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Rogers says bull market in oil has `years to go’ (transcript)
Betty Liu, Bloomberg
Jim Rogers, chairman of Rogers Holdings, talks with Bloomberg’s Betty Liu from Singapore about Lehman Brothers Holdings Inc. and other investment banks, Federal Reserve policy, airline stocks and the outlook for oil. Rogers said the increase in the price of crude oil has “years to go” as known sources of petroleum are dwindling.
… LIU: All right. Jim, also talk to us about oil. You know, you’ve been very bullish on oil. We’ve had a lot of people talk about, you and I had a debate about whether or not there’s speculation in oil markets right now.
You say no, others say yes, like Soros, he says it’s going to bubble. What do you know that others don’t about the oil market?
ROGERS: Look, look, Betty, there are always speculators in every market. Look at the New York Stock Exchange right now. You think there aren’t any speculators down there on the floor of the stock exchange? There are always speculators. That’s what business is all about.
I submit to you that most of the people and – I don’t know about most of the people, I shouldn’t say that, but we know that the IEA, the definitive authority on oil has said that the world has an oil problem. The Saudis have told Bush that we have an oil problem.
Betty, if there is lot of oil, please, would somebody tell us where it is, so we can all invest in it? The world has a serious oil problem.
Now, Betty, that does not mean that oil cannot go down 50 percent. During this bull market since 1999, oil has gone down twice by 50 percent, going down by 50 percent in 2001 and again, in 2000 whatever it was, ’05 or ’06. So sure, you can have big reaction in any bull market.
But that’s not the end of the bull market. There is no supply of oil unless you – somebody can tell us where the oil is, the bull market in oil has years to go despite new corrections which may or may not come.
LIU: Well, but you know, and I know you always hate having me ask you about – about limits or caps and all of that. But, given the supply/demand situation that you’re talking about, how high can oil go?
ROGERS: Betty, I know you – how you’re paid to ask questions like that, but I don’t know the answer. I’m not smart enough. I know that unless somebody discovers a lot of oil, the price of oil can go to $150, $200. You pick the number.
Eventually, if it goes high enough, if oil goes to $300, there will be drilling for oil on the White House lawn. Hillary Clinton won’t be speculating in cattle futures anymore, she will be speculating in oil futures. She will be out there drilling for oil.
If it goes to $300, there will be drilling at Buckingham Palace. I don’t know how high it’s going to go, Betty, but unless somebody discovers a lot of oil very quickly and very accessible areas, the facts are the world is running out of oil – out of known oil – known oil reserves.
(6 June 2008)
Megaprojects predict decline of oil production
Jim Kingsdale, Seeking Alpha
… I think megaprojects analysis gives us the best insight on near-future oil supply levels. Some other observers prefer to to predict future supplies using the formulas of Dr. M. King Hubbert which are based on original oil in place and decline rates. But Hubbert’s math was done before the current technologies for enhanced oil recovery were available. These new techniques and technologies change the timing of oil extraction over the life of a field resulting in more oil being produced more rapidly than could be done when Hubbert was writing. That puts Hubbert’s mathematical model into question, I believe, as a near term predictor of peak oil.
There is nothing theoretical about megaprojects analysis, only a bunch of best guesses as to actual production from new oil fields measured against estimated near term declines in production from old oil fields and estimated changes in global demand for oil, all by year. Those guesses may be close to the truth or not but they are not based on theory. They are based on announced production intentions and historical facts of decline and demand used to estimate future decline rates and demand. All three areas, when projected into the future, will differ from the eventual reality, but if they are fairly close – even just in the right ballpark – the results may give us a meaningful estimate of the timing of peak oil.
(2 September 2008)
The crash course (End of Money) (audio and slides)
Chris Martenson, website
Ready to learn everything you need to know about the economy in less than two hours?
The Crash Course is a condensed online version of Chris Martenson’s “End of Money” seminar…. The Crash Course seeks to provide you with a baseline understanding of the economy so that you can better appreciate the risks that we all face.
