Trust me when I say that it wasn't the number of submissions. I've come to accept my readers' proclivity for comments—something I absolutely love, by the way. Rather, it was the individual submissions themselves.
And to think some of you called me a doom and gloomer!
Hopefully there'll be a special room reserved for us all after it hits the fan, but don't worry about bringing a book because you sure as hell won't be lonely.
As far as the list's coveted #1 spot, you only have to wait another few days (it's only right to give some of the latecomers a shot at the title, too). And honestly, sorting out my favorites is proving to be more difficult than you might think. Every few minutes I'm forced to stop and send several submissions around the office.
So for now, keep them rolling in.
$100 Oil on the Horizon
"Another record high!" This might as well be the catch phrase for the next generation.
That's all I've been hearing lately. And every time the yell was bellowed across the office, it was projected in a different voice. Each time I couldn't help but think it would be the last.
The last week was the worst, too.
Here's a better look at what I'm talking about. . . .
Crude Oil December 2007 (NYMEX)
As you can see, there's been quite a bit of yelling, so imagine my lack of surprise today when I was taking a sip of coffee and heard, "$94.45 a barrel . . . another record high!"
Since reaching past the $94-per-barrel mark today, prices have come back down. Yet you won't believe the reasons I'm hearing for these record prices.
What's Driving the Price of Oil?
In one ear it's, "It's all about this mess with Turkey, Keith. They've got plenty of oil left." Well, I don't know who "they" are, but I'd sure like to meet them. And then there's the other camp, telling me, "This whole mess has nothing to do with anything but the fact that the dollar is crashing."
To tell you the truth, neither one of them is wrong, except to say that one thing or another is the only thing driving up prices. We know that geopolitical fiascos (more specifically ones in the Middle East) can give rise to fears that supply will be disrupted, causing a surge in oil prices.
On the other hand, the falling dollar is certainly having an effect in the oil markets. There's an entire army of analysts boasting that oil's run-up is based solely on the declining dollar. But to do so neglects the drop in supply.
Many of my readers agree that peak oil is starting to show its ugly face. And whether you believe global production will experience a sharp decline or a long plateau, most of you agree that output won't climb much higher.
Here's how I think about it . . .
When over 60% of the world's oil-producing countries are believed to have passed their production peak, the supply picture doesn't look too bright. For example, when three-quarters of your production is coming from aging fields that are more than half empty—(cough) Iran (cough)—increasing (or even sustaining) production is nearly impossible. But what do they care, their nuke program is going to solve all their energy woes, right?
I have an eerie feeling that next week I'll be hearing someone yelling "$100 oil!"
Of course, I'll have to immediately chime in . . .
"Another record high!"
For you, these record high oil prices represent an investment opportunity of a lifetime. If you're interested in finding out more, feel free to click here .
Until next time,
Keith Kohl
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In 1870 it was $80 in today's dollars but that was because drilling technology was in its infancy. The OPEC oil shocks were not this high. All through WW2 it was still under $20. So war and political disturbances are not enough of a reason. The reasons in 1870 were obvious and the 1970/79 shocks were due to a cartel imposing artificial supply limits. Something new is going on here.
I've always been intrigued by the concept of supply and demand as it applies to oil. Prices have gone up a lot at the pump in the last 5 years but consumption goes up as well. It is called 'economic growth'. So if putting the price up does not curb demand, something has to give and I suppose it probably is demand in poor countries. That may be an issue if those countries are near oil producing countries. I must get on with building that windmill project...
DOES ANYONE STOP TO THINK THAT OUR DOLLAR IS ALL TIME LOW AND IF YOU WERE AN OIL SHIEDOM WOULDNT YOUWANT MORE U.S. DOLLAS FOR YOUR OIL SINCE ITS CONVERWSION INTO GOLD REQWUIRES MORE DOLLARS THAT WHEN THE DOLLARE WAS TRADNG AT 115 NOW AROND 80??
HOW MANY MORE U.S. DOLLARS WOULD YOU WANT??
WE ONLY IMPORTED 1 AND 1/2 MILLION BARRESL FROM IRAQ WHEN SADDAM WAS THERE ANYWAY....WHICH IS A SMALL PART OF OUR 18 AND 1/2 MILLION BVARRELS USED PER DAY...HOW ABOUT RETURN COMMENT
'LGPOPOFF
Regards
Robert
1) OPEC can go another 5 million bbl/day in case of need, but it will be lower grade oil not Light Arabian Sweet.
2) The market is quite well supplied at present, but every body runs his own estimates and produces a set of figures that will only make the problem worse.
3) You have the problem of Nigeria, Venezuela and Iran in which the best way of describing it is "chaos". Venezuela use to produce 3.8 million bbl/day in 1998, since the present government decided to make life miserable for the "empire" investment dissappeared and production has reduced to 2.2 million bbl/day.
4) Your main problem lies in refining. Product is driving crude price by a mechanism of perceived lack of crude. The reality is that refineries have not increased since 1975, and only some upgrades and maintenance have been donne. On top of it, the existing refineries were designed for light crudes; the crude slate is moving more and more to heavier crudes and these refineries are either not capable of refining them or if capable at a much reduced efficiency. But nobody wants a refinery in their backyard. This is your main problem
5) Add to that what I describe as "too many papers chasing many paper barrels" to the equation and you have the complete picture. Speculators are making a killing in many markets. This is the truth.
Name omitted because of working for an oil company
though there is a lot of collusion
between the Oil producers, and the
Governments( ALL) Last evening the pricing here in the Vancouver area
was $1.plus CDN (Litre) measure. Of
course this equals pricing i.e. US
dollars almost four dollars. Of course this is legal extortion,YES.
There is lots of crude oil. We are being programmed to accept a great
shortage. The oil sands in Alberta
have extremely large extensive $$$
investments. and that spells to me there is multi-millions reserves that the governments will collect in revenues. Canada ships, I believe 80% of finished product to the United States. No one will put their neck on the line,as the end results would produce a national
uprising. The answer... Do not invest in the industry. Let them run short of operating capital and
Government will reduce the excessive taxes and the oil companies will come clean an make known some of the truths that at present is a guarded secret.Og course the Governments require a good shake up as well. Just listen to the politicians. They never do
come clean when questioned on ANY subject.
Enjoy your articles. The best on the net for sure.
Charlie
401141 contracts of 1,000 bbl each.
Daily input about 15,000,000 bbl
Days supply under contract: 27
Domestic production one-third, so if all the oil under contract is delivered to Cushing OK, nearly 10,000,000 bbl/day will have to be shipped there for settlement!!
Keep in mind that every contract has a buyer and a seller; the bears are getting gored, and their actions to cover help to accelerate the price rise. One solution to cooling off the blow out would be to raise margins from 5% to 50%; such action would tend to push the pricing mechanism to an equilibrium that would be closer to where it belongs, probably $200/bbl.