Oil how high will it go?

Price at $135 today, risen 20% in May alone. Price will be way over $200 by 2016! Could easily see $150 by end of summer, if not more. We have a big problem until a solution is found, as was pointed out on this thread, it would take a huge amount of nuclear power plants to fill the oil gap, with possible uranium shortages etc. Its clear Ireland needs at least one reactor, (in Enfield preferably.)

Maybe Ireland could be the first to build the 'Pod Car' - Solar powered electric vehicles on fixed guideways. It could go from Dublin to Enfield, first, since they'll have the nuclear reactor!
 
shnaek said:
Here's an article you might be interested in reading:
http://www.nea.fr/html/pub/newsletter/2002/20-2-Nuclear_fuel_resources.pdf
This suggests we have enough nuclear fuel resources to last for millenia.
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That's a great document there shnaek "speculative resources" "seawater extraction". Sounds fab. Except the speculative resources haven't been found and the seawater extraction has only been achieved in a test tube.

Here's another site:
http://www.opendemocracy.net/globalization-climate_change_debate/2587.jsp
that says that current known reserves will give current reactors 40-50 years more fuel. Reprocessing and MOX reactors will extend that. But try adding in the 80+% of world power that isn't nuclear. Then add in future expansion. Then add in all the other things that are liquid or gas fuel powered (other than electricity generation) and you end up with a lifespan of 10-20 years for known fuel reserves.

Wanna guess how expensive uranium will be when we hit peak uranium???
 
This whole thread has highlighted some interesting issues. My earlier post said that uranium would last for millions of years, clearly i was wrong, and have been corrected.

A couple of hundred years from now (give or take), there will no fossil fuels and no nuclear power. Our future descendents will have to do with Wind, solar, hydro and a few other weak energy sources. Definitely not enough to satisfy a population of probably 100 billion people by then.
The world’s population has doubled in the last 25 years, and considering most of the underdeveloped world are multiplying rapidly, it will double again and again and again. Currently the population of the world is increasing by nearly 2 million a week. India alone is increasing by 17 million a year.

It points to a Malthusian catastrophe in the future as the production and delivery of food is totally dependent on cheap readily available energy.
 

As has been the said the current price is more speculative than anything else at the moment, several factors causing it to rise higher :
  • the dollar's decreasing value due to the Fed's monetary policy, if you look at oil priced in euro then the rise is there but not nearly as dramatic, e.g. in the previous price spike in 2006 oil was priced $74.40 / €58.67, at the moment it's about $135 / €85, so in the two years since 2006 the dollar price has risen about 80% but in euros about 45%
  • speculation, lots of money floating around the financial markets looking for a safe home, right now it's piling into oil, until recently there was a big push into grain, etc. but they have since pulled back somewhat
  • the price has now diverged from fundamentals, with global markets experiencing reduced growth forecasts and new production due to come on-stream in 2008 expected to be more than the increase in global demand will cause the current spike to be pricked at some stage
In the short-term to medium-term I think it will fall back to about $100. If it continues on the recent upward trend then it will start to really hit the economy and drive down demand. The economy can adjust to a slow steady increase but not this type of price volatility. As for what happens in 2016, well as we have seen since 2000, a lot can happen in 8 years!
 
Ivuernis:
A very good rational analysis Ivuernis, there is no doubt that the weak dollar has impacted on the price of oil, I hope you are right, but as you say yourself a lot can happen in 8 years. So therefore a fall in oil price will depend on a stronger dollar, markets calming down, and reduced global demand? These are all contra indicators? Since a recovering dollar will improve U.S. demand?

You left out one very important factor causing it to rise higher the massive demand from China / India etc. Its all just a witches brew ready to boil over.
I still dont believe it will fall back to $100 in short - medium term, we'll just have to wait and see.
 
I ask the question : "what event has happened in the last few months, that may coincide with the price of oil rising so fast? "
Have millions of Indian and Chinese companies suddenly evolved?
Has the world's demand for cars/planes/lorries etc suddenly doubled?
or.....Has America been hit with something now commonly known as "sub-prime mortgages ? " ( thus causing a dollar that's in the fertiliser! )

http://www.cnbc.com/id/21541741/
 
the price of oil is goign to have a very severe correction , maybe in the order of 50% and heres why

1. the oil futures contract have moved from backwardation to contango , this is a sign that the rally is in the final innings
2. oil stocks sold off last week even though oil was making new highs
3. funds are buying 2016 contracts - that happens where no one will sell a near contract, everyone is long. and we all know what happens when everyone is long i.e. dotcom crash etc, it reverses and people get burned veryvery badly
4. US demand is decreasing - they drove 11 billion less highway miles in march that march of last year, the biggest drop EVER!
5. the asian economies have begun to remove price restrictions - this is the MOST important factor in the whole oil story. petrol and diesel are very heavily subsidised in these countries and demand is kepy artifically high. indonesis has had riots over the weekend cos petrol was hiked 33%. this will kill demand in poorer countries im afraid. this will spell troulbe for economic growth in these countries but it will beneift europe and in particualr the US

so to sumamrise we are at the very end of the oil market bull run (for now) - but the final stretch is when prices can move most violently so i wouldnt be surprised to see high have one last crazy jum up wards, but then i would advise take a short position on oil and watch the money roll in
 
Elphaba said:
You left out one very important factor causing it to rise higher the massive demand from China / India etc. Its all just a witches brew ready to boil over.
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I purposely left it out because demand from Chindia does not explain the recent run-up in the oil price. China and India have been gradually putting pressure on demand for the last decade and explains the gradual rise in the price of oil since the 90's and the advent of globalisation. It does not explain the spike we've been seeing in the last 12 months.

