Oct
19
Oil Surges Over $90 A Barrel
By
The Financial Times (and everyone else) reports “Crude oil prices on Friday rose to a fresh all-time high above $90 a barrel as the US dollar sunk to a new low against the euro.
Persistent worries about tight supplies ahead of the winter peak season and fresh geopolitical tensions also helped to push prices higher.
Nymex November West Texas Intermediate hit $90.02 a barrel in overnight trading. It later was 10 cents higher at $89.57 a barrel, extending Thursday’s $2.07 price jump. It is the sixth straight trading day that oil set a record high…”
Read the rest of the article.
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HEADS UP: Lord Oxburgh, the former Shell chairman says that diminishing resources could push price of crude to $150 a barrel.
9 Comments
October 19th, 2007 at 8:24 am
The oil companies only have about a year and 3 months to get all they can. It’s going to be a bumpy time.
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October 19th, 2007 at 9:28 am
Rip, I assume your comment is a reference to the remainder of the Bush presidency. Certainly Bush/Cheney are doing everything they can to help Oil companies with inside deals and contracts in Iraq.
However, there is a much bigger picture here that transcends partisan politics. Folks like Uptown Ruler and me believe we are the brink of a permanant supply crisis. I recently discovered that three is actually a Peak Oil Caucus in the US Congress. Here is the resolution they offered:
http://en.wikipedia.org/wiki/U.S._House_Peak_Oil_Caucus
The current price rise is probably not being driven completely by supply/demand fundamentals (more on futures speculation and related to decline of the dollar as I understand it), but supply and demand is very tight and there is NO way oil production can keep up, barring some huge new discoveries. Soon, oil production will start to decline, just as demand is soaring. It’s going to be an economic mess and unless we get serious about finding alternatives, it could be the end of “carbon man” and modern civilization as we know it (though that is not an entirely bad thing in my opinion).
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October 19th, 2007 at 10:03 am
I realize that oil is not an unlimited resource in this world and I agree that serious steps need to be taken. However the impact of burning fossil fuels is a much more serious problem and will, in my opinion, have a much more profound effect on our world before the effects of a true oil shortage are ever realized.
I agree that soon production will decrease as demand will soar but I think it is a tightly controlled situation that will keep the oil companies in power for decades to come.
There are still many sources to explore, the “oil sands” deposits in Canada and Venezuela are said to hold as much as 3.5 trillion barrels of oil. These deposits are also in 70 other countries world-wide. However it will cost trillions of dollars to build refineries that will process these vast reserves.
The oil companies have not built any new refineries in the United States since the early 70′s. They want to keep supply just at or slightly below the demand.
The large oil companies executives who are making money faster than it can be counted are only interested in the here and now – they are not interested in spending any of their obscene profits on the future of a world they won’t be in.
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October 19th, 2007 at 11:29 am
Rip – I think there is a lot of truth in your comments. I’m not quite as reflexively anti-corporate as a lot of folks, but if anyone deserves some hooligan scrutiny, it is certainly the oil industry.
On a broader timescale coal/oil/natural gas, population growth, and climate change are all intimately linked.
A huge one-time endowment of fossil fuels will have been depleted in a historically miniscule span of one or two centuries. In that short span our population exploded, the industrial age was born, and we spewed all of this stuff into our air. Without a viable replacement population may need to go back to the pre-oil age level.
Or perhaps we can be the first species ever to self regulate its growth before we overshoot our habitat. I doubt very much that will happen. Climate change and oil depletion are going to force it to happen and it may not be very pleasant.
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October 19th, 2007 at 12:10 pm
Bit of semi-related trivia: Bus systems have learned that spikes in gas prices do not necessarily mean more riders.
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October 19th, 2007 at 3:42 pm
I’m not trying to come across as “reflexively anti-corporate”. It’s not just “Big Oil” and I hope I don’t sound like a conspiracy theorist type….I just believe that a cloud of unadulterated greed has the overtaken the common sense and responsibility of quite a few corporations in the last decade.
But maybe the next administration will be a little more environmentally friendly and a little less likely to give in to the influence of the lobbying of big money.
One can always dream….?
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October 19th, 2007 at 3:57 pm
Paul-V writes: Bus systems have learned that
which only shows that gasoline prizes are still way to low, let’s hope oil prices will go to $ 150 or more for then we will force government to provide better public transportation and alternative fuel solutions etc.
I agree with Kurt Vonnegut who wrote in his last book that we are like junkies, in denial and headed to go cold turkey and when that happens hold on to your heads (yes I intentionally wrote heads not hats)
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October 19th, 2007 at 4:58 pm
I’m sure the next administration will be better, but probably still unwilling to take the action necessary to effectively address climate change and oil supply problems.
It stunned me when I learned that the energy density in one barrel of oil is the equivalent of eight people working full time for one year. Really try to grasp that fact. Oil has been relatively easy to get, its very portable, and has a high energy returned on energy invested ratio. There is simply no viable alternative known today. Some analysts calculate that the Canadian oil sands have a very small or even a negative energy returned on energy invested. They are currently using stranded natural gas to produce the oil from the sands and when that gas runs out, the oil sands could become completely impractical.
Then again, even at $90 per barrel, oil may be undervalued if you consider that eight people working full time for a year would only equate to $0.0054/hour wage. When supply drops and then becomes scarce, it seems the price could go WAY WAY higher and as you said, Oil companies and Oil rich countries will be in the drivers seat for a long time (unless we get serious about alternatives and consevation/efficiency).
Hopefully, the decline is slow and gradual. If not, we face war after war and a never ending recession until we fully transition to some post oil age. Hopefully science will discover something and do it soon or else we will be blessed to live in interesting times.
Either Climate change or peak oil taken alone are each compelling reasons to find clean sustainable energy alternatives. When you combine them, it just blow my mind that this is not issue #1 in the Presidential race.
To Tim Peck and other doubters, I sincerely hope and pray that I’m wrong and you are right.
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October 19th, 2007 at 5:13 pm
Asheman writes: no viable alternative known today
well define viable. the solution is not to find something to replace oil but a change in live style. For example: I am a believer that part of public transportation needs to be PPM’s go read:
http://www.brainshrub.com/drupal/node?page=3
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