If It’s in the Ground, It Can Only Go Down

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  Posted By: alvdh1 @ 05/24/2009 1:03:09 PM

  This article will go down in history as one of the most poorly researched analysis's of the oil markets ever written with regard to supply and demand, population growth and commodity sunstitution.

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  Posted By: MattDick @ 05/16/2009 10:07:37 AM

  I'm not sure upon what Mr. Sharma is basing his statement, "This long-term price decline is due mainly to the constant discovery of new fields and greater energy efficiency, making nonsense of the idea that the world is rapidly running out of oil" as all of the evidence I've seen indicates that oil field discovery plateaued back in the 1960's and has been in decline ever since. The following article lays out this case in great detail (http://www.tsl.uu.se/uhdsg/Publications/GOF_decline_Article.pdf) and I would have expected that a Newsweek cover story might have dug a bit deeper into the actual oil field discovery rate prior to misleading readers about our energy predicament. In fact there is a high probability that the sky high gasoline prices experienced by drivers last summer may just be a prelude to a far more serious energy crisis than we've seen thus far. I'm sure that after it has already happened then Newsweek will run the cover story about the world running out of oil and unfortunately it will be too late to rally the public to take the necessary action to come up with a plan B.

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  Posted By: billyt @ 05/07/2009 12:04:32 AM

  The fundamental problem with this analysis is that reserves of oil are actually decreasing - not enough new oil is being discovered to replace the oil that we consume - over the last 10 years some 100bn new barrels compared to 300bn consumed. There is no indication that this scenario will change in a positive way in the future. So, there is no physical possibility that oil production can continue to grow in the longer term. If that is so, then the only mechanism by which oil prices will enter a "long bear market" is if demand steadily drops over the coming years - ie economic decline.