who can explain the drop in oil price

[Wahalla]

Re: who can explain the drop in oil price

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Tuff Gong</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Wahalla</div><div class="ubbcode-body">$26 per bbl in 12 months.... $240.00 in 24 months.... </div></div>
The price per barrel will not go to the $20s but will go back to $70s+Speculation maybe in 24 months as you said. That my long view. Speculators were adding $20, then $40, then $60 to the price of each Barrel therefore in the ordinary run of things when China, the USA, India, Brazil and Europe is clicking ordinary demand should move the price to about $70, then you can tack on the extras for the Speculators. </div></div>

That was a quote from a guy I know who runs an oil company... I think minimum $45.00... But it will bounce. to $189.00.. Reason last week the EIA claimed that the world needs anotehr 3 sausis in the next 20 years... there is only one.. Brazil...

But my friend owns the oil company I dont.... And as he would quote the Koran... &quot;Only allah can determine the price&quot; since there is no god.. then work it out

[diabolical_Tanya]

Re: who can explain the drop in oil price

Wahalla what does this word mean <span style="font-weight: bold">sausis </span>?

[championgal262]

Re: who can explain the drop in oil price

just like exxon made all they wanted and sold to gulf

[Wahalla]

Re: who can explain the drop in oil price

Oilfield Production Drops Will Pressure Supply
by Guy Chazan Dow Jones Newswires Thursday, November 13, 2008


NEW YORK (WALL STREET JOURNAL via Dow Jones Newswires), November 13, 2008

Oil fields world-wide will experience faster production declines in coming years as the industry moves offshore and into smaller fields, in a further sign that future supplies could be tighter than previously thought, the International Energy Agency said Wednesday.



The Paris-based watchdog, which represents the interests of energy-consuming nations, made its prediction in a detailed analysis of 800 of the world's oil fields -- the first report of its kind.

The IEA has a reputation as one of the few serious independent sources of energy data, and the results will be studied closely by big oil companies and by Wall Street. The report is likely to deepen the pessimism about long-term oil supply that is taking root among some oil executives, economists and market analysts.

The study, part of the IEA's annual World Energy Outlook, shows that the investment needed to increase overall oil production as well as offset falls at the world's aging fields may be much higher than initially estimated.

The world will have to invest $26.3 trillion by 2030, or more than $1 trillion a year, to ensure adequate energy supplies, the IEA said. That is $4 trillion more than its year-earlier estimate.

That estimate comes amid a global financial crisis that has reduced the appetite of energy companies to invest, setting the scene for a supply squeeze that could choke economic recovery.

Oil and gas firms world-wide are putting off major projects and curbing capital spending amid plunging crude prices and a slowdown that has slashed demand for oil. U.S. benchmark crude closed down $3.17, or 5.34%, on Wednesday on the New York Mercantile Exchange at $56.16 a barrel -- its lowest close since Jan. 29, 2007.

&quot;When demand starts to pick up, say in 2010, if the current investment plans are postponed we may see a supply crunch that is much stronger than what we saw last year, and prices that are much higher,&quot; said Fatih Birol, the IEA's chief economist and leader of the field analysis.

Opportunities to invest are more constrained than in the past. International oil majors such as Exxon Mobil Corp. and Royal Dutch Shell PLC are being squeezed out of the world's main oil-producing areas by national oil companies. It's uncertain whether these state-run behemoths are willing -- or able -- to make the kind of investments the world needs.

The American Petroleum Institute said the IEA's report underlined the need for the U.S. to develop its own oil and gas resources. &quot;The new administration and Congress should not reimpose the ban on U.S. oil and natural gas development, or otherwise set restrictions that would keep off-limits some of our nation's most promising resources,&quot; it said.

Despite the short-term effects of the global slowdown, the IEA said energy demand would continue to grow 1.6% a year on average from 2006 to 2030 -- a total increase of 45%. Demand for oil is expected to rise to 106 million barrels a day in 2030 -- 10 million barrels a day below what than the agency predicted last year -- from about 85 million barrels a day now.

One of the most troubling trends identified in the IEA's report was that of declining production at the world's existing oil fields. The analysis, which included fields accounting for more than two-thirds of the crude oil produced globally in 2007, found that decline rates would rise in the long term, from an average of 6.7% today to 8.6% in 2030.

&quot;Even if oil demand was to remain flat to 2030, 45 million barrels per day of gross capacity -- roughly four times the current capacity of Saudi Arabia -- would need to be built by 2030 just to offset the effect of oil-field decline,&quot; said IEA Executive Director Nobuo Tanaka.

Part of the problem is that a growing share of oil production is expected to come from smaller reservoirs and offshore fields, which tend to decline more quickly once they have reached their peak than big onshore fields. That is bad news for a world looking to big deepwater projects offshore Brazil, Angola and Nigeria to underpin future supply growth.

The bulk of the world's crude comes from a small number of very prolific fields. Some have been producing for many years, and in some cases, for decades. But the IEA found that output at 16 of the world's largest fields is below historic peaks. The biggest fall was at Samotlor, a massive Russian field in Siberia. Cantarell in Mexico, Ahwaz in Iran, and Greater Burgan in Kuwait also saw big drops.

The good news is that Ghawar in Saudi Arabia, the world's largest oil field, is still producing near its peak, though it entered production 57 years ago. Engineers have been able to keep output stable for longer by injecting seawater into the reservoir, pushing oil up toward producing wells. Enhanced oil-recovery techniques have been used to boost capacity in the mature parts of the field.

The IEA stressed that decline rates vary markedly by region, with the lowest in the Middle East and the highest in the North Sea. It said North Sea fields have declined 11.5% a year on average since their peak, while Middle East fields have averaged less than 3% a year.

[Tuff Gong]

Re: who can explain the drop in oil price

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Wahalla</div><div class="ubbcode-body">Oilfield Production Drops Will Pressure Supply
by Guy Chazan Dow Jones Newswires Thursday, November 13, 2008


NEW YORK (WALL STREET JOURNAL via Dow Jones Newswires), November 13, 2008

Oil fields world-wide will experience faster production declines in coming years as the industry moves offshore and into smaller fields, in a further sign that future supplies could be tighter than previously thought, the International Energy Agency said Wednesday. </div></div>Very <span style="font-family: 'Arial Black'">timely</span> report this should add $10 to the price by next week!

[Derek]

Re: who can explain the drop in oil price

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Tuff Gong</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Wahalla</div><div class="ubbcode-body">$26 per bbl in 12 months.... $240.00 in 24 months.... </div></div>
The price per barrel will not go to the $20s but will go back to $70s+Speculation maybe in 24 months as you said. That my long view. Speculators were adding $20, then $40, then $60 to the price of each Barrel therefore in the ordinary run of things when China, the USA, India, Brazil and Europe is clicking ordinary demand should move the price to about $70, then you can tack on the extras for the Speculators. </div></div>

The World Bank also adds a huge chunk onto the price per barrel, which we pay for and they skim off.