Posted on 04/12/2008 7:20:50 AM PDT by kellynla
The world is now in a period of sky-high oil prices that will last a long time—probably until 2020, according to the world's largest investment bank. Senior analyst Gioavanni Serio in Goldman Sachs, visiting Norway, told participants in an energy seminar that the oil industry moves in 20-year cycles, reports finance industry newswire E24.
The price for American raw oil rose to a record-high USD 112 per barrel this week after new figures revealed a surprising decrease in storage the week before.
Brent oil from the North Sea also rose to new highs, selling for USD 109 per barrel.
In the long-term, oil prices reflect marginal costs to the oil industry," said Serio at a yearly energy seminar held by Wilhelmsen at Lysaker outside of Oslo. "The oil price and marginal costs stayed low in the 1990s. Now that it has become far more expensive for the oil producers to retrieve oil, the price is going to rise correspondingly," he predicted.
The Goldman analyst does not think oil demand will increase significantly but he pointed to "bottlenecks everywhere". He said: "Oil companies are lacking professionals and rig rates have exploded from around USD 100,000 per day in 2002 to USD 500,000 per day this year."
Serio expects oil prices to fall in the short-term, to about USD 90 per barrel, but said it is "unrealistic" that the price would fall under USD 70 per barrel in the coming years. By the end of 2008, he expects the price to be well over USD 100 per barrel.
However, not everyone shares Goldman Sachs' bullish predictions. Italian oil giant ENI's CEO Paolo Scaroni said last week he believes oil prices will fall as a result of increased production.
"We expect the oil price to fall to USD 50-60 per barrel, a price that will provide for global growth," said Scaroni in an interview on Italian TV.
The Norwegian economy has boomed on the back of soaring prices for Norway's oil and gas amid a general world economic downturn.
We could about triple our domestic oil production before we reached the domestic refinery capacity. We would just use our own oil instead of funding OPEC nations.
Care to name us a few? I’ve only been in this business for about 35 years, there must be something those like me have missed.
Only problem with that statement is it not true. Stock Market has not lost "much of its revenue". It still retains 80% of the value it has added since it low point in Oct 2002.
The concept of velocity seems to be poorly understood outside of physics and banking.
So, how many years have you been making a living in the Oil industry? You have such quick answers to all of this oil you seem to know so much about.
Well I don’t make a living in the oil industry but sure do follow investment trends. There’s billions of $$$ pouring into Alberta as they develop the shale.
PSYCHO-FREEP
What part of the stream?
I am in oil and gas field services, onshore and off. The company I work for provides: fracing, acidizing, hydraulic work over, coiled tubing, drilling & measurement (eline), wireline and well control services that include fire fighting and blowouts.
In Houston...what about you?
Again, factually false. For example just in the last two weeks.
USGS Assesses Bakken Formation to Hold 3 to 4.3 Billion Barrels...25 Times More Than 1995 Estimate
http://www.freerepublic.com/focus/f-news/2000039/posts
It isn't getting the oil that is the problem. The problem is our political class has surrendered to a bunch of well funded hyper activists “eviormental” pressure groups who have a total Luddite view of how the world should work.
And - I can wouch for that - is that the revenue part continues just fine. Brokers, clearing houses, financial advisors, hedge funds, their revenue continues just fine.
The stock market per se doesn’t have revenue, it has money flows, and they can be positive or negative, but the participants/enabling companies have plenty revenue as long as there’s volume.
Cheaper than that. Alberta oil sands have been in continuous commercial production for over 40 years.
Oil Sands History
http://www.syncrude.ca/users/folder.asp?FolderID=5657
But it has been a smaller operation in the past. Today's high prices have $150 Billion dollars being invested in more production.
Inventory of Major Alberta Projects
http://www.alberta-canada.com/statpub/albertaConstructionProjects/mpindex.cfm
Scroll down and select "Oilsands"
Considering how wrong your every statement has been here, I have to wonder which Govt agency you work for if you have been "in the business" yet so fundamentally wrong for 35 years.
Yes, there are billions pouring in because it is government controlled but there are not those billions pouring out. The project is nothing more than an experiment like ethanol.
Canada is also building Nuclear power plants and is going unanimously “green” as in “Greenpeace”. Oil is a bad word in Canada these days.
Many of their drilling technicians have been forced to come down here to find work. The industry as a whole in Canada is not looking good.
In 1963 I got my first transistor radio ... might have been GE, but I can't remember. It cost $29.95.
In a relatively short time, they were down to $4.98 ... and soon disappeared altogether.
My not-so-in-depth observation of the electronics world seems to show that electronics almost always becomes less expensive as time, science and technology advances.
Interesting.
Now, Let's say in 1963 the average annual pay in America was $10,000.
Automobiles, homes, clothing ... everything was based on that kind of income and life went smoothly.
It seems to me that Someone Somewhere decided an orange should cost 3 cents instead of one ... and well ... did all of an entire economy decide that they had to increase their costs because the orange was (arbitrarilly?) increased in cost?
Is all of this a convoluted twist on the "Go back in time and step on a twig that alters all history" science fiction?
I'm obviously too simplistic in my thought processes, but ... I'd guess the barter system of old pretty much kept pace with what a chicken was worth, whether as a token of trade, or as a monetary value ... and if so ... what happened?
You must be management if you been in the feild 35 years and don't know any of this.
Guess what, I happen to work there as a Directional Drilling Technician and have for a decade. Prior to that, I worked in the Arctic. Drilling there.
Your claim that drilling the Bakken is not a problem, you should come to work there and teach us what we must be doing wrong as soon as possible. We desperately need experts like you to show us how.
Again, factually incorrect. Seems your understanding of the Oil Business is based on reading Greenpeace press releases. So which Enviromental pressure group do you work for?
If so there will be rioting and looting and a lot more stealing .
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