oil prices

So much for peak oil

It is interesting being in Dubai and listening to people talk about how oil prices will rise again one Iran’s sanctions are lifted and with the low price hurting shale oil.

It is also interesting to wonder why we hear nothing anymore from the hippies about peak oil.

The US shale industry has failed to crack as expected. North Sea oil drillers and high-cost producers off the coast of Africa are in dire straits, but America’s “flexi-frackers” remain largely unruffled.

One starts to glimpse the extraordinary possibility that the US oil industry could be the last one standing in a long and bitter price war for global market share, or may at least emerge as an energy superpower with greater political staying-power than Opec.

It is 10 months since the global crude market buckled, turning into a full-blown rout in November when Saudi Arabia abandoned its role as the oil world’s “Federal Reserve” and opted instead to drive out competitors.

If the purpose was to choke the US “tight oil” industry before it becomes an existential threat – and to choke solar power in the process – it risks going badly awry, though perhaps they had no choice. “There was a strong expectation that the US system would crash. It hasn’t,” said Atul Arya, from IHS.

“The freight train of North American tight oil has just kept on coming. This is a classic price discovery exercise,” said Rex Tillerson, head of Exxon Mobil, the big brother of the Western oil industry.

Mr Tillerson said shale producers are more agile than critics expected, which means that the price war will go on. “This is going to last for a while,” he said, warning that any rallies are likely to prove false dawns. Read more »

Venezuela’s socialist paradise is turning into a nightmare

Venezuela is held up by many on the left as a socialist paradise, funded by oil profits and dogged by big spending socialist governments the place is rooted.

They can’t afford condoms, a?36-pack of Trojan condoms are going for 4,760 bolivars (about $US750) and now with oil prices plunging?people are dying in the socialist paradise for want of simple medical supplies.

Venezuela is suffering under the boot of socialism.

For Jose Perez, a Venezuelan taxi driver from Caracas, the hardest part about watching his wife die from heart failure was knowing just how easily she could have been saved.

The surgeons at the Caracas University Hospital were ready to operate on 51-year-old Carmen, but because of the shortages of medicines now ravaging Venezuela, they had no stocks of the prosthetic artery that would have saved her life.

For a day, the family enjoyed a glimmer of hope after a nationwide search uncovered one such device, but Carmen needed two and a second one was nowhere to be found. She died two days later.

It is life-and-death stories like these that illustrate the depth of the economic crisis now confronting Venezuela, a crumbling socialist-run petro-state that looks in danger of being tipped over the edge by the crunch in world oil prices.

For Venezuelans like Mr Perez and tens of thousands more awaiting medical treatment around the country, the magic realism of Hugo Chavez?s great Bolivarian socialist revolution has turned to bitter reality less than two years after the former leader?s death from cancer.

?It?s the government who is responsible for my wife?s death, not the doctors,? Mr Perez, 63, told The Telegraph last week. ?Things are very bad in this country, and they are getting worse. I feel that we are in a dictatorship. At the start I believed in Chavez, now I can?t look at him. He is in the best place now.?

Read more »

Revisiting Green party press releases

In 2008 the Green party issued this press release:

The Green Party is warning that today’s record breaking crude oil price of US$100 per barrel is just the first flirtation in what is going to be a long term relationship with triple digits in an ongoing trend of rising oil prices.

The price of oil reportedly surged during the first trading day in the New Year with light sweet crude rising US$4.02 to US$100 a barrel in New York.

“The era of cheap oil has been over for some time. While today’s price breaks a psychological limit, the long term trend indicates that oil may not be consistently priced this high until July or August. However, that’s very short time in planning terms and it is extremely urgent that we re-examine our budget priorities for roading, public transport and freight,” Co-Leader Jeanette Fitzsimons says.

While today’s price of US$100 did retreat soon after breaking the record, prices will never retreat back to the lows of just a few years ago.

“While there isn’t any need to panic, it is a clear signal that we should be planning for an oil constrained future. This means changing the way we get around, investing in more public transport and better urban design that supports walking and cycling. You only need to look at the major cities around the world that were built before the oil age to see that vibrant, exciting lifestyles are possible without depending on the private motor vehicle.

“If you read my latest Bill to be drawn, Climate Change (Transport Funding) Bill, you’ll see a phased programme for refocusing priorities towards more sustainable transport and reducing our reliance on fossil fuels.”

Read more »

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And save us from building all those horrible wind farms

? The Telegraph

Peak oil? Nah…with Europe’s economy collapsing demand is falling and consequently prices:

The oil price could almost halve later this year if the crisis in the eurozone escalates, Credit Suisse believes.

?Brent oil prices would again hit $50 (?32) a barrel? in a worst-case scenario, according to analysts Jan Stuart and Stefan Revielle. ?Oil demand would deflate sharply following acute crises of confidence.?

The analysts said that all potential negative scenarios involved Europe ?to some degree? with the starting point of collapse coming over the summer. However, Brent crude rose $1.06 to $98.20 yesterday after the US Energy Department said the country?s stockpiles had seen a surprise fall of 191,000 barrels to 384.4m barrels last week.

Comparing the situation in 2008 and today, Mr Stuart and Mr Revielle noted that ?global imbalances are worse and much of the available political and real capital has merely been squandered in the interim.?

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