Posted on 01/27/2006 5:23:10 PM PST by LouAvul
DAVOS, Switzerland (FORTUNE) - Be afraid. Be very afraid.
That's the message from two of the world's most successful investors on the topic of high oil prices. One of them, Hermitage Capital's Bill Browder, has outlined six scenarios that could take oil up to a downright terrifying $262 a barrel.
The other, billionaire investor George Soros, wouldn't make any specific predictions about prices. But as a legendary commodities player, it's worth paying heed to the words of the man who once took on the Bank of England -- and won. "I'm very worried about the supply-demand balance, which is very tight," Soros says.
"U.S. power and influence has declined precipitously because of Iraq and the war on terror and that creates an incentive for anyone who wants to make trouble to go ahead and make it." As an example, Soros pointed to the regime in Iran, which is heading towards a confrontation with the West over its nuclear power program and doesn't show any signs of compromising. "Iran is on a collision course and I have a difficulty seeing how such a collision can be avoided," he says.
Another emboldened troublemaker is Russian president Vladimir Putin, Soros said, citing Putin's recent decision to briefly shut the supply of natural gas to Ukraine. The only bit of optimism Soros could offer was that the next 12 months would be most dangerous in terms of any price shocks, because beginning in 2007 he predicts new oil supplies will come online.
(Excerpt) Read more at money.cnn.com ...
Apart from the Russian interest, active proponents of the abiogenic theory in the west have all but disappeared. Thomas Gold died in 2004, with apparently none of his students following up on his research.
Market forces will drive the drilling. They will find a way.
???? The parts of geology that deal with sedimentation, erosion, etc., are not plate tectonics. So what?
50 years ago it took one car of coal to get 100 cars of coal to market. Now it takes one car of coal to get 50 cars of coal to market.
That is resource cost.
It's an artificial, politically mandated 'cost'. -- 'The market' obviously needs energy. When the market regains political sanity, coal will be used on site to generate electricity, which can be cheaply transported where needed.
When it takes one car of coal to get one car of coal to market, coal will not be as great a resource.
Coal is a great energy source. It just needs to be used efficiently.
People just don't understand. There are just so many pipe manufactuers, upsetters, threaders, inspection companies, truckers etc., There is just no way to increase drilling right now.
I am going to buy me a G-5, just like Rush has.
How about you?
Coal is shipped pretty far. Electricity has a practical distance limit of about 300 miles. That's fine for those who live near the major coal deposits.
why isn't china manufacturing rigs - they have huge manufacturing capacity, machine tools, etc.
In terms of extraction, Oils Sands Heavy oil is break even at cdn $29 per barrel in the pipe.
"Kuwait peaked last year."
Um, no, they will be increasing it in the future.
" Kuwait cut their reserves in half last week."
news to me... the link?
" And so on. Peak Oil will be here soon and may be the defining event of a generation."
Yes, it will be the defining event ... of 2035.
CERA has estimated another 16 million barrels a day coming online in the next 10 years. we are far from peak oil, indeed it is a flawed concept.
Saudi oil is break even at $1 at the wellhead. That's hard to compete with.
China makes great household machines but not reliable when it comes to industrial strength. Thats why I do not own any china made hand tools. I value my hands to only american made tool that do not slip or break.
Saudi sweet crude will peak in 2010.
>>" Kuwait cut their reserves in half last week."
>>news to me... the link?
http://today.reuters.com/business/newsarticle.aspx?type=tnBusinessNews&storyID=nL20548125&imageid=&cap=
Jimmy Carter would have given the rights back to them, without compensation.
CanWest Petroleum (cwpc) is about $4.45 per share right now as a leader in the infancy stages right now in the oil sands....probably not a bad play to get in right now before it shoots to about $50.
I live in a small town in SW Ok (pop. 4500). Chesapeake Oil is close to completing 4 oil wells within the city limits and have already started surveying other sites within the community.
I have mineral interest in land in the panhandle of Texas. During the early 80's we had quite a few independents who drilled wells for oil/natural gas which were productive. During the oil bust the independents went out of business and most of their wells were capped. Other's were sold to companies such as Devon and Duke. No drilling is currently taking place on the land but I wouldn't be surprised if prices continue to go up that new wells would be drilled.
Now wait a minute, there. There may not be a publicized rush to alternates but things may be headed in that direction. Give it some time to work out.
The link in post 14 had some interesting articles.
Yeah but as I said before Western analysts have come out and publicly stated that SA is fudging it's reserves.
The Saudis admitted this summer that they could not increase capacity.
There are two components to increasing capacity; available unexploited reserves and the ability to bring them to market.
My research has revealed that 80% of Saudi oil is water pumped into the fields in order to squeaze out the remaining non pressurized oil. That is a classic example of a declining resource.
The future is not easily accessable and cheap sweat crude it is heavy oil in secure locations close to secure infrastructure.
Where will you find that? Canada.
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