my post wasnt directed at you toddy,
while you posted i was writing mine.
but i hope you have a good feed this spring......... try not to get the staggers.
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my post wasnt directed at you toddy,
while you posted i was writing mine.
but i hope you have a good feed this spring......... try not to get the staggers.
You're on to it Bermuda. I am with you, we arent going to see cheap oil again. I guess if the mainstream media or the major oil companies were to come out in public and say "we are running out of oil" all hell would break loose.
On another note we dont need Miz Clarke trying to kill the developing oil industry in this country with her politically correct ass covering posturing. She needs to get real :mad:
i tend to disagree that oil will hit 200 or even 150 a barrel.
think of it logically.
we have just broken all time inflation adjusted highs from back in the 70s. see what it did then? imagine if it was to hit 200 a barrel, this is say 2.5 times what its weighted average approx over last 4 weeks. that means, at the pumps, petrol will cost 2.5*1.60 = $4 a litre. if the nzd was to drop (which will happen), add at least 30-50% on that. $5.20-$6 a litre? c'mon, think about it fundamentally, nz is a reasonably well off country and not many/if any would own a car at those prices. it would be the same for the rest of the world...
it may eventually hit those prices, but not in real terms...i dont even see how it can hold at these levels. usa has the largest oil reserves in the world (enough for the states for 100 years) which are economically recoverable at $30 a barrel. do the maths, but ill take it while it comes with shares in oil companies...although its a pity nzo/ppp are only starting to move there was no strike on drills.
Upside Down...
how do you come up with the idea the US has enough oil reserves to last 100 years???? I am sure there are a lot of people who would love to know where all these low cost reserves are. ANWR is a no go zone so dont even include that in your calculations. The world is waiting ..:)
the oil shale reserves in the us. read it in the austrailian weekender one day at uni.
recoverable at $30 as they have to heat the shale up which big rods which make the oil seep out and then they can recover. what they're waiting for is certainty that oil will stay this high. remember in the 70's (i dont, but again, i've read), that oil companies set up camp trying to extract oil from us shale, the oil price slumped and they lost billions (yes, billions in the 70's, that was a lot of money). now, they wont go near there with a barge pole until they have certainty oil price doesnt collapse.
look at any oil reserves by geographical location and you will see the states has the highest by far, i thought you would have known this oiler.
i ask you the question, would you pay $4 a litre to fill up?
fill up 5 times and its worth more than my car!
Don't agree with your $4/litre Upside. Petrol may be $1.60/litre, however only a fraction of that is made up of the price of crude. Assuming refining costs, GST and the rest of aunty Helen's taxes don't change I suspect oil at $200/barrel would work out somewhere this side of $3 per litre (anyone got a figure?). They already pay those levels in some parts of the world.
If petrol ened up at $3 per litre or so and stayed there for some time then people would get acustomed to it. Back in late 70's or ealry 80's petrol was 99.9 cents per litre. It cost me $90 to fill up the Valiant yet i was only on $200 per week.
Only2 or 3 years ago many thought that oil at $50 was far fetched. Even when there was talk of possibly hitting $80 most laughed. If it does hit $100, $150 or $200 people will see it as reality and adjust accordingly. Just like CNG, LPG was the big thing in the early 80's other fuel options will become more viable. $200 per barrel is not the end of the world. Just possibly get used to it.
UU..... if there is one thing I have learnt about markets, it is the illogical actions that can take place in the marketplace in times of extreme demands or uncertainty....so I now expect anything no matter how absurd it may seem to me now at the present day
You asked the question whether I would pay $4/litre at the pump? ...yes I would if I had no other choice.
Would this happen within the next few years?
Oil shocks do happen and we haven't had one for a while...so it is not impossible.
yeah your right, i was being rather illogical on that one. didnt think about it too indepth.
anyone know an approx formula to work it out? taxes will remain the same and are applied for the end consumer, which means would increase linear with production costs. the world bank was suggesting of nz increasing their gst to reduce inflationary pressures...
they do already pay around the $3 a litre, your right again, but their top selling vehicle isnt a v8, and they mostly run diesel. their exchange rates are reasonably stable, compared to ours, so it cant change much apart from fluctuations in the oil price. the question is, would they pay much more? ie at 200 a barrel.
thinking about it more, the reason why some are saying it will hit that price is because of the usd declining further. in that case it shouldnt it have too much of an effect on foriegn purchases..but im sure it would, its never equal.
nita, you talk of a supply shock and other fuel options. fuel options now are getting more and more viable. sure they take a few years to get up and running, but it will sort itself out before oil hits 200 a barrel imo. i doubt anyone will come to party and have a go at the us shale for a while either. 1 billion barrels per square mile...amazing.
