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Cheap Crude Oil Is Gone, And That's Good News
The Market Oracle ^ | 1-15-2010 | Casey Research

Posted on 01/16/2010 8:32:04 AM PST by blam

Cheap Crude Oil Is Gone, And That's Good News

Commodities / Crude Oil
Jan 15, 2010 - 04:21 PM
By: Casey Research

Marin Katusa writes: Over the next year or two, you will likely find yourself paying a LOT more at the gas pump. Big changes are taking place in the oil industry. With increased global demand and declining supply, easy oil is not so easy anymore.

Everything is about to get more expensive. From gasoline to anti-freeze, life jackets to golf balls, and eye glasses to fertilizer. There are very few things in the modern world that aren't made from oil, made by machines dependant on oil, or shipped by vehicles powered by oil.

The implications, at first glance, appear to be the opposite of good news. In fact, it's enough to strike panic in the hearts and wallets of the average consumer. And that's exactly why the International Energy Agency just released its annual World Energy Outlook, clearly rejecting the possibility that crude output is now in terminal decline. Their attitude seems to be, what you don't know won't hurt you. For now that is.

The truth however, is beginning to surface, and from an investor's perspective, the truth can mean money in the bank. Right now, the IEA's claim that oil production will be ramped up from its current level of 85 million barrels per day to 105 million barrel per day by 2030 is receiving harsh criticism.

The Guardian reports, "The world is much closer to running out of oil than official estimates admit."

This comes from a whistleblower inside the International Energy Agency who states the fear of triggering panic buying has caused them to intentionally underplay the inevitable shortage.

[snip]

(Monday may be a good day to buy the fertlizer for your depression garden, ahem)


TOPICS: News/Current Events
KEYWORDS: commodities; crudeoil; gasoline
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1 posted on 01/16/2010 8:32:07 AM PST by blam
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To: blam

I have no doubt the MSM would declare it awesome great news should O devalue the dollar. Throwing tens of millions into poverty.

idiots.


2 posted on 01/16/2010 8:35:21 AM PST by GeronL (http://libertyfic.proboards,com)
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To: blam

He predictions on terminal decline are 180deg out from everything I have been reading in the last few years.


3 posted on 01/16/2010 8:36:01 AM PST by NucSubs ( Cognitive dissonance: Conflict or anxiety resulting from inconsistency between beliefs and actions)
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To: blam

Drill here! Drill now!


4 posted on 01/16/2010 8:36:11 AM PST by NaughtiusMaximus (Screw the polar bears. What have polar bears ever done for me?)
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To: blam

All the while, America’s oil is not accessable to the American people. It’s like having a car and they pass a law that you says you can’t drive it.


5 posted on 01/16/2010 8:38:15 AM PST by RC2
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To: blam
More peak oil bullshit. Didn't Brazil just discover a huge new reservoir of oil offshore?
6 posted on 01/16/2010 8:39:58 AM PST by Jagman
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To: blam

Increased demand? Pffft! Thanks to a dollar worth ####!. Courtesy of your loving, Marxist government.


7 posted on 01/16/2010 8:40:25 AM PST by WKUHilltopper (Fix bayonets!)
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To: blam

Oh yes that would be great news if it were true. We could magically make everything from free electricity. It comes from the wind and the sun and all


8 posted on 01/16/2010 8:41:40 AM PST by Figment ("A communist is someone who reads Marx.An anti-communist is someone who understands Marx" R Reagan)
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To: blam

Perhaps it is spot on but I’ll take anything said by a group whose name starts with “International” with an iceberg-sized grain of salt, thankyouverymuch.


9 posted on 01/16/2010 8:44:50 AM PST by NonValueAdded ("'Diversity' is one of those words designed to absolve you of the need to think." Mark Steyn)
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To: Jagman
"More peak oil bullshit. Didn't Brazil just discover a huge new reservoir of oil offshore? "

I thought we did too...in 20 feet of water in the Gulf off the Louisiana coast. A big field, I thought.(?)

10 posted on 01/16/2010 8:45:41 AM PST by blam
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To: blam
What this brief report didn't say was whether the “crisis” man made or actual. There apparently is plenty of oil out there, it is just that for various reasons (political and/environmental) our “rulers” refuse to allow us to extract it.

Another entirely unrelated point is that there is lots of natural gas. Natural gas can be used for feed stock for many petroleum products. In addition, CH4 can be used for heating and transportation, When ruled by an “educated class” which has no technical background many problems seem to be insurmountable.

May God have mercy on us and our descendent's!

