John Ke

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$200 Oil Is a Very Real Possibility [view article]
Peak Oil has not been reached yet. Speculation, the weak dollar and momentum are driving crude higher in this cycle. This bubble will end with a good pop when the combination of extra production (everybody is pumping at these prices) and a stronger dollar (the fed shall tighten after this credit instability eases) thus triggering a sell off, but not a "bust".
A lot more oil is coming on line from the South Atlantic and Central Asia regions in the next few years. Yes, many current fields are becoming exhausted, but it is the ratio of new production versus declining which is still favorable to the current world situation. When demand reaches 95 to 100 million barrels a day, however; there will occur a period of sudden unsustainability. This will show itself with increasingly persistent shortages not related to distribution problems eg. politics (Ukraine) and infrastructure (Iran/Iraq). Concurrently, the new production versus declining production ratio will become unfavorable and thus there shall be an acceleration of this deleterious effect. A serious issue then will be presented to our world governments which they will have to act on... at a time when a barrel of oil will most certainly cost more than a barrel of milk or one of Coca Cola for that matter. Mar 15 06:23 AM

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