Deconstructing the Oil Crunch | Newsweek Environment

Oil Trouble

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What are you projecting?
Based on our outlook of fundamentals, we see prices on an annual average basis next year in the upper $70s, but with significant upward price risk.

Where do you stand on the question of peak oil: that we're on a slope of dwindling resources?
We believe there is plenty of below-ground resources to satisfy demand …

For how long?
We have an outlook that goes to 2030, so we don't see a peak in the supply. But what's really important is, will investment be allowed to go to areas that can move supply? If investment is not allowed to go there, we could have very tight oil supply … Venezuela has significantly altered its investment climate, so investments there are not as attractive as they used to be. Mexico does not allow foreign investment [in the oil sector].

When we started this discussion, you mentioned worries about Iran. It seems as if the situation with Iran has kind of cooled off a bit. But that's not reflected in the markets. Is there still concern that there's going to be a conflict with Iran?
There's been no resolution of the Iranian nuclear issue, so it's not off the radar screen by any means.

Is this something that's going to affect the markets for years on end?
It could affect the market when you look out at the next two, three years, absolutely.

Where would you see oil going if there were a conflict with Iran?
We're not predicting a military conflict with Iran. So we don't build that into our outlook.

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The USA is the World's 3rd largest oil producer. Texas alone, if a country would be the World's 5th largest oil producer. The USA has the talent and ability to get a 30% cleaner burn AND defray another 30% oil equivalence to OTHER types of energy efficiencies and SOURCE products for such....almost over night IF? they really wanted to. It's easier not to though. Keep in mind 60 some years ago the same country developed the A Bomb in just barely over a 1 year time frame ( if that's not remarkable energy conversion..then what is?). The track the USA is on will take crude to $250 within 3 years. The more bought with USA currency now....the higher oil gets and the more worthless said currency becomes on a daily basis. There will be an opportunity in 08 to actually index a barrel of oil to 4 bushels of wheat which would be a salvation type deal for the USA currency/oil situation at this time. Furthermore it would also help the whole global USA currency imbalance long term. Doubtfull though that dc and the corp club thereof will see it or be able to figure out how to play it either. Everyone has to get postured so about 5 of em glean the whole deal. Posturing takes time...and that's how the country got into this mess to start with, to much posturing, and so few REAL players.

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Posted By: alxe123 @ 08/09/2008 8:17:35 PM

It is time for our government to meet with other world leaders, both suppliers and consumers, to invoke the Rimini and Uppsala protocol.
Call your congressman today!
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Posted By: mullenhead @ 03/14/2008 4:40:53 PM

This comment is just scary on so many levels.
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Posted By: Markwri @ 01/06/2008 4:03:18 AM

The USA is the World's 3rd largest oil producer. Texas alone, if a country would be the World's 5th largest oil producer. The USA has the talent and ability to get a 30% cleaner burn AND defray another 30% oil equivalence to OTHER types of energy efficiencies and SOURCE products for such....almost over night IF? they really wanted to. It's easier not to though. Keep in mind 60 some years ago the same country developed the A Bomb in just barely over a 1 year time frame ( if that's not remarkable energy conversion..then what is?). The track the USA is on will take crude to $250 within 3 years. The more bought with USA currency now....the higher oil gets and the more worthless said currency becomes on a daily basis. There will be an opportunity in 08 to actually index a barrel of oil to 4 bushels of wheat which would be a salvation type deal for the USA currency/oil situation at this time. Furthermore it would also help the whole global USA currency imbalance long term. Doubtfull though that dc and the corp club thereof will see it or be able to figure out how to play it either. Everyone has to get postured so about 5 of em glean the whole deal. Posturing takes time...and that's how the country got into this mess to start with, to much posturing, and so few REAL players.