11 posted on 01/16/2010 8:45:48 AM PST by Citizen Tom Paine
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To: blam

Seems like the more oil runs out, the more they find. Between the recent finds in Louisiana and North Dakota, there ought to be enough oil to get the US through this century and beyond. Add to that shale oil and Canada’s tar sands, and we have a few more centuries of clear sailing. With the right people in Washington, we might find ANWR has a hundred times what has been estimated. All that is needed now to keep oil production up and prices down, is less intrusive government and an end to lying, liberal science.


12 posted on 01/16/2010 8:47:15 AM PST by pallis
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To: Jagman

Still an importer but they are close to being an exporter, but then again if they have any economic growth they won’t be exporting crude.


13 posted on 01/16/2010 8:48:36 AM PST by junta (S.C.U.M. = State Controlled Unreliable Media)
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To: NucSubs
Salesmen like Casey always neglect to tell you that as prices increase, proven reserves increase as well. That is because, by definition, "proven reserves" means economically recoverable. Large sources of oil that were not economically recoverable ten years ago are going strong today, and there will be more to come on line as rising prices and improving technology make them worthwhile.

Will prices go up? Sure. When have they not, in the long run. But we are nowhere near running out.

14 posted on 01/16/2010 8:49:53 AM PST by hinckley buzzard
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To: blam
According to Professor Aleklett's research, they are making a dangerous and unjustified assumption. One that is dependent upon the oil industry's ability to ramp up production to levels never before achieved.

This is marketing hype for someone's stock picks. If oil prospectors were free to explore all promising sites in the US, and develop shale technology, (and more oil is being discovered all over the world including the Middle East), the world could reach and exceed the needed production levels for quite a few decades into the future.

(And there is that crazy idea going around that the earth is actually producing more crude oil on an ongoing basis, that the supply is not fixed, but being replenished.) Needs more study.

15 posted on 01/16/2010 8:51:24 AM PST by Will88
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To: RC2

They have been playing the peak oil game since the 1920s. But they are constantly being surpised because we reall—just don’t know as much as the speculators assume. The Big East Texas Field, for instance, was NOT thought to be possible. Furthermore, we don’t know for sure how petroleum is formed. Whether there is a fixed amount from the deposit of organisms or whether it is formed from minerals. As far as the development of probable resources, ie “known” fields such as those in Alaska, the Big Companies may think of these as reserves they are waiting to tap when the moment is ripe—for them.


16 posted on 01/16/2010 8:52:50 AM PST by RobbyS (Pray with the suffering souls.)
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To: blam

There is zero empirical evidence for the claim that we are running out of oil.

The prediction has been made for at least 50 years and it never happens.

Oil companies and environmentalists are colluding to create the fiction that oil is scarce.

The artificial scarcity in the US created by banning fossil fuel production increases pollution globally.


17 posted on 01/16/2010 9:05:48 AM PST by lonestar67 ("I love my country a lot more than I love politics," President George W. Bush)
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To: lonestar67

“The prediction has been made for at least 50 years and it never happens.”

For as long as I can remember, we’ve been “30 years away” from running out of oil. And I remember first hearing that claim pretty close to 30 years ago.


18 posted on 01/16/2010 9:08:47 AM PST by ZirconEncrustedTweezers (STOP GLOBAL WHINING!!)
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To: Jagman
This isn't quite the 'peak oil' argument. It's the 'peak cheap oil' argument. The oil find off Brazil is in deep water, and deep water rigs to drill and pump are not cheap.
19 posted on 01/16/2010 9:10:23 AM PST by slowhandluke (It's hard to be cynical enough in this age.)
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To: NaughtiusMaximus

We have a LOT of oil but the government won’t lwt us go get it! (130 years worth of oil with NO imports and without touching our coal reserves or natural gas reserves)

http://www.futurepundit.com/archives/002981.html

Shell says they can extract it for $30 a barrell, make that $50 using in situ, just to be safe.

“...Some estimates for the amount of oil in shale range as high as 1 trillion to 1.8 trillion barrels. Assume that 1 trillion barrels could be extracted. The United States currently uses about 20.5 million barrels per day which is about a quarter of current world oil demand. World oil demand is projected to rise to 119 million barrels per day by 2025 or about a 50% increase. Suppose we take that 119 million barrel figure and round it off to 120 million barrels. Also let us assume that oil shale could yield 1 trillion barrels of oil. That oil shale would satisfy total world oil demand by this equation: 1,000,000 million barrels/(365 days per year times 120 million barrels per day) which equals only 22 years at the projected year 2025 consumption rate. Even oil shale can delay the end of the oil era by a couple of decades. Still, we could use those decades to develop technologies to lower the cost of nuclear and photovoltaic solar power...”

1,000,000,000,000 barrels / 21,000,000 barrels per day x 365 days yealds about 130 years worth of oil with NO imports and without touching our coal reserves or natural gas reserves.


20 posted on 01/16/2010 9:12:15 AM PST by WellyP
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