Guess what all kinds of new tech have been introduced over the past century to enhance and expand what is possible to recover.
Where would we have peaked at without offshore? or injection wells? or pump lifts? or vertical fracking? steerable bits? the list goes on....
No, he is just saying he holding on peak oil as tight as can, even when reality says something different.
Check out page 15 here: http://www.eia.gov/pressroom/presentations/sieminski_01042014.pdf
The peak for tight oil will occur fairly soon, but it will still level off at levels higher than today. Not sure how/if they take into account future, currently unforeseen technology improvements.
I read an article yesterday that indicated that lots of U.S. shale oil is profitable down to $40 a barrel.
Yes, oil-related securities will suffer from extended low oil prices. But there will be major winners, too. Like pretty much anyone who drives a fossil-fuel powered car. Like pretty much anyone who directly or indirectly uses fossil fuel for electricity.
And think of Russia and Iran and Venezuela and all of those oil sheikdoms. Can it possibly be a bad thing that the leaders of those countries will get all of the blame when cheap oil (further) decimates their economies?
This is quite possibly the dumbest post ever. The large drop in 2008 wasn't because of the same reasons.
Saudi Arabia is playing hardball with competition and DELIBERATELY selling oil at extremely low prices in order to kill competition that can't afford to sell for that low. Honestly from a business perspective, smart move.
People are saying the Keystone Pipeline project to the gulf is dead thanks to the low prices it doesn't make it worth doing anymore. http://finance.yahoo.com/news/why-keystone-xl-pipeline-already-113000920.html
Heres the counter opinion that its Saudis doing
http://seekingalpha.com/article/272...ast-to-2020-will-make-saudi-arabia-very-happy
Leaving aside the popular presss antipathy to Saudi Arabia, it is eminently possible the reason oil prices finally crashed from their unreasonably high level, was not a Machiavellian scheme instigated by Saudi Arabia, and more likely had something to do with the increasing demand from U.S. shale-oil producers to hedge the part of their production that was necessary for their payback on CAPEX
The Saudis have been remarkably open and consistent about their position. For ten-years, they have been telling anyone and everyone who would listen what they think is the correct price of oil; that (NYSE:A)) their customers can afford and (B) provides a reasonable incentive for bringing-on new oil to replace what got pumped.
· When it shot to $145 in 2008 ..They said the correct price was $75
· When it plunged to $35 in 2009 ..They said the correct price was $80
· When it jumped to $85 in 2010 ..They said thats about right
· When it rocketed to $110 ..They said the correct price was $90
· Now .. They are saying the correct price is $95
It is (perhaps) reasonable to ask, If the Saudis think the correct price of oil today is $95 then why is it $65? The reason is that four-years of prices being higher that what Warren Buffet calls the intrinsic value, accountants call Fair Value, and others call the Fundamental, leads like day follows night to what the Austrian Economists call malinvestment.
Peak oil already took place. That's why we're now forced to use shale oil.
Peak oil isn't a theory its fact, its simple, flow rates from conventional oil will peak to a maximum , they have in 2005 or 2008 depending on who you read, everything else added has been substitution,
Just because shale oil is adding to the lower 48 production how's Alaska doing? North Sea? Mexico? Canadian conventional and on and on, its global and that has hit maximum flow
Everything should lose, to cool, clean, Nuclear Energy.Sooo... If you took out a loan in an oil based economy at $100/barrel and then oil goes to $60/barrel aren't you screwed on the deflation? Is this what keeps leading to an economic crash after an oil crash?
FWIW its not like economics considers oil anything other than a commodity, but the economy truly is oil based at the moment. If you buy capital goods at $100/barrel energy prices with your loan and it goes to $60/barrel you got ripped off as well. Talking like, manufacturing equipment, R&D, whatever. Tesla Gigafactory? :hmm:
Any big infrastructure projects over the last couple years at higher prices are probably doomed to fail financially. Dams, bridges, etc.
When HP was at the bottom of the hill trading at ~$11 from it's peak of $50 a couple years ago, was there anywhere to go but up? It's up to $38 as of today. It's not exactly rocket science. I honestly wish I had the money to invest at the time.
I completely disagree. If you pay attention to the news, if you watch what you buy and when you buy, it's not hard. There are also plenty of safe bets that you can buy for the sake of dividends as well.
But yes, individual stocks should be on the basis of money you don't mind losing. Just ask Enron folks whom invested their entire retirement into company stock.
Sooo... If you took out a loan in an oil based economy at $100/barrel and then oil goes to $60/barrel aren't you screwed on the deflation? Is this what keeps leading to an economic crash after an oil crash?
FWIW its not like economics considers oil anything other than a commodity, but the economy truly is oil based at the moment. If you buy capital goods at $100/barrel energy prices with your loan and it goes to $60/barrel you got ripped off as well. Talking like, manufacturing equipment, R&D, whatever. Tesla Gigafactory? :hmm:
Any big infrastructure projects over the last couple years at higher prices are probably doomed to fail financially. Dams, bridges, etc.
This is what I am wondering too, if the price war is sustained for very long. The current oil boom has been great for a lot of states, I also know a lot of people working in the oil industry. We have also seen this game from OPEC so many times, dump oil, destroy competition, restrict supply, rinse, repeat that I'd really hope we would be smart enough to protect ourselves from it again, even if it meant slightly higher gas prices today.
The last time this happened was during the second half of 2008, and the beginning of that oil price crash preceded the great financial collapse that happened later that year by several months. Well, now it is happening again, but this time the stakes are even higher.
When the price of oil falls dramatically, that is a sign that economic activity is slowing down.
Yet production keeps going higher. We have not hit a peak, because technology keeps improving our ability to produce. Even when a well gets plugged we are lucky to have extracted 1/2 of what is in that reservoir. Technology changes what is possible and what is economical.
Peak oil is a term that misused. A reservoir will have a peak production, but technology can change how much oil is extracted. At the current pace, Texas may pass its prior peak production set in the 70s. This is because technology has made more extraction possible.
You right, many countries have declining production including mexico. But here is a tip, the eagleford shale does not stop at the Texas border. It is only a matter of time before Mexico's production starts to rise because of this. There are shale formation all over the world, the US was just the first to exploit them. Shale will very likely be exploited worldwide in the near future.
Meanwhile, we could have cool, clean, nuclear power.
-John