jul 2008 17:57:29 -0400
Let me tell you where I think the real "breakthroughs" will occur. When we go after our known domestic reserves of 85bbl of oil and trillions of feet of natural gas offshore, ditto for Alaska, our 250 years of coal to oil and gas (...a 60 year old technology), and our 200 years of oil shale in the Rockies.

Unfortunately, we're not suffering enough YET for this to happen right away. But $6-8 gasoline, the coming Depression, 8000 on the Dow, forcibly altered lifestyles, and becoming poor will get us there eventually.

Meanwhile, we'll make some nice strides with alternative energy technologies, which will help us out in the long run and keep us entertained in the interim. As for me, it's like the drill sergeant said in the Bill Murray movie, "I'm getting too old for this sh--!" ]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201751 201751 Wed, 09 Jul 2008 16:46:06 -0400
A cartel/monopoly/econom... hostage situation breaks down if it loses 20% of it's projected demand."

Not with oil. With peak oil (and its consequent declining oil production each year) it would just delay total catastrophe a few years.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201725 201725 Wed, 09 Jul 2008 15:59:29 -0400
That's 70% of the world oil demand that can (start to) switch away if a viable alternative comes along. That's a HUGE risk if you're a perma oil peaker.

I think if prices keep going up, demand is going to follow supply: first stabilize, then the mix (industrial/automobile) starts to change, then as automobile alternatives gets hotter, total demand volume will drop off -- but by then, it is too late for oil. Once a technology becomes viable, we won't go back.

Think how email replaced snail mail and snail mail's volume never matched the actual exponential growth in "messaging" communication. It is also too late for snail mail to return to the "monopolistic" days.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201717 201717 Wed, 09 Jul 2008 15:50:43 -0400
People are sprouting doomsday scenarios with oil running out and society declining to 100w/hr "human" energy!!! sheesh!

"Prices will go up forever", "Buy now or forever be priced out", "There is no more supply! This is the last bunch!", "Future demand will grow! Regardless of prices!"

Sounds like oil? No I'm talking about houses at 2006.

Look at how similar this sounds to the peak oil crowd now.

Innovation is the final frontier of energy, not oil. This "false" peak oil may be the best thing to happen to planet earth and our science yet!]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201684 201684 Wed, 09 Jul 2008 15:06:41 -0400
Would the price still go down?

Or many other alternate possible events

(All of which are relevant , as evidenced by their being partly built in ,right now, to the oil price).

200 would not be out of the question , and a far cry from the present 140 , regardless of the l/t fundamentals.

My point is that a time/price analysis can be done at any time , and it won't necessarily reflect whether prices have peaked or not.

And right now , nobody has any freakin idea which way the next direction is after this "drop" to the 130's , or maybe lower.

All the analysis in the world won't accurately tell you when "peak oil" will kick in , or if an event will raise or lower the price tomorrow.

The only thing we do know is that if you're not in now , you've missed the boat , so jumping in at these levels can be risky regardlerss of the reward potential.

So , in that case - DO NOTHING .

If the price goes up , tough luck , you missed this one -

Try something else when it's cheap .

If the price drops appreciably -

Take some bites at positions at what appears to be intermediate term support and hope for the best.

]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201668 201668 Wed, 09 Jul 2008 14:48:09 -0400
I wonder what we're doing with all our deadly nuclear waste NOW. France must be in REAL trouble, 80% of their electricity is already provided by nuclear reactors.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201664 201664 Wed, 09 Jul 2008 14:44:25 -0400
Yes, the geologists ARE wrong, which Hubbert himself admitted to astrophysicist Thomas Gold. Oil occurs naturally in the earth's mantle, which is why oil slicks are visible throughout the oceans from satellites. ]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201557 201557 Wed, 09 Jul 2008 12:56:49 -0400 NOBODY SO FAR HAS FOUND A WAY HOW TO SAFELY DISPOSE THE HIGHLY TOXIC RADIATING WASTE FROM NUCLEAR POWER PLANTS THAT WILL RADIATE AND THREATEN THE ENTIRE PLANET FOR AT LEAST 5,000-10,000 YEARS!
Can it be done at all? I doubt, but it may be possible some day. Will it cost a few bucks? You bet! It will most likely render nuclear power prohibitively expensive.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201554 201554 Wed, 09 Jul 2008 12:54:03 -0400
I'm sorry, I don't see much evidence in the article. World oil production has been flat for three years now, and many oil producing regions are in serious decline. New oil production if firstly going to have to make up for this decline. Even though demand might be dropping in developed nations, countries like China and India continue to have their economies grow at double digit rates, and some of their cities are registering a thousand new cars every day. Yes, it's supply and demand, but the supply is severely constrained, with no good alternatives, while demand continues to skyrocket. There may well be a short term correction in the price of oil, but the long term trend is in one direction, and it is the opposite of what the article claims. Do a search on Peak Oil.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201552 201552 Wed, 09 Jul 2008 12:53:01 -0400
LNG although attractive to Exxon and ship owners as a setter of marginal price for gas is not going to be a factor without the Congress being purchased as it was for ethanol. Nixon tried this in the 70's but one big accident with flames, cities and a possible rapid phase transition demonstration and it too will be forgotten. It could make 9/11 look like a marshmallow roast.

