[KevO]

not if Opec have their way they won't.

"Crude could fetch just US$45 a barrel by end of decade, report says
OTTAWA - Oil prices, which hit a 14-month low of less than US$60 a barrel this week, will sink a lot lower over the next four years, according to new Canadian government projections which see prices falling to US$45 a barrel by the end of the decade"

CANADIAN ARTICLE HERE


.

[EnergyUnlimited]

$this->bbcode_second_pass_quote('KevO', 'n')ot if Opec have their way they won't.

"Crude could fetch just US$45 a barrel by end of decade, report says
OTTAWA - Oil prices, which hit a 14-month low of less than US$60 a barrel this week, will sink a lot lower over the next four years, according to new Canadian government projections which see prices falling to US$45 a barrel by the end of the decade"

CANADIAN ARTICLE HERE


.

[IslandCrow]

$this->bbcode_second_pass_quote('EnergyUnlimited', 'I')s anyone here able to explain paradox "the fewer oil we have, the cheaper it gets" ?

[Heineken]

Demand can't fall much, or for long---not given the huge buildout in oil-gobbling infrastructure over the past decade around the world.

In other words, a vast percentage of demand is inelastic.

So what you have is not really a drop in absolute demand (except very briefly) but a fleeting reduction in the rate of growth of demand.

All the trends that will bring us to $100--$200/bbl oil by 2010 or so are in place. Nothing fundamental has changed and nothing fundamental CAN change.

This is a huge buying opportunity if you're into energy stocks and have a smidgeon of patience and guts.

[Fergus]

I am beginning to think someones setting America up for the fall. Lull them to thinking (not that they needed to try) oil is everywhere and you can buy that 2nd home and the 2nd SUV, maybe even that private jet if your budget can afford it (and you can cause oil is CHEAP again forever). Then when someone feels we are ripe for the pickings, jack up oil and flood media outlets with stories of how oil has just dried up and theres nothing to be pumped in volumes that can equal the demand.

Boom. Down goes America.

I think an ever vigilant outlook should be used during this price 'war'. But we all know collectively America will eat it up and come back for seconds while the getting is good and the price to be paid later be damned.

Sometimes I think America is the stupidest country ever. yet we will fall for this. Mark my words, someones gunna have a great laugh at our expense. And America collectively cant even see it coming.

[rockdoc123]

The projections regarding lower oil prices from 2009 onwards are based on the knowledge that there are a number of projects which will be bringing additional oil on stream towards the end of the decade. A number of firms who do this sort of analysis such as WoodMackenzie and IHS Energy have shown that if demand growth is low there will be considerably more product available than is demanded. That being said based on what I've seen from the projections if demand growth continues at 1.5%/annum then there is only a brief period when there is a big gap between supply and demand, it is quickly closed in the early part of the next decade unless some significant discoveries are made in the next couple of years. Of course the projections also assume little in the way of project delays and I think we can expect to see a number of those. As a consequence you may never see a broadening of the supply demand gap to any great extent.

[DantesPeak]

$this->bbcode_second_pass_quote('Fergus', 'S')ometimes I think America is the stupidest country ever. yet we will fall for this. Mark my words, someones gunna have a great laugh at our expense. And America collectively cant even see it coming.

[dinopello]

$this->bbcode_second_pass_quote('Heineken', 'I')n other words, a vast percentage of demand is inelastic.

[rwwff]

$this->bbcode_second_pass_quote('DantesPeak', 'I')t's not that the powers that be can't see this coming, although that's partly true, they just don't want to tell the truth. Do they really want to tell the US that current policies will lead to a much lower standard of living and possible serious wars?

[mekrob]

$this->bbcode_second_pass_quote('', 'I') think the reality as seen by those in power is that all possible policies lead to a much lower standard of living and serious wars are guaranteed.

[dinopello]

$this->bbcode_second_pass_quote('mekrob', '
')As far as a lower standard of living, standard of living isn't just how big and comfy your house is or how big your wallet or tummy is, it's education, health, enjoyment. We have an immense amount of room to improve in the standard of living. I'd say we have a very poor standard of living now. Sure, we have plenty of food. But how many people are happy?

[ClubOfRomeII]

$this->bbcode_second_pass_quote('mekrob', '
')
As far as a lower standard of living, standard of living isn't just how big and comfy your house is or how big your wallet or tummy is, it's education, health, enjoyment.

[Ludi]

Yeah, we'll powerdown by losing our jobs. Those discretionary trips and consumerism = someone's job, you know.

What do YOU do for a living which is so vital and non-discretionary?

[ClubOfRomeII]

$this->bbcode_second_pass_quote('Ludi', '
')
What do YOU do for a living which is so vital and non-discretionary?

[mgibbons19]

that's funny, I was beginning to think you hung out on the internet for a living.

ba da boom

couldn't resist.

carry on.

[lorenzo]

Yes, read this too in De Standaard today, a petro-analyst saying that oil will gently decline to US$ 40-45 ("which is still very expensive") the coming years, because so many new projects are coming on line. He didn't say which projects, but he mentioned Iraq's huge unrealised potential (11million bpd, of which only 2 million bpd gets out today).

[rwwff]

$this->bbcode_second_pass_quote('mekrob', '')$this->bbcode_second_pass_quote('', 'I') think the reality as seen by those in power is that all possible policies lead to a much lower standard of living and serious wars are guaranteed.

[Heineken]

$this->bbcode_second_pass_quote('DantesPeak', ' ')

One of the great ironies of PO is that the US is using more energy than ever before - so things are really better than ever before. It's very difficult to see the down side of PO, etc., under these circumstances.

[Rincewind]

I think that this site should retain this item at the top of the boards so that we can see how it pans out.

POers often get told (quite rightly) the PO has been forecast to occur many times in the past. We do have a tendency to be pesimistic, which is not to say PO theory is wrong just we interprete the (incomplete) data very conservatively.

On the other hand how many times has 'cheap oil is coming' been forecast and how many times have those forecasters been wrong? No one seems to hold this group to account.

I often disagree with Rockdoc about climate change science but I respect his thoughts on the oil patch. I think his point higher up this thread is very important.

We need to monitor this expected increase in the production/demand gap due to expected projects coming on line.

Keeping tabs on:

1 whether they come on line when stated
2 if there are start up delays - how many and for how long a delay
3 if production ramped up as quickly as expected
4 if expected max production is achieved (perhaps too difficult)
5 if the quality of the product is what was originally claimed


I suppose what I am concerned about is that as the industry comes under more pressure to produce there is more pressure on it to 'spin' any news in a positive way.

I would be nice to audit this in a systematic way.

cheers Rincewind

[TommyJefferson]

$this->bbcode_second_pass_quote('rockdoc123', '.')..based on what I've seen from the projections if demand growth continues at 1.5%/annum then there is only a brief period when there is a big gap between supply and demand, it is quickly closed in the early part of the next decade