U.S. Department of Energy sees decline in oil production

by **Outcast_Searcher** » Thu 01 Apr 2010, 20:34:39

$this->bbcode_second_pass_quote('AirlinePilot', 'I')m finding this all rather bizarre just about now. We have climbing oil prices in light of good storage numbers and significant US demand cutbacks. We have several slightly fringe energy sites/blogs calling BS on OPEC/Saud reserve estimates. We have some recent articles talking about blatant obfuscation in the energy industry. By all normal and "credible" sources there IS NO PROBLEM with oil other than speculators!

by **mos6507** » Thu 01 Apr 2010, 20:49:42

The saudis came out recently talking about how they think $80 is the sweet spot and if necessary they can open the spigot to keep it in that range. This is consistent with other estimates that indicate that the Saudis do in fact still have a reasonable cushion. So in the immediate future I don't really see an oil superspike.

I think the DOE report has been overplayed and somewhat twisted in interpretation by websites with agendas. I don't think the administration is panicking over peak oil. I think they understand there are issues ahead, but not TSHTF peak oil doom that you or I think about. Chu already gave a technofix type argument regarding peak oil. So that is pretty much the party line--that we will innovate our way out of this, and that we can do so at a relatively leisurely pace.

by JJ » Thu 01 Apr 2010, 22:39:23

well, I made a comment at work about the white house actually recognizing peak oil and was ridiculed. "Oh they've been saying that for years"...

by **misterno** » Thu 01 Apr 2010, 23:37:21

1) Currently, the world is awash with oil, this is due to lower demand stemmed from worldwide recession.

2) The reason for $80+/barrel has nothing to do with peak oil or shortage of oil or hidden demand. The only reason is the low value of dollar due to extremely low interest rates. OPEC and other producers keep the price high to compensate for the low value of USD.

3) If and only if demand recovers and US economy starts to grow which I think never will happen, then FED increases the interest rates and this creates capital inflow to the US thus increasing demand for USD. When USD appreciates against other currencies, oil will go back to $30/barrel gradually.

Only problem is I don't think US Economy can ever grow wihout an artificial boom like back late 90's and 2002-2007 era.

by **Daniel_Plainview** » Thu 08 Apr 2010, 01:31:24

The DoD and the DoE seem to agree on the same prediction: PO within a few years !!!

$this->bbcode_second_pass_quote('', 'A') report of the American Department of Defense (DoD), titled Joint Operating Environemnt 2010 [PDF] indicates (page 29):

$this->bbcode_second_pass_quote('', '&')quot;By 2012, surplus oil production capacity could entirely disappear, and as early as 2015. the shortfall in output could reach nearly 10 MBD."

by **TheDude** » Thu 08 Apr 2010, 01:43:46

$this->bbcode_second_pass_quote('misterno', '2')) The reason for $80+/barrel has nothing to do with peak oil or shortage of oil or hidden demand. The only reason is the low value of dollar due to extremely low interest rates. OPEC and other producers keep the price high to compensate for the low value of USD.