A von Altendorf

Oil Swings Go Beyond Fundamentals

War risk is $30 or more. Big swings are reaction to news, rumors.

World Oil Reserves: Russia's on the Map

Estimates of reserves are based on USGS survey ccompleted in 2000, a better graphic and explanatory text available here:
www.agiweb.org/geotime...

Russia indeed has the greatest potential, most of it in Western Siberia, followed by Greenland and other Arctic waters. Reservoirs in China have been wrecked, Saudi Arabia and Iran are in decline.

See also my negative research report last week on Brazil seekingalpha.com/artic...

I agree that Canada is an extremely important resource, but not oil sands, rather new oil & gas exploration in the far north and near Greenland: Cairn Energy Plc, EnCana, Husky, DONG, Chevron.

What's Behind the U-Turn in Oil Prices?

Jim, I doubt Saudi Aramco has any spare capacity. You're on the right track when you talk about war risk. Ask yourself if Russia would like to be a monopoly exporter? That's what shutting off the ME means. And it would certainly screw the Americans.

Has Oil Production Reached a 'De Facto' Peak?

"some countries, like Venezuela, could be feigning incompetence"

Well, no. Chavez fired Pedevesa's senior scientific/technical staff and replaced them with party functionaries. He nationalized foreign assets and cancelled deals with U.S. e&p consultants. Deliberate brain drain, hatred of expertise as such.

I enjoy reading your articles.

Is Oil a Bubble? Part One

Odd remark upthread: "If oil hits $150 maybe drilling through ice in Russia becomes worth it economically."

Uh, no. Price is not important. Recoverable reserves are what matter, and after that political, legal, and regulatory hurdles. Most of the world's recoverable reserves are in the hands of dictators and bureaucrats, in a word: morons who do not understand where oil and gas come from or what it takes to find it, produce it, refine it and transport it. The integrated majors (Exxon, BP, Shell) are in worse trouble than you realize. They added reserves by M&A, not new recoverable discoveries.

OPEC can't increase production. They're having a hard time hiring skilled people, and there are petrophysical limits to production in mature, declining fields including Ghawar. I wouldn't be surprised if Pedevesa went offline in an explosion, since Chavez fired the entire professional staff and replaced them with morons.

I think it's a chumps game to speculate in oil, despite the fact that world supply is declining and demand is elastic. It is especially dumb to invest in PBR.