$100 barrel of oil, here we come….

[Arraya]

$100 oil is very good for the environment

Hardly… Coal is cheap and dirty now. Plus how long before we open up Anwar..

[DaCounselor]

Crude is a huge commodity play. It’s a high profile commodity with lots of news to provide traction and momentum. Hedgies and major traders are carrying prices. I don’t think anyone disputes that a significant % of price moves are due to speculation. I suspect we’re not far off a short-driven move down.

[DaCounselor]

Crude is a huge commodity play. It’s a high profile commodity with lots of news to provide traction and momentum. Hedgies and major traders are carrying prices. I don’t think anyone disputes that a significant % of price moves are due to speculation. I suspect we’re not far off a short-driven move down.

[DaCounselor]

Crude is a huge commodity play. It’s a high profile commodity with lots of news to provide traction and momentum. Hedgies and major traders are carrying prices. I don’t think anyone disputes that a significant % of price moves are due to speculation. I suspect we’re not far off a short-driven move down.

[Arraya]

“I don’t think anyone disputes that a significant % of price moves are due to speculation. I suspect we’re not far off a short-driven move down.”

Actually Professor Graig Pirrong (Professor of Finance and Energy Markets, University of Houston Disagrees, he says this:

“If anything, the entry of speculators affects the price of energy price risk. That is, it impacts the “drift” in a futures price to an expected future spot price that is based on expectations regarding supply and demand conditions at contract expiration, rather than affecting the price of physical oil. Put differently, derivatives markets are primarily for buying and selling price risks rather than for buying and selling the commodities themselves. The delivery process ensures that futures prices converge to physical spot prices, but the amount of activity in contracts with payoffs tied to a commodity price need bear no relationship to the amount of the physical commodity available, and if speculators (and others) act competitively, the physical spot price will be driven by supply and demand fundamentals regardless of the magnitude of the “side bets” on commodity price risk.”

[Arraya]

“I don’t think anyone disputes that a significant % of price moves are due to speculation. I suspect we’re not far off a short-driven move down.”

Actually Professor Graig Pirrong (Professor of Finance and Energy Markets, University of Houston Disagrees, he says this:

“If anything, the entry of speculators affects the price of energy price risk. That is, it impacts the “drift” in a futures price to an expected future spot price that is based on expectations regarding supply and demand conditions at contract expiration, rather than affecting the price of physical oil. Put differently, derivatives markets are primarily for buying and selling price risks rather than for buying and selling the commodities themselves. The delivery process ensures that futures prices converge to physical spot prices, but the amount of activity in contracts with payoffs tied to a commodity price need bear no relationship to the amount of the physical commodity available, and if speculators (and others) act competitively, the physical spot price will be driven by supply and demand fundamentals regardless of the magnitude of the “side bets” on commodity price risk.”

[Arraya]

“I don’t think anyone disputes that a significant % of price moves are due to speculation. I suspect we’re not far off a short-driven move down.”

Actually Professor Graig Pirrong (Professor of Finance and Energy Markets, University of Houston Disagrees, he says this:

“If anything, the entry of speculators affects the price of energy price risk. That is, it impacts the “drift” in a futures price to an expected future spot price that is based on expectations regarding supply and demand conditions at contract expiration, rather than affecting the price of physical oil. Put differently, derivatives markets are primarily for buying and selling price risks rather than for buying and selling the commodities themselves. The delivery process ensures that futures prices converge to physical spot prices, but the amount of activity in contracts with payoffs tied to a commodity price need bear no relationship to the amount of the physical commodity available, and if speculators (and others) act competitively, the physical spot price will be driven by supply and demand fundamentals regardless of the magnitude of the “side bets” on commodity price risk.”

[one_muggle]

Wow. Sounds like this is a religious issue for some of us.

