Peak Oil Oz - Promoting A Sustainable Future

Oil price rising, how surprising « GreensBlog - the official blog of the Australian Greens Senators
I have to confess myself quite flabbergasted by the extent to which our governments, oppositions, economists, planners and media claim to have been caught unawares by the rocketing global oil price and imply that no one could have seen it coming.

Not that I am surprised by their position – after all, they rely on ABARE. I have challenged ABARE at every Estimates hearing for two years and more as to their long-term estimates of oil price, and got the same answer each time - $40-45. Even as the price hit $100 early this year, they stuck firm to their projection. And yet ABARE continues to command more respect than the Association for the Study of Peak Oil (ASPO), which has been spot on in its forecasts.

But, just as the reality of climate change is only now sinking in, years after the science was settled and the urgency unquestionable, no-one can truly claim that they weren’t warned about peak oil.

One of my first actions after being elected to the Senate was to instigate a Senate Inquiry into Australia’s Future Oil Supply and Alternative Transport Fuels. In this Inquiry, everyone from Iranian oil guru, Dr Bakhtiari, to public transport groups, to the Councils of Western Sydney, to ASPO and many more, were all calling for the same thing: a rapid shift to mass transit, higher vehicle fuel efficiency standards, an end to the Fringe Benefits tax concession on motor vehicles and accelerated R&D into second generation biofuels.

Articles
Has oil hit its peak price or not? The answer to that question leads us to ask whether or not commodities are a bubble about to burst. Barron’s recent cover story on commodities came down on the side that the party was over.

I believe the charts I have in this column contain some powerful insights. You will want to keep them handy when things get rocky. They come courtesy of Barry Bannister, an analyst at Stifel Nicolaus, who delivered an interesting talk in Baltimore recently.

I’ll focus on oil, though a similar story holds true throughout the commodity sector. I don’t put a lot of faith in macro predictions — as no one can predict the future. But you can study track records. You can look at history. History reveals some interesting clues about what the future may hold.

Oil surges to fresh all-time highs close to $130/bbl - Forbes.com
LONDON (Thomson Financial) - Oil surged to a fresh all-time high above $129 a barrel in New York on Tuesday following a rash of bullish predictions for continued strength in prices.

Prices rallied after billionaire oil magnate and hedge fund manager T. Boone Pickens predicted prices would hit $150 a barrel this year, echoing recent bullish estimates from Goldman Sachs (nyse: GS - news - people ), the most active investment bank in energy markets.

Investment banks Credit Suisse and Societe Generale upped their 2008 average price forecast for crude to $120 a barrel from $91 a barrel and to $115 a barrel from $101 a barrel respectively, citing booming demand and concerns over production growth rates.

Sucden trader Rob Montefusco said that bullish predictions were encouraging more speculative fund money into the oil market.

Bloomberg.com: Latin America
May 21 (Bloomberg) — Oil rose above $130 a barrel for the first time after at least five banks raised price forecasts in the past week on expectations supply constraints will persist.

Crude oil for July delivery gained as much as $1.21, or 0.9 percent, to $130.28 a barrel, in electronic trading on the New York Mercantile Exchange. It traded for $130.22 at 11:13 a.m. London time.

Oil for delivery in December 2016 surged $17.08, or 14 percent, in the three trading days since Goldman Sachs Group Inc., raised its forecast to $141 a barrel for the second half of the year. Yesterday, Societe Generale SA and Credit Suisse raised their forecasts, while billionaire Boone Pickens repeated his prediction for $150 oil this year.

“You see more money going into the back end of the curve,'’ said Olivier Jakob, managing director of Petromatrix Gmbh in Zug, Swizterland. “The issue is not the fundamentals. What’s bullish is the comments from people like Goldman Sachs, Boone Pickens.'’

Alex Jones’ Infowars: There’s a war on for your mind!
The price of oil hit a new high of $135 a barrel today, prompting Libya’s top oil official to admit that it could soon reach $200.

After dwindling stocks of fuel in the United States and the weak dollar pushed crude oil to yet another new high, Shokri Ghanem said that oil cartel Opec was already doing all it could to boost supply.

“It is out of our hands. We are as worried as you are,” he said, speaking on Bloomberg TV. “$200 a barrel is not logical, but even $135 is not logical, so yes oil could reach $200 a barrel. Why not?” he added, insisting that speculators are responsible for the seemingly unstoppable rise.

At $135.04 a barrel, oil is more than twice as expensive as a year ago - having hit a series of new highs since it broke through the $100 mark in January. As well as forcing petrol prices higher, dearer oil is fuelling inflation across the economy by making it more expensive to transport goods such as food.

