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Houston with oil at $70 or $300
Rick Casey, Houston Chronicle
… Houston investment banker Matt Simmons, whose Simmons & Co. survived the 1980s oil patch depression and is thriving as Wall Street investment banks implode, says the economy here is “stronger than horseradish.”
Yeah, but are we on the edge of a precipice? Not unless Washington totally blows it, he says.
“Not unless they say, ‘Let the fire burn itself out,’ ” he says. “Look how effortlessly we did away with Washington Mutual and Wachovia. It was done gracefully.”
That doesn’t mean there won’t be hitches with tight credit for a while, but Simmons is convinced such “paper” problems will be worked out.
… He’s focused on what he considers a much bigger crisis, albeit one that for some time to come will keep Houston humming.
As profiled in the current issue of Fortune magazine, Simmons is the high priest of “peak oil.” His thesis is that Saudi Arabia and the world have less oil than is claimed, and that we either are now at or have already passed peak production of oil.
Meanwhile, he says, world demand is growing, especially in the mega-nations of China and India.
The result, he predicts, will be oil at $300 a barrel or more. He’s hardly alone. Boone Pickens told CNBC this week he sees oil at $150 a barrel in a year.
… Henry Groppe is the dean of Houston forecasters of oil and gas prices. His company, Groppe, Long & Littell, has been advising investors for 53 years. Like Simmons, he is legendary for the depth of his research.
He agrees with “my dear, dear friend Matt” that oil production has reached its peak. But he doesn’t see oil going to $300 any time in the next 10 years.
“We’ve been telling our clients all year that oil prices would inevitably go down to $70 by the end of this year,” he said Thursday, as the price dropped to just under $94 at closing. That’s down from nearly $150 earlier this year.
(2 October 2008)
Do You Have A Peak Oil Plan? Find Out How Some Torontonians Are Preparing (text and video)
Shawne McKeown, City News (Toronto)
… There are many Torontonians concerned about how the city and its citizens will fare in a peak oil scenario when our demand for energy outweighs supply, resulting in big price increases and possibly other consequences.
Randy Park chairs the group Post Carbon Toronto, whose goal is to spread the word and raise awareness about peak oil, a problem it claims the world will start to experience in the next few years.
… Post Carbon Toronto is a group comprised of about 100 people, with many senior members who have expertise in physics and geology. It’s loosely affiliated with an international group called the Post Carbon Institute.
” … people are very predisposed to short-term thinking and it takes extra effort to look past the next day, or week, or year and say, okay, what are we going to do now that’s going to affect our lifetime or our children’s lifetime,” Park said, adding the concerns expressed about the peak oil situation are very similar to those raised in regards to climate change.
In order to deal with rising energy costs due to declining production, Park said Torontonians and should start retrofitting their homes to increase efficiency, reducing their addiction to cars and supporting public transit initiatives.
“Ironically, even though it’s a very big problem a lot of the solutions are very locally-focused and one of the reasons is because it’s the local governments that make the decisions that do have a long-term impact, like building codes and zoning regulations and transit planning,” Park said.
Some Torontonians are preparing for more than increased costs to fill the car and heat their home. Graphic artist Laurie Varga runs the newly-formed Toronto Survivalism meetup group where people share survival skills and do-it-yourself techniques.
(3 October 2008)
ASPO-USA conference proceedings
ASPO-USA
(October 2008)
PDFs of the presentations at the recent ASPO-USA conference are online at this page on the ASPO-USA site, as are Speaker biographies. We’ve been posting links to reports and videos from the conference as they come online. Conference site. -BA
Commodities Head for Biggest Weekly Decline in Over 50 Years
Glenys Sim, Bloomberg
Oil, copper, and corn drove commodities toward their biggest weekly decline in more than 50 years on concern that the worst financial crisis since the Great Depression will push the U.S. into recession.
Commodities, as measured by the Reuters/Jefferies CRB Index of 19 raw materials, have tumbled 9.9 percent this week, the most since at least 1956. Manufacturing declined to a 7-year low in the U.S. and contracted at the fastest pace in 16 years in the U.K. last month. Initial jobless claims rose to the highest since 2001, the U.S. Labor Department said yesterday.
“Panic, risk aversion and liquidation of contracts are characterizing the oil market as well as many other markets at the moment,” said Thina Saltvedt, a Nordea Bank AB analyst in Oslo. “Prices are not only being set by fundamentals, but fears of how crises in the financial sector may spread to other parts of the economy.”
(3 October 2008)
Sentiment of oil markets is shifting from bullish to bearish
Syed Rashid Husain, Arab News
Fears of a global economic meltdown have overtaken the oil markets. Further contraction is a reality — now looming large on the horizon — and the crude markets could not be far behind in taking the cue.
Prices continued to fall on concerns that even a US bailout of its ailing financial sector would not be enough to restore the declining oil demand. Markets lost nearly 10 percent in New York in response to the dramatic rejection of the $700-billion bailout plan by US legislators last Monday, dropping more than $10 a barrel to slip below $100, and they appear poised to keep falling.
“Oil traded for the last five years on fear of supply interruptions. It is now trading on fear of economic collapse,” James Williams of WTRG Economics said, adding downward pressure on oil prices should continue.
Market sentiments today stand drastically altered. The sharp rise to $130 a barrel the week before is again history — more of an aberration, the last gasp for the bull market — rather than the beginning of a run to new record highs
(3 October 2008)
