Oil prices could hit $80 within two years

Daily Star ^ | March 04, 2005 | Paul Cochrane

[Crackingham]

Prices of crude oil could rise to as high as $80 a barrel within the next two years although such a price band would not last long, OPEC's acting secretary general was quoted as saying Thursday. "I can affirm that the price of a barrel of crude oil rising to $80 in the near future is a weak possibility," Adnan Shehab al-Dine told Kuwait's Al-Qabas newspaper.

"But I cannot rule out (the possibility) of oil prices rising to $80 a barrel within the next two years," he said.

"If the oil price rises to this level for one reason or another - for example, interruption of supplies from a producing nation by 1 to 2 million barrels a day - it is not expected to continue for long," he said.

Shehab al-Dine said a price rise to between $50 to $60 a barrel for a period of two years or more will inevitably boost investments to increase supplies and lead to a drop in demand, eventually reducing prices.

World oil prices were mixed on Thursday after reaching four-month highs in New York and London the previous day amid a rise in U.S. crude stocks and jitters over increased global demand.

The crude oil closed in New York at just over $53.05 a barrel for the second day, the highest closing level since Oct. 26.

In London, the price of Brent North Sea crude oil for delivery in April rose $0.08 to $51.30 a barrel on Thursday, after earlier reaching a new four-month high of $51.50.

"The continued upward trend in crude prices is a reflection of market perception that has changed in the last few weeks," London-based Barclays Capital analyst Kevin Norrish said.

"The market is very sensitive to any kind of supply disruptions at the moment."

The Organization of Petroleum Exporting Countries (OPEC) was to meet in Isfahan, Iran on March 16, when it was expected to maintain its current production level of 27 million barrels a day.

"OPEC certainly won't cut production, the question is whether they will agree to increase production," Barclays Capital's Norrish said.

[Final Authority]

Good. I hope that gas goes to $3.00 a gallon so I can get a huge discount on a new Escalade and let my wife drive it to work (three mile commute).

But really, every time anyone of us buys a product made in China we are just fueling the demand for autos in China thereby driving up the price of gas here in the USA. Statistics don't tell the whole story of how the Chinese are doing with respect to personal transportation as the numbers look still small in comparison to ours regarding newly built vehicles but there's the rub. When we build a million vehicles and sell them here only a small percentage are actually added to the daily fleet. Some are wrecked or salvaged, some are sitting on lots, most are retained as secondary vehicles and not driven daily or far, but for the Chinese it is different. Nearly every new car they build is added to the primary fleet. If they build a million they put a million on the road and they all need fuel. India is the same way. As we offshore more of our technology they can afford more vehicles and they all need fuel.

It used to be that we only really competed with Europe and Japan for imported fuel as SA and Mexico produced their own and countries like NZ and Australia used not very much. But now nations with about 50% of the worlds population are competing for what we took for granted.

This is almost a perfect example of unintended consequences to an action.

[dalereed]

You belong in Europe not here!

Shut up the enviros and tap Californias oil, there is over an 800 year supply waiting to be used!

[tobyhill]

Light, sweet crude was speculation on my part but speculation is all I have since the eco-twirps have blocked research in ANWR.

[null and void]

Good tag line!

Seher gut!

[null and void]

You TOLD!

[ThanhPhero]

Alaska, the Gulf of Mexico, and off the coast of California. There is much oil out there.

[starfish923]

Simple fact of the matter is, you don't have to give up anything. Get the EPA and the enviro-loons out of the oil industry. Open up the coast of California and Florida to drilling. Open up ANWAR to drilling. Then watch the oil company make a profit off of $20 barrel oil and smile. Because they sure as hell can't make a profit off of $20 barrel of oil now.

Sounds so simple. I wonder why it isn't being done now. If it were as profitable as it appears so simple, I think it would have already been done. SOMEone is holding SOMEthing back.

[Lewite]

I have a wonderful 1981 Mercedes Diesel 300 Turbo. It gets over thirty miles per gallon. It has 273,000+ miles on it, so it will only last me another 200 thou or so. I put on less thand 3,000 per year, so I guess at nearly 63, I don't have a lot to worry about. I say drill here. bring the ragheads to their knees!!!

[null and void]

The problem is, nobody seems to know how to get it out at a reasonable price.

Actually the problem is that as soon as a company has made the HUGE investment in equipment and resources needed to extract oil from shale at $25/bbl OPEC can drop the price to $10/bbl (extraction of ME oil is <<$1/bbl).

