Peak Oil (was "petroleum geologist explains US war policy")

[elbows]

Yes bigfish, thats been their position for a while, they have said similar stuff since at least 2000, albeit with a greater sense of urgency now.

Here's a fun story from 2000:

http://news.bbc.co.uk/1/hi/world/middle_east/920301.stm

So lets see what comes out of this oil summit. More than words are required, if Saudi Arabia is so confident about present & future supply, but dont like the price, then maybe they could increase production now.

Instead we have entered a phase where demand destruction is occuring, so for at least a while the problem (that you dont think exists) will be tackled on the demand side rather than supply side. Maybe some new supplies will come online in the next year or 2 and greater consumption will be encouraged again, rather than demand destruction via subsidy reduction in developing nations that is todays story, time will tell.

See for example this prediction that the price of oil will fall once data demonstrating demand destruction is available:

http://uk.reuters.com/article/newsOne/idUKSP23448220080608

It seems we will have to wait a while for the numbers, unless there is a complete economic meltdown which will make reduced demand a cert, no need to wait for the numbers under that scenario.

BP's CEO does not share Saudi Arabia's stance it seems:

"Oil volatile as markets not well supplied: BP CEO"

http://www.reuters.com/article/reutersEdge/idUSSP12987020080609?pageNumber=1&virtualBrandChannel=0

Nor Gazprom:

"Gazprom, the world's biggest natural-gas company, expects oil prices to reach $250 a barrel in the ``foreseeable future'' as competition for energy resources increases, Chief Executive Officer Alexei Miller said."

http://www.bloomberg.com/apps/news?pid=20601085&sid=aIjhO.KunHcE&refer=

I know you could say that they are producers who are conspiring for profit, and part of the false problem, but if so then how come Saudi Arabia's stated view isnt the same?

Cheers

Steve Elbows

 

[elbows]

The delicate issue of what actual OPEC spare capacity is right now:

http://www.gulf-times.com/site/topi...=223516&version=1&template_id=48&parent_id=28

No consensus on that, as usual!

Meanwhile the IEA has cut its demand forecast a bit, as expected, and this has hit Gazprom's share price a little:

http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/10/afx5099861.html

This is why I think its oversimplistic to think that producing nations and companies would like to conspire to keep the price real high, because they dont really want to destroy demand and lose sales. The story of oil for many years was OPEC using its might to control the oil price, trying to stop the price from falling too low, but also preventing it from rising too much. This hasnt been working this century though.

Its a good thing the cold war ended because Russia produced more oil than Saudi Arabia last year, according to IEA data. But they have higher domestic demand so I believe Saudi Arabia is still the bigger exporter.

 

[elbows]

Aha the IEA also said that supply surged in May, but that it is worried about future supply, and that the current price is largely driven by fundamentals:

http://afp.google.com/article/ALeqM5gxEl_sVC_5c2Udi7kB-i_ll_1QEw

I like this bit:

Acknowledging that the price leap on Friday had been driven partly by speculators, the International Energy Agency said that the sudden rise was more a reflection of "risk management rather than speculation."
And commenting on possible threats to supplies because of tension over Iran, it said: "There is also another supply response to consider: an IEA strategic stock release.
"Given that OPEC countries are running close to flat out (supply), the market can take comfort that the IEA is watching developments very closely and is prepared to act quickly if necessary."

 

[elbows]

Oil price up a bit again, fowwing article is fairly well balanced:

http://news.bbc.co.uk/1/hi/business/7447956.stm

"The higher oil price is partly due to the fact many analysts believe data on Thursday will show a decline in US inventories for the fourth week running.
At the same time, a report from British oil giant BP highlighted an imbalance in production and consumption trends.
In its Statistical Review of World Energy, BP said that oil consumption increased by 1.1% in 2007, while production fell by 0.2%.
BP attributed this to the Organization of Petroleum Exporting Countries (Opec) cutting production in November 2006 and in February 2007, and oil fields in various parts of the world reaching maturity."

 

[bigfish]

The world is not running out of oil say BP

The world is not running out of oil and can continue to produce hydrocarbons for the next 40 years provided restrictions on where companies can operate are lifted, the head of BP said yesterday.

