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***Countdown to $100 oil (28) - New records suggest more to come

by Jerome a Paris Tue Jul 18th, 2006 at 08:11:26 AM EST

No, I'm not talking about the new highs reached by oil prices ($78.40 for WTI in New York, $78.66 for Brent in London) - these would not have been enough to take me out of my holiday. I'm not even talking about whatever's happening in the eastern Mediterranean basin - war and hate in that region are part of the scenery and mostly irrelevant to oil prices (in fact, they are a great distraction from oil-related news). No, I'm talking about two other records that have come along and suggest without a doubt that we are fucked.

***back from the front page...


One is known to the markets and directly impacted oil prices:



US demand growth remains firm

"The initial reading on June gasoline demand is now put at 9.506m b/d, which is the first time that monthly demand has ever surpassed 9.5m b/d"

So, despite record high oil (and gasoline) prices, US demand for gasoline is still growing more than ever. With demand growing at record paces in countries like China, India, Iran or Saudi Arabia, and production stagnant, you'd expect the higher oil prices to at least have on rich world demand. Many parts of Europe did see demand reduction, as drivers used thir cars less and switched to more fuel efficient vehicles, but in the US - nope. Individual efforts have not yet been enough to beat the huge inertia of the system.

Which means that prices will have to go much higher to actually have an impact on US demand.

The second record is the one that inspired me to write this diary - it's a strong contender for the title of stupidest newspaper headline, found in the local paper here in Sydney.

As you may have heard, an Australian TV channel recently broadcasted a high profile documentary on peak oil. A well known Iranian peak oil expert is currently in Australia, and he spoke at a conference:



"In the near future there is no way to go but on the decline," he said. "[Consumption] will decline to 55 million barrels by 2020" from a peak of 81 million barrels this year. In the mid-1990s the only unexplored frontiers were the poles, but now energy companies were moving into the Arctic. "There is only one frontier left and that is Antarctica," Dr Bakhtiari said.

Dr Bakhtiari is a well known voice in peak oil circles, especially for his willingness to contest official OPEC reserve numbers, and he is one of the most pessimistic as to the date of peak oil.

So you'd expect the paper to notice that pessimism, maybe? Nope. Here's their glorious headline (for a small half-column article):

Antarctic next, says oil expert

We'll just keep on producing more and go the the next available spot. Nothing to worry, move along...

It's not with headlines like this one that peak oil is going to enter our collective consciousness and that politicians will be moved to do anything. Blaming Iran, Palestinians, speculators, the imperialist Russians or the greedy Chinese is sooo much easier...

$100 oil will happen this year and it will be an anti-climax.

Earlier "Countdown Diaries" (links to both ET and DK when the versions are different enough):
Countdown to $100 oil (27) - 'Mission Accomplished' - High oil prices are here to stay
Countdown to $100 oil (26) - Time to bet again (eurotrib)
Countdown to $100 oil (26) - Time to bet again (dKos)
Countdown to $100 oil (25) - Iran vows that oil prices will not go down
Countdown to $100 oil (24) - What markets are telling us about future energy prices
Countdown to $100 oil (23) - Running out of natural gas in North America
Countdown to 100$ oil (22) - gas shortages in the UK - 240$/boe
Countdown to 100$ oil (21bis) - long term vs short term worries (dKos)
Countdown to 100$ oil (21) - 8-page extravaganza in the Independent: 'we're doomed'
Countdown to 100$ oil (20) - Meteor Blades is Da Man in 2005
Countdown to 100$ oil (19) - Your bets for 2006 (Eurotrib)
Countdown to 100$ oil (19) - Your bets for 2006 (DailyKos)
Countdown to 100$ oil (18) - OPEC happy with oil above 50$
Countdown to 100$ oil (17) - Does it matter politically? A naked appeal for your support
Countdown to 100$ oil (16) - We'll know on Monday
Countdown to 100$ oil (15) - the impact on your electricity bill
Countdown to 100$ oil (14) - Greenspan acknoweldges peak oil
Countdown to 100$ oil (13) - Katrina strikes / refinery crisis
Countdown to 100$ oil (12) - Al-Qaeda, oil and Asian financial centers
Countdown to 100$ oil (11) - it's Greenspan's fault!
Countdown to 100$ oil (10) - Simmons says 300$ soon - and more
Countdown to 100$ oil (9) - I am taking bets (eurotrib)
Countdown to 100$ oil (9) - I am taking bets (dKos)
Countdown to 100$ oil (8) - just raw data
Countdown to 100$ oil (7) - a smart solution: the bike
Countdown to 100$ oil (6) - and the loser is ... Africa
Countdown to 100$ oil (5) - OPEC inexorably raises floor price
Countdown to 100$ oil (4) - WSJ wingnuts vs China
Countdown to 100$ oil (3) - industry is beginning to suffer
Countdown to 100$ oil (2) - the views of the elites on peak oil
Countdown to 100$ oil (1) (eurotrib)
Countdown to 100$ oil (1) (dKos)

