Posted on 01/21/2015 10:02:40 AM PST by thackney
talian oil group Eni has warned oil could shoot up to $200 a barrel if the Opec cartel fails to cut supplies.
Eni's chief executive, Claudio Descalzi, said the oil industry would cut capital spending by 10-13% this year because of slumping prices.
He said that would create longer-term shortages and sharp price rises in four to five years' time.
Mr Descalzi was speaking at the World Economic Forum in the Swiss resort of Davos.
He said: "Opec is like the central bank for oil which must give stability to the oil prices to be able to invest in a regular way."
Politicians, economists and industry leaders in Davos have been voicing their worries over the impact of lower prices.
Total and BHP Billiton both said on Wednesday that they would cut back on shale oil projects.
People's Bank of China governor Zhou Xiaochuan said low oil prices could slow down China's development of renewable energy projects.
(Excerpt) Read more at bbc.com ...
How would one figure 200 per barrel if no one would pay that price to begin with?
www.theskyisfalling.com : )
Not buying it... If a shortage occurs, as the article suggests, oil production can be ramped up very quickly to meet demand... long before the price hit 200 dollars a barrel.
So if OPEC doesn’t cut production now, the low price of oil will curtail future exploration causing oil to go up?
OK, then when oil goes up, exploration will resume. So what?
He’s saying there would be a shortage, meaning that the buyers who wanted and needed the oil would have to pay the prevailing price if they really needed it.
SO ... only the ones who needed the oil would be paying that price.
There’s always a significant time lag before that happens, and it would be during that time lag that you would see the spike in prices.
I can't believe that it will be because of increased use, even with gas at two bucks, if you have zero bucks coming in your not going to buy a lot and with this economy we have more people with zero bucks coming in than ever before.
Like it did in 2008?
The Saudis seem determined to keep OPEC in check, and we’ll all be driving solar cars by then anyway.../s
The problem is the long thruput of drilling projects.
Capex for most companies was cut by 50% due to price concerns.
This will result in dramatic undersupply.
And thus a dramatic price rise, probably a quick one as people try to buy up cheap crude before it gets too expensive.
But like cattle right now. You had cheap beef prices because the drought forced guys to sell. Breeding stock got less and price is through the roof. And people hold back heifers to breed more. Which will result in oversupply and a price drop.
Rise, repeat.
Hahahhaha. If by “quickly” you mean in a year or two, maybe.
Bogus talk. Can’t happen in today’s environment. Saudis are screwed and can only hope they force price to stay at $55 a barrel for three years...killing off US fracking industry for time-being. Meanwhile....everyone makes less and grumbles. What happens when price hits $100 a barrel again? Frackers restart, and clear profit again. It’s going to be $55 or less for a decade now. Congress may tax the heck out of gas, but it has no potential to rise much above $55.
What price would you pay to drive to work before you sold your house to move or quit your job?
Oil demand tends to be very inelastic in the short term.
Which is why we saw the 2008 price spike of $145.
It won’t stay that high, no way, but he is suggesting the spike could be that high.
Considering how well the predictions on future price swings on crude oil have been realized, this is just a little more effort to create buzz, but nothing concrete.
The price of oil will stabilize at somewhat above the cost of production of the majority of the resources from where it is recovered.
If that is by fracking, then the cost of fracking plus maybe 5-10%. If by thermal depolymerization, then probably by the same margins. If by the dry reforming of methane into liquid hydrocarbons, depends on the supply of the feedstock methane, and the requirements of the final composition of the fuel desired, again along the same margins.
The world shall NEVER run out of hydrocarbon mixtures commonly known as kerogen or crude oil.
I would bet against that.
Nope, it will eventually become uneconomical and we will move on to something else. The stone age didn't end because we ran out of stones, or bronze, or iron, etc...
This guy is full of it. But as we learned during the 70s oil crisis, we’ll pay whatever we have to for petroleum, even $200 a barrel if it came to that. At least until sufficient new energy sources/supplies could be brought on line.
Bingo.
I honestly wonder if the Saudis don't have other targets here. Maybe Iran and Russia. The Russian economy is really hurting over this.
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