The Arctic and closed areas off the coast of America should be considered for exploration if rising global energy demand is to be met in future, said chief executive Tony Hayward at the launch of his company's annual statistical review of world energy in London.
...
"Declining oil production in the OECD highlights the fact that, while resources are not constrained globally, the resources within reach of private investment by companies like BP are limited," said Hayward. "Political factors, barriers to entry and high taxes all play a role here. In other words, when it comes to producing more oil, the problems are above ground, not below it. They are not geological, but political."
....
Production volumes had been falling in Russia due to a tax system that means the vast bulk of the revenues has gone to the Kremlin since the price of oil rose above $30 a barrel. [Actually output from the former Soviet Union countries rose by nearly 500,000 barrels a day, with Azerbaijan and Russia each growing by more than 200,000 barrels a day. bf http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/11/afx5103450.html ]

The BP boss ... appeared to support the idea of tax breaks to encourage more drilling in the North Sea. ...

The review said that world oil consumption grew by 1.1% in 2007, or 1m barrels a day, slightly below the 10-year average, while production fell by 0.2%, or 130,000 barrels a day, the first decline in five years.

An increasing number of oil industry commentators [actually, it's just the same old suspects. bf] believe that "peak oil" - the point where production begins to decline - has been reached and is responsible for the huge rise in crude prices this year to record highs of nearly $140 a barrel. But BP said proven oil reserves at 1.24tn barrels were enough to meet current production for 41 years.

Hayward batted aside Opec arguments that the extremely high price of oil could be attributed to financial speculators playing the commodity markets and the slump in the dollar's relative value to other currencies.

"The defining feature of global energy markets remains high and volatile prices, reflecting a tight balance of supply and demand," he said.

"I am certainly not a subscriber to peak oil [theories]."

Hayward defied predictions from some of his peers that current oil production of around 81.5m barrels a day may never be exceeded. He suggested 100m barrels may still be possible. The era of cheap energy was over, with oil prices moving steadily upwards over the past six years, but this was definitely not because the world is running out of oil, he said.

The markets in 2007 had been hit by Opec production having fallen by 350,000 barrels a day as a result of the cumulative impact of production cuts implemented in November 2006 and February 2007, while non-Opec output rose 200,000 barrels a day.

Hayward declined to comment on where oil prices would go from here but his chairman, Peter Sutherland, dismissed as "apocalyptic" Tuesday's warning by Alexei Miller, Gazprom's chief executive, that the price could virtually double to $250 a barrel by the end of 2009.

"I don't believe in some of the more apocalyptic predictions," he told a separate meeting of the European Policy Centre. "I don't believe we are in for a spike to $250 and I am hopeful that we will not have further dramatic escalations in the price. Personally, I would like to see prices fall." ...

http://www.guardian.co.uk/business/2008/jun/12/bp.oil

 

[elbows]

Interesting stuff from BP there, cheers. No surprise that they favour tax breaks, and see taxation as a reason why there hasnt been enough investment.

At least he acknowledges there are problems, even though I obviously do not agree with him about why there are problems. The tax & political issues he refers too may very well be responsible for the difficult supply-demand situation we are in so far.But even then, the reason Russia & the Middle East can complicate the political dimension, is that we need their oil. If there were no 'problems below ground' in OECD oil producing countries, then we wouldnt need to be more reliant on OPEC etc.

I can believe it when he says he doesnt want the price to reach $250, as I probably said previously, there are reasons that the oil companies dont want the price to go to high, and why they arent behind the peak oil theories.

If the majority woke up tomorrow and decided that they believed in peak oil, where do you think the price of oil would be at?

And the reason for the disparity between Russia's output and what you quoted from Forbes, is that Russia does not include all the former soviet countries, just Russia. And Russia has been providing a heck of a lot of oil for the world, so any decline there is big news. The former soviet countries that have oil coming online are helpful, but as far as I know are not predicted to become real giants in terms of oil exports, they can replace a very limited amount of the production that Russia and Saudi Arabia currently provide. How useful these countries are, in terms of buying us time, depends how steep the decline is, which is one of the big questions that people who give credence to peak oil would love to know the answer to.

