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Q: Oil bubble ( No Answer,   4 Comments )
Subject: Oil bubble
Category: Science > Social Sciences
Asked by: hedgie-ga
List Price: $20.00
Posted: 25 Aug 2005 03:00 PDT
Expires: 24 Sep 2005 03:00 PDT
Question ID: 560190
To ask a question well, one has to say shat s/he knows, so bear with me.

We know that price of oil (nominal per barrel  of crude) doubled from
$30 to over $60 since 2003

and are now approaching the 'oil-crises' prices of 1980-ies

Also "Compared to few years ago demand is not significantly higher nor
is supply significantly lower"

My question is inquiry about the causes of this spike or bubble.

I know about the 'peak oil' theory - but do not see any study which
justify such sharp increases.

If  some studies  which provide such correlation or justification can
be found - that would be a welcome part of an answer.
If some behind-the-scene cartel is manipulating the prices, may be
some coalitions of non-democratic states, Venezuela, Iran
Russia, terrorists,... may have such influence - that would be of interest as well.

But I do not want conspiracy theories.
Solid analysis of causes, supported by verified data, such as those
published by the gov:
World Oil Market and Oil Price Chronologies:

which would at least hypotheticaly explain this rarely precedented spike 
               that is what I am after.

And prediction, not guesses, how toppling of Iran and Venezuela
governments could affect
this run-up. Would crude prices go up to $105 per barrel, or or drop
to normal levels?

$60 per barrel translates to $3 per gallon at the pump in the US. 
Not so long ago, we had problems as prices at the pump exceeded $1.

Is this consistent with what we know about peak oil - or is, perhaps,
some Enron style
manipulation, like what we have seen in the California energy crisis
which toppled Grey Davis?

this time on the global scale?
All comments welcome. I am interested in views of the public as well.
There is no answer at this time.

Subject: Re: Oil bubble
From: omnivorous-ga on 25 Aug 2005 08:51 PDT
Hedgie --

Some people (and institutions) to read in this are:

Dr. Colin Campbell (an Irish geologist whose predictions on oil
production peaking are some 15 years old)
Michael Lynch, an American oil industry consultant who argues that
energy production will continue to climb
Michael Rodgers, of PFC Energy, a Washington-based consulting firm
(who predicts the peak at 2010-2015)
International Energy Agency, a Paris-based energy consulting firm
Alan Kelly, manager of coprorate planning for Exxon Mobil, one of the
most bullish of companies about oil supplies

Best regards,

Subject: Re: Oil bubble
From: scribe-ga on 25 Aug 2005 11:25 PDT
Are you aware of the article in last Sunday's (8/21) NY Times magazine
about oil, by Peter Maass? It may contain some answers to the
questions you pose:

I would add that before giving credence to any conspiracy theory, you
should consider the possibility that this price increase is NOT caused
by shortfalls in supply, artificial or otherwise, but by huge global
growth in DEMAND for oil. And this growth will accelerate in the years
ahead. Think about the dizzying increase in the number of cars in
China (less than one million of them in 1990, 20 million in 2004, and
a projected 140 million in 2020!)

Subject: Re: Oil bubble
From: hedgie-ga on 25 Aug 2005 19:31 PDT
Thanks for the suggestions and references  omnivorous and scribe
So far we have three posibilities

POPA : Peak Oil arrived 
         Possible - but time scale is wrong.
         half-time is 25 years: in 2040 production is halved (see Fig2)
         Price run-up is happening to fast for that explanation. 

RS:  Real shortages of refining capacity and groeth in demand
         Possible - but actual numbers to not suppport demand growth
         Demand grows  at the rate  2-3%  and prices by 33% 
       -- that is much stronger reaction that any-time in the past
       2.1-percent annual average increase compared with 3.2 percent in 2004.
      This represents a downward revision from the previous Outlook?s annual
       growth rate of 2.5 percent in 2005 and 2006.
        worldwide petroleum demand growth 

AS: Artificial shortages (taking capacity off line to drive up prices)
as happened in California
         ... several US refineries have recently suspended production
for the repeated emergence of problems
            and have thus affected oil supply  ( they probably mean
gas supply?) according
          But of course, it could be legitimate need for maintenance
Subject: Re: Oil bubble
From: hedgie-ga on 07 Sep 2005 00:07 PDT
There is some support for the AS hypotesis:

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