im not fully aware of how the supply shock occured back in the 70's, can someone explain if circumstances are similar? and how it would occur from here?
refining must have gotten a little more efficent since those days wouldnt you think? or maybe just a reduction of taxes etc...
can china/india the upcoming consumers, afford to pay that much more out of their already little disposable income?
we all know how inlastic gasoline is...but there must be a point where that stops, and becomes elastic and nz will be like the netherlands with bicycles from here to amsterdam.
also, what on earth were you doing driving a valiant around at those prices?
shrewd crude report :cool:
some very interesting topics ATM...
first of all, Great couple of days for NZO... backed up by PRC on a charge.... great for my NZO friends....
happy to see PRC run in the face of stiff opposition here at ST...
I reckon NZO sp will be strong after AGM ;)
....
Upside down....
Im with Bermuda and Oiler around high future oil prices,
it will get incrementally higher as time passes...
oil willnot run out, it will just be depleted to the point where it will become so expensive for the general population that we will be forced to stop consuming....consumption will go to the rich, or necessary input as raw material to create final product....
there are so many reasons why oil price ^ is the case.... and I guess thats a whole new thread's debate....
going back to your reasoning of saying that 'why is oil so high when we have shale idea'?
Yes Shale has some massive numbers in barrels terms, but Shale is far from the answer at this stage due to technological and enviornmental reasons amongst others.... Inground resource is just that, in the ground... it means nothing when I go to the petrol station and want to fill up.... its all about having the barrel in your hand... which is the underlying problem....
facts: oil shale provides .0001 of World Energy
:Oil shale contains 1/10 the energy of Oil
:Oil shale contains 1/6 the energy of coal
:$500m electricity expense per year to produce 100,000 barrels of oil shale per day....
:60% of worlds oil shale in Colorado and Utah...
Oil shale is capital intensive, inefficient, messy, a big polluter, consumes a massive amount of energy to produce....( 3 barrels of water for every barrel of oil)...
Shells scientists have concluded that "blasting, digging, hauling, roasting, disposing, and revegetating millions of ton of shale ore would never be economically viable or environmentally acceptable"....
....
At this stage technological advances are not quite there to produce oil shale....
The one idea (patented by Shell) is to somehow create some underground furnace and squeeze oil shale to the surface, but we are still awhile off that.... Can Oil shale takeover from conventional oil?... and will it halt decreasing oil supply?.... I dont think so...
with oil consumption at 80 something million...NO nation has ever produced more than 16,000 barrels per day in oil shale....
If you believe in the Idea then have alook at GRV... billions of barrels in oil shale resource, 20 something million market cap.... been watching it for years, and its done nothing.....
1.... 70's oil spike due to Iran invading Iraq or vice versa... factors nowadays are alittle different but more intense because of the demand, supply side problems and ever tighting excess capacity which will be minimal to none in 2012 and beyond... but the threat of a spike is there now, next year, and beyond.. A future oil shock will be on a different level to the 70's one... 70's was spike up and spike down.... I dont believe that next shock will be like that, but more like a sustained shock... events likeQuote:
1....im not fully aware of how the supply shock occured back in the 70's, can someone explain if circumstances are similar? and how it would occur from here?
2....can china/india the upcoming consumers, afford to pay that much more out of their already little disposable income?
Hurricanes, rebel attacks middle east, terrorism, war, and the further tension of increasing demand, cartel Opec straining supply and no incentive to change (extra capacity is minimal anyway), supply decreasing... if a problem comes up that cant be sorted out immediately, then we have prolonged spike due to the tight market... it willnot not take much to tip the scales..... back in the 70's b4 the spike excess oil capacity wasnot so tight...
2.....yes they can afford to pay even with increasing prices... to fill a car up is not really that expensive... it just appears so for us as NZ Govt slaps on taxes every which way possible, oil is still cheap... When I was in China this year it cost me 8 yuan or $1.6 for a 20min to 25min taxi ride which was cheap as....thats on top of expenses to run car, depreciation etc...
back to the question,
..the problem only gets bigger as India and China become richer...
The main point is that every economy needs oil to grow... as soon as oil consumption stops then so does GDP growth... the fight for who gets those barrels only becomes more difficult when those emerging countries get richer...
Thats what it will come down to one day when demand will outstrip supply and we will fight for barrels by signalling prices.... The current situation churning away and then a shock to finish it off is where we are heading......
the longer this goes on, then the smaller the shock required...
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SC