Mind you, even if peak oil hits bigtime, its quite plausible that you could spend your life without seeing anything that convinces you, because the efects may be masked by depression or war or other mass demand destruction worldchanging events that may seem to explain our fate better to many.

 

[Darios]

Interesting mention of Peak Oil in the Guardian:

"Now the overriding concern is whether we are reaching the end game, the era of 'peak oil' and the point when the world is at maximum production, after which supplies start to dwindle. Once little more than a cultish view, the peak oil theory has gained increasing currency in recent years."

"Once little more than a cultish view?" - Sometimes I really hate the media. Perhaps this should be fixed: "Once little more than a non-reported view".

 

[zceb90]

Interesting mention of Peak Oil in the Guardian:

"Now the overriding concern is whether we are reaching the end game, the era of 'peak oil' and the point when the world is at maximum production, after which supplies start to dwindle. Once little more than a cultish view, the peak oil theory has gained increasing currency in recent years."

"Once little more than a cultish view?" - Sometimes I really hate the media. Perhaps this should be fixed: "Once little more than a non-reported view".

Thanks for the link; Guardian article refers to rising costs especially for Brazil deepwater oil. The principal reason why costs are rising is falling net energy returns on new projects - the oil industry has mainly exploited the 'easy oil' first and much more difficult deposits are now having to be exploited.

Two separate petroleum geologists, Euan Mearns and Professor emiritus Kenneth Deffeyes (Princeton University) have both stated that ERoEI <7 will require committment of a level of funding and resources simply to obtain energy that we won't have enough surplus resources to continue business as usual. We strongly suspect that much of the UK N Sea oil remaining (which Prof Odell indicated is 'almost as much as has already been extracted') falls into this low ERoEI category.

The situation the oil industry is now facing is depicted in the following curve:

 

[elbows]

Great article in the Telegraph, it actually tries to explain the issue:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/15/ccliam115.xml

Bravo! And the fact Saudi may raise output once their new field is finally online, rather uggests they have been running at their limit or else why wait till then?

As for the Guardian, well they seem to be at the stage where they embrace peak oil as being the obvious reality, but this is a tad uncomfortable so its still being padded with mixed messages here and there.

 

[elbows]

Oh now the UN have announced that Saudi Arabia will raise output in July:

http://news.bbc.co.uk/1/hi/business/7455570.stm

Unlike the Telegraph article, this one does nothing much to enlighten the reader. Still its interesting that we've reached the stage where the UN ends up announcing stuff like this on a Sunday.

Reality bites eh, there are not so many bigfish in the sea of wishful thinking these days!

 

[elbows]

Fear not, Bush has words of wisdom !

Taken from: http://www.guardian.co.uk/world/2008/jun/15/georgebush.usa1

The oil crisis

"There is no magic wand. It took us a while to get to where we are. It's going to take us a while to get out of it. And the truth of the matter is that there's either got to be more supply or less demand. And demand doesn't decline overnight.

During my trips to the Middle East, I talked to King Abdullah about increasing the supply of oil, on the theory that if you harm your consumers with high prices they will find other ways to power their economies - and that he should not want to see the kind of worldwide contraction as a result of consumers spending money on energy that ends up overseas, as opposed to spending money on opportunities in their respective economies.

So I think people, if they take a sober look at the world's supply, there's just not a lot, relative to demand. But if I might repeat, the solution to the price of hydrocarbons is either more hydrocarbons or less usage of hydrocarbons.

What people don't understand is that hydrocarbons are necessary as we transition to a new era, based upon new technologies. New technologies don't happen overnight."

 

[frogwoman]

Wow, what a long thread. And yet I have never posted on it

 

[elbows]

Welcome to the thread. Yeah its taken a long time to get to the point where even Bush seems to be speaking the language of peak oil. I took several years off from this thread but as the oil situation has now reached a new phase, Im back and posting far too much in this thread lately.

Its the story of the century, but its made a compete oil bore out of me!

