Tuesday, April 04, 2006

 

'The Crunch Is Already Here': Saudis

The Associated Press has this report on oil supplies. "The world's only oil superpower boosted output last month. But demand for the world's premiere source of energy is rising so fast — by around 2 million barrels per day each year, that even Saudi Arabia's vast resources will be unable to cope without drastic help, oil executives and analysts say."

"Remarkably, even Saudis, who control over a quarter of the world's known oil, are calling for relief from relentless consumption. 'The current out-of-control demand is not good for us,' Ghazi Al-Rawi, head of private equity at Gulf One Investment Bank, said in a recent interview. 'When you have this kind of demand, you're forced to supply beyond the optimal rate. That's not a positive thing.'"

"Most urgently needed is energy conservation, especially in the United States, which now burns up a quarter of the oil sold to the world, said Saddad al-Husseini, the former head of production at state-owned Saudi Aramco. 'We need some help,' said Nawaf Obaid, a Saudi petroleum adviser with close ties to the government."

"'Can [global consumers] afford to keep increasing demand by almost 2 million barrels a day each year? Is it Saudi Arabia's role to meet that demand?' asked al-Husseini. 'You're leading yourself to having to find an alternative source of energy very quickly.'"

"Sharif Ghalib of Energy Intelligence Research in New York, say the world's cushion of oil-production capacity, a safety margin that keeps a lid on prices, is so low that demand could outstrip supplies now. All it would take is a single oil producer going off-line for any reason. 'The crunch is already here. It's not five years down the road,' Ghalib said. 'There is no thought being given in the U.S. to raising gasoline taxes or increasing mileage on U.S. cars. In China, automobile use is skyrocketing.'"

Comments:
ben, I don't know if you consider water to be money or a metal, but there was a good interview with a water expert on financial sense this weekend. they also had axel merk, who manages a hard currency fund.

big picture, hour 2.

FSO

Big picture MP3
 
Oil has not been subject to free market conditions in my lifetime. We subsidize it's extraction and borrow massively to protect free "access". We subsidize construction of infrastructure to facilitate its consumption. Yes, if there weren't packs of thugs itching to control it, we'd have something closer to a free market for the stuff.
 
(If oil is in high supply and they can't keep up, prices go up.)

like say, going from $10 to near $70 dollars in a few years?
 
PEAK OIL! PEAK OIL! PEAK OIL!!!!
 
you got it TJ.
 
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