Strong reasoned arguments, but they are based on a dramatic slowing economy, not just in the US, but also in Asia. And if that happens, as industrial activity declines, and depression and poverty sets in, then yes of course your projections are most likely.
But I think even a slowdown will not change the fundamentals much. The US is not the world, and Asia's rapidly increasing demand is what is putting pressure on supplies. Even if the US slows considerably, that slack will be rapidly tighten the supply picture again.
In the longer term, in my opinion, it isn't so much a supply problem rather than a price problem, because at higher prices, a lot of marginal wells can be brought on, as demand slackens. But it all takes time. The fruit hanging low in the branches has been easy picking, the rest will take much more effort.
I don't know if you read this piece:
"PARIS (ResourceInvestor.com) -- North Sea production could show its largest fall ever this year as Norwegian production has tumbled beyond expectations. Meanwhile these and Chinese economic figures are confounding oil bears like the International Energy Agency (IEA) and OPEC."
"Firstly, figures out from Norway show their North Sea production fell year-on-year by 700,000 barrels per day (bpd). Quarterly production is also down. Figures for the second quarter of 2005 are 300,000 bpd lower than the first."
resourceinvestor.com
Those figures, if accurate, cannot be lightly dismissed. |