 

[frogwoman]

Welcome to the thread. Yeah its taken a long time to get to the point where even Bush seems to be speaking the language of peak oil. I took several years off from this thread but as the oil situation has now reached a new phase, Im back and posting far too much in this thread lately.

Its the story of the century, but its made a compete oil bore out of me!

heh dude

 

[elbows]

Here's one I missed from last week that will give those who doubt actual supply tightness something to think about:

"Refiners are paying record premiums for the high-quality crude oil they use to produce diesel and petrol, a sign of strong demand in the physical oil market that calls into question claims that soaring oil prices are being driven by speculators.

Refiners are paying up to $5-$6 a barrel on top of current record prices to secure high-grade oil, traders said, double the level of a year ago. The mark-ups are four times higher than the 2000-2008 average. The movement in prices paid for physical barrels of oil has gone largely undetected outside the refinery industry because financial markets pay almost exclusive attention to the price of oil futures traded in London and New York."

http://www.ft.com/cms/s/e223dab4-38a3-11dd-8aed-0000779fd2ac

 

[elbows]

In yesterdays press conference with Bush, Gordon Brown got pretty close to admitting peak oil, although he chose his words very carefully:

"Prime Minister:

Can I say I am travelling to Jedda next Sunday at the invitation of the King of Saudi Arabia and I want a long term dialogue, and this is part of a process, not an event, between oil producers and oil consumers. I think there is a view developing that the price of oil is increasingly dependent, not just on today's demand and supply factors, but on what people perceive as demand outstripping supply next year, in the medium term and in the long term. And I want to tell the King of Saudi Arabia and others who are there that the world will build more nuclear power and I have suggested that on present trends it would be about 1,000 nuclear power stations over the next 30 years, the world will increase its use of renewables, the world will increase its use of coal, it will lessen its dependence on oil, and that the world is determined to make a more efficient use of oil. And I think this dialogue between producers and consumers is absolutely essential. President Bush has just been in Saudi Arabia, I have not been there recently, I want to go and talk to the King and talk to others there about what I believe should be a process whereby we understand what are the pressures on demand in future years as well as we understand the pressures on supply and I believe that that long term debate about the future can have an effect on today's markets. Now that is what the debate is about and that is part of a process that I hope will continue if necessary with a meeting in London later and with further meetings so that there is a genuine dialogue between producers and consumers about what is the most worrying situation in the world at the moment, and that is the trebling of the price of oil."

From: http://www.number-10.gov.uk/output/Page15783.asp

 

[david dissadent]

Crispy can you change the name of this thread to something explicitly about peak oil perhaps just "PEAK OIL". I think alot of people dont really read the thread because of its ambiguous title. Either that or then just start a new thread.

Anyway things are moving so increadibly quickly these days. It seems the fast collapse people are the ones who have been the most accurate over the past 12 months. I am normally a slow collapse over decades type person but I dunno things are getting spooky out there. Global warming and resource depletion are smacking straight into the disaster in the financial institutions and housing markets.

If I am right about us hitting peak oil in the next 2 1/2 years max (Manifa and Khurais in Saudi may just give the world one last big bump in oil production) but the financial fallout from so many bussiness models going sour, airlines hitting chapter 11 then out of bussiness, inflation, factories shutting down, tourist industries hitting brick walls [Las Vegas is already very fucked atm the Med islands will soon be following] that we are in for a nasty long recession just when we need all the cash we can get to be building new rail routes, tramlines and renewable energy sources.

Still the main reason I delurked is to post this.

http://publications.uu.se/abstract.xsql?dbid=7625

An excellent and concise document covering all the bases on peak oil. History of oil, oil geology and a study of the great fields. Having actually read Simmons Twilight In The Dessert the bible of peakers some of it was not new to me but still at only 150 pages docs like this are absolute goldmines of information and should be required reading for everyone with an interest in international politics.

Its not all doom and gloom, we may have a shit load less coal and oil than we think we have but I suspect that natural gas will be a good source of energy for a while. Unconventional gas sources are proving very handy indeed (tight gas, shale gas, coal mine gas). But as the oil remains flat then depletes there will be a dash for gas as a liquid fuel substitute, the price is gonna sky rocket.

