OPEC’s secretary general told Reuters today that oil prices could hit $80 to $90 a barrel by early next year. At the same time, Abdullah al-Badri also said OPEC was not ready to formally increase its output ceiling.
Tuesday, West Texas crude was going for $68.25 per barrel.
In a separate story, Baldri told Reuters that more balance was needed between the amount of oil traded in the physical markets and the “paper” markets. OPEC has blamed that imbalance for driving oil prices to a record-high $147 a barrel last year.
6 Comments
There is a supply problem with oil.
Why do you suppose that is?
As a geologist I would say that we have either reached peak oil or have at least come very close thereto. As we pass that point production of this dwindling finite resource will decline. Remember, while oil IS being created that is in GEOLOGIC time frame of millions of years. For all practical purposes oil is NOT being created on this planet.
Therefore, just as we had to find a replacement for dwindling supplies of whale oil for our oil lamps today we must find replacements for dwindling oil supplies. This also needs to be done so that we can continue to make use of petroleum as a feedstock for chemicals. Oil is simply too valuable a commodity to burn it all up.
Conservation, efficiencies, nuclear, wind, solar, etc. That is where we need to be looking.
I couldn’t agree with you more Ben. We’ve reached peak oil and that downward slide of that hill is going to be fast.
There is no possible way we can sustain our daily consumption of oil at current or even increasingly current rates. It’s just not possible.
I agree with you also bth — we can’t put all our eggs in one petro-basket.
But perhaps as a geologist you could enlighten me on another thing I ran across last year, that natural gas wells in the Gulf of Mexico that had been closed were producing again. Is gas in the ground pooling in those geologic structures, or the earth producing methane, or just market prices making the wells economically viable again?
I would say it is likely a pricing issue. There probably is some ‘pooling’ as methane migrates from high pressure to low pressure but that is usually a fairly minor factor. As for the earth producing it the only significant ‘real-time’ production is in landfills where there is a lot of feedstock in one place.