Display:
on Bastille Day (or the next? - I am a bit confused by time zones right now)

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Jul 14th, 2006 at 10:37:10 AM EST
Your "Time to bet again (ET)" link is bad.

Nothing is 'mere'. — Richard P. Feynman
by Migeru (migeru at eurotrib dot com) on Fri Jul 14th, 2006 at 10:42:44 AM EST
[ Parent ]
Now corrected

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Jul 14th, 2006 at 11:14:34 AM EST
[ Parent ]
Bloomberg: Tokyo Oil Surges to Record on Middle East Violence, Nigeria (July 14)
``Together with the Nigerian issue, Israeli attacks on Lebanon could lead to political instability in the whole Middle East,'' said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures Ltd. in Tokyo, said by phone today.

...

``Oil in New York will perhaps breach $80 a barrel next week, and hit $96 some time in the next two months through the end of September,'' Emori said.

Emori-san is too polite to say $100.

Nothing is 'mere'. — Richard P. Feynman
by Migeru (migeru at eurotrib dot com) on Fri Jul 14th, 2006 at 10:41:45 AM EST
Erm, aren't you supposed to be on a beach or something ?

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Fri Jul 14th, 2006 at 10:49:36 AM EST
He probably is, laptop and all.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Jul 14th, 2006 at 11:19:35 AM EST
[ Parent ]
Isn't free wi-fi a wonderful thing?

Nothing is 'mere'. — Richard P. Feynman
by Migeru (migeru at eurotrib dot com) on Fri Jul 14th, 2006 at 11:20:54 AM EST
[ Parent ]
let's put the things straight...Jerome is supposed to be in the middle of great wilderness with beatiful beaches, family, enjoying life..

ANd I am supposed to be in the middle of a war.

I just wanted to state the obvious...and set it  clear :)

I love you Helen.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Fri Jul 14th, 2006 at 01:06:43 PM EST
[ Parent ]
How's that war thing going for you? I assume you're well away from the action?
by Colman (colman at eurotrib.com) on Fri Jul 14th, 2006 at 01:08:23 PM EST
[ Parent ]
Yes... I hoped that..until I learned from haaretz that israel thinks that Hezbollahas some rockets thatcan reach Tel-Aviv...not a lot of them but some...so I changed my status :)

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Fri Jul 14th, 2006 at 07:48:18 PM EST
[ Parent ]
I love you Helen

Aww shucks {embarrassed}

Tho I think one of my planned diaries in the next few days is gonna provide a big disappointment

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Sat Jul 15th, 2006 at 04:46:44 AM EST
[ Parent ]
For God's sake, Jerome, go out and look at all the wildlife.  You're in a country that has Great White Sharks, Box Jellyfish, Kangaroos, and, of course, Australians.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri Jul 14th, 2006 at 11:04:55 AM EST
but today we got up at 2pm and nightime is at 5pm (winter here...)

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Jul 14th, 2006 at 11:11:25 AM EST
[ Parent ]
Where in Oz are you, BTW?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Jul 14th, 2006 at 11:18:46 AM EST
[ Parent ]
then the next few weeks up on the Coast, then onto Ayers Rock.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Jul 14th, 2006 at 11:37:12 AM EST
[ Parent ]
Intriguing name. I had to look it up.

Ooh, nice.

Ayers Rock

Sacred place, Uluru. Interesting satellite picture at bottom of page

Uluru [wikipedia]

Beautiful Google maps image

_____

Oh, my. Have a lovely time!

