IEA: Price Spike Coming In 2020

Discussion in 'Business and Economics' started by Carcus, Sep 20, 2017.

  1. Carcus

    Carcus Well-Known Member

    "The problem of a shortage of supply seems very far off today, given the swift turnaround in U.S. shale and persistently high levels of crude storage.

    But demand continues to rise—the IEA just upgraded its demand growth estimate for 2017 to 1.6 million barrels per day (mb/d). If that level of demand growth continues for a few years, it will more than devour the excess supply on the market. Even a more tempered growth rate would strain supplies toward the end of the decade, absent a corresponding uptick in production.

    “There are still not enough signs of investment beginning to return, and that raises the risk of tightening of the market in the next five years and a risk to the stability of oil prices,” Neil Atkinson, head of the IEA’s oil markets and industry division, said at a conference in Bahrain. “There is at least a possibility of going back to the situation we had 10 years ago where oil prices were very, very high at a time when demand was growing.”"


    "In a 2016 report, the IEA estimated that the industry would need to bring online an additional 21 mb/d of new supply by 2025 just to keep current production flat, after factoring in depletion rates from existing projects plus higher demand levels."

    Low Oil Prices Lead To Fastest Mature Fields Decline In 25 Years
    Last edited: Sep 20, 2017
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  2. ALS

    ALS Super Moderator Staff Member

    We'll see on that one. All my life I've heard the same stories and and not once have they come true. With the changes coming to the automobile industry and I use England and France as an example as they want to eliminate the sale of gasoline and diesel automobiles in the next two decades. Things are changing and these stories show how small minded the authors are. All we've heard for the last thirty to forty years of how we're going to see peak oil by this date and that date and not once did any of these prophecies ever come true.
  3. Carcus

    Carcus Well-Known Member

    What I posted isn't about peak oil. It's about the end of "cheap" oil.

    You'd be hard pressed to find an analyst who doesn't think oil is going higher over the next 5 years. -- and (unlike a few years ago) most of them are talking about the impact (or lack thereof) from electric vehicles and increased fuel efficiency.
    kbergene likes this.
  4. ALS

    ALS Super Moderator Staff Member

    Do I see $60 oil, yes we might even see $75 a barrel for oil, but the days of $100 a barrel are over for a generation.

    Like the idiots in my state Government can't balance the budget but had no problem raising the speed limits on the Turnpike and almost all the interstates to 70 mph. It's all about increasing the gasoline tax revenue not convenience of the higher speeds for the residents of the state. I drove up to Watkins Glen on the 3rd and almost no one was driving over 65 mph on sections of the interstates with 70 mph speed limits. That change hasn't work out for the state the way they wanted it to.

    What people don't realize is most of the mandated efficiency gains aren't for saving fuel but more of a strategic starving off the income of our political enemies.

    Most of the oil producers have pretty high government costs due to social programs as well as oil exports are their main source of income for the country, think Middle East, Venezuela, Russia.

    Most of the funding for many of the Anti-Fracking groups here and in the E.U. have been traced directly back to Saudi Arabia.

    The Fracking Genie is out of the bottle as they say and western Europe is just getting on the oil and gas drilling bandwagon.

    I have a member on another board that has several wells he drilled in Texas in the last two years and his costs are under $30 per barrel and WTI is trading today around $50.73.

    Do you think he's complaining making over $20 per barrel profit.

    Most of the costs of drilling have come down across the board due to major technology advances in the last five years of so.

    When the five of the biggest and or growing economies are looking at dramatically cutting their oil usage, these rogue oil producing countries are in big trouble.

    The U.S., China, E.U., Briton and India have all announced major government objectives to cut their oil use dramatically over the next few decades.
    Carcus likes this.
  5. Carcus

    Carcus Well-Known Member

  6. Carcus

    Carcus Well-Known Member

    I don't doubt there are operators (some, not all) in west Texas making good money at $50/barrel. But Texas shale or even US shale isn't nearly enough to make up for World demand growth and World decline rates.

    Duplicating the US shale revolution in most other parts of the world is going to be very difficult. The US has a lot of unique features which allowed the shale boom to happen here which most other places in the world are lacking.

    I think most of the sizable supply potential lies in (expensive) offshore projects and tar sands.
    Last edited: Sep 29, 2017
  7. PaleMelanesian

    PaleMelanesian Beat the System Staff Member

    I read the title wrong. I thought this was about prices on Swedish furniture. :p
    BillLin likes this.
  8. Carcus

    Carcus Well-Known Member

    I now exactly what your taling about!
    BillLin likes this.
  9. Carcus

    Carcus Well-Known Member

    China Study Warns Of Impending Oil Production Peak & World Oil Market Squeeze, + Peak Recoverable Coal ~2020

    "China is rapidly approaching peak fossil fuel extraction according to a new state-funded study led by the China University of Petroleum in Beijing.

    The study findings include the assertion that China will experience a peak in its total oil production (conventional + unconventional) by as early as 2018. As a result, world oil markets and geopolitics are likely to be greatly affected as China seeks to meet the widening demand shortfall through trade."

    "The new study was published in the September 19th edition of Springer’s peer-reviewed Petroleum Science journal. Financial support was provided by all three of China’s major oil firms: the China National Petroleum Corporation (CNPC), China Petroleum Corporation (Sinopec), and China National Offshore Oil Corporation (CNOOC)."