 

[david dissadent]

Oh now the UN have announced that Saudi Arabia will raise output in July:

http://news.bbc.co.uk/1/hi/business/7455570.stm

They have not promised to increase exports and this increase is as some severly delayed new fields are comming online. Does nothing to dispell the impression that they have virtualy no spare capacity without ramping up Ghawar and the other fields to the point where they damage them (bubble pressure and all that).

If they do have spare capacity it is likely to be in the very low API stuff that the refiners dont want\ cant use atm.

Hey ho but first oil is due from Thunderhorse very soon. All gravy. Its supposed to be really good oil and by the time it works up to full output it could stave off the consaquencies of Cantrells depletion for the US for a year or so, perhaps even dropping the price of oil a bit.

Then again I have been predicting oil to drop on demand destruction since it crossed $100. Luckily I do not trade or I would be bloody broke by now. I was tempted to stick some money into oil major shares on the knowledge that the price of oil would go up alot quicker than there production would deplete and they be raking it in. But I reckon they are going to be taxed to hell and back in the next few years.

 

[elbows]

Yeah output from the delayed Saudi fields is probably what they were announcing, its supposed to be high quality stuff but yeah the total output wont be that much in the grand scheme of things. Have you any idea what the picture is in Russia right now? Ive been putting some of the extra price jumps since October down to Russian exports declining more than expected.

Its the Saudi oil conference on Sunday, I will be watching closely to see whether anything new gets said as a result.

Ive been expecting demand destruction for a while too, saw some signs of it recently with some airlines cutting flights. Was also expecting decreased demand in the developing world due to recent reductions in oil price subsidy, but just read stuff that suggests it could actually increase demand within China as some refineries were holding back on production to reduce their losses (China just put up their oil prices recently).

 

[david dissadent]

Yeah output from the delayed Saudi fields is probably what they were announcing, its supposed to be high quality stuff but yeah the total output wont be that much in the grand scheme of things. Have you any idea what the picture is in Russia right now? Ive been putting some of the extra price jumps since October down to Russian exports declining more than expected.

Its the Saudi oil conference on Sunday, I will be watching closely to see whether anything new gets said as a result.

Ive been expecting demand destruction for a while too, saw some signs of it recently with some airlines cutting flights. Was also expecting decreased demand in the developing world due to recent reductions in oil price subsidy, but just read stuff that suggests it could actually increase demand within China as some refineries were holding back on production to reduce their losses (China just put up their oil prices recently).

Russia is set for a decline without doubt. But it is only partly geological, Lukoil, Gazprom and the like do not have the expertise of Saudi Aramco (the only genuinely technically capable national oil company so far as I can see) or the big oil majors. The fall out of things like Sakhalin II and I debacles has meant a drop in investment by the technically capable oil majors so much of the more advanced secondary and tertiary recovery technology that the Russians had been relying on to lift production in the 2000's is no longer available*. Alot of the uneploxed but recently discovered fields in Russia are also nearly inaccessable due to just how goddam fracking huge Russia is, that and that they are in very hostile parts of the world such as the arctic.

Russia is also liable to become another clear case of export land as the money they get from oil goes up they can use it to spend locally. I think the big story this year is likely to be export land model. As Russia, Saudi and Kuwait become wealthier they will have more money to spend and buy oil with. This is especialy notable for Russia with its giant population (Brazils new oil is also likely to go to Brazilians when it arrives).

Kuwait for example is installing some bloody giantic new powerstations that will run on oil for the first couple of years before changing to gas. The UAE states are building fantasy palaces and tower blocks that bring to mind "In Xanadu did Kublikahn a pleasure dome decree". Ski slopes in the dessert take alot of energy to keep cold.

The global big picutre is currently a wealth transfer between the 'occident' to the 'orient'. Between those who used to be the 'have's' and those who now either have the energy or do the work.

*Sakhalin I is supposed to be going to deplete by up to 25% of production this year as unlike other depleting oil projects there are no new wells being drilled to increase production.

 

[elbows]

Thanks for the info, the Export Land model is interesting indeed.