All I was saying about Hubbert’s Peak is that it is an overly simplistic model and that his estimates were based on the extraction of cheap oil. As price goes up, production will increase because one can now make money on the oil that is more expensive to extract (deep ocean, shale, etc) or more expensive to refine (such as oil with high sulfur).
I liked the suggestion for me to read a science book because I said production follows demand–as if I suggested we could simply manufacture more oil. The fact is, oil wells are not simply straws sucking the fluid from a big bucket of dino-goo.
If you read a book on the subject, you will see that many current oil wells require a relaxation time before pumping can continue since these oil fields are more like sponges. Once you pump out all the oil near the well, it takes time for the oil to percolate depending on the permeability of the substrate, and viscosity if the oil.
Other wells require enormous capital outlay to reach the remaining oil. Many wells only reach 10% extraction ratios–and all this is the oil Hubbert used in his calculation, not the 100% that is there. If we increase the extraction ratio, the date of peak total oil shifts out.
From:
http://en.wikipedia.org/wiki/Hubbert_peak_theory
Critics such as Leonardo Maugeri, vice president for the Italian energy company ENI, argue that Hubbert peak supporters such as Campbell previously predicted a peak in global oil production in both 1989 and 1995 [31], based on oil production data available at that time. Maugeri claims that nearly all of these estimates do not take into account non-conventional oil even though the availability of these resources is significant and the costs of extraction and processing, while still very high, are falling due to improved technology. Furthermore, he notes that the recovery rate from existing world oil fields has increased from about 22% in 1980 to 35% today due to new technology and predicts this trend will continue.

As far as oil/energy being a problem–it is probably the most pressing long term issue of the planet, but for now and in the short term, it is mainly an economic issue.

Anyone interested in a fairly easy paper on advancing extraction methods http://www.ge-at.iastate.edu/Beresnev/beresnev_johnson.pdf

-one muggle

[one_muggle]

Wow. Sounds like this is a religious issue for some of us.

All I was saying about Hubbert’s Peak is that it is an overly simplistic model and that his estimates were based on the extraction of cheap oil. As price goes up, production will increase because one can now make money on the oil that is more expensive to extract (deep ocean, shale, etc) or more expensive to refine (such as oil with high sulfur).
I liked the suggestion for me to read a science book because I said production follows demand–as if I suggested we could simply manufacture more oil. The fact is, oil wells are not simply straws sucking the fluid from a big bucket of dino-goo.
If you read a book on the subject, you will see that many current oil wells require a relaxation time before pumping can continue since these oil fields are more like sponges. Once you pump out all the oil near the well, it takes time for the oil to percolate depending on the permeability of the substrate, and viscosity if the oil.
Other wells require enormous capital outlay to reach the remaining oil. Many wells only reach 10% extraction ratios–and all this is the oil Hubbert used in his calculation, not the 100% that is there. If we increase the extraction ratio, the date of peak total oil shifts out.
From:
http://en.wikipedia.org/wiki/Hubbert_peak_theory
Critics such as Leonardo Maugeri, vice president for the Italian energy company ENI, argue that Hubbert peak supporters such as Campbell previously predicted a peak in global oil production in both 1989 and 1995 [31], based on oil production data available at that time. Maugeri claims that nearly all of these estimates do not take into account non-conventional oil even though the availability of these resources is significant and the costs of extraction and processing, while still very high, are falling due to improved technology. Furthermore, he notes that the recovery rate from existing world oil fields has increased from about 22% in 1980 to 35% today due to new technology and predicts this trend will continue.

As far as oil/energy being a problem–it is probably the most pressing long term issue of the planet, but for now and in the short term, it is mainly an economic issue.

Anyone interested in a fairly easy paper on advancing extraction methods http://www.ge-at.iastate.edu/Beresnev/beresnev_johnson.pdf

-one muggle

[one_muggle]

Wow. Sounds like this is a religious issue for some of us.

