Category: Peak Oil

It was only four years ago that economist and New York Times Columnist Paul Krugman sounded the alarm on peak oil , lamenting that high oil and commodity prices reflect the fact that we live in a “finite world.” But now oil prices are plummeting as U.S. oil production booms due to hydraulic fracturing, or fracking, and horizontal drilling. On top of that, a new government report indicates that proved U.S. oil reserves have grown for the fifth year in a row. “U.S. crude oil proved reserves increased for the fifth year in a row in 2013, a net addition of 3.1 billion barrels of proved oil reserves (a 9% increase),” according to the Energy Information Administration (EIA). Proved reserves are oil and gas plays that are “recoverable under existing economic and operating conditions,” says EIA. As technology improves and the price of oil hits the right level, proved […]

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Remember "Peak Oil?" The world  was running out of oil , we were told: Prices would soon skyrocket, and we had better find other fuels. Well, that argument didn’t work out so well for environmentalists, did it? As oil reserves and those of other carbon fuels became scarce and prices rose, the law of supply and demand kicked in. The industry invested the profits from those higher prices in new technologies, and the oil barons found even more destructive ways to extract oil and gas—by exploiting the muck from tar sands, inventing hydro-fracking, and despoiling sources in developing countries. So now, oil is cheaper than it’s been in years, about $66 a barrel. Regular unleaded gasoline can be had for well under $3 a gallon. One of the few things sustaining U.S. consumer purchasing power in the face of dismal wages is close to $100 billion saved in energy […]

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“We don’t need to be flaring, and we can find an economic benefit to this natural gas.” These words were spoken by Mark Fox, chairman of the Three Affiliated Tribes — a group of Native American tribes from the Dakotas that joined together during the late 19th century after suffering massive population loss due to disease. The group recently bought land in some areas of North Dakota, including places where oil drilling has been prolific. Transform $1,000 Into A $238,960 Windfall With This Tiny Oil Stock! Since 2006, companies in the Bakken have drilled over 11,000 oil wells. Almost 40,000 miles of drilled space spiderwebs beneath the ground in the state. According to the  New York Times , if these well bores were dismantled and placed one after the other, they would circle the planet one and a half times. But a problem with all of the oil drilling has […]

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Summary Shale oil is totally different from conventional oil – production tracks oil prices lagged one year; new wells get payback in two years and their production is hedged. U.S. shale oil production in 2015 will be 6 Million barrels/day up from 4 Million in 2014 -regardless of oil price slump. Production will be flat in 2016 if oil prices stay low – which likely they will for four years. Saudi Arabia did not engineer the drop in oil prices – likely it was prospects for massive increase in U.S. shale-oil production. According to Reuters and CNN …and others, “OPEC” has declared war on shale-oil drillers in America. That’s a serious accusation. In the not too distant past whole countries were bombed back into the Stone Ages for lesser transgressions!! Saudi Arabia was the only OPEC member to forcefully advocate not cutting back, so for “OPEC” read “The Saudis” […]

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British banker and politician Nathan Rothschild once said: “Buy when there’s blood running in the streets.” And blood is certainly spilling in the streets of the oil and gas industry. The North Sea benchmark, Brent crude, closed at $70 a barrel on Friday, declining by 40% since June. Today it’s trading at around $71. Energy stocks around the world lost $500 billion of market value in the past week, while many oil-exporting countries will face budget crunches in 2015. Saudi Arabia needs Brent at $93 a barrel to balance its budget; for Russia, as high as $120 a barrel. We have argued for lower oil prices since last year, due to these three factors: 1. The unprecedented increase in U.S. oil production due to more efficient horizontal drilling and hydraulic fracturing technologies; 2. Weak demand growth in developed countries; 3. The imminent slowdown of the Chinese economy, which has […]

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Years ago, at an international conference on peak oil, I met I had no way to check Ruppert’s statement, but, on the whole, it made sense to me. The CIA, after all, is an “intelligence” agency and their main purpose is to collect data. So, the fact that some CIA people were attending a meeting on peak oil didn’t mean that it was because they thought we were dangerous subversives. They were simply doing their job: collecting data about peak oil; a dangerous economic and political problem (or maybe both things….. Who knows?) Over the years, I have occasionally wondered about what the Central Intelligence Agency may know about peak oil. They surely have lots of data on the world of oil, including data that for us – common citizens – are not available. In principle, they could do a much better job than the ragtag group of geologists […]

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When an asset class takes a swan dive off the cliff, fortunes can be lost trying to call the bottom. It’s often impossible to tell whether the asset in question is on a suicide run or undergoing a short-term correction. And so it is with oil. Oil prices are down by a third since June and are less than half of their 2008 high of $147 (U.S.) a barrel. So time to buy? If I knew how to call bottoms, I would not be a miserable, ink-stained wretch; I would be filthy rich and living in a villa on the Amalfi Coast or Côte d’Azur, martini in each hand. But allow me to present four ideas of why the foundation for a compelling oil price bounce-back is being set even as prices tumble. I’m just not going to tell you when that might happen, because I have no clue. […]

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The recent price crash in crude oil, if it lasts for any length of time, will certainly affect oil production. The question is, just how great an effect will it Continue Reading

Crude Oil Does The Limbo: How Low Can It Go? thumbnail The commodity market for crude oil may have been the one of the two most exciting financial markets around the world during 2014’s first 11 months. Crude’s price per barrel rose to a high of $107.95 June 20, according to Federal Reserve Economic Data , or FRED. And oil’s price per barrel fell to a low of $66.15 Friday, based on its January 2015 futures settlement price at the CME Group . This breathtaking plunge of -$41.80, or -38.72 percent, has had and will have major — and wildly uneven — implications for crude-oil consumers and producers globally. Accordingly, both the winners and the losers in the new petroleum pricing game have stakes in attempting to contextualize where the commodity’s market has been, is and will be. For example, airlines in the Asia-Pacific region generally have not yet […]

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