What are oil reserves? Nobody knows. OPEC Rules divi up the production cap according to stated reserves, so when they adopted that rule, declared reserves jumped without any new oil finds, and no-one ever accepts that their reserves have been depleted at all by the fact that they are taking some out.
Back in March 2008, I put down my prediction that later that year the oil price would reach $145 – from the $110 it had reached then – and bring an end to world economic growth. Now we’re back at $90, will it happen again?
A quarter or two where the GDP manages a dribble of growth isn’t “out of recession”. If I’m right about the likely oil price reaction to any sustained return to growth, we possibly never will be.
I’m interested by the claim repeated in numerous news analyses that “investors are buying oil to hedge against the sliding greenback” – it seems to me to be a tad more significant that world oil demand has exceeded world oil supply for the last several months, and looks like doing so for at least the rest of this year. My forecasts for year end 2008: $145 barrel; A$1=US$1; ULP at $1.87 per litre. Enjoy.
On Webdiary we’ve gone round the the Peak Oil loop more than a few times over the last few years (eg here). A new point of interest has arisen over this week: for the first time in the last few years the oil futures price has come out of its persistent state of contango as it rose back over USD75. What does this mean? Well, the short answer is, for the first time in a long while, oil futures dealers are not on balance convinced that the next move in the oil price is necessarily up.
No one strategy can do all that we need to stop dangerous climate change. We need to follow several strategies simultaneously – but which ones? And are there solutions without nuclear power?