Oil price discussion and analysis

[Tysonboss1]

Re: OIL AGAIN!

I honestly don't like energy retailers at the moment. And I especially don't like AGL. I think people can do much better than them...

why don't you like energy retailers,.... I think as part of a long term income trust agl will perform fantastically

 

[Knobby22]

Re: OIL AGAIN!

At the risk of appearing somewhat big headed, that would put the timing exactly as predicted by Smurf some years ago.

Seriously though, I was hoping to be wrong about this one.

It seems we're passed the point of maximum oil production. Next, and not far away, comes the point where combined production of oil and gas begins to slide as the growth in gas fails to offset declines in oil.

Then gas actually peaks. Probably sooner than most expect given a three quarters concentration of the resource in a very small number of countries plus the serious depletion of North American and North Sea reserves.

Sometime after that, and it will likely be a while yet, we get a situation where the combined availability of oil, gas and coal peaks as the growth in coal fails to offset declining oil and gas availability.

And then finally, we get a peak in coal itself. A situation that's already happened in a few places, most notably the UK about 90 years ago (though to this day that resource driven peaking is rarely acknowledged).

Hence my very long held view that we'll be using gas to replace oil for transport etc and will be scrambling to find anything other than oil and gas with which to run industry and especially generate electricity.

And for the ordinary consumer, it's starting to get expensive. Power prices are starting to rise and there is plenty more to come. Petrol is up, so is diesel. LPG's getting expensive too. Natural gas is still relatively cheap - but it's increasingly acknowledged that Australian gas is undervalued so that won't last.

Congrats Smurf. I have had a keen interest in this subject for years and I would say that you are probably one of the best informed on the issue within Australia. Do you have a job related to energy or education?

The way I see us going long term is by using solar panel to create hrdrogen from water. The longer it takes us however the more difficult it will be to turn around the worlds economies. I am really a bit scared. I just don't think most people realise the enormity of what is happening.

 

[rederob]

Re: OIL AGAIN!

Oil leapt around 5% higher overnight.
Looks like the cold snap in parts of USA is reverberating into the minds of market makers.

 

[rederob]

Re: OIL AGAIN!

The below chart is rather compelling if you follow the peak oil debate.
Moving average data sets from the International Energy Agency, and the US Energy Information Agency clearly shows that crude oil output will have difficulty meeting increased demand in future years.
Each data set shows a peak, and we are now on the slope down.
Global demand is expected to be no less than one percent higher next year, so condensates and reserves will be filling the gap in supply.
Given that these data are openly available, there is a reasonable presumption that whatever measures could have been made to increase output, are now being made: And no dent is made to the chart patterns.
In the gold thread all sorts of reasons are put to explain price action, especially the resilience of prices under various pressures.
My view is that market players are watching oil for clues as to whether or not to dump gold, and to date the goldil nexus is limiting gold's reasonable downside.
I do not see this nexus being broken in 2008.

 

[benwex]

Re: OIL AGAIN!

It occurred to me why the Iranians would want to build nuclear reactors when they are sitting on such a large reserve...

Maybe they are smarter than we give them credit for and they realise saving their oil for a rainy day in the future.

When Peak Oil has played out further and the current major suppliers are all in declinie, oil might be reaching $1000+ a barrel.

Could be in less than a decade from now.

Great doco on SBS tonight about the Oil industry. Did anyone catch it??

Benwex

 

[Synergy]

Re: OIL AGAIN!

Great doco on SBS tonight about the Oil industry. Did anyone catch it??

Benwex

Yeah I was lucky enough to catch it. Outstanding I thought. Really opened my eyes to the devistation oil companies have caused to 3rd world countries and to the likelihood that major nations will be battling for the supply from these 3rd world counties in the future. Pretty scary stuff all in all.

The population growth stats were also eye opening. Sure we know its growing fast, but its easy to see things aren't sustainable when the facts are spelt out.

 

[numbercruncher]

Re: OIL AGAIN!

$3 gas: America's braking point
After shrugging off high prices for years, American drivers are finally starting to cut back. Is it a sign of shifting habits, or looming recession?

NEW YORK (CNNMoney.com) -- Gasoline demand has fallen for the first time in years as drivers appear to recoil from near-record prices, throwing doubt on America's seemingly insatiable thirst for fuel.

Growth in gasoline demand has been slowing all year. In five of the last seven weeks, the amount of gas that Americans consume has actually fallen compared to the same time last year, according to retail sales data gathered by MasterCard SpendingPulse, a research report that tracks gasoline sales using MasterCard, other credit cards and cash purchases at approximately 140,000 service stations around the country.

"With prices over $3 a gallon, there seems to be some real resistance from the consumer," said Michael McNamara, director of research for MasterCard SpendingPulse.

In some weeks demand has fallen by as much as 3 percent.

http://money.cnn.com/2007/12/18/news/economy/gas_demand/index.htm


Might be the death of the SUV on the horizion ? US gov aiming for 40mpg vehicles ...

 

[Tysonboss1]

Re: OIL AGAIN!

It occurred to me why the Iranians would want to build nuclear reactors when they are sitting on such a large reserve...

Maybe they are smarter than we give them credit for and they realise saving their oil for a rainy day in the future.

When Peak Oil has played out further and the current major suppliers are all in declinie, oil might be reaching $1000+ a barrel.

Could be in less than a decade from now.

Great doco on SBS tonight about the Oil industry. Did anyone catch it??

Benwex

Iran has already said the want to phase out oil and gas electricity so they can save the oil and gas for export,....

Makes sense to me,.... Import $1000 of uranium and export $50,000 worth of oil that you would have had to burn instead of the uranium.

 

[Tysonboss1]

Re: OIL AGAIN!

