[Cashmere]

Wow. Now the MSM has connected the dots on supply.

How long til they figure out the ramifications long term?

MSMSeesIt

$this->bbcode_second_pass_quote('', 'O')il from Canada's tar sands, currently producing about 1.2 million barrels a day, is arguably the most expensive oil in world, and is getting even more expensive.

Last year analysts estimated it cost around $60 a barrel to produce light oil from here. The most recent estimate from the Canadian Association of Petroleum Producers (CAPP) now puts that number at $75 to $90. Comparatively, Saudi Arabian crude is said to cost around $1 a barrel.

[wisconsin_cur]

$this->bbcode_second_pass_quote('Cashmere', 'W')ow. Now the MSM has connected the dots on supply.

How long til they figure out the ramifications long term?

MSMSeesIt

$this->bbcode_second_pass_quote('', 'O')il from Canada's tar sands, currently producing about 1.2 million barrels a day, is arguably the most expensive oil in world, and is getting even more expensive.

Last year analysts estimated it cost around $60 a barrel to produce light oil from here. The most recent estimate from the Canadian Association of Petroleum Producers (CAPP) now puts that number at $75 to $90. Comparatively, Saudi Arabian crude is said to cost around $1 a barrel.

[joeltrout]

There was some guy on CNBC yesterday saying that the tar sands were still economic at either $45 or $35/bbl. I forget which one but it shocked me and made me realize these are the people who are creating the problems.

joeltrout

[MadScientist]

because the tar sands are so energy intensive, the price went up 50% as the cost of oil went up.


KSA oil at $1 and Canadian tar sands at $90.

Hmm it would be really interesting to see what the "average cost per barrel of crude oil production" is on a running graph worldwide.

[ROCKMAN]

joel,

So...some people are just making up numbers. So what? Some of us have made a good living in the past doing just that. Of course, now that oil prices are up I don't have to do that any more.

Soory...just a little inside joke for joel about geologists and fund managers.

[zoidberg]

$this->bbcode_second_pass_quote('Cashmere', 'W')ow. Now the MSM has connected the dots on supply.

How long til they figure out the ramifications long term?

[ROCKMAN]

For me zoid the question is: when will OPEC offset demand destruction by lowering output to raise prices while developing the internal self control to not compete with each other for market share? That's the day the world will enter into very new reality.

The answer: I don't make predictions. Maybe 2 years...maybe 30 years. But I do think we likely hit that new reality someday.

And what do you see as THE question?

[MadScientist]

$this->bbcode_second_pass_quote('ROCKMAN', 'F')or me zoid the question is: when will OPEC offset demand destruction by lowering output to raise prices while developing the internal self control to not compete with each other for market share? That's the day the world will enter into very new reality.

The answer: I don't make predictions. Maybe 2 years...maybe 30 years. But I do think we likely hit that new reality someday.

And what do you see as THE question?

[TheDude]

Oh, OPEC didn't publicly announce they were giving up on quotas, did they? There were some juicy remarks from anonymous ministers, but ostensibly they'll still attempt to hew to them.

OPEC faces new challenges as global oil demand slows

$this->bbcode_second_pass_quote('', 'I')nterestingly, after a long time, the issue of abiding by the OPEC output quotas is also back under hammer. The group's President Chakib Khelil while on a visit to Iran last week, emphasized that the OPEC members should keep oil output within the agreed targets. The issue of quota is also back on the table and with a vengeance this time, it seems.

Underlining the rapidly changing market dynamics, the International Energy Agency (IEA) has also cut its forecast for 2008 demand of oil from OPEC by 100,000 b/d despite raising the forecast for non-OPEC supply. Production is assuming to be an issue for now at least.

[ROCKMAN]

Such a crap shoot, eh Dude. There has to be a few OPEC members (seeing their clearly declining capabilities) ready to cut production to maximize prices. You know Hugo would like nothing better than to give himself a little breathing room and poke the US in the eye at the same time. We may not be too close to that tipping point but my gut tells me it may not be that many years out.

Hey...you wanna put a skids on alt development in the US? Cut oil imports to the point our society can just barely produce the necessities. You gotta admit it: it would be one world class game of "Chicken".

[zoidberg]

$this->bbcode_second_pass_quote('ROCKMAN', '
')And what do you see as THE question?

[ROCKMAN]

Got it zoid. Your's is really THE BIG QUESTION. Mine was just one of the smaller Big Questions that would lead to your Bigger Question. And I do see the analogy to the USSR. We encouraged them to spend themselves into disaster just as we've encouraged our populace to do the same. The USSR built to many tanks and planes and we built too many sub-prime financed homes and big SUV's.

A rather silly comparision but, unfortunately, seems to work uncomfortably well.

[doodlebug2]

This post seems to be going of topic, BUT it is still good reading.

Back to tar sands, I do not know much about them, but all the info I read (here and internet) is that it is still costs more energy involved than to get energy out (bbl oil). To me , if the media ever brought this up, people would freak out. So many people believe that tar sands are our nations oil savior (are they?)

[bl00k]

$this->bbcode_second_pass_quote('doodlebug2', 'B')ack to tar sands, I do not know much about them, but all the info I read (here and internet) is that it is still costs more energy involved than to get energy out (bbl oil). To me , if the media ever brought this up, people would freak out. So many people believe that tar sands are our nations oil savior (are they?)

[timmac]

Yes high prices are here and might hang around for a while but oil looks as if it might dip below $100 a barrel very soon unless opec cuts production,,

how low can it go before it levels out,, I hope $90 a barrel is a least the bottom,, my business needs a gas break for a while,, last months gas bill was $2800.00...

[Cashmere]

$this->bbcode_second_pass_quote('timmac', 'Y')es high prices are here and might hang around for a while but oil looks as if it might dip below $100 a barrel very soon unless opec cuts production,,

how low can it go before it levels out,, I hope $90 a barrel is a least the bottom,, my business needs a gas break for a while,, last months gas bill was $2800.00...

[timmac]

I still hope it dips to $90 before it starts to rise again,, our economy could use a boost before old man winter gets here and people that are on a tight budget will get heating oil for there homes.

However winter is not a problem where I am from here in Vegas but lower gas will help with our tourist slow down we have been having lately.

I hope Isreal puts off bombing Iran for a year or two,, that will screw the prices up fast..

[zoidberg]

$this->bbcode_second_pass_quote('bl00k', '
')You are correct. It's called EROEI, energy returned on energy invested. I don't know the exact EROEI of tar sands but i do know you'll end up with a lot less energy extracting oil from tar sands than you do extracting oil from a 'regular' oil field.

[zoidberg]

$this->bbcode_second_pass_quote('timmac', 'I') still hope it dips to $90 before it starts to rise again,, our economy could use a boost before old man winter gets here and people that are on a tight budget will get heating oil for there homes.

However winter is not a problem where I am from here in Vegas but lower gas will help with our tourist slow down we have been having lately.

I hope Isreal puts off bombing Iran for a year or two,, that will screw the prices up fast..

[timmac]

$102 a barrel as of today,, just maybe it might get into the $90 range,, how low will it go ????

Whats also strange is that $102 a barrel seems cheap..