[ColossalContrarian]

Whaaaaa... it was at 68 earlier today now 73

[DantesPeak]

$this->bbcode_second_pass_quote('ColossalContrarian', 'W')haaaaa... it was at 68 earlier today now 73

[lowem]

There went $70 oil. Looking to see if there's any support left at 50-dma.

[Graeme]

Of Oil Price Shock And Market Fundamentals

$this->bbcode_second_pass_quote('', 'C')apital expenditure (capex) in the oil and gas sector has reportedly been declining since the precipitous fall of crude oil prices from the peak of about US$147 per barrel in July 2008. Speculation has inevitably been rife about a price shock occasioned by the inability of supply facilities to meet demand requirements (due to withdrawal of the enabling investment) when the global economy begins to rebound. The International Energy Agency has projected a price crunch by the year 2012, just 3 years away.

Such concerns may be unrealistic and for three reasons:

First, there have been massive additions to the global production capacity far in excess of the projected losses. There are also equally massive capacities rapidly coming on-stream. For example, Saudi Arabia recently announced the introduction of a record 1.2 million barrels per day of light crude from the large Khurais field to the global tally.

[AirlinePilot]

The writer of this article does not understand depletion nor have they perused the Wiki Oil megaprojects site. The statement that was made about "massive new capacity" and Suadi new production being a "record setting" 1.2 mbd additional shows a complete misunderstanding of decline and what the news has been on that front.

I'd take that article with a huge grain of salt. By all repsects and looking at the hard data, we are setting ourselves up for a mega spike within a few months of any real demand signals going positive once again.

That may not happen soon. if it does not it will be due to much greater issues at hand with the global economy.

[DantesPeak]

$this->bbcode_second_pass_quote('AirlinePilot', 'T')he writer of this article does not understand depletion nor have they perused the Wiki Oil megaprojects site. The statement that was made about "massive new capacity" and Suadi new production being a "record setting" 1.2 mbd additional shows a complete misunderstanding of decline and what the news has been on that front.

I'd take that article with a huge grain of salt. By all repsects and looking at the hard data, we are setting ourselves up for a mega spike within a few months of any real demand signals going positive once again. That may not happen soon. if it does not it will be due to much greater issues at hand with the global economy.

[lowem]

Crude oil just bounced off the 50-dma ($63.37) with a low of $63.40 but it's still very much touch-and-go.

[Graeme]

Leanan has just posted this report on the front page. If true, then PO has not occurred yet.

Technology can help Saudi tap 'real' oil wealth

$this->bbcode_second_pass_quote('', 'S')audi Arabia controls nearly $16.9 trillion (Dh62trn) worth of oil reserves under its arid sands but the wealth could sharply rise with the advent of more advanced production technology, a key Saudi bank said yesterday.

The National Commercial Bank (NCB) said the kingdom's oil resources that can be recovered by present technology are estimated at around 260 billion barrels but they account for just a fraction of the real oil deposits.

In a short study sent to Emirates Business, NCB estimated Saudi Arabia's total crude resources in place at more than 742 billion barrels, including those which can not be reached by present production and drilling techniques.

"Only a fraction of this oil can be brought to the surface on limitations of petroleum extraction technologies and the typical structure of the reservoir… at the end of 2008, Saudi Aramco's oil and gas reserves were spread over 104 fields of which only 23 were in production," it said.

"Assuming a crude oil production rate of 8.9 million barrels per day, these proven reserves could deplete in the next 80 years. At an average crude oil price of $65 a barrel, the market value of these reserves is estimated at about $16.9trn.

"Moreover, at the fixed level of 2009 budgetary outlays, this amount could last for the next 133 years."

[DantesPeak]

"Only a fraction of this oil can be brought to the surface on limitations of petroleum extraction technologies and the typical structure of the reservoir… at the end of 2008, Saudi Aramco's oil and gas reserves were spread over 104 fields of which only 23 were in production"

They appear to be saying it will be difficult to extract what remains. I am not an expert on all the SA fields but it my understanding that they are actively working only on those fields that would result in a profit after operating and development costs, although there may be a few that are intentionally being held idle.

[lowem]

Haven't they been bandying about that 260 billion barrel figure for the past 20 years or so?

[Graeme]

Don't know how much truth there is in the above article but the information is now published and can be scrutinised by others who may have better knowledge or information.

Here is some recent news that should affect oil prices.

Oil, Gas Market Speculation May Face Restrictions

$this->bbcode_second_pass_quote('', 'U').S. regulators say they may clamp down on oil and gas price speculators by limiting the holdings of energy futures traders, including index and exchange-traded funds.

The Commodity Futures Trading Commission will hold hearings this month and next to explore the need for government-imposed restrictions on speculative trading in oil, gas and other energy markets, Chairman Gary Gensler said today in a statement.

[lowem]

TPB probably trying hard to drive the Golden Cross back down towards 200-dma.

[TheDude]

$58.91 at the start.

Wow, a Saudi bank is bullish on Saudi Arabia. Consider me stunned.

[lowem]

200-dma stands at $56.22 while NYMEX crude oil prices continue to hover around $60. Putting up quite a fight since hitting $61 and coming back down again. Good support for now around this level, see what comes up next.

[lowem]

Welcome back to $60 oil, no wait, it's back below $60, no wait, it's above $60 again, hold on it's $59.94, just a moment it's $60.40, no scratch that, it's $58, uh, as of *the moment of writing* it's $60.49.

Can somebody please put an end to this +/- $60 level craziness and pick a clear direction?

[Daniel_Plainview]

$this->bbcode_second_pass_quote('lowem', 'W')elcome back to $60 oil, no wait, it's back below $60, no wait, it's above $60 again, hold on it's $59.94, just a moment it's $60.40, no scratch that, it's $58, uh, as of *the moment of writing* it's $60.49.

Can somebody please put an end to this +/- $60 level craziness and pick a clear direction?

[frankthetank]

Up over $67... That didn't stay down long. Get ready for a spike in gasoline prices.

[lowem]

$this->bbcode_second_pass_quote('frankthetank', 'U')p over $67... That didn't stay down long. Get ready for a spike in gasoline prices.

[Daniel_Plainview]

$this->bbcode_second_pass_quote('frankthetank', 'U')p over $67... That didn't stay down long. Get ready for a spike in gasoline prices.

[Voice_du_More]

The direction is up!

What alot of us do not seem to get is that China is still growing, someone said 5% per year. So yes they had a 50% drop in growth from 10% per year. But here we are in a 5% tail spin.

Any talk, just talk of an end to the recession is going to reinflate oil. Those are the facts as best as I can remember them.

$85 by labor day unless Americans cut back again and the economy starts sliding again. With a major hurricane in the gulf $90 by mid September. By Nov 09 it will start to be come very clear to alot of folks that oil production simply cannot be ramped back up and I expect a spike to develop next spring at a time when we do not expect it, a very sharp spike and then a drop back to a level near $100 per barrel. Gas will be heading north of $3.50 again next year and it will not look back for several years even though the US will be desparately scrambling to realign its transport needs with the new paradigm.

Hyperinflation is coming to the US within the next year. BTW New York might get hit by a hurricane too.