When, not if, the oilshale companies go bust OPECers buy out the equipment and infrastructure for fractions of a penny on the dollar and destroy it all.

It's a powerful disincentive for investment.

[starfish923]

e oil company takes the risk. The landowner signs a lease and will receive a percentage of the revenues that, in our case, is from 20 to 25%.

When I was VERY young and naive I used to wonder and grumble at the tax breaks that these oil companies got. Then my ex and I worked in the petroleum business for a while. I then discovered the danger and the risks of the business...and understood why the tax breaks existed.
And I also discovered that the private sector took all the risk in this country, that THEY ran the business, unlike the rest of the planet where the local governnments took all the risks and ran/controlled the industry. Makes a huge difference in the competition.

[Nowhere Man]

It is time to move away from oil based energy. How about 1000 brand new nuclear plants, home solar plants on every rooftop, and a new hydrogen based combustion engine. Oh, and lets drill Anwar so we can continue to produce our own petro-chemical by-products without going broke.

I agree with most of what you say although I disagree on hydrogen, I would rather see engines run on alcohol (methanol preferably, ethanol takes away from food crops) and/or bio-diesel. At least with alcohol, it is more or less simple to convert diesel/gasoline engines to run on it. We need atomic energy badly although with the home solar plants, it will take a lot of money to do that, the government will go broke, plus here in Pittsburgh, the sun doesn't come out a lot. I really don't believe the peak oil people and if I did, we still have plenty of coal to use as a substitute, but I think we need to really get back on track with atomic power.

[Eric in the Ozarks]

I know Alaska North Slope crude is some heavy stuff. Not as heavy as Lloydminster or Peace River Canadian, but still pretty dense and high sulfur.

[Nowhere Man]

Time to dust off the ANWR bill, open up domestic and off-shore exploration, and shove it down the Dimwits throats - the time is right, even if there is no immediate impact aside from OPEC fears that the ANWR field may be bigger than anyone believes.

Personally, if I was President Bush, I'd open up ANWR by Executive Order.

[ARCADIA]

would rather see engines run on alcohol (methanol preferably, ethanol takes away from food crops) and/or bio-diesel.

Those still require a distribution system (hence a long deployment windows), whereas hydrogen may require nothing more then a long extension cord and a few gallons of water.

[null and void]

I'll look forward to him doing that the same day he stops illegal invasion immigration.

Satan will be ice-skating to work first...

[trebb]

International law always seems to go against America, let's use it to our advantage for once

Except for the fact that the U.N. and the fascists that run it would most likely decide that the U.S. needed to pay $200.00/barrel so the rest of the world could get its oil free. That would allow the Europeans to raise taxes to make up the difference to fund their socialist programs and make all the leftists happy.

[RayChuang88]

I have a wonderful 1981 Mercedes Diesel 300 Turbo. It gets over thirty miles per gallon.

You must have a 300D Turbodiesel sedan. Getting over 30 miles per US gallon is pretty amazing considering the state of diesel engine techonology back then! Today, the current M-B equivalent (E320 CDI) actually has more usable power than its gasoline equivalent, and has fuel efficiency that can get you something like 37 mpg in freeway driving!

With the coming of clean-burning diesel fuel I hope Americans get the chance to experience the amazing high-tech diesels now available in Europe. Imagine driving a BMW 330d turbodiesel sports car with almost the same performancce as the BMW 330i but with 35-45% better fuel efficiency; small wonder why diesel-powered cars account for 40% of all new cars sales in Europe lately. Now, if we can just convince BMW to put that amazing 3.0-liter I-6 turbodiesel engine into the X3 small SUV....

[Mike Darancette]

Think of all that oil in Utah, Wyoming and Alberta that it becomes profitable to go after at $80/BBL.

[q_an_a]

the world is coming to and end we will be in a quagmire. small cars are unsafe.

The end of the stone age did not happen because of a lack of stones. Make oil high enough and inventors will KILL th OIL AGE.

[Tumbleweed_Connection]

The "point" is not economic.

You are portraying US "energy enemies" as foreign, which is missing the boat.

Make believe all of the stupid ewacko concerns could be resolved before drilling in ANWAR, offshore, or building new refineries. Why do you think the liberals would then approve?

Your plan caves to the foreigners who whose biggest audience is the liberals.