Oil Price Forcast

Oil prices could shoot beyond 2008 peak by 2012: Saudi Arabia - Interesting. So many arguments for and against it. I am surprised that oil has kept as high as it has, which is actually good for alternative energy since those that could survive at $50 a barrel oil have continued. A crash to $20 would have devastated the industry.

Oil Prices

It actually helps environmentally that Oil Prices have stayed around $50 per barrel. If they had collapsed to $20, there would be even more of a rush for SUV's and exit from investment in alternate fuels. Oil Prices Resist the World’s Recession Trend - NY Times

Algae to Oil Update

Good news, even with lower oil prices, is research into Algae into oil is continuing:

Pond Scum Gets Limelight Moment

Jerry Brand has been tending the world's largest pond scum collection for 10 years. The quest for renewable energy has made him and his algae hot commodities.

From the WSJ.

Oil Sand Update

Canadian oil-sand mines hit by price drop - UK Times.

It seems the magic number is $70 per barrel, and right now oil is around $40.

Nice to have basically what is an upper limit on the price of oil if I am understanding this correctly.

Crude Investment Dilemma

Crude Awakening: Saudi Oil Minister Warns Against Renewable Exuberance - WSJ.

Basically oil costs money to get out of the ground, and with less investment and problems (corruption, rebels, lack of investment, etc.) in Nigeria, Venezuela, Russia, and Mexico that will lead to less oil in the future before alternate energy sources are available.

Of course, the question is why do the Saudi's care if the US wastes it money? But they do have a nightmare that alternate energy and increased efficiency will reduce the need for their oil. And they need a high price of oil to keep their rulers in power.

Oil at $32

OPEC's holiday gift to us: Oil at $36 a barrel Los Angeles Times

The question is for how long?

Positives:

• Form of economic aid that will shorten the recession by putting more money into consumers pockets. This is huge! When Oil was near $150 a barrel there were riots in poorer countries because of increases in the price of gas and cooking oil.
  
• Makes the world a nicer places and helps countries that are not oil producers (majority of the world, including the poor such as in India and Pakistan).
• May help the Big 3 by increasing truck sales.
  

Negatives:

• Hurts Oil Producers such as Iran, Saudi Arabia, Venezuela, and Russia.
• May decrease interest in Hybrids and Electric Vehicles
• May reduce investment in alternate energy R&D.
• May increase use of oil
• May reduce projects to increase oil efficiency.
  

Oil Increase - More on why

Another explanation from the WSJ for the increase in October oil imports was due to Hurricane Damage in the Gulf that reduced refinery output in the gulf, increasing the demand for oil imports.

Why did Oil imports increase?

Why have all the articles I have seen so far state that oil prices are down, US deficit is up because oil imports have increased in October, and the reason for the increase is?

Oh wait, here is one that explains it. Room for Second Guessing

The higher oil prices led to higher imports, as oil producers tried to take advantage of the price. Hence higher supply than demand, since the economic destruction in the US caused by higher oil prices was not seen.

55 Mile Hour Speed Limit - Why not again?

55 Mile Hour Speed Limit - why not again? Because of Sammy Hagar's I can't drive 55?

It was implemented in 1974, modified in 1987 to allow 65 on longer stretches, and finally repealed in 1995. It reduced fuel usage by about .5 to 2.2% for the entire US. Today it may be more since the weight of cars has gone up, per this site Drive 55 Conservation Project 3%.

My opinion is nobody has the courage or sees the need at a National Level for the 55 MPH Speed Limit. Senator Warner brought it up, but he was retiring giving him the freedom to speak out.

References:

• Unmentioned Energy Fix: A 55 M.P.H. Speed Limit from the NY Times.
• Drive 55 Conservation Project
• National speed limit pushed as gas saver - CNN.com
• Would You Drive 55? - TIME

Related Posts:

• How to Kick Our Oil Addiction
• Energy Independence Requirements in 10 Years
• What If - Carter's Energy Policy

How to Kick Our Oil Addiction

How to Kick Our Oil Addiction from the WSJ.  Interesting that none of the contributors mentioned the 55 MPH Speed limit, political suicide. I thought my 20 item list of How to Kick Our Oil Addiction was better.

Oil Crises

1973 Oil Embargo - Caused by Yom Kipper War.
1976 - Shah of Iran loses power.
1979 - Iran Hostage Crises
1992- Gulf War I
2000's - Caused by growth in China and India not being matched by growth of oil supply. May have been some future trading.

And historically when the price of oil has gone down, research into alternate energy sources has also gone down.

