[Starvid]

$this->bbcode_second_pass_quote('', 'I')n an interview with lastoilshock.com, Mr Groppe went on to argue that Saudi Arabia can maintain current production for up to two decades, global peak oil will come in 2008, but that prices will nevertheless remain between $65 and $85 per barrel until around 2015.

[...]

That's because around 15 mb/d of oil consumption in the developing world is still used for electricity generation and other non-transport purposes for which there are much cheaper alternatives such as coal.

[...]

It was the elimination of this kind of oil use in the US and Europe that led global oil consumption to drop by 8 mb/d between 1980 and 1985.

[...]

Groppe is a Houston-based contemporary of M. King Hubbert who founded the consultancy Groppe, Long, Littell over 50 years ago, and who claims to have forecast every major discontinuity in the oil market since then.

[Starvid]

Oh man, this is rich.

Listening to the Groppe interview, he says something along the lines of: OPEC has its own secretariat figuring out supply and demand balances, but in reality they just take the IEA numbers and tweak them around a little, and that's what OPEC is operating on.

[Starvid]

Strahan: So everthing that's been shocking the oil market and getting everybody talking over the last few months, in fact has been because the Saudis mistakenly relied on the IEA's overoptimistic forecasts, is what you're saying?

Groppe: Exactly, exactly.

[bonehead]

I truly hope i'm wrong,but it sure doesn't look like we will ever see $65 again.

[Starvid]

Well, if Groppe is right, prices rocketed because the Saudis made a giant cut as they belived the IEA who said non-OPEC supply would grow at its fastest pace since 1984.

And of course it didn't. This is just so fucking hilarious and shows what a farce the oil market is. For those of you who haven't read it and want some more surreal reading, check this out: http://www.energybulletin.net/1036.html

$this->bbcode_second_pass_quote('', 'F')rom his spare office over a grocery store in Geneva, Conrad Gerber can sway world oil markets. Mr Gerber runs a small firm, Petro-Logistics, that collects and analyses data on the world's supplies of oil. His confidential reports, which cost his select list of clients as much as $ 5,000 a month, often find their way into the business press, typically causing jumps or dips in the volatile petroleum markets.

Mr Gerber freely admits that he first learned about the oil business in the 1970's when he was helping his country, then known as Rhodesia and now called Zimbabwe, to circumvent international sanctions and procure illegal oil. Combining the skills of a contraband trader with those of a spy, he acknowledges that his company uses tricks from intelligence work to pierce the curtain of secrecy raised by oil-producing countries, especially the members of OPEC in the Persian Gulf.

[...]

Mr Gerber worked as an economist in the government of Rhodesia. He started his company in 1980, shortly after the United Nations lifted sanctions against the country. Among his business associates and friends, Mr Gerber counted Theodore G. Shackley, one of the CIA's most famous spymasters, who led efforts to battle Fidel Castro when he was station chief in Miami in the early 1960's. Mr Shackley engaged in some oil trading after he retired from the CIA in 1979. Mr Gerber said he was at Mr Shackley's bedside just before he died last year.

[slick50]

If it's cheaper for third world countries to use coal instead of oil for electrical generation then why haven't they done so already? Something does not add up here.

[Sys1]

This is absolutely nonsense for 2 reasons :
1) Oil is at 97,70$ now

2) More complicated. Oil price is not the only thing we have to watch carrefully, especially when the dollar is crashing as we speak. If world economy enters in a 1929 depression or worse (which it will before 2010 IMHO) in 2008, oil price could plunge to 40$ a barrel. At this time, I don't think you'll have the time to argue about oil price, you'll be too busy waiting in line with the neighbourhood for this tasty onion soup.

[clueless]

$this->bbcode_second_pass_quote('Sys1', '')$this->bbcode_second_pass_quote('', '2')) More complicated. Oil price is not the only thing we have to watch carrefully, especially when the dollar is crashing as we speak. If world economy enters in a 1929 depression or worse (which it will before 2010 IMHO) in 2008, oil price could plunge to 40$ a barrel. At this time, I don't think you'll have the time to argue about oil price, you'll be too busy waiting in line with the neighbourhood for this tasty onion soup.

[heroineworshipper]

Oil peaked in 2005.

[clueless]

$this->bbcode_second_pass_quote('heroineworshipper', 'O')il peaked in 2005.

[kublikhan]

$this->bbcode_second_pass_quote('slick50', 'I')f it's cheaper for third world countries to use coal instead of oil for electrical generation then why haven't they done so already? Something does not add up here.

[thylacine]

Also, coal may be cheaper if you have your own coalfields, but I would guess not so cheap if you have to truck/train it in over long distances from foreign sources.

Oil is more energy dense, there are established distribution networks, it can be moved around more easily. In short - it used to be simpler to build oil fired generators than coal.

[TheDude]

$this->bbcode_second_pass_quote('Starvid', 'T')he funniest thing is that Mr. Gerber could have invented all his tanker tracker spies and is just sitting in his little Geneva grocery store, swaying the world oil markets while dragging the numbers out of his ass, and no one would notice it.

[Starvid]

$this->bbcode_second_pass_quote('slick50', 'I')f it's cheaper for third world countries to use coal instead of oil for electrical generation then why haven't they done so already? Something does not add up here.

[Starvid]

$this->bbcode_second_pass_quote('Sys1', 'M')ore complicated. Oil price is not the only thing we have to watch carrefully, especially when the dollar is crashing as we speak. If world economy enters in a 1929 depression or worse (which it will before 2010 IMHO) in 2008, oil price could plunge to 40$ a barrel. At this time, I don't think you'll have the time to argue about oil price, you'll be too busy waiting in line with the neighbourhood for this tasty onion soup.

[Starvid]

$this->bbcode_second_pass_quote('TheDude', 'D')on't think Gerber would have had much of a business if his observations didn't jibe with reality on some level.

[Bas]

$this->bbcode_second_pass_quote('', 'T')hat's because around 15 mb/d of oil consumption in the developing world is still used for electricity generation and other non-transport purposes for which there are much cheaper alternatives such as coal.

[...]

It was the elimination of this kind of oil use in the US and Europe that led global oil consumption to drop by 8 mb/d between 1980 and 1985.

[Bas]

Best argument I've heard in a very long time in the debate about the effects of peakoil on the short term.....Can't believe nobody else ever came up with it, but that's probably because there aren't many hard figures around about the use of oil in developing nations.

[oilluber]

Groppe is a legend when forecasting oil.

But the new reality of the crash of the USD, I don;'t think
is discounted in his model.

Considering growing demand from countries with
strengthening currencies compared to the USD,
...... say the USD is devaluing 10 -20% per year going
forward,,,,, oil nominated in USD should continue to
go up from here.

I don't think Groppe ever forecasted the subprime mess, all he
forecasted were rolling recessions brought on by peak oil.

With the subprime mess and Bernanke ready to pump the printing machines, Oil should go on ward and upwards from here.

[Starvid]

I'd say that the collpase of the dollar is somewhat overblown.

The big slide came between mid 2003 and january 2005, when the dollar went from 1:1 to 1,35:1 against the euro. Since then we've seen a further slide ro 1,45:1.