Analysts foresee ‘new world energy order’ - CNN.com
PARIS, France (AP) — A leading global energy monitor fears there may not be enough oil out there to slake the world’s thirst — and is preparing a landmark forecast that could reverberate through the global economy even as major companies announce fuel-related cutbacks.
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The IEA study was prompted by concern about volatile world oil markets and uncertainty about supplies.

The International Energy Agency is studying depletion rates at about 400 oil fields in a first-of-its-kind study of world oil supply, chief economist Fatih Birol said.

“We are entering a new world energy order, ” Birol told The Associated Press.

Market analysts call the Paris-based IEA the world’s most reliable independent source of oil information and welcomed its decision to undertake a deep study of oil supplies.

But the IEA’s new forecasts are likely to further upset markets. Oil prices hit an all-time high Thursday above $135 a barrel before falling back.

Alex Jones’ Infowars: There’s a war on for your mind!
Arjun Murti remembers the pain of the oil shocks of the 1970s. But he is bracing for something far worse now: He foresees a “super spike” — a price surge that will soon drive crude oil to $200 a barrel.

Murti, who has a bit of a green streak, is not bothered much by the prospect of even higher oil prices, figuring it might finally prompt America to become more energy efficient.

An analyst at Goldman Sachs, Murti has become the talk of the oil market by issuing one sensational forecast after another. A few years ago, rivals scoffed when he predicted oil would breach $100 a barrel. Few are laughing now. Oil shattered yet another record on Tuesday, touching $129.60 on the New York Mercantile Exchange. Gas at $4 a gallon is arriving just in time for those long summer drives.

Murti, 39, argues that the world’s seemingly unquenchable thirst for oil means prices will keep rising from here and stay above $100 into 2011. Others disagree, arguing that prices could abruptly tumble if speculators in the market rush for the exits. But the grim calculus of Murti’s prediction, issued in March and reconfirmed two weeks ago, is enough to give anyone pause: in an America of $200 oil, gasoline could cost more than $6 a gallon.

A crude detachment | Your Say Blog | The Australian
JUST as the credit crunch seemed to be passing, at least in the US, another and much more ominous financial crisis has broken out. The escalation of oil prices, which this week reached a previously unthinkable $US130 ($135) a barrel (with predictions of $US150 and $US200 soon to come), threatens to do far more damage to the world economy than the credit crunch, says Anatole Kaletsky.

Instead of just causing a brief recession, the oil and commodity boom threatens a prolonged period of global stagflation, the lethal combination of high inflation and economic stagnation last seen in the world economy in the 1970s and early ‘80s. This would be a disaster far more momentous than the repossession of a few million homes or collapse of a couple of banks.

Commodity inflation is far more lethal than a credit crunch for two reasons. It prevents central banks in advanced economies from cutting interest rates to keep their economies growing. Even worse, it encourages the governments of developing countries to turn their backs on global markets, resorting instead to price controls, trade restrictions and currency manipulations to protect their citizens from the rising costs of energy and food.

For both these reasons, the boom in oil and commodity prices - if it lasts much longer - could reverse the globalisation process that has delivered 20 years of almost uninterrupted growth to America and Europe and rescued billions of people from extreme poverty in China, India, Brazil and many other countries.

Alex Jones’ Infowars: There’s a war on for your mind!
It may be the mother of all doom and gloom gas price predictions: $12 for a gallon of gas is “inevitable.”

Robert Hirsch, Management Information Services Senior Energy Advisor, gave a dire warning about the potential future of gas prices on CNBC’s May 20 “Squawk Box”. He told host Becky Quick there was no single thing that would solve the problem, due to the enormity of the problem.

“[T]he prices that we’re paying at the pump today are, I think, going to be ‘the good old days,’ because others who watch this very closely forecast that we’re going to be hitting $12 and $15 per gallon,” Hirsch said. “And then, after that, when oil – world oil production goes into decline, we’re going to talk about rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, but in addition to that, we’re not going to be able to get the fuel when we want it.”

Oil at $109 a barrel | Business | guardian.co.uk

Oil prices remained close to $109 a barrel this morning amid ongoing fears that problems at a European refinery could hit supplies.

US crude dipped slightly to $108.97 a barrel in early trading, following a $3 jump yesterday. London Brent crude was 21 cents down at $106.90.

London’s gas oil futures hit a record high of $1,017 a tonne.

Finnish refiner Neste said yesterday that repairs on a diesel unit at its Porvoo plant, a leading supplier to Europe which produces 200,000 barrels a day, will stretch through May following a fire on Friday.