All I was saying about Hubbert’s Peak is that it is an overly simplistic model and that his estimates were based on the extraction of cheap oil. As price goes up, production will increase because one can now make money on the oil that is more expensive to extract (deep ocean, shale, etc) or more expensive to refine (such as oil with high sulfur).
I liked the suggestion for me to read a science book because I said production follows demand–as if I suggested we could simply manufacture more oil. The fact is, oil wells are not simply straws sucking the fluid from a big bucket of dino-goo.
If you read a book on the subject, you will see that many current oil wells require a relaxation time before pumping can continue since these oil fields are more like sponges. Once you pump out all the oil near the well, it takes time for the oil to percolate depending on the permeability of the substrate, and viscosity if the oil.
Other wells require enormous capital outlay to reach the remaining oil. Many wells only reach 10% extraction ratios–and all this is the oil Hubbert used in his calculation, not the 100% that is there. If we increase the extraction ratio, the date of peak total oil shifts out.
From:
http://en.wikipedia.org/wiki/Hubbert_peak_theory
Critics such as Leonardo Maugeri, vice president for the Italian energy company ENI, argue that Hubbert peak supporters such as Campbell previously predicted a peak in global oil production in both 1989 and 1995 [31], based on oil production data available at that time. Maugeri claims that nearly all of these estimates do not take into account non-conventional oil even though the availability of these resources is significant and the costs of extraction and processing, while still very high, are falling due to improved technology. Furthermore, he notes that the recovery rate from existing world oil fields has increased from about 22% in 1980 to 35% today due to new technology and predicts this trend will continue.

As far as oil/energy being a problem–it is probably the most pressing long term issue of the planet, but for now and in the short term, it is mainly an economic issue.

Anyone interested in a fairly easy paper on advancing extraction methods http://www.ge-at.iastate.edu/Beresnev/beresnev_johnson.pdf

-one muggle

[one_muggle]

Wow. Sounds like this is a religious issue for some of us.

All I was saying about Hubbert’s Peak is that it is an overly simplistic model and that his estimates were based on the extraction of cheap oil. As price goes up, production will increase because one can now make money on the oil that is more expensive to extract (deep ocean, shale, etc) or more expensive to refine (such as oil with high sulfur).
I liked the suggestion for me to read a science book because I said production follows demand–as if I suggested we could simply manufacture more oil. The fact is, oil wells are not simply straws sucking the fluid from a big bucket of dino-goo.
If you read a book on the subject, you will see that many current oil wells require a relaxation time before pumping can continue since these oil fields are more like sponges. Once you pump out all the oil near the well, it takes time for the oil to percolate depending on the permeability of the substrate, and viscosity if the oil.
Other wells require enormous capital outlay to reach the remaining oil. Many wells only reach 10% extraction ratios–and all this is the oil Hubbert used in his calculation, not the 100% that is there. If we increase the extraction ratio, the date of peak total oil shifts out.
From:
http://en.wikipedia.org/wiki/Hubbert_peak_theory
Critics such as Leonardo Maugeri, vice president for the Italian energy company ENI, argue that Hubbert peak supporters such as Campbell previously predicted a peak in global oil production in both 1989 and 1995 [31], based on oil production data available at that time. Maugeri claims that nearly all of these estimates do not take into account non-conventional oil even though the availability of these resources is significant and the costs of extraction and processing, while still very high, are falling due to improved technology. Furthermore, he notes that the recovery rate from existing world oil fields has increased from about 22% in 1980 to 35% today due to new technology and predicts this trend will continue.

As far as oil/energy being a problem–it is probably the most pressing long term issue of the planet, but for now and in the short term, it is mainly an economic issue.

Anyone interested in a fairly easy paper on advancing extraction methods http://www.ge-at.iastate.edu/Beresnev/beresnev_johnson.pdf

-one muggle

[4plexowner]

So why has production been essentially flat for three years while oil has gone from $30 to $94 (according to you this increase in prices should have caused production to increase)

That’s 0% increase in production

300% increase in price

Seems that your argument is missing something

[4plexowner]

So why has production been essentially flat for three years while oil has gone from $30 to $94 (according to you this increase in prices should have caused production to increase)

That’s 0% increase in production

300% increase in price

Seems that your argument is missing something

[4plexowner]

So why has production been essentially flat for three years while oil has gone from $30 to $94 (according to you this increase in prices should have caused production to increase)

That’s 0% increase in production

300% increase in price

Seems that your argument is missing something

[4plexowner]

So why has production been essentially flat for three years while oil has gone from $30 to $94 (according to you this increase in prices should have caused production to increase)

That’s 0% increase in production

300% increase in price

Seems that your argument is missing something

[Author]

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