Under $3 Gas - More SUV's on the Road

In my area recently, I noticed there seems to be more SUV's and trucks driving around. And the line for gas at Costco is so much smaller. It makes me wonder if the the amount of miles driven is going to go up again, increasing the demand for gas, and resulting in higher gas prices.

Low Oil Prices Take Wind Out Of Renewables

Low Oil Prices Take Wind Out Of Renewables from the SF Chronicle.

I am afraid of this.

Interesting quote:

"So if you believe that we are about to enter a rather severe global recession ... then my guess is it won't be long before oil prices are back where they were before this spiral began, back in the $20s," said Jerry Taylor, senior analyst with the Cato Institute think tank. "And political interest in energy will disappear."

Under $3 Gas

I went to Costco tonight near our house and gas was under $3. Wow!

Some questions I have:

• Are people now going to forget the habits they developed when gas was near $ a gallon?
  
• Will this kill the new Electric cars?
  
• Will this help the Big 3 that depended on high margin trucks for their profits?

The decrease in prices is relatively new, so my thought is give it a few more weeks to see how people react to it. The price of oil seems to be very volatile, and may actually fall even more. Even if OPEC Orders Cut in Oil Production. Personally, I am more open on Thanksgiving weekend to driving due to the lower price of gas.

Oil in Cuba

How Cuba's Oil Find Could Change the US Embargo from Time Magazine. If true, this could help the US. Of course we have that political albatross called the embargo. We have better relations if you can believe it with North Korea (which is a lot worse than Cuba), than Cuba. The truth is if the US eliminated the embargo it would hurt the political regime in Cuba more than the US. The embargo actually helps the communist party keep power. And oil does have a way of making the US friendlier, we are selling agriculture products to Cuba.

Cheap Oil - Venezuala

Oil-Fueled Nation Feels Pinch - from the Washington Post about Venezuela. They need $94 per barrel oil, and it's around $70 right now. Venezuala does have foreign reserves, but how long will they last?

Estimates are a year, if spending is not increased...

Oil Prices Slip Below $70 a Barrel

Oil Prices Slip Below $70 a Barrel - this is going to hurt the Economies of Iran and Venezuela.

Interesting Quote:
The drop in prices has already created problems for oil producers. Iran and Venezuela both need oil prices at $95 a barrel to balance their national budgets, Russia needs $70 and Saudi Arabia needs $55 a barrel, according to Deutsche Bank estimates

Of course the economies of the world are not doing that great right now, which is reducing demand for oil. Nigeria's rebels pushed too hard, so finally something is being done to increase oil production there. Iraq is coming along. Iran has the embargo which has resulted in reduced production. Mexico, decreasing due to lack of investment. Brazil, some positive changes in a couple of years. North Seas - declining.

Alternate energy, it's around $55 per barrel currently and the price is dropping every year due to better technology. I wonder if anyone has done a extrapolation on this based on trends for the last couple of years. Something like Moores Law. And of course, if Oil goes to $30 for a couple of years this would devastate the alternate energy area and kill R&D in it, again. But it seems that Saudi needs to keep the price up (question if the $55 price they need can be decreased by canceling non important projects).

The question is can the OPEC nations actually decrease oil, since they do need the money in. Is India and China have increased demand for Oil? When will coal gasification in China have an impact on their imports? When will more nuclear and coal plants have an impact on oil imports in China?

And in a couple of years, what impact will increases in fuel economy with all the hybrid and electric cars that are coming out have on oil usage? What will a new US administration do for energy conservation?

We do live in interesting times!

High Energy Thursday: With oil down, is our green future at risk?

High Energy Thursday: With oil down, is our green future at risk? from the NY Times. If oil falls to far, Green Energy will take a hit. The good thing is every time going through this cycle (3 times so far), green energy gets cheaper and cheaper and closer to be competitive with oil.

Nigeria - Rebels overplayed hand?

NIGERIA: Clean, Lean, Mean And On The Offensive

Key Points:

• New army commander because the previous one may have been corrupt.
• Rebels are demanding a cease fire.
• Investigators have been sent to check reports of payoffs to the military in the delta.

Hopefully this will payoff. Lots of corruption in Nigeria with the rebels able to make money by siphoning off the oil, which buys them speedboats and weapons. It looks like as long as they did not cause to much damage they were ignored, as the local government was more focused on lining their pockets. But they did too much damage, so now the military in the area seems to be cleaning itself up and being more effective.

Nigeria has such potential, but the corruption has hurt the country so much.

Oil Roller Coaster

Record single-day increase in oil prices from the SF Chronicle and Oil Rises More Than $10 on US Bailout Plan, Weaker Dollar from Bloomberg.