Tuesday, September 28, 2004


$50-Elephant was Off by a Month

The Difference Between Malthusians and Prophets

So, with oil heading into record territory, it begs the question...Is it the end of cheap oil? I doubt it, but it looks like political instablity in oil producing countries will keep prices up for a while. So what's the fuss all about. Are we running out of oil as the alarmists say? Or not?

The End of Cheap Oil (partial article from Nat. Geo.)

The End of Cheap Oil (This one has graphs so it must be accurate...wink).

Or as Elephant's older brother put it. "If the war in Iraq is about oil, where's my $1/gal. premium?"

Well Elephant, you were right (late, but right) about having $50 oil. Although technically, we never had a closing price over $50, but there was intra-day trading over fifty on Tuesday I think. My guess is that it will eventually settle around the low $40s. I don't think oil is going to go down below that any time in the next few years.
The way I see it, the world demand is just going to go up, China especially. And even if by some extreme miracle there was peace in the middle east (at least enough peace to ship oil out) it would take quite a few years to get significantly more oil to market because of the lack of tankers. So its fine for Saudi to say they can turn up the taps, but there is just no way to get that oil to market.

B from Calgary
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