Oil Crunch in 5 years

[dtryanxpress]

http://www.ft.com/cms/s/2d97d75a-2e0...p%3Ft%3D134796

World will face oil crunch ‘in five years’
By Javier Blas, Commodities Correspondent

Published: July 9 2007 13:25 | Last updated: July 9 2007 13:25

The world is facing an oil supply “crunch” within five years that will force up prices to record levels and increase the west’s dependence on oil cartel Opec, the industrialised countries’ energy watchdog has warned.

In its starkest warning yet on the world’s fuel outlook, the International Energy Agency said “oil looks extremely tight in five years time” and there are “prospects of even tighter natural gas markets at the turn of the decade”.

The IEA said that supply was falling faster than expected in mature areas, such as the North Sea or Mexico, while projects in new provinces such as the Russian Far East, faced long delays. Meanwhile consumption is accelerating on strong economic growth in emerging countries.

The problem is exacerbated by the fact that supply from non-members of the Organisation of the Petroleum Exporting Countries will increase at an annual pace of 1 per cent, or less than half the rate of the demand rise.

The widening gap between rising consumption and lagging non-Opec supply will force Opec to sharply increase its production in the next five years.

Lawrence Eagles, head of the IEA’s oil market division, told the Financial Times: “If we get to the point were there is insufficient supply, the only way to balance the market will be through higher prices and a drop in demand.”

The IEA Medium Term Oil Market Report came as oil is approaching last year’s record high. Brent crude oil on Monday rose 72 cents to a 11-month high of $76.34 a barrel.

Refineries are already paying record high prices as producing countries have cut the discount at which they sell their oil relative to Brent, according to an analysis by the FT. Most of the discounts had been reduced to levels not seen since 2004 and some even to six-years lows.

Oil demand will grow at an annual rate of 2.2 per cent during the next five years, up from a previous estimate of 2 per cent, to reach 95.8m barrels a day in 2012. China, the Middle East and other emerging countries will lead the increase.

Rex Tillerson, the chairman and chief executive of ExxonMobil, said recently that he thought non-Opec oil production was close to levelling off. He told the FT: “We still see capacity for a little more growth, but pretty modest, and then in our own energy outlook it begins to plateau. And that results then in this call on Opec.”

UK oil production is set to suffer a dramatic decline from today’s 1.7m barrels a day to just 1.0m b/d in 2012, according to the IEA.

The IEA estimates Opec would have to supply about 36.2m b/d in 2012, up from today’s 31.3m b/d. That would reduce the oil cartel’s spare capacity to a “minimal level” of 1.6 per cent of global demand, down from 2.9 per cent in 2007.

Additional reporting by Ed Crooks in London

Copyright The Financial Times Limited 2007

How bad will this kill the trucking industry?

[abc123]

will hurt the entire economy

[Cluggy619]

It's just more of Bush's Bull***** Baked Beans. It's yet another another story to raise the cost of fuel that they add as a side dish to what is going on today.

Oil is not the problem. Converting it to fuel is.

But that's just my opinion.

[Mackman]

It's just more of Bush's Bull***** Baked Beans.

[Jackrabbit379]

Good one, Cluggy.

I have to say, those are the lamest commercials I have ever seen. :shock: :P

[dtryanxpress]

So are truck drivers screwed?

(even more now)

[Cluggy619]

So are truck drivers screwed?

(even more now)

No. Unless your O/O, paying for fuel.

[abc123]

o/o will make same money, , lets say o/o made $500 for a specific load, even at $10 a gallon he will get much more money for the load but will net the same $500 as before, because if you think about all the companies are o/o, if they have to pay more for fuel the shipper will pay more per load.

most o/o are netting same money as 10 years ago, but gross they are making alot more then 10 years ago, all the extra gross is to compensate for fuel going up, but net were not doing any better.

[Useless]

Note:

The BLACK Color represents our oil costs and supply problems.


The BLUE Color represents our sense of personal discipline and social responsibility.

The GREEN Color represents the money we wast by not using our gasoline and automobiles more efficiently.

The "shortages" of oil will not really be caused by lack of supply; we have massive reserves of crude in the Gulf of Mexico, but it will be very expensive to drill for it. As was in the 1970's, and it will be again, any "shortage" of oil will be the direct result of failed U.S. foriegn policy, the lack of a serious national energy policy, our refusal to get absolutely serious about development of alternative fuels, improve the efficiency of wind power (expanding and developing more advanced technology in the use of windmill power) and the ever increasing demand due to the economic growth and development of China.


