Don Stowers, Editor, Oil & Gas Financial Journal
“The reality is that the economy will come back and when it does there are serious doubts as to whether the supply of oil will be adequate to sustain the economic engine. So all those doubters who criticized Matt Simmons’ view about peak oil may soon have to come to grips with the reality that oil scarcity may become a fact of life in the near future.”
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Items from the Mailbag:
View from Iraq; and the Population Issue We hear from readers periodically. Here are two recent items of note, on important issues. #1: Peak Oil from the Front Lines Here in Iraq, I’ve had interesting conversations over the past few days with some of my soldiers. Those exchanges illuminate the problem we face in getting people to understand the gravity of our energy situation. The guys
Production and Prices
Oil prices opened and closed the week around $68 a barrel. At one point they fell below $65 on news of a build in US crude stocks and later touched a high of over $70 on hopes that US unemployment was bottoming out. Oil’s connection to the dollar, equity markets, and hopes for an economic recovery remains strong. Demand for oil remains weak, with US consumption of petroleum products falling
Airlines Under Pressure
Last summer with oil prices approaching $150 a barrel, the world’s airlines were approaching collapse. The drop in oil prices in the second half of 2008 gave them a temporary reprieve, but now a combination of rising prices and falling traffic is again increasing the financial pressure. Last week the International Air Transport Association reported that 2009 airline losses are expected to be
Update on China
Prior to last summer’s Olympics, China was moving the oil markets by importing unprecedented quantities of oil and products to insure the games would be successful. After the Olympics, China’s demand for oil fell as its exports, GDP, and industrial activity declined. Their GDP, which had been running at a 10-11 percent annual increase in recent years, contracted to a claimed six percent. To
Briefs
Over the next 11 years, Canada’s oil industry is likely to produce 500,000 b/d less than was forecast a year ago, according to the Canadian Association of Petroleum Producers. The forecast for the oil sands has dropped even further, the industry group said in an annual report. Oil sands production is expected to reach only 2.9 million b/d by 2020 - down from 3.5