Well if the stories Ive read so far are anything to go by, the Saudi conference is sticking to the 'US blames production, Saudi blames speculators' script. Still I hear that OPEC have blamed speculation for price rises since they were formed.

Saudi wants greater transparency of markets so they can see who is speculating and how bad the problem is. Those concerned with production figures might rather have more transparent data on production & reserves.

To get the price to move much they need some sort of big announcement that restores future supply optimism. No small task these days!

 

[elbows]

Ooh something slightly different has emerged, Gordon Brown's 'New Deal' that he will propose at the summit, according to the Guardian:

http://www.guardian.co.uk/business/2008/jun/21/oil.renewableenergy

"I am going to Saudi to see if we can get a new deal between oil producers and the consumers where oil producers will invest in countries like ours, and oil consumers like us with good companies with good technology and skills can invest in the oil-producing countries. Where we can make credible commitments and the world can see we will reduce our dependence on oil and we will get demand and supply back into balance."

"It is changing the terms of the debate about oil that I think is the key to tackling what is the biggest of all three oil shocks. I don't think people have yet realised that if you have oil priced at $10 ten years ago and $135 today, and even in the last year the price has trebled, you've got a major shock.

"We have had some of the benefits of globalisation with cheaper consumer goods and lower interest rates. Now we are going to have to deal with the downside of globalisation, which is the restructuring of our economies and the pressure on our resources."

"Over the next three years I think we will see large investments in Britain in solar, wind power, wave power, nuclear and in expansion of alternatives to oil. The world is going to have to build 1,000 nuclear power stations."

 

[elbows]

Tony Blair = Climate Change
Gordon Brown = Peak Oil

Logical reason for OPEC members to accept Browns offer - it gives them continued ability to profit from supplying energy to us, long after the oil declines.

 

[elbows]

Well Gordon Brown mentioned just about every possible idea (apart from abandoning growth), Saudi Arabia tried to talk up their already announced production increases, and make some big statements about how much extra capacity they will have in future, but nothing concrete came out of the meeting. Coupled with more supply disruptions in Nigeria, this may make the price of oil higher come Monday.

Full transcript of Gordon's speech:

http://www.number-10.gov.uk/output/Page15821.asp

Less than optimistic article in the FT:

http://www.ft.com/cms/s/0/9c2756b4-4035-11dd-bd48-0000779fd2ac,s01=1.html

 

[zceb90]

Well Gordon Brown mentioned just about every possible idea (apart from abandoning growth), Saudi Arabia tried to talk up their already announced production increases, and make some big statements about how much extra capacity they will have in future, but nothing concrete came out of the meeting. Coupled with more supply disruptions in Nigeria, this may make the price of oil higher come Monday.

Full transcript of Gordon's speech:

http://www.number-10.gov.uk/output/Page15821.asp

Less than optimistic article in the FT:

http://www.ft.com/cms/s/0/9c2756b4-4035-11dd-bd48-0000779fd2ac,s01=1.html

From GB's speech this section was broadcast on BBC Radio 4's 'The World This Weekend' today:

For Britain I pledge that by examining incentives for greater recovery of oil and for smaller fields we will do more to exploit the 25 billion barrels of reserves still in the North Sea.

Other estimates of future recoverable UK N Sea reserves are very different (GB does not specify UK NS but the context of taking incentive actions by UK Gov't must surely exclude the Norwegian sector). BP Statistical Review and Mearns2 show 3.9Gbbls and 3 - 5 Gbbls respectively. The 'reserves' quoted by GB are 6 times the average of these 2 forecasts and in all probability exclude ERoEI considerations and the fact that average size of new NS fields is now sub 20m bbls (Prof Kemp) as discussed upthread.

Another 25 Gbbls might sound good in a speech but is unlikely to be type of barrels which actually show up in the tank!

 

[elbows]

Yeah I dont take any of the recent North Sea stuff very seriously. If they could actually get the production levels up then it would be a real positive indicator for the world, considering the UK North Sea decline rate has been a very troubling indicator of what could happen elsewhere. But as they dont even seem to dare to give any silly estimates for future production, I doubt they have anything substantial up their sleeve.

