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Peak Oil: An Idea Whose Time Is Up
IBD ^ | May 28, 2008

Posted on 05/28/2008 5:10:23 PM PDT by Kaslin

Energy: Analysts have found that investors spooked by the peak oil theory — the belief that crude production has topped out and is in decline — are partly behind the soaring oil prices. Someone should set them straight.


Blame part of $135-a-barrel oil on the increased demand in China and India, where the populations and economies are growing rapidly.

But the impact of those nations on crude prices in recent months is suspect. Global oil consumption grew 2% in the first quarter of this year over the first quarter of 2007, while production increased 2.5% over the same period. On a daily basis, roughly 85 million barrels of oil are consumed across the world, almost exactly matching the amount produced each day.

Production over the next two quarters is projected to continue rising (3.3% and 4.1%, according to estimates from Citigroup), while demand is expected to grow at a slower 1.6% pace over the next six months.

These data don't indicate higher prices, so something else is at work. Some analysts believe that investors who have swallowed the peak oil theory are pricing oil higher because they fear the world is running out of crude and permanent shortages are nigh. They shouldn't believe it.

(Excerpt) Read more at ibdeditorials.com ...


TOPICS: Business/Economy; Editorial
KEYWORDS: energy; energyprices; oil; oilreserves; oilresrves; oilshock; oilsupply; peakoil
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Comment #1 Removed by Moderator

To: Kaslin

People are going to have to pay to get rid of the stuff someday.


2 posted on 05/28/2008 5:13:56 PM PDT by spanalot
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To: spanalot

US oil production has dropped 40% and consumption has doubled.
Congress decided to put a moratorium on new drilling on public land and developing oil shale. Congress has gotten in bed with Eco Freaks to get money and make Bush look bad at the same time and are about to wreck the country.


3 posted on 05/28/2008 5:20:38 PM PDT by mountainlion (Concerned Conservative.)
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To: mountainlion

On the other hand, we’ll be the last ones with the stuff.


4 posted on 05/28/2008 5:22:37 PM PDT by Gondring (I'll give up my right to die when hell freezes over my dead body!)
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To: Kaslin
On a daily basis, roughly 85 million barrels of oil are consumed across the world, almost exactly matching the amount produced each day.

Wow! What a coincidence!

</sarc>

5 posted on 05/28/2008 5:23:50 PM PDT by Gondring (I'll give up my right to die when hell freezes over my dead body!)
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To: Kaslin; txflake
I got yer "peak oil" RIGHT HERE!!!


6 posted on 05/28/2008 5:28:39 PM PDT by Nervous Tick (La Raza hates white folks. And John McCain loves La Raza!)
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To: mountainlion

You would have to throw a turd in the punch bowl by stating the facts.


7 posted on 05/28/2008 5:32:47 PM PDT by kempo (c)
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To: Kaslin
Some analysts believe that investors who have swallowed the peak oil theory are pricing oil higher because they fear the world is running out of crude and permanent shortages are nigh.

The fact that these investors are making huge profits from their manipulation of that alledged fear of shortage somehow always gets ignored.

8 posted on 05/28/2008 5:38:34 PM PDT by SoldierDad (Proud Dad of a 2nd BCT 10th Mountain Soldier home after 15 months in the Triangle of death)
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To: SoldierDad

How much oil in the ground is a closely guarded secret. Oil companies only tell part of the story, IMHO.


9 posted on 05/28/2008 5:49:02 PM PDT by Thebaddog (Dog breath? I don't think so.)
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To: Nervous Tick
We should start an oil-crash 'proposition' on InTrade.

Burn, baby, burn.

10 posted on 05/28/2008 5:49:55 PM PDT by txhurl (Hirari, Owari ne" ("It's Over for Hillary, Isn't it?"))
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To: Kaslin

“Blame part of $135-a-barrel oil on the increased demand in China and India, where the populations and economies are growing rapidly.”

How is chinas population growing rapidly when they’ve only been allowed to have one child per couple??? include the fact that everyone chose to have male babies shouldn’t their population be shrinking and fast!?