Elphaba said:
I still dont believe it will fall back to $100 in short - medium term, we'll just have to wait and see.
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Let's see what happens over the course of the next 6-12 months. The price of oil is now entering territory where there will be a negative feedback in the global economy. I'm betting we'll see $100 oil again before we see $200 oil. $200+ will come eventually, just not yet.
 


We are nowhere near peak uranium - and nor are we very near peak oil. Oil will be back around $100 next year, and some people are going to make a killing going short on it.

From wiki:
Uranium is approximately as common as tin or germanium in Earth's crust, and is about 35 times as common as silver.

From this: http://www.oecdbookshop.org/oecd/display.asp?sf1=identifiers&st1=662006031P1
we have enough economically recoverable uranium stocks to last 80years current consumption. That's at Uranium's current price. Uranium enrichment can be increased from what it is currently. Thorium can also be used as a fission fuel - and it is more common that uranium. Not to mention the potential of fusion to serve our energy needs indefinitely, once our scientists get a fist on it.

So, in conclusion, there's no need to panic. And no possibility, despite the desires of some sectors of society, that we will go back to the dark ages.
 
if we ever do hit peak oil the oil wont just disappear. it will happen very gradually and slowly so while its happening we will turn more to coal, wind, solar, hydrogen etc. the stone age didnt end cos we ran out of stone, and the oil age wont end cos we run out of oil either. lots of oil will be left in the ground forever cos we wont need it . at present we only get 30-40% of oil out of each well, technology is now being brought on line to bring that figure up to 80%. thats adds a hug ammount to reserves. so long term no need to worry .short term, worry if ur long on oil
 

The pop growth has been falling for some time now and is due to peak at under 10 billion. The earth has been colonised. Future expansion is unlikely unless we find a new planet.
However in the meantime these people will be born into higher levels of energy demand.
Thankfully we only capture a tiny fraction of the suns energy, if only we could find an easy way to store it. Biomass is currently the best option but it tends to need harvesting etc and competes with land (apart from microseaweed which is 20 times as good as bioethanol)
 
....1 month later, and price now over $140, I feel glee at my prediction
but woe for the economy, Highly likely another month from now could be at $150? Was shocked at OPEC'S recent statement, saying it could reach 150 -170 by end of Summer, You'd think they'd keep this bit of news to themselves, thus avoiding recent hike to 142....
 
It's a bubble, and it will collapse-just like property. It's the same cycle which happens over and over again. We have a boom, then we have a bust. The bust starts with Equity, then Property, and then Commodities. All of this has happened before, and all of this will happen again. Oil will be back around $100 by Christmas. You can come back here and kiss my feet then.
 
Can people use the Euro price for oil in this discussion. The dollar rate is irrelevant in a vacuum given its fluctuations. Oil reaching $200 or whatever per barrel means nothing unless we know what the exchange rate will be at that time.
 

I dont think so, if two of Saudi's top oil execs cant agree. A one Mr Husseini says we have to work harder to get oil, those that contend otherwise, he insists claim to have some magic potion that does not exist. The other guy, Saleri says the world has plenty of oil? Add OPEC predicting prices at $150-$170, this alone will fuel further speculation.
So, when top oil guys dont know for certain and have conflicting opinions,
just adds to uncertainty..If price goes down to $100, I wont be kissing any feet, but I will eat my socks.
 
Elphaba said:
So, when top oil guys dont know for certain and have conflicting opinions,
just adds to uncertainty.
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Look at all the economists and bankers were saying about the property market for the last few years. It's a bubble alright, all it will take is an event to prick it and let all the air out.

You want salt and vinegar on the socks?
 
No, it all doesn't add up. There is a queue of 'bad events' waiting to unfold...The only event to push price down, would be if they put an end to futures contracts, and this is unlikely, I'd say over 170 by December -
speaking of socks, I know someone who drank a pint of guinness through a smelly sock at a rugby do..
 
Elphaba said:
No, it all doesn't add up. There is a queue of 'bad events' waiting to unfold...The only event to push price down, would be if they put an end to futures contracts, and this is unlikely, I'd say over 170 by December -
Click to expand...

Maybe, but as oil goes higher and higher at a faster rate something has to snap. The bubble will burst, at what price I dunno - 170, 200, 220 ? Any commodity price which rises exponentially in price will eventually fall rapidly.
If western economies slip further into recession due to cost of oil, the demand for oil collapses resulting in a massive over-supply and therefore oil prices will have to fall significantly, especially when speculators pull out - just like property.

But lets comfort ourselves with an old FF saying: "don't talk doom and gloom, but boom and bloom"
 
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