[down there where you can look up our Northern hemispheric petticoats]

by cigonia on Fri Jul 14th, 2006 at 02:47:38 PM EST
[ Parent ]
Are you going to Cairns ? Self-styled adventure capital of the world. I saw a travel prog on it once and it looked like the most fun it was possible to cram into one area.

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Sat Jul 15th, 2006 at 04:48:35 AM EST
[ Parent ]
Hey Jerome, are you in Sydney?! Being very busy?

Welcome to the land of land clearing, and funny animals, of course.

by das monde on Sat Jul 15th, 2006 at 01:28:22 AM EST
[ Parent ]
Beware of the killer kangaroos, Jerome.

Those who can make you believe absurdities can make you commit atrocities. -Voltaire
by p------- on Fri Jul 14th, 2006 at 11:36:41 AM EST
We heard about the Australian TV programme and Dr Bakhtiari on Fran's Breakfast Thread two days ago. We do our best to keep up, you know.

Hope things will get better down there than getting up at 2 pm in the depths of austral January!

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Jul 14th, 2006 at 11:55:50 AM EST
Not much of the wild life down in Sydney...except at ZOO, ha-ha. It took me several years of living here to see kangaroo (in the "wildness") and even that was far north of Queensland. Actually I saw it around the house we rented for our holyday at Airlie Beach. It was more like a pet. First photo shows it. Few months ago I made this second photo visiting some friends around  Sydney area (Jarvis bay) . In the end few more photos of "pets" here in my home, Brisbane...Last one ducks having a "pool party" at my back yard, ha-ha.
I don't think Jerome can resist Internet and ET for more then few hours...while he sleeps, of course. Have a good time!

I would appreciate if Sirroco or someone else can make a mosaic of my photos (to save some space) so that people can open them individually ...I don't know how to do it.

Science without religion is lame, religion without science is blind...Albert Einstein

by vbo on Sat Jul 15th, 2006 at 10:33:04 AM EST
Few more:



Science without religion is lame, religion without science is blind...Albert Einstein

by vbo on Sat Jul 15th, 2006 at 10:40:52 AM EST
For some reason some photos are not showing...



Science without religion is lame, religion without science is blind...Albert Einstein

by vbo on Sat Jul 15th, 2006 at 10:44:59 AM EST
From a Flemish paper today(my translation):
Israel orders jet-fuel(JP8) for 210 milion dollars in the US. The fuel will be used by Israeli combat-planes for peace and security missions.

Euh....US-fuel + Israeli plane = peace ????

Why not give such fuel to every army?

But I have a question to: since I coulnd't find the original source of this 'news' I looked around and found this on the website of the US DoD:

DEFENSE LOGISTICS AGENCY
            Valero Marketing & Supply Co., San Antonio, Texas, is being awarded a maximum $36,781,780 fixed-price with economic price adjustment contract for JP8 jet fuel for the government of Israel.  The other location of performance is Corpus Christi Refinery, Corpus Christi, Texas.  There were 13 proposals solicited and four responded.  Contract funds will expire at the end of the current fiscal year.  The date of performance completion is Jan. 30, 2007.  Contracting activity is Defense Energy Support Center, Fort Belvoir, Va. (SP0600-06-D-0542).

Does this mean the US is actually paying for this fuel?


The struggle of man against tyranny is the struggle of memory against forgetting.(Kundera)
by Elco B (elcob at scarlet dot be) on Sat Jul 15th, 2006 at 01:40:01 PM EST
My heart sinks when I see that, despite all the time and efforts spent by Jerome to enlighten our fellow liberals on Kos, I just came across a post by "pissedpatriot" (uder ID 80883) -- obviously a recent contributor -- who wrote:

The time of cheap oil is NOT OVER, that is nonsense. Oil was just 20 bucks a barrel a few years ago under Clinton. The only things changed as I have mentioned is that china and india need more but their demand is covered, the problem is the mid east instability.

THE REAL problem is the people who think oil is running out have NO UNDERSTANDING of why the price is so high at the moment.  You don't seem to grasp what causes oil prices. IT IS SPECULATION.  The price is high because of the FEAR of a disruption due to all this war. OIL SUPPLY AT THE TIME IS FINE.

link.

by Lupin on Sun Jul 16th, 2006 at 03:33:23 AM EST


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