Mr. Reality Check

1 Comment

    • ON: Mon Nov 26th 14:33 PM
      Commented on:
      Is Oil Actually Worth $100 a Barrel?
      Mr Lyons....I think you should do a bit of homework before making blanket statements like this. It's a fact that over the past 30+ years the U.S. has been loosing control of its energy supply. Try looking up Hubberts Peak on Google and see what you find. In 1970 the U.S. hit its peak production at 9 mill barrels per day...today we are about 5.5mill. Many of the world's best analysts have already estimated global peak production is behind us too. Hubbert predicted the year 2000 and just recently Petroconsultants of Geneva predicted 2001(the top two experts in this field). There are currently 98 oil producing countries in the wolrd of whcih 64 are thought to have passed their geology imposed prod peak. 60 of the 64 are in terminal production declines. Does that mean that the world is running out of oil? No...not yet. But it does mean the end is now in sight. It also means we are running out of cheap pumpable oil that has fueled economic growth in the 20th century. By the way...the countries that hold all the cards by largest reserves)Abu Dabi, Iraq, Saudi Arabia and Kuwait....aren't exactly sending us birthday cards every year. But he real key to prices is that the worlds demand for oil is growing faster than oil production can increase...even with slower global growth. Let's just do one exercise. In the late 70's early 80's crude prices went from $1.35 to $35.00 per barrel..a multiple of 26X. That's an increase of 30% a year for 12 yrs. If you apply the same multiple on this past decade low of $10 per barrel....that would equal $260 per barrel. So if you think the prices are two high now....just wait.
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