As we all know, oil hit a new record high of $90 a barrel in electronic trading last night.
Oil futures surpass $90 a barrel
Light, sweet crude for November delivery hit $90.02 in electronic trading Thursday evening before returning to around $89.60. Earlier, prices had
risen $2.07 to settle at a record $89.47 on the New York Mercantile Exchange.
This isn't a freak accident or something that will be easily corrected. Despite the analyist talking about confilct in this country or that, and the
falling dollar, the real driving force behind this rise is the lack of supply. Boone Pickens stated yesterday on CNBC that "world demand for oil is
88mb and they're only able to produce 85". So we're about 3mb short on daily supply.
Production is flat. It's been flat since 2005, yet demand keeps rising. Ask yourself why production is flat. If the price of oil is near an all-time
high, even adjusted for inflation, why doesn't OPEC put out more oil? In short, they can't produce more. We've reached the limit. Pickens mentioned
that last month, OPEC lifted the production cap on it's members so they are free to produce as much oil as possible. Yet despite this fantastic
chance to sell more for the highest price, there will be no increase in production other than a near 500,000 bd blip after OPEC removed restrictions.
This last drop they squeezed out is enough oil to meet U.S. demands for just over 30 min. Whoop-dee-doo.
Boone Pickens discusses oil prices - $100 within a year, possibly this quarter
Energy analyst John Kilduff - $100 oil this year
World total liquids production (Fig 1) remains on a peak plateau since 2006 and is forecast to fall off this peak plateau in the middle of 2009.
According to the IEA, the current peak production of 86.13 mbd occurred on July 2006 and only one year later, June 2007 total liquids production fell
to an unexpectedly low 84.50 mbd. A good increase up to 85.10 mbd occurred for September 2007. As long as demand continues increasing then prices will
also continue increasing.
Oil Drum
Peak Oil - You're looking at it
[edit on 19-10-2007 by dbates]