Our petroleum and automotive addiction will be cured "cooling turkey" by price. With few exceptions the oil industry is in liquidation. Back to the tar sands and coal conversion to methanol and dimethyl ether like the apolitical Chinese.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201550 201550 Wed, 09 Jul 2008 12:52:33 -0400 good article!]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201498 201498 Wed, 09 Jul 2008 12:06:45 -0400 http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201492 201492 Wed, 09 Jul 2008 12:01:29 -0400
www.prosefights.org/fu...]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201471 201471 Wed, 09 Jul 2008 11:49:00 -0400
"The basic economic principle, which has stood the test of time and applies to this day, is that supply rises in response to prices..."

I think this ignores the fundamental fact that oil is non-renewable and finite, unlike most other products. If the supply of pencils runs low relative to demand, prices rise, and more pencils will no doubt be manufactured to meet the demand and to reduce prices over time. But oil cannot be manufactured like pencils. And most of the credible petrol geologists (which excludes the Russian 'abiotic oil' camp) are telling us that further exploration and drilling cannot even offset the depletion of existing wells, let alone add to top line supply numbers.

So the only way that this article and its author can be right, long term, is if the peak oil geologists are wrong. Hauling out an overly simplistic economics adage is not compelling. Solid evidence that the peak oil engineers and geologists are wrong would be - yet despite an intensive search for such, I have been unable to find such evidence.

Remember that an heretofore truthful adage like the one which undergirds this article's argument is obviated and becomes false when a fundamentally new paradigm replaces the old. If the peakers are right and we are at, near, or even past peak oil, then a new paradigm is upon us. And if that's the case, then I suspect that at some point, what happens to one's position in oil (or any other virtual, non-physical investment for that matter) will be the least of one's worries. ]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201458 201458 Wed, 09 Jul 2008 11:43:33 -0400
The Saudis always lie because they don't want to tell the truth, which is:
1. Khurais is a joke- never produced more than 144kbopd and was shut in in 1981
2. They don't have any other capacity anywhere in the country
3. They've explored everywhere and found nothing that we don't already know about
4. OPEC is a joke; they are all producing at capacity just as if they were in Texas or the North Sea.

Some of us learned about trusting the Saudis on 9/11. Others have yet to learn the lesson.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201455 201455 Wed, 09 Jul 2008 11:42:23 -0400
The real breakthrough could be something else. Behavior, Segway, Hydrogen, Terrestrial solar (or extra-terrestrial kind), etc. I can't tell you what it is else I'll be rich. :)

Remember guys, all breakthroughs only need to affect the top 20% of automobile oil demand for things to shift the market pattern in "game-changing" ways.

A cartel/monopoly/economic hostage situation breaks down if it loses 20% of it's projected demand.

40-50K is definitely affordable for 20% of the automobile population -- if it makes sense to do it, there'll be people to buy it.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201448 201448 Wed, 09 Jul 2008 11:38:43 -0400 Cheers Ispyoil]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201430 201430 Wed, 09 Jul 2008 11:27:58 -0400 http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201407 201407 Wed, 09 Jul 2008 11:12:17 -0400
Let's see if I have this right... The reason we're not exploring for more domestic oil is the CA Congressional delegation, and their public employee pension fund is at the top of the list of speculative investors, which they blame for skyrocketing oil prices.

This is fitting, and makes as much sense as the rest of our nation's Democrat energy policies. ]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201400 201400 Wed, 09 Jul 2008 11:06:58 -0400 http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201390 201390 Wed, 09 Jul 2008 10:58:29 -0400
World demand is going up. Emerging economies boost this. World population is going up by 70 MILLION more people per YEAR !!

DO THE MATH.


DONT BREED]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201381 201381 Wed, 09 Jul 2008 10:53:24 -0400 Corporate America [the greed by corporations is unbelievable]had better wake up...jobs/production going out of the USA equalls NO buying prower in the USA...plain and simple, then we won't need to worry about the cost of oil or anything else. Anarchy and revolution is just around the corner.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201375 201375 Wed, 09 Jul 2008 10:47:37 -0400
Good thoughts. But let's see how many electrics commuters buy at $40-50K per click. MORE OIL is still the answer in our lifetimes.]]> http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201314 201314 Wed, 09 Jul 2008 10:05:18 -0400 http://seekingalpha.com/article/84250-why-140-barrel-crude-is-unsustainable?source=feed#comment-201313 201313 Wed, 09 Jul 2008 10:05:02 -0400