Oil price to collapse to $20 barrel

ad9898_3

StevieJ wrote: »

Not a high risk strategy seeing as you don't have one

Hey I'm workin' on it, not too long now in the big scheme of things.;)

thor

ad9898 wrote: »

I disagree, if you're prepared to go long on oil, expect $200-$400 p/barrel within a decade. Peak Oil is here folks, and our only hope of grid level energy on a scale to keep 6 billion + people afloat is fusion, which is at least 2-3 decades away, if ever.

I concur. Supplies of oil and gas is finite and we must be looking for alternate fuel sources. Fusion if it ever gets going would be the ideal solution but who knows when it will come online? Till that time we should ignore the nimbys and implement a massive drive to switch to renewables such as wind, solar, biomass and thermal. Also it means we will have to get used to variable power and increased energy efficiency. In fact I reckon we will not have a choice. Big oil companies are not stupid and I would not be surprised if they have not already got plans to follow this direction.

crazygaijin

dopester wrote: »

ad9898 and I have a bet made in early June... although I wish now I'd negotiated some more amusing penalty.

It is complex though.. my views are on deflation, the ability to pay, and overcapacity going into the next few years... when there are so many other variables and megapolitical issues involved with oil.

Can you tell us what you both bet on?

I cant see $10 bar ever again but maybe falling to $20.

ad9898_3

crazygaijin wrote: »

Can you tell us what you both bet on?

I cant see $10 bar ever again but maybe falling to $20.

That we would never again see $10 a barrel, nor $20 for that matter unless we get another economic collapse, which is a possibility I suppose.

But $10.... not a chance.

Really2

ad9898 wrote: »

That we would never again see $10 a barrel, nor $20 for that matter unless we get another economic collapse, which is a possibility I suppose.

But $10.... not a chance.

I believe the cost of producing a barrel is $38+ a barrel (could be wrong).

So if they ever did fall that low the would just restrict production until it went back up to over cost.

I believe the oil producing nations want around $70 per barrel.

ad9898_3

Really2 wrote: »

I believe the cost of producing a barrel is $38+ a barrel (could be wrong).

Yeh it depends where it's coming from, in Saudi it's little more than $2-3 a barrel, this of course will change as we come off the peak.

Bob_the_Saver

Even now China and to a lesser extent India (travel to both and you'll see why lumping them together as usually happens is silly) are growing at a real rate we can't understand. Not just their output (India's increase in GDP expected to SLIP to under 7% this year) but their expectations. Over the next 10 -15 years they will buy up the oil. China has the 'string of pearls' strategy (google it) and India is starting from such a low base the only way is up - big time. What's going to stop this?

Arcaine

I don't think that oil will ever hit $20 a barrel again, but I disagree on peak oil, we are not quite there yet. Close but no cigar so to speak. Last years oil spike we can safely say was down to rampant speculation on an ever increasing oil price that like any bubble fundamentals kicked in and we saw the slump in oil. I have seen many quotes saying that somewhere between 65-80 a barrel is a fair price given that demand is falling and that China's growth numbers are, shall we say, exaggerated (see todays FT). Don't get me wrong here, peak oil is just around the corner, and I believe securing sustainable energy supplies is vitally important. Unfortunately fusion is going to be too costly and will not arrive in time, Uranium is a finite resource. I beleive in part the answer will come from microgeneration and selling the excess to the grid, not sure how it would work in practice but its one of the less outlandish ideas I have seen.

Graham_Devon

The peak oil argument somewhat confuses me.

I remember Gordon Brown and Alistair Darling rushing up to Scotland in seperate 4 litre fuel guzzling cars with range rovers and jags escorting them.

Before this meeting we had been told the high prices were to do with peak oil and demand hitting the roof of what could eb supplied etc etc, nothing we can do etc.

But, the result of the meeting wasn't anything to do with the prices, but a demand from GB to "pump more".

If we were at peak, how can we pump more? Yet the taps were turned on.

I admit, I'm an amatuer when it comes to peak oil etc, my interest is the pump price, I have done whats in my power to get over 50mpg at a reasonable cost to myself. The green argument just infuriates me more, as that's just used to take more money out of my pocket....yet when it suits, the green argument is forgotten (scrappage scheme).

ad9898_3

Graham_Devon wrote: »

But, the result of the meeting wasn't anything to do with the prices, but a demand from GB to "pump more".

If we were at peak, how can we pump more? Yet the taps were turned on.

You hit the nail on the head Graham, no more could be pumped that was it. When Gordon Brown made that statement he was either being thick....... or more likely disingenuous, no world leader dare utter the words 'peak oil' otherwise panic is likely to set in.