11 posted on 05/28/2008 6:23:19 PM PDT by annelizly
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To: Thebaddog
How much oil in the ground is a closely guarded secret. Oil companies only tell part of the story, IMHO.

No CEO in his right mind would overstate reserves, because of the probablility of being prosecuted under Sarbanes Oxley.

12 posted on 05/28/2008 6:24:42 PM PDT by Paleo Conservative (1984 was supposed to be a warning not an instruction manual!)
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To: annelizly
How is chinas population growing rapidly when they’ve only been allowed to have one child per couple??? include the fact that everyone chose to have male babies shouldn’t their population be shrinking and fast!?

Population keeps growing, because death rate are decreasing, and people live longer. Their economic growth has been much higher than population growth.

13 posted on 05/28/2008 6:26:57 PM PDT by Paleo Conservative (1984 was supposed to be a warning not an instruction manual!)
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To: Thebaddog
Part of the problem is that the oil companies are only 14% of the oil market now, most of the market is now the national oil companies. So we don't have access to audited numbers on oil reserves and so forth. A key part of the peak oil argument is the claim that the Saudis have substantially overstated their reserves. Unfortunately, we can't be sure what the Saudis have, one way or the other.

I'm not a big peak oil believer; we're not running out of oil. But we are now running low on the cheap stuff. We're now using advanced drilling and prospecting methods, we're drilling in deep oceans and in difficult locations. And we're now starting an inevitable transition from liquid ("conventional") petroleum to stuff like tar sands. (That's good news, ultimately, because we have vast amounts of oil shale and tar sands in North America.)

14 posted on 05/28/2008 6:35:40 PM PDT by megatherium
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To: Kaslin

In the 1990’s it was tech stocks; that crashed. Then they moved to real estate; that crashed. Now they’re investing/speculating in oil and gold. I wonder what the next boom and bust will be.


15 posted on 05/28/2008 6:44:35 PM PDT by loreldan (Can't vote for Obama, so rah rah McCain I guess)
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To: Kaslin

bump


16 posted on 05/28/2008 6:47:52 PM PDT by fso301
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To: mountainlion
Congress decided to put a moratorium on new drilling on public land and developing oil shale. Congress has gotten in bed with Eco Freaks to get money and make Bush look bad at the same time and are about to wreck the country.

And there you have it. All the rest of the facts are window dressing.

17 posted on 05/28/2008 7:08:20 PM PDT by Mind-numbed Robot (Not all that needs to be done, needs to be done by the government.)
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To: Kaslin
"Energy: Analysts have found that investors spooked by the peak oil theory — the belief that crude production has topped out and is in decline — are partly behind the soaring oil prices. Someone should set them straight."

A few "analysts" (import propagandists) are a little retarded, as indicated by their projection of their own problem on investors. Rising oil prices and increases in domestic manufacturing are inevitable.


18 posted on 05/28/2008 7:21:24 PM PDT by familyop (cbt. engr. (cbt), NG, '89-'96, Duncan Hunter or no-vote)
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To: spanalot

[People are going to have to pay to get rid of the stuff someday.]

Its got all the earmarks of a classic bubble, doesn’t it. Irrational exuberance driven by Green fear. And some point, supply and demand curves have to adjust. Just wish I knew how to short the top effectively.


19 posted on 05/28/2008 7:22:01 PM PDT by FastCoyote (I am intolerant of the intolerable.)
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To: Paleo Conservative

True. The demand for oil in China is all about everyone wanting to get a car to replace that bicycle or scooter.

Even with people living longer, the one child policy has dropped China’s total fertility rate to 1.6, well below replacement levels. The Population Research Bureau is even projecting that China’s total population will actually begin to shrink between 2025 and 2050 by nearly 40 million. Obviously, trends can change but the one child policy has really become entrenched within China and the bureaucracy. Thus, making such a change may require a radical change in China.


20 posted on 05/28/2008 7:26:48 PM PDT by LenS
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