Skip to comments.'Sky-High' Oil Prices to Last Until 2020
Posted on 04/12/2008 7:20:50 AM PDT by kellynla
The world is now in a period of sky-high oil prices that will last a long timeprobably until 2020, according to the world's largest investment bank. Senior analyst Gioavanni Serio in Goldman Sachs, visiting Norway, told participants in an energy seminar that the oil industry moves in 20-year cycles, reports finance industry newswire E24.
The price for American raw oil rose to a record-high USD 112 per barrel this week after new figures revealed a surprising decrease in storage the week before.
Brent oil from the North Sea also rose to new highs, selling for USD 109 per barrel.
In the long-term, oil prices reflect marginal costs to the oil industry," said Serio at a yearly energy seminar held by Wilhelmsen at Lysaker outside of Oslo. "The oil price and marginal costs stayed low in the 1990s. Now that it has become far more expensive for the oil producers to retrieve oil, the price is going to rise correspondingly," he predicted.
The Goldman analyst does not think oil demand will increase significantly but he pointed to "bottlenecks everywhere". He said: "Oil companies are lacking professionals and rig rates have exploded from around USD 100,000 per day in 2002 to USD 500,000 per day this year."
Serio expects oil prices to fall in the short-term, to about USD 90 per barrel, but said it is "unrealistic" that the price would fall under USD 70 per barrel in the coming years. By the end of 2008, he expects the price to be well over USD 100 per barrel.
However, not everyone shares Goldman Sachs' bullish predictions. Italian oil giant ENI's CEO Paolo Scaroni said last week he believes oil prices will fall as a result of increased production.
"We expect the oil price to fall to USD 50-60 per barrel, a price that will provide for global growth," said Scaroni in an interview on Italian TV.
The Norwegian economy has boomed on the back of soaring prices for Norway's oil and gas amid a general world economic downturn.
Another Michael Ramirez Classic! LOL
I know a guy who has www.oilrising.com for those who believe oil prices are going up, and also www.oilfalling.com for those who believe prices are going down. It is funny because he is taking advantage of both sides in this very debate.
That's an important point.
That was Great. Now on my home page.
Huh? Are you kidding? That's just the problem - there is not "plenty of oil" left at all. In fact there really isn't much more than 50 years worth by many estimates. And that includes drilling in ANWR and everywhere else. It's going to run out someday, and that day is fast approaching.
There need to be more conservatives like you posting on here. These people just don't get it.
It won't run out all that fast. It's at peak production right now so it isn't going to suddenly stop now. The cost will rise and rise until it is no longer a resource. Then it will be over even if it hasn't run out.
Welcome to FR.
If the tanking of Asian markets combined with the slow response of OPEC to scale back production that resulted in spot price for oil that low for a few months and compare that today’s price is a sign of the president’s fault, please explain it to me.
... and by just as "many", if not more than ... there is plenty of oil.
So I'm not an oil man, nor play one on TV, but I've chosen to believe the ones that say there is, rather than the ones that say there isn't.
Pretty much the same as Gorebull warming, eh?
I wonder if this 'information highway' thing is such a great idea.
I can't remember ever having so many bullets to believe/disbelieve in my life .. ever .. until I turned on my computer in 1998.
There does seem to be a trend ... That for every thesis there is an equal and opposite anti-thesis, and the theory of synthesis is yet to be proven.
The oil man retires in January of 2009, so I don’t see the climbing prices going much beyond that.
We cannot know now. We can look back at some future time and say it was but in the middle of the ongoing it is impossible to do more than pass rumor.
EASY easy easy money....BUT it involves hard and dangerous work.
Just bought a $$$boatload of stock in Transocean Inc.(RIG) and Schlumberger (SLB).
There's a lot of money to be had investing in the "Drillers" and "Oil Services" industry. IMO.
In 1980 those estimates said we had 27 years left.
In 1990 those estimates said we had 41 years left.
In 2000 those estimates said we had 36 years left.
In 2005 those estimates said we had 41 years left.
In 2007 those estimates said we had 43 years left.
On average, the petroleum industry meets the rising demand and still adds more to the proved reserves.
Proved reserves are only based upon fields that have been flow tested. Areas known to contain oil but not drilled, like ANWR and most of NPRA for example are not counted in the total.
Now add those others plus oil shale, coal-to-liquid, gas-to-liquid and methane hydrates to our supplies.
Still think we won’t use liquid petroleum in 50 years? I’m not claiming it will be cheap, but I suspect it will still be the largest source of world energy.
It's an important point, that's what I said, that's what I mean.
When in history did something like this happen before?
Your cartoon expresses the truth in a nutshell.
Here's the synthesis:
Yes we are running out of easy to recover oil but there is a whole sh*t load of difficult to recover oil still in the earth.
Difficult = $$$. So Goldman Sach's predection of 20 year high oil prices is probably true.
No need after 12/21/2012....
“No need after 12/21/2012?”
Okay, I give up...what happens then? LOL