Originally Posted by
Offshore-Wealth.com
Interesting,
What we are seeing is fear driven, both Saudi Arabia and Kuwait are already beyond peak, but few outside of the country, and industry know the truth, so it did not surprise me that they have been holding out on forgiving debt, never mind refusing. There futures are not bright, and they know it. Just look at what the Saudi's are doing, building islands, hundreds of skyscrapers, even an indoor sky resort, so the truth be known, they have to go in different direction as their oil parade is almost over.
Peak oil is the point when global oil production peaks, leading to a steep and irreversible decline which both Saudi Arabia and Kuwait are dealing with. The moment when peak oil occurred, occurs or will occur is still under debate given both no longer utilize outside consulting companies. But the effects are already being felt.
The signs are all around us, you just need to put the pieces together.
Nine out of ten of the largest oil fields in the world have entered into decline. One in particular--Mexico's Cantarell oilfield--has dropped by 20% in production so far.
Oil prices have tripled since 2000, and we're never going to see oil below $50 a barrel, ever again. We haven't even hit the summer yet, when oil prices are at their highest, yet oil is threatening last year's high of $78 a barrel.
Oil companies are fighting like hell not just to boost their production and reserves, but also to hide the fact that anything is wrong. But numbers don't lie. In 2006, Shell produced twice as much oil as it discovered. Not to mention that the oil boys are also grasping at unconventional sources like oil sands to increase reserves.
Now let's factor in the fact that three quarters of the world's oil reserves are controlled by OPEC. OPEC countries like Saudi Arabia refuse to disclose statistics on their oil fields, further complicating the calculation of peak oil's actual date.
Yet even if you believe peak oil won't happen for another few years, one thing has become apparent: the world hasn't collapsed from higher oil prices.
If people cringe at $3 for a gallon of gasoline, they'll look back fondly on that when gas hits $5. But where will that end? Sure, $5 gas is better than $10 gas.
This is what it comes down to: What is the breaking point for oil prices when people wake up and realize we're living in a world of peak oil? $100 a barrel? $200 a barrel? If you had asked someone that question ten years ago, they might've said $70 a barrel.
And amid the struggle to increase production, the shadow of our rising demand looms more ominously every year. By 2015, we will need to produce 13 million more barrels of oil every day compared to today's production! By 2030 we'll need an extra 33 million barrels per day. These numbers, taken from the Energy Information Agency's International Energy Outlook 2006, may even be too low, as some experts predict.
So where does that leave us?
Money for the Taking
Once you accept the reality of high oil prices, you can take one of two paths.
The first is to sit idle like my friend at the gas pump, sacrificing your hard-earned cash to your SUV's $80 thirst for unleaded every week.
Not the most attractive option, is it?
The other choice you have is to play your money off this surging commodity. Any investor--any smart investor, that is--will look to the future and jump on it in the present.
When was the last time you saw somebody making money by sitting on his thumbs?
It's no secret that the U.S. is growing tired of Middle Eastern antics, with the oil sheikhs driving prices up and never boosting production to meet the swelling demand. What did OPEC say? They are "comfortable" with the present oil market and see no need to boost production.
Very comforting, indeed.
This leads us to the alternatives. Granted, renewable sources are vital to meeting long-term energy needs. But our thirst for oil isn't going away anytime soon.
So where will we get our oil in the future?
The door is wide open for Canadian oil sands, but bringing this oil to market will take many years as the extraction technology is not quite here yet. The U.S. is trying to increase their Canadian oil imports to over five million barrels per day. The potential profits in these companies are staggering, so yes, there are some great investment opportunities as these new reserves are tapped cost effectively, and with the price of oil to soon hit $100. per barrel, it is going to happen.
What Iraq should do is plant itself on the borders of Kuwait and pump the region dry knowing Kuwait was already cross drilling into Iraq which prompted Saddam's attack. Amazing how ungrateful Kuwait is after U.S. saved their greedy a$$es. Short memories goes along with their short oil reserves. lol
Good luck and health to all, Mike