See also the Countdown to $100 oil series. In the long run, we're all dead. John Maynard Keynes
One day, a head of a competitor's company invited a colleague from the formerly best firm to a business lunch, and after fourth martini asked him: "Tell me, what has happened to you?"
He got the following answer: "You know, we used to have this partner. He was consistently wrong about everything. We came to rely on his judgement. But recently he has retired".
People say it's a true story.
Developed countries urged to set targets A group of large financial institutional investors will on Tuesday call on rich countries to cut their emissions by up to 95 per cent by 2050, in the sector's strongest demand yet on climate change. The group of more than 130 investors, with a combined $7,000bn under management, includes Calpers, Calsters, several other US public sector pension funds, and several UK public sector pension funds. The group also includes Blackrock Investment Management, Deutsche Asset Management, HSBC Investments, Schroders and BNP Paribas Asset Management. In a statement to be sent to governments today, they urge developed countries to set targets to cut emissions by 25-40 per cent by 2020, compared with 1990 levels, and cuts of 80-95 per cent by 2050. The investors, brought together by the Ceres group, a US-based coalition of investors concerned about climate change, want the targets enshrined in the successor to the Kyoto protocol.
A group of large financial institutional investors will on Tuesday call on rich countries to cut their emissions by up to 95 per cent by 2050, in the sector's strongest demand yet on climate change.
The group of more than 130 investors, with a combined $7,000bn under management, includes Calpers, Calsters, several other US public sector pension funds, and several UK public sector pension funds. The group also includes Blackrock Investment Management, Deutsche Asset Management, HSBC Investments, Schroders and BNP Paribas Asset Management.
In a statement to be sent to governments today, they urge developed countries to set targets to cut emissions by 25-40 per cent by 2020, compared with 1990 levels, and cuts of 80-95 per cent by 2050.
The investors, brought together by the Ceres group, a US-based coalition of investors concerned about climate change, want the targets enshrined in the successor to the Kyoto protocol.
The Oil Drum will post a series of articles commenting on the report, so be on the lookout for them, starting tomorrow. In the long run, we're all dead. John Maynard Keynes
Worldwide, conventional crude production increases only modestly between 2007 and 2030 - by 5 mb/d - as almost all the additional capacity from new oilfields is offset by the decline in output at existing fields. Output from known oilfields that are already being developed or are awaiting development expands through to 2020, but then begins to drop, as few such fields are left to be brought into production and many of them enter their decline phase. Fields that are yet to be found account for about a quarter of total crude oil production by 2030. - IEA WEO 2008, p. 249
- IEA WEO 2008, p. 249
This strikes me as crazily, wildly optimistic, based on discovery trends over the last decades...
the mechanism that has been pushing prices down is the same one that had been pushing prices up in the first part of the year (as I explained in this recent opus of the series: it's the marginal cost of demand destruction that matters, rather than thr marginal cost of production. Demand was driving prices up when it was strong, and it is now driving prices down just as brutally as it is now crumbling just as spectacularly (whether directly, finally, because of high prices, or indirectly via the economic crunch).
As I've said before, I think your explanation re marginal costs as setting the parameters for price setting is correct. My take on it - as a Bear of Little Economic Brain - is as a market swinging from being a "Buyer's Market" to being a "Seller's Market" and back again.
But whether it was "large volatility" (as you described it) or a "bubble" (as I saw it) the cause of the massive rise to $147.00 and fall back is IMHO the excessive gearing which results from borrowing; derivatives; or both.
It reminds me a bit of the effect of water on a RoRo ferry's car deck - except the inevitable capsize is still to come because the bow doors remain open...
Re Yergin, I've got a late invite to speak about "unitisation" of energy at the
13th IIES International Oil and Gas Conference in Teheran
where he's speaking. I could maybe find out the secret of his success... "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
But we now, unexepctedly, have a strong "buy" signal again: an article by CERA's Daniel Yergin telling us that current prices are justified.
