Hi Edward,
Re: RE: "As far as world reserves we are still swimming in oil"
The easy read:
sciam.com
The slightly harder read:
usgs.gov
I was living in Eugene, OR in 1973, fresh out of college and wet behing the ears. I attended a series of lectures at the University of Oregon and the speaker was a resources wonk of some stripe or other. The topic was, of course, how America was going to handle the oil crisis caused by the first assertion of muscle by a third world seller's cartel.
Let me assure you, that discussion leader/wonk had absolutely everyone in the room convinced that we were running out of affordable oil within 10 years. I believed him..... Then Brent happened, Nigeria happened, Grand Banks happened, new strikes in Latin America, Southeast Asia, yada di yada. Stripers even came back into production and we had a revolution in creative prospecting.
In short, we conference attendees was bamboozled by a very well meaning but misinformed ecologist/enviromentalist.
The lesson of the latter part of the 20th Century is that wealth creates commodity deflation. Ask the farmers, ask the gold miners, ask the Rio Tinto Zinc crowd. They can't rape and pillage the earth fast enough to make a buck out of it any more.
The price action in the crude oil market is a wonder to behold. In a nutshell, a shortfall or surplus of supply of 1MM barrels per day generally creates a 50% change in the price level. Thus, from December, 1998, when there was perhaps a 1MM bbl/d surplus of supply, we've swung back to a point where as of 01-Sep-00 the world was consuming 75MM bbl/d and the production was 73MM bbl/d. To the keen observer the price swing from $11/bbl to $38/bbl is an uncanny match for rule of thumb on price swing. Remember 1MM bbl=50% price swing.
26-Oct-00, API announced that in the most recent reporting period, the week prior, that there appeared to be about 1MM excess of supply over demand. Barring market manipulation for political purposes, etc., or an exceptional cold snap in the northern latitudes, we shall see the spot price of oil declining fairly quickly to the high $20's.
Human history is full of wrong thinkers with influence, at least temporarily. We humans still think of ourselves as
the center of the universe, for the most part, and we think that everything will always be there for us because we are all so important.
An excellent argument for banning the Bible, the Koran and all the other anthropocentric and archaic books that weren't so harmfully out of synch with our present reality when there were vastly fewer ravenous and rapacious consumers on the planet.
IMO, Ray |