Might be the death of the SUV on the horizion ? US gov aiming for 40mpg vehicles ...

Hopfully,... Bring on the 'plug in Hybrids' I say,

Say is it just a north shore sydney thing or has every body else noticed an explosion in the number of Toyota prius Hybrids,...... they are every where I look.

 

[chops_a_must]

Re: OIL AGAIN!

Hopfully,... Bring on the 'plug in Hybrids' I say,

Say is it just a north shore sydney thing or has every body else noticed an explosion in the number of Toyota prius Hybrids,...... they are every where I look.

I'm noticing it as well. Must have finally caught up with the back log. They don't look too bad on the road either.

 

[Smurf1976]

Re: OIL AGAIN!

It occurred to me why the Iranians would want to build nuclear reactors when they are sitting on such a large reserve...

Maybe they are smarter than we give them credit for and they realise saving their oil for a rainy day in the future.

When Peak Oil has played out further and the current major suppliers are all in declinie, oil might be reaching $1000+ a barrel.

Could be in less than a decade from now.

Great doco on SBS tonight about the Oil industry. Did anyone catch it??

Benwex

It makes perfectly good sense for Iran, as a major holder of gas reserves, to avoid using the stuff for power generation. It makes even more sense for others to do likewise.

Iran is far, far smarter in this regard than most Western countries IMO.

Iran't present oil production is about 40% below its peak by the way.

 

[Smurf1976]

Re: OIL AGAIN!

Hopfully,... Bring on the 'plug in Hybrids' I say,

Say is it just a north shore sydney thing or has every body else noticed an explosion in the number of Toyota prius Hybrids,...... they are every where I look.

Noticed one yesterday. Only the second time I've ever noticed a privately owned one. Not a huge number out there, at least not near me, but it's increasing.

 

[Tysonboss1]

Re: OIL AGAIN!

Hi Guys,

Just read an alarming piece of triva,...

Apparantly Saudi Arabia has 3 times as many producing oil wells than they did in 2000 but are still producing about the same amount of oil each year.

this is the same thing that happened in texas in the 70's right before they announced that they had declining production levels,

 

[rederob]

Re: OIL AGAIN!

Hi Guys,

Just read an alarming piece of triva,...

Apparently Saudi Arabia has 3 times as many producing oil wells than they did in 2000 but are still producing about the same amount of oil each year.

this is the same thing that happened in Texas in the 70's right before they announced that they had declining production levels,

Saudi production peaked several years ago.
At least they have never matched the highs of back then, and plateaued production is now edging down.
It is the primary reason I am very bullish on oil prices into 2008 and beyond.
The counter point is that the Saudis can add to OPEC output and keep oil prices stable, or lower than present. That point is not one that holds water with me.

 

[ta2693]

Re: OIL AGAIN!

Saudi production peaked several years ago.
At least they have never matched the highs of back then, and plateaued production is now edging down.
It is the primary reason I am very bullish on oil prices into 2008 and beyond.
The counter point is that the Saudis can add to OPEC output and keep oil prices stable, or lower than present. That point is not one that holds water with me.

I agree with you. but I do not which way we can expose to hiking oil price better? At least we have the following options.
1 oil future
2 big oil company like wpl sto
3 Small oil search company bucket strategy like CVN, EGO, CVI, DIO, MPO
4 Oil exploration service company like WOR ( I prefer to expose myself in this way)
5 Coal company like WHC, REY

 

[Smurf1976]

Re: OIL AGAIN!

Don't confuse the number of rigs operating with the number of wells producing as they're not the same.

Agreed with the overall point though. Drilling more and more wells faster and faster with no gain in production is the classic sign of peaking.

When you look at the available info on in-ground resources and then factor in the above ground issues, I just can't see any way that production will rise to match demand.

Which reminds me that I need to buy some kero before I'm priced out of the market. :

 

[rederob]

Re: OIL AGAIN!

Chart for WTIC looks good:

 

[Garpal Gumnut]

Re: OIL AGAIN!

I agree with you. but I do not which way we can expose to hiking oil price better? At least we have the following options.
1 oil future
2 big oil company like wpl sto
3 Small oil search company bucket strategy like CVN, EGO, CVI, DIO, MPO
4 Oil exploration service company like WOR ( I prefer to expose myself in this way)
5 Coal company like WHC, REY

Thanks ta2693,

A good summary of the options available at this present time in the Australian context.

I can't see oil getting any cheaper.

gg

 

[ithatheekret]

Re: OIL AGAIN!

Does any have a projected bottom for the oil price ?

I have one @ $72.40-$72.8/90 based on the lowest mean futures price .

Still pretty stiff though ............

 

[BREND]

Re: OIL AGAIN!

I agree with you. but I do not which way we can expose to hiking oil price better? At least we have the following options.
1 oil future
2 big oil company like wpl sto
3 Small oil search company bucket strategy like CVN, EGO, CVI, DIO, MPO
4 Oil exploration service company like WOR ( I prefer to expose myself in this way)
5 Coal company like WHC, REY

Don't forget about oil ETF.

Oil futures rose above $97 a barrel Thursday after the government reported larger-than-expected declines in crude and heating oil inventories.

In its weekly inventory report, the Energy Department's Energy Information Administration said oil inventories fell by 3.3 million barrels last week, more than double the 1.3 million barrel decline analysts surveyed by Dow Jones Newswires had expected. Inventories of distillates, which include heating oil and diesel fuel, fell by 2.8 million barrels, much more than the expected 800,000 barrel decline.

Crude and heating oil supplies have declined more than expected for several weeks running, exacerbating a perception that supplies may be inadequate to meet demand.

My model is showing bullish signal for oil. Finally fundamental and technical agree with each other for crude oil, it has the potential to cross $100 within months.

Going long on crude oil now.