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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (21600)	11/10/2004 1:36:37 AM
From: mishedlo	Respond to of 110194

Obviously pricing power at its finest. Are you holding out for 0% on your house? Mish

To: ild who wrote (21600)	11/10/2004 12:09:04 PM
From: ild	Read Replies (2) \| Respond to of 110194

Date: Wed Nov 10 2004 08:09 trotsky (P. Yorkie@oil) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i don't think the weekly US inventory data are much help in determining the global peak - aside from the fact that inventories remain tight, recent relief notwithstanding, they only reflect relatively short term availability. what one can however do is watch actual production ( as far as this is possible ) from the major producing regions. what can be gleaned from that is that many regions ( recently most important: North Sea, Venezuela, Indonesia ) HAVE peaked already, with some new projects as well as the ME able to make up for that thus far. the global peak's timing is difficult to establish, since FSU and West Africa are still growing, while ME is a mixed bag ( some growing, some already declining ) . it's highly likely that we'll see a 'plateau period' before the actual production peak, that might last several years. probably THE key variable are the 14 largest fields that provide about 20% of global supply ( out of a total of almost 8,000 fields ) . they are all very OLD ( 40-60 years ) and require all sorts of machinations to keep up their output ( like e.g. the 7 million bbl. of water that must be pumped into Ghawar every day to keep up reservoir pressure ) . the second largest , Mexico's Cantarell, is projected to peak this year ( its production will likely be cut in half over the next 6-8 years ) . no-one knows the true state of ME reserves, but it's a good guess that the truth is somewhere in the middle of what BP, Exxon et al. reported when they were still running those fields and what the state controlled companies report now ( e.g. the 3.3 billion bbl. Saudi Arabia pumps out every year somehow haven't dented reported remaining reserves for 15 years running, without any new discoveries able to account for this ) . anyway, the few giant fields that produce 1m. bbl. and more per day are the crucial variable. is there anything that 'needs' to be done, as the bulk of peak oil worriers insists? the answer is an unequivocal NO. personal preparations aside, the hope that state intervention will somehow help to 'fix' the problem is utter nonsense. if there IS a solution to the problem, the market will provide it. if the market fails to provide a solution, then there isn't one. it's as simple as that.