Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.
Oil price volatility continued this week with the current trend being upwards. The main driver is the possibility of hurricane Gustav hitting the Louisiana oil fields and causing damage there. The tension between Russia and the West continues to be a factor, with Russia’s recognition of the independence of S. Ossetia and Abkhazia this week bringing a frosty response from the US and EU nations. India is experiencing diesel shortages as people increasingly resort to generators in order to stave off the impact of power cuts. China however may cut fuel imports in the next month due to the stockpile it accrued prior to the Olympics. The extent of any Olympic hangover and its effect on prices will become apparent in the next months.
Volatility in the oil price has been predicted by key peak oil theorists such as Kenneth Deffeyes and Richard Heinberg. Essentially, a high oil price has the effect of destroying demand, thus leading to a drop in the price and a short-term recovery. Such recoveries are however on a backdrop of long-term decline as demand picks up again when the price drops, causing it to rise again and as supply gaps become more acute. As the UK economy slips into recession, Governor of the Bank of England Mervyn King this week painted a bleaker picture of the next 12 months than he has previously. He did however assure his audience that “This is just a transitory period of subdued growth and we will get through the other side and the growth will resume to more normal levels”. In other words we are encouraged to believe that the good times will return, which in effect means that we don’t really need to change what we are doing.
On the international stage it is easier to see that the world is changing. The EIA is struggling to make meaningful oil price predictions in the light of increasing demand from the developing world and, in the words of UK Energy Minister Malcom Wicks “There is a huge global grab for energy going on…”. Nations are making strategic moves to claim territory or influence.
There are echoes of the Cold War in Georgian conflict, but this has little to do with ideology and this is no longer a world of two opposing superpowers.
Oil Rises a Fourth Day as Gustav Threatens U.S. Gulf Platforms
Energy Price Prediction ‘More Difficult,’ EIA’s Caruso Says
Diesel crisis might worsen in October
China’s petrol buying spree poised to end
Russia’s oil boom may be running on empty
Mexico’s Cantarell oil output falls again in July
Iraq, China agree $3bn oil service deal
Rush for oil reaches Britain’s fields
Indonesian Oil Output May Fall to 840,000 Barrels/Day
Drilling Boom Revives Hopes for Natural Gas
Medvedev endorses Georgia break-up
Russia’s Achilles Heel
Harper Arctic Cabinet Meeting Risks New Russia Cold War for Oil
Ascension Island. Barren, 4,044 miles from Land’s End, but ours says the FO
Downturn could ‘drag on for some time’, warns Bank deputy governor
Recession worries send euro to new low
Ministers back away from windfall tax on energy companies as pressure grows to help poor families
Fuel prices drive cars off the roads
Credit squeeze moves car clubs into top gear
Toyota Cuts 2009 Sales Forecast on Lower U.S. Demand
Indian suitor wins £1.4bn bid battle for Imperial oil
Oil majors look set fair for mergers