Oil prices up yet again.

[oompah]

Considering that the price of oil has doubled in the past year I don't think $4 is here nor there do you?

Oh and BTW there is still 20p per litre to go on domestic fuel that is still in the pipeline. Even if things stay as they are you'll soon be paying an extra 20p at the pumps.

Its down to $135 now so that 20p? wherever you got from will be 10p now more joy

 

[joe-90]

A year ago it was around $70.

 

[Hysteresis]

A year ago it was around $70.

It was $70 in the nid 90's and then it dropped to around $35 in a very short time, with words from the Oil Industry was that it would never get as High as $70 ever again.
I have no doubt this is not about to happen this time but the price of Oil is volatile and subject to unpredictible changes,
You never Know , we might strike lucky again - Who Knows?

 

[ub7rm]

My 2 cents worth....

The general opinion is that the recent hike in the oil price is related to supply and demand. It isn't, last year supply exceeded demand by 1%, this year it is projected to exceed demand by 2%. Global demand is pretty flat at the moment.

It is accepted that the only reason for the sudden hike in oil prices is purely down to market speculation. Consider the investment houses and banks that lots billions of pounds in the sub prime mortgage fiasco and the ensuing 'credit crunch'. Where else to invest their money? No one is going to stop buying oil, we're all thouroughly hooked and its a finite resourse - no ones making more. Easy money....

I work in the oil industry (not a commercial guy, engineer) and can reassure you that there is about as much oil left in the north sea than has been extracted. And thats based on what we know about, there's plenty of acerage that hasn't been drilled. When you consider the astronomical sums of money invested in getting the black stuff out, its pretty amazing just how cheap petrol is! Ducks for cover........

 

[joe-90]

You just happen to be wrong. China alone year on year uses 15% more than the year before - where's it coming from?

Just because you've got a job in oil doesn't mean that you are privy to anything other than mess room gossip.

 

[ub7rm]

Good thinking Masona, but let's take it a bit further. The reason that no new refineries are being built is...? That's right - NO NEW OIL.
/quote]

BS

technically you might be right in that there is no new oil. But new discoveries are being made all the time. Huge finds are being made on the Ivory Coast, GOM and India. Even in our well trodden North Sea new - and sizeable - discoveries are being made annually.

Operators have historically been shy about their reserves - for one thing it identifies you as a nice juicy target for taxation, for another maintaining the notion that oil is in short supply does nothing to hurt the price of oil.

 

[Shytalkz]

Ub, meet Joe - he Googles everything, so by definition knows far more than anyone who's actually involved in an industry

 

[joe-90]

Let's stick to facts shall we? At it's peak Nth Sea oil produced less than 3 million barrels per day - the world uses 87 million barrels per day. Today it produces less than a million and will soon dry up altogether.

Try again.

 

[joe-90]

No major finds have been located since 1962 - even with new technology - because there isn't any.

 

[ub7rm]

You just happen to be wrong. China alone year on year uses 15% more than the year before - where's it coming from?

Just because you've got a job in oil doesn't mean that you are privy to anything other than mess room gossip.

I happen to be right. GLOBAL demand, not CHINA demand.

I am privy to a more realistic picture of available reserves than most. Certainly more reliable gossip than you are privy to.

 

[joe-90]

Of course you are.

 

[Shytalkz]

Don't waste your keypad, Joe knows...

 

[ub7rm]

Don't waste your keypad, Joe knows...

Seems that way. Ah well if it makes him happy....

 

[joe-90]

Gimme facts - not mess room gossip. Why do you think you are right and the rest of the world wrong?

 

[ub7rm]

Gimme facts - not mess room gossip. Why do you think you are right and the rest of the world wrong?

I could ask you the same thing......

I don't think the rest of the world has the same opinions as you for a start.

If you look at North Sea production its certainly true that the elephant fields have been discovered and that we are unlikely to find others of that size. However you cant look at production and say that the reserves are dwindling. Economics plays a huge part here, taxation has removed much of the incentive for exploration, development and general investment since around 2005. That only started to change last year when some of the bigger operators (with their big overheads) gave up some of their licences to smaller operators. Coupled with a higher oil price this means that exploration / development is at its highest level for over a decade. Look at the accounts of all the major north sea contractors and you will see a surge in turnover from late 2006 onwards - Fact.

The higher the oil price goes the more economical it is to develop marginal fields / increase productivity from partially depleted fields. Even with todays technology its only possible to recover about 30 - 40% of a fields hydrocarbon reserves and thats where the challenge lies to get the other 60-70% out. We are going back to old fields that had been mothballed because the technology / economic climate is such now that we can make these fields work again. It would surprise most to know that the UK has more oil reserves than Kuwait! (Note reserves are not the same as production!!)

If you like googleing, google Oilexco and their activities in the north sea (Shelly / Huntington (Forties again) in the last few years) and come back and tell me that there is no 'new' oil. They are a great example of the new entrants and their exploration activities. Huge reserves lie untapped West of Shetland but its more expensive to get at and the current tax regime does nothing to promote growth. Thats the reason for a decline in production, not lack of oil. The relaxation of taxes for new entrants to the NS has to some extent overcome this and in a few years the major operators will be leaving and smaller operators taking over their assets.

I remember reading a text book in school (which was probably older than I was!) that claimed oil would run out in 10 years. That was around 15 years ago. An operators stated design life for a field isn't the same as the actual life of the field, it tends to refer to the design life of the asset thats developing it (and the platforms that were installed in the seventies are still going strong following several life extension programmes and upgrades). What was hard to see back then was that as the cost of oil increased, the economical life of the field would increase and that would drive new technology. This continues to be the case.

What is this 1962 development you're referring to?

Of course its a finite resource, and of course it will run out. However that won't be in my or your lifetime. These oil price scares we have at the moment help drive development of non fossil energy supplies which in time will reduce demand. The oil price should be a reflection of demand and how hard it is to obtain. Currently that is not the case. Even for the most arduous (NS) fields it costs about $40 a barrel to extract / refine/ deliver to the pump. The rest of the price is driven by demand and profiteering.

I think its safe to say you are somewhat of a doom monger, and I suspect that there is little point in having a reasonable debate with you but I assure you this is not mess room gossip. (We don't have a mess room )It might seem painful but try reading some of the less pessimistic views on oil production then balance that against the pessimistic ones. Can I ask what you base your opinions on? Mine are based on my observations from years in the industry, reading industry journals and publications and the wider media.