Hell, we could increase fuel efficiency in our automobiles in as little as 60 days if we only did two things:

1.) If people would just put a little effort into keeping their car and personal vehichle's, tires properly inflated, which would not only increase fuel efficiency, but also extend tire life and reduce wear and tear on the vehichle itself.

2.) By making some minor modifications in our driving habits, such as not flooring the accelerator when the light turn green, and reducing unneccessary trips and driving.

If all of us would agree to these two very small, very simple sacrifices, of

1.) Keeping our tired properly inflated.

2.) Laying off of the accelerator, and driving smarter, thus reducing unneccessary trips.

we could substantially reduce our demand for gasoline, and help contain the cost of driving.

As for me?? I am not yet ready to make such sacrifices!!

[marcel27208]

o/o will make same money, , lets say o/o made $500 for a specific load, even at $10 a gallon he will get much more money for the load but will net the same $500 as before, because if you think about all the companies are o/o, if they have to pay more for fuel the shipper will pay more per load.

most o/o are netting same money as 10 years ago, but gross they are making alot more then 10 years ago, all the extra gross is to compensate for fuel going up, but net were not doing any better.

so in retrospect it will hurt everyone then, more to pay o/o to pull the load, they will pass that on to the consumer by raising prices on the products being hauled

[abc123]

correct, and we are all consumers, i guess im gonna start making biodiesel, mcdonalds here i come

[ben45750]

Being that the article is written by a commodity's correspondence take that article with a grain of salt. Commodity's are bought and sold on speculations just as this article is based on speculation. Yes, the demand is going to increase but so will production, so petroleum company's can continue to make billions.

[DBW]

Good one, Cluggy.

I have to say, those are the lamest commercials I have ever seen. :shock: :P

Lame perhaps... but much better than the ongoing circus show at 1600 Pennsylvania.

[RedRaven]

Actually, everyone is going to be in a worse situation, and much sooner. Biofuels are already having a serious impact on food livestock production. More farms are actually going out of business due to higher fuel costs, and cost for corn to grow to feed their livestock...

I've said it before, and I'll say it again, you don't want biofuels, they are not going to cost less to make anytime soon, and they are impacting the heart of food production in this country, and around the world.

Which would you prefer, food, or fuel?...

Frankly, they should have turned to other sources for biofuel production, soybeans, olives, canola, any other organic means other than corn. Corn is to much of a basic necessity for the production of food livestock, to place it's use the biofuel catagory...

I've recently spoken with this regions largest Dairy Cattle businessman, and they are hurting due to the corn issue. Not only does it cost them more to feed their Dairy Cattle, but, to buy corn to grow their corn crops to feed their animals, and their fuel costs are still going up anyway to run equipment...

So, where is the savings in this biofuel scheme?... It was, and is a bad idea to divert a basic food staple to the production of fuel. You would think that the scientists would have come up with a better idea...

Haven't talked with any farmers who do cash crops, and grow corn. They are happy to get more money for their corn, but, in the long run they are cutting their own throats in other ways in the end...

Kind of like credit card debt, using two credit cards to pay off the bill of the other, instead of clearing up the debt completely in the first place.

It is an escalating situation, that will only get worse as time moves on...

Would love to talk to the individual who came up with the corn crop for biofuel idea in the first place...

I'd rather see waste veggie oils, recycled for fuel use first... Heck there has got to be plenty of that available, and has been used to fuel specially rigged diesel vehicles already... Would like to know where all the waste veggie oils end up, once they leave the businesses that use them... Haven't heard anything in regard to them using it for vehicle fuel usage, has anyone else?...

Well, the fact here folks is plain, and simple the only way your going to reduce fuel needs is to reduce your human population, period. The days of needing large families to run the farm are gone, and the need to have kids isn't there anymore either...

I say get a pet instead... They're cheaper to keep, and they don't pollute the planet like humans do... :wink: Look at it this way, you don't have to pay for braces, prom's, graduations, college, weddings, etc... Think of the money you could save for that great retirement, or extended vacation you've always wanted to take... Or better yet, on your fuel costs... You only live once folks, take advantage of it. But, leave this world better for all the living beings that inhabit it now, and in the future... Just my opinion... :wink:

[Aligator]

Life will go on...
But you gotta wonder about the guy who predicts "record high prices by 2012".................Pssstt, PAL! We're AT record high prices!

Yeah. It'll get higher. And then someday we'll run low on oil. But life'll go on.