World Oil Balance Charts

[MDimitri]

I have a few sites I am a member of while monitoring Futures and Options and this is one I check frequently. I found a great chart, published quarterly, on Global oil demand and supply. Have a look.

http://omrpublic.iea.org/balances.asp

In the last 4 years Oil demand has gone up but but no where near as much as anylists keep reporting... have a look at the site you will see that there has been about a 2-2.6% increase in global demand, in some parts there has been a decrease. So as for the large spike since last year in April to now, there is no real correlation of evidence supporting the hike in prices. No wars, no earthquakes, no storms...etc. The conflict in Iraq has been taken into consideration and the amount of oil being pumped from there is so negligible it is not even counted. If and when Iraq gets back on it's feet again it should be able to tap into it's reported 120Billion barrels of oil, over 90% of which is still underground.

Read this:
According to the US Energy Information Administration (EIA), "Iraq holds more than 112 billion barrels of oil - the world's second largest proven reserves. Iraq also contains 110 trillion cubic feet of natural gas, and is a focal point for regional and international security issues."

Iraq's Oil Reserves: Untapped Potential
While its proven oil reserves of 112 billion barrels ranks Iraq second in the work behind Saudi Arabia, EIA estimates that up to 90-percent of the county remains unexplored due to years of wars and sanctions. Unexplored regions of Iraq could yield an additional 100 billion barrels. Iraq's oil production costs are among the lowest in the world. However, only about 2,000 wells have been drilled in Iraq, compared to about 1 million wells in Texas alone.

Iraqi Oil Production
Shortly after its failed 1990 invasion of Kuwait and imposition of resulting trade embargos, Iraq's oil production fell from 3.5 million barrels per day to around 300,000 barrels per day. By February 2002, Iraqi oil production had recovered to about 2.5 million barrels per day. Iraqi officials had hoped to increase the country's oil production capacity to 3.5 million barrels per day by the end of 2000, but did not accomplish this given technical problems with Iraqi oil fields, pipelines, and other oil infrastructure. Iraq also claims that oil production capacity expansion has been constrained by refusal of the United Nations to provide Iraq with all the oil industry equipment it has requested.

EIA's oil industry experts generally assess Iraq's sustainable production capacity at no higher than about 2.8-2.9 million barrels per day, with net export potential of around 2.3-2.5 million barrels per day. In comparison, Iraq produced 3.5 million barrels per day in July 1990, prior to its invasion of Kuwait.

Here is a website for those interested in following this a bit more.
http://usgovinfo.about.com/gi/dynami...iraqchron.html

Shedding Some Light on this issue.

Cheers!

[wpage]

Interesting find. I remember being taught as a college freshman in 1972 that all oil reserves would be exhausted by 1984!
We needed to get busy with alternate solutions...
Deja Vue all over again!

[KenP]

I'm no expert at futures and options, but I heard some interesting rumbles today. Some big name investors, ie George Soros while on Capital Hill, is equating this to the dot-com and housing bubbles. Soros is known for selling short and he may be perpetuating his own profits by this.

If it's true, look for prices to plumet by a good amount.

[MDimitri]

I totally agree with George in relation to market manipulation. I am also glad to see that the following is ocurring:

"The Commodity Futures Trading Commission is investigating whether speculative buying is influencing oil prices, and whether outright market manipulation is taking place. Last week, it signed an agreement with the UK's Financial Services Authority to share information about trading on electronic exchanges based in London."

Here is the link to the article:

http://www.independent.co.uk/news/bu...es-839692.html

All I can say is as long as inflation is kept in check we won't feel the damage that high oil prices are doing like they did in 73-74 when inflation in some countries was as high as 26%.

[ROX]

I was told, in April, that paper trades were ~3000 times higher than actual product being delivered, and that investors that normally buy the dollar, are instead buying oil futures. Hopefully, the trend will end.

It's good to see this discussion taking place.

Good info!

[MDimitri]

Here is a scarey thought, what if those investors are insurance companies or pension funds? if they bought in at this time under the assumption that prices will go much higher they better get out while they can! Or you and I will be paying for their losses for the next several years.

Like a bad dream, I'm trying to wake up but I can't...

[MDimitri]

LONG TERM WORLD OIL SUPPLY:

Alot was taken into consideration when this was written but I don't think enough was focused on alternative energy resources and the advancement of FUEL CELL technology within the next 5 years and how it will apply to vehicles and overall global transportaion. Another thing not taken into consideration is the increase in Nuclear Energy as an alternative to coal/oil burning power plants, a new item on the table, especially here in Alberta is the talk of a Fussion Reactor. If any of you know what fussion is then you'll know that this is equivilent in temperature as the surface of the sun. Once this type of reactor is started all you need to do to keep it burning is feed it garbage. Face it folks burning garbage and non recyclable materials under fussion temperature's vaporizes anything thrown into it, including engine blocks. This is a very good alternative to recylcing those certain items that use up more energy in the recycling process as opposed to the manufacturing process.

Here is a link to this article

http://www.eia.doe.gov/pub/oil_gas/p...lsupply04.html

What it all boils down to is this:

The bottom line

Will the world ever physically run out of crude oil?No, but only because it will eventually become very expensive in absence of lower-cost alternatives. When will worldwide production of conventionally reservoired crude oil peak? That will in part depend on the rate of demand growth, which is subject to reduction via both technological advancements in petroleum product usage such as hybrid-powered automobiles and the substitution of new energy source technologies such as hydrogen-fed fuel cells where the hydrogen is obtained, for example, from natural gas, other hydrogen-rich organic compounds, or electrolysis of water. It will also depend in part on the rate at which technological advancement, operating in concert with world oil market economics, accelerates large-scale development of unconventional sources of crude such as tar sands and very heavy oils. Production from some of the Canadian tar sands and Venezuelan heavy oil deposits is already economic and growing.

In any event, the world production peak for conventionally reservoired crude is unlikely to be "right around the corner" as so many other estimators have been predicting. Our analysis shows that it will be closer to the middle of the 21st century than to its beginning. Given the long lead times required for significant mass-market penetration of new energy technologies, this result in no way justifies complacency about both supply-side and demand-side research and development.

Cheers !

[Big Dad]

You guys should checkout this site to get another aspect of the industry:

http://www.api.org/

But then again, I'm partial to it.

[KenP]

Here you go!

http://www.iht.com/articles/ap/2008/...peculation.php

A single energy conglomerate held 11 percent of all contracts on the New York Mercantile Exchange at one point last month, according to a published report Thursday, suggesting that speculators may have played a larger part in volatile oil markets than once thought.

The Commodity Futures Trading Commission made an unusual request last month for data from Vitol Group, a private Swiss energy company that regulators thought was helping industrial firms get the oil they needed, according to The Washington Post.

The commission discovered, however, that the Vitol would be better described as a speculator, trading oil contracts to turn profits rather than assisting companies that actually needed oil delivered for their operations

"It is now evident that speculators in the energy futures markets play a much larger role than previously thought, and it is now even harder to accept the agency's laughable assertion that excessive speculation has not contributed to rising energy prices," said Rep. John Dingell, a Michigan Democrat.

The commission investigation showed Vitol was one of the most active traders of oil on Nymex as prices reached record levels.

By June 6, Vitol had amassed contracts equal to 57.7 million barrels of oil, about three times the amount the United States consumes daily. On that day, the price for a barrel of oil spiked $11 to settle at $138.54, per barrel, valuing Vitol's oil holding at nearly $8 billion.

[wpage]

Bring back Rockafella and the old fashioned robber barons...

They had bigger hearts then these modern greedy bastids