When will we see 2-digit oil?

Inevitable? Or just the rantings of perma-bulls who don’t understand the fundamental arithmetic of exponential growth in oil use and forever-constrained supply?

There’s a third way, I guess, where non-oil energy is so successful that demand for oil goes down far enough to bring it to $99.99 or lower.

But surely that particular set of events will need five years of feverish engineering and massive political will.

Anyway, I’d like to see people’s predictions for the continued fortunes of 3-digit oil. And their rationales for such.

Oil is really facinating me at the mo’.

It pervades every aspect of our modern life.
there is something especially human in our relationship with it, both in the lack of respect we give it as a resource, and our believe it is ours as a right, at zero cost and for ever.

I believe, the world is rapidly, and i mean rapidly waking up to the fact that this stuff is finite, and that the sleeping giants of the 3rd world are beginning to demand there fair share.
here lies, the problem, globalisation and the development of the third worlds are begining to turn up demand, last year Russia increased its amount of cars sold by 60% in one year,
China, India are all demanding oil

I hear the arguments about speculation etc, and i suppose (What do i know) that soem of the rises in price is as a effect of this. however, the elephant in the room is the may 2005 peak oil output, whilst is may be a “false peak” it is still to be bettered. Clever people around the globe are jumping up and down and saying that we cannot get the rate of extraction up any higher.

if we see double digit prices again, i believe its short term. for me the price is going one way. as somebody posted here, the world needs to see $200pb before real effeciancies are engaged.

the real question is where will it stop? its took 100 years to build our dependancy on it, how long will it take to change that? and what will it top out at.

the next generation will be very very aware of oil prices.

That, or a global economic collapse :open_mouth: Either way, a huge reduction in demand.

I don’t expect oil to go back down much ever again. Assuming the world starts real efforts to move away from oil in the next few years; and that we are more-or-less at Peak Oil now; then both supply and demand will be reducing over the longer term, holding the price fairly steady, at a high level.

Short-term there’s too much speculation, still way too much loose credit sloshing round the system. Prices of everything will rise and fall almost at random over the next 5 years until the excess credit burns itself up in speculative frenzies.

And therein is both the worst problem and maybe the solution.

The 3rd world is the poorest place, but it is also the sunniest.

It’s easy to make electricity out of the sun, without complex solar panels. Since the 15th century, people have been using curved mirrors to concentrate sunshine into a laser-like beam of extreme heat. In the 15th century they used it to weld metal. In the 19th century they used that to heat water into steam, to create electricity. Cheap oil from a certain Quran-reading region of the world made this type of energy uneconomic 100 years ago.

Northern Africa might just have a very positive future providing Europe and themselves with zero-waste, hyper-abundant energy.

Driving less might be a sign of reductions in usage to come:
calculatedrisk.blogspot.com/2008 … march.html
From the US:

With the price of oil and gas permanently high, Ireland and Britain will eventually go down the nuclear route in a big way for the following reasons:

  • We dont have the engineering or the project management skills to harvest green energy like wind on a large scale.
  • Irish politicians always do what big business tells them and big energy companys love building and operating nuclear stations.
  • Big energy companies love nuclear because it concentrates a lot of generating capacity in one station giving the operator near monopoly pricing power.

Financialsense Newshour
3rd Hour with Jim & John May 24, 2008
netcastdaily.com/broadcast/f … 524-3a.m3u

I’m inclined to disagree with this one. It’s not rocket science.
It just generators, traffos and cables only bigger.

When will we see 2 digit oil?

September 10th 2008 9am GMT. :confused:

I agree its not rocket science. But we havent done rockets either. And we’re still using the same roads and rail lines built under the british administration 100 years ago.

The bottom line is if we were able to do large scale wind, we would have done it already. We’re well behind Denmark, Netherlands, Germany Sweden, Texas, Spain in wind power and yet we have more wind here than all those countries.

Braighni, why dont you show me all these wind “generators, traffos and cables”. Where are they? Youre out of touch with reality.

There’s the slight point that the cheap oil we’ve had for the last 25 years has made wind seem an extremely uneconomic proposition.

If oil had been at 3 digits from 1985 onwards, we’d have a lot of wind generation here right now. After Chernobyl, the nuclear option would have been dead as a dodo politically while a clean alternative existed.

Covering the country in windmills would have employed tens of thousands of low-skilled people all over the nation, every constituency would have hundreds of people working on the mills, so the politicians would have plumped for it.

green bear, your ace.

i Listened to the oil segment… :open_mouth: :open_mouth: :open_mouth:

I read somewhere (it was only about twenty minutes ago, so I’m astonished I can’t remember where!) that oil has a price elasticity of 10x, and that given that there’s a 2.4% gap between supply and demand that the price should have increased by 24%.

It sort of made sense when I read it, now it doesn’t!:

  • what’s the base to add this 24% increase on to?
  • how is it compounded (how often should you add it on)?
  • can an elasticity measure stay constant? Should it not be exponential, e.g. 10x at 1% gap, 25x at 2% etc.

Anyone have any insights?

(I’ve read financial sense newshour aswell and so am looking for a fundamental price calculation).

For an idea of the pain the US motorist (and the trucking industry) is going through:
tickerforum.org/cgi-ticker/a … post=45959
Reposted from the Mercury News:

Even though this is cheap by our standards (about 3.80 litres in a US gallon, so about 90 euro cent a litre), imagine what would happen here if prices tripled in a year?!

You better hope that nice Mr. Trichet keeps the euro strong. (Another reason to hope that interest rates remain high).

i think we’ll see double digit oil if/when we move to a world that doesn’t rely on it any more (at least not to anything resembling current levels) and it will therefore not be a valued commodity. any time before that and i reckon we’ll stay above the $100 mark. the only way to see a depression in long term oil prices is if demand drops because the supply side doesn’t seem to have a solution nor does the cost side and the difference has to come from somewhere?

technologyreview.com/microsi … index.aspx

The problem herein is that making electricity from the sun is also one of the most expensive and complicated for the individual. You can easily have a government spending a trillion on a new dam project or nuclear power station but you won’t get them buying and distributing thousands of solar panels for schools, hospitals, houses etc.

I remember watching a documentary about this some time ago but can’t remember where or what. Another one for Sergey and Larry…