You will learn about:
Intro (on this page, below)
Section 1: Three Beliefs (Time: 1:46)
Section 2: The Three “E”s (Time: 1:38)
Section 3: Exponential Growth (Time: 3:07)
Section 4: Compounding is the Problem (Time: 3:06)
Section 5: Growth vs. Prosperity (Time: 3:40)
Section 6: What is Money? (Time: 5:55)
Section 7: Money Creation (Time: 4:19)
Section 8: The Fed – Money Creation (Time: 7:13)
Section 9: A Brief History of US Money (Time: 7:14)
Section 10: Inflation (Time: 11:48)
Section 11: How Much Is A Trillion? (Time: 3:28)
Section 12: Debt (Time: 12:32)
Section 13: A National Failure To Save (Time: 12:06)
Section 14: Assets & Demographics (Time: 13:41)
Section 15: Bubbles (Time: 14:10)
Section 16: Fuzzy Numbers NEW! – August 5 (Time: 15:52)
Section 17: Peak Oil NEW! – August 23 (Time: 17:52)
Section 17 PART B: Energy Budgeting NEW! – August 28 (Time: 12:15)
Section 17 PART C: Energy And The Economy NEW! – August 29 (Time: 7:05)
A condensed version of a seminar. The online segments seem to be free.
Recommended by Nate Hagens of The Oil Drum (Drumbeat Sept 2):
That Chris Martenson site is great! He packaged alot of TOD themes into more slick compact presentations -did a pretty good job on net energy.
Peak retail sales in Italy?
Edward Hugh, Seeking Alpha
What follows is the first of three posts which will appear this week on the “peak retail sales” phenomenon – one on them will look at Italy, another will look at Germany, and the third will examine the Hungarian case. The basic idea is that as populations age and decline, it is only natural that we should anticipate a longer term decline in the volume of retail sales in the most affected societies. Many theorists place the impact of population ageing out at some distant point in the future, often people seem to like to use 2050 as a reference point, or possibly 2020. But the fact of the matter is that we seem to be able to identify significant consequences flowing from population ageing already, in levels of housing activity to give one example, and in retail sales, to mention another.
So the purpose of these posts – which will be tentative – is to examine just what has been happening in some of the rapidly ageing economies, and to ask whether it might not be the case that in a select few of them retail sales have already peaked.
And, since Ugo Bardi recently put some of these issues on the table by asking whether Italy had not in fact passed its own particular historical “peak oil” and “peak mafia” points, I thought it might be interesting to start with the Italian case.
Sharp Drop In June Sales
Italian retail sales fell sharply in June, posting their sharpest drop on the year in more than three years, as sales fell across the board, according to data last week from the national statistics office Istat, but what many observers seem to fail to be taking note of is that Italian retail sales have been dropping steadily for some years now. Even more importantly – as will be argued in this post – there are serious theoretical grounds (in the context of Italy’s ageing population problem) for postulating that Italy’s retail sales may NEVER rebound again on more than a conjunctural basis, that is we may see local “peaks” and “troughs” but the secular decline may now not reverse.
(2 September 2008)
The question Wall Street is ignoring but the world can’t: Is oil production falling faster than demand?
Energy Tech Stocks
Every Wall Street forecast of where oil prices are headed next – up or down – seems to be based solely on the degree of “demand destruction” that can be expected. But what about “supply destruction?” Whatever the level of demand destruction, if supply destruction is greater, oil prices will rise, not fall.
Wall Street seems to think that, because OPEC is thinking about possibly lowering production, this must mean there’s plenty of oil available, forgetting that OPEC has been unable to raise production to take advantage of sharply higher crude prices. Led by Russia, it’s been the non-OPEC countries, responsible for 60% of global oil production vs. 40% for OPEC, that have been able to raise their output as global demand has grown.
But the evidence indicates that supply destruction is starting to hit key non-OPEC producers hard, and that supply destruction may soon outpace demand destruction, even as many developed nations endure economic downturns
(3 September 2008)