    /China is the world's largest importer of oil, ... kind of difficult to imagine that they'd be pushing the "world oil market squeeze" angle if they didn't think it was real.
  10. Carcus

    Carcus Well-Known Member

    OPEC March Data and Saudi Report
    by RON PATTERSON posted on 04/10/2019


    In 2004 and again in 2006, we had hints, from Saudi officials themselves, that Saudi oil fields were beginning to have serious water cut and depletion problems. Now with this bond prospectus, we have the coup de gras. Ghawar and the majority of Saudi’s other super-giant oil fields are in serious decline.

    The idea that Saudi still has 266 billion barrels of proven reserves must now be regarded as pure fiction. The Saudis themselves are no longer supporting that figure. They are now saying 256.9 billion barrels of oil equivalent. That included condensate, NGLs, and natural gas. Their oil reserves, they say, are 201.4 billion barrels of C+C. But even those numbers are absolute fiction. They have been lying for years so why should we start believing them now. Then they say they got their decline rate down to almost 2%. But then they confuse things by claiming this is also their depletion rate.

    My estimate of Saudi reserves. I agree with Dr. Mamdouh Salameh, Saudi likely has between 70 and 74 billion barrels of recoverable reserves."

    "OPEC’s de facto leader and largest producer Saudi Arabia followed through its commitment from February to cut deeper and pump well below 10 million bpd. Saudi Arabia’s crude oil production dropped by a massive 324,000 bpd from February to stand at 9.794 million bpd in March—just as Saudi Energy Minister Khalid al-Falih had said the Kingdom would do and pump around 9.8 million bpd in March, some 500,000 bpd below the 10.311-million-bpdcommitment in the OPEC+ deal.

    //as others have stated: we'll see what happens when Brent gets above $90, ... if Saudi maintains their cuts, .. then there's the confirmation -- they're trying to stretch their "20 year reserves" to the last drop. I would expect 'before' the last drop falls, ... the ruling elite will load up into their gilded 747s and head for the south of France (or maybe south Florida).
    ///if 'they' (whoever 'they' are) can bring Yemen fully 'online' then we might be looking at another scenario
    Last edited: Apr 20, 2019
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  11. Carcus

    Carcus Well-Known Member

    The Case For $100 Oil
    "The odds of an oil price spike this year are much higher than the prevailing consensus in the market, according to a new report from Bank of America Merrill Lynch.

    The oil market has been tightening rapidly this year, due to OPEC+ cuts taking supply off of the market, outages in Iran and Venezuela, and a slowdown in U.S. shale. But forthcoming regulations from the International Maritime Organization (IMO) could provide an additional jolt, particularly as global inventories decline against the backdrop of a tightening market."
    EdwinTheMagnificent likes this.
  12. Jay

    Jay Well-Known Member

    If anybody really knew where oil prices were heading, they could make a fortune in the futures markets and have their own private island. I think prices will stay in the $60/bbl range for the next few months then head lower as a new worldwide economic recession settles in--but then I'm a perma-bear.
    EdwinTheMagnificent likes this.
  13. Carcus

    Carcus Well-Known Member

    Saudi Arabia To Invest $10bn In The Maldives

    /or private island's'
  14. priusCpilot

    priusCpilot George

    Island for them all to escape to when the time comes.
  15. Carcus

    Carcus Well-Known Member

    the things you don't see on your evening news channel:

    Russia Gains Stranglehold Over Persian Gulf
    "In a potentially catastrophic escalation of tensions in the Persian Gulf, Russia plans to use Iran’s ports in Bandar-e-Bushehr and Chabahar as forward military bases for warships and nuclear submarines, guarded by hundreds of Special Forces troops under the guise of ‘military advisers’, and an airbase near Bandar-e-Bushehr as a hub for 35 Sukhoi Su-57 fighter planes has exclusively been told by senior sources close to the Iranian regime. The next round of joint military exercises in the Indian Ocean and the Strait of Hormuz will mark the onset of this in-situ military expansion in Iran, as the Russian ships involved will be allowed by Iran to use the facilities in Bandar-e-Bushehr and Chabahar. Depending on the practical strength of domestic and international reaction to this, these ships and Spetsntaz will remain in place and will be expanded in numbers over the next 50 years.

    This gradual roll-out of Russian capability in a country is the Kremlin’s tried and tested operating procedure for leveraging economic and/or political support for a country into that country allowing itself to be used as, effectively, one large multi-level forward military base for Russia. Exactly the same plan was used, and remains in place, in Syria, with Russia. ....."

    -- which 'might' actually help hold the price of oil down, .. for a while. If Iran goes into Russian managed full production, that could be a lot of oil -- I'm sure China will be glad to fuel up their semis running all up and down their new silk road

    /so this would be Middle East 2.0 -- where we did have Sunni/Saudi/US/UK + friends controlling the Persian Gulf and its oil, .. we now move to Shia/Iran/Russia/China + friends .... and around and around we go --- till it all blows up.

    Sunnis and Shia: Islam's ancient schism
    Last edited: Aug 5, 2019
  16. EdwinTheMagnificent

    EdwinTheMagnificent Legend In His Mind

    This would be fascinating if it wasn't so scary.
  17. Carcus

    Carcus Well-Known Member

    Agreed, ... if only we were safely viewing from NCC 1701
  18. Carcus

    Carcus Well-Known Member

    India's Highway Super-System: Future MEGAPROJECTS

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