 

[bigfish]

The 'Peak Oil' Myth: New Oil Is Plentiful

The data is becoming conclusive that peak oil is a myth. High oil prices are doing their job as oil exploration is flush with new finds:

1. An offshore find by Brazilian state oil company Petrobras (PBR) in partnership with BG Group (BRGYY.PK) and Repsol-YPF may be the world's biggest discovery in 30 years, the head of the National Petroleum Agency said. A deep-water exploration area could contain as much as 33 billion barrels of oil, an amount that would nearly triple Brazil's reserves and make the offshore bloc the world's third-largest known oil reserve. "This would lay to rest some of the peak oil pronouncements that we were out of oil, that we weren't going to find any more and that we have to change our way of life," said Roger Read, an energy analyst and managing director at New York-based investment bank Natixis Bleichroeder Inc.

2. A trio of oil companies led by Chevron Corp. (CVX) has tapped a petroleum pool deep beneath the Gulf of Mexico that could boost U.S. reserves by more than 50 percent. A test well indicates it could be the biggest new domestic oil discovery since Alaska's Prudhoe Bay a generation ago. Chevron estimated the 300-square-mile region where its test well sits could hold up to 15 billion barrels of oil and natural gas

3. Kosmos Energy says its oil field at West Cape Three Points is the largest discovery in deep water West Africa and potentially the largest single field discovery in the region.

4. A new oil discovery has been made by Statoil (STO) in the Ragnarrock prospect near the Sleipner area in the North Sea. "It is encouraging that Statoil has made an oil discovery in a little-explored exploration model that is close to our North Sea infrastructure," says Frode Fasteland, acting exploration manager for the North Sea.

5. Shell (RDS.A) is currently analyzing and evaluating the well data of their own find in the Gulf of mexico to determine next steps. This find is rumored to be capable of producing 100 billion barrels. Operating in ultra-deep waters of the Gulf of Mexico, the Perdido spar will float on the surface in nearly 8,000 ft of water and is capable of producing as much as 130,000 barrels of oil equivalent per day.

6. In Iraq, excavators have struck three oil fields with reserves estimated at about 2 billion barrels, Kurdish region's Oil Minister Ashti Horami said.

7. Iran has discovered an oil field within its southwest Jofeir oilfield that is expected to boost Jofeir's oil output to 33,000 barrels per day. Iran's new discovery is estimated to have reserves of 750 million barrels, according to Iran's Oil Minister, Gholamhossein Nozari.
...
The peak oil theory is a money making scam put out by the speculators looking for high commodity returns in a challenging market environment. Most of the above mentioned finds have occurred in the last two years alone. I didn't even mention the untapped Alaskan oil fields or the recent Danish and Australian finds. In the long term, crude prices will find stability at historic norms because there is no supply problem. How much longer will investors ignore these new oil finds? Probably until they can find other investment alternatives which won't happen in the broad market until financials stop hemorrhaging. Respect the trend but understand that this is a bubble preparing to burst. When oil hit it's high of $139 it represented more than a 600% increase in crude since the bull market began, returns eerily similar to the dot.com craze.

http://seekingalpha.com/article/82236-the-peak-oil-myth-new-oil-is-plentiful

 

[Crispy]

Well, let's see shall we. The proof is in the pumping.

 

[elbows]

Well the price is moving up again, and I found some parts of this FT story interesting:

Adam Sieminski of Deutsche Bank said there was a tug of war in oil markets based on two distinct views of how the marginal price of crude was set.

One view was that “marginal cost of supply” should dominate and this might be near $75 to $100 a barrel. The other view was that prices were rising toward the level required to destroy demand, or to get it to slow dramatically, probably above $150 a barrel.

Mr Sieminski noted that oil producers were becoming more accustomed to higher prices and Deutsche Bank’s review of the extremes in oil valuations suggested that prices might have to remain at elevated levels to curb demand growth

http://www.ft.com/cms/s/0/0c984a74-441f-11dd-b151-0000779fd2ac.html?nclick_check=1

 

[A Dashing Blade]

Classic sign that we're close to the top is when analysts claim "but this time it's different . . . "

Dec 125 puts 7.5 offered . . . .stroke chin . . .