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Predictions for the future:
- Thread starter teknobucks
- Start date
teknobucks
Active member
teknobucks
Active member
imported post
IN MEMORIAM: CHEAP OIL
By Eric J. Fry
The world will not run out of oil any time soon...just
CHEAP oil...
So says a fascinating report that bears the title: "The
Death of Cheap Oil." The report's author, Steve Belmont,
Senior Market Strategist for the Rutsen Meier Belmont Group
LLC in Chicago, lays out a compelling - and somewhat
frightening - case for much higher oil prices.
Admittedly, oil prices might retreat a bit over the near
term, as evidenced by yesterday's $1.20 slide to $45.28 a
barrel, but Belmont believes the price of crude oil will be
much higher by the end of 2006 than it is today. He bases
his bullish call on the inevitable - he believes - clash
between shrinking supplies and soaring demand. To preview
his conclusion: Buy long-dated call options on crude oil.
In Today's Rude Awakening we highlight the first half of
Belmont's argument: oil demand. Tomorrow we'll examine the
supply side, while also revealing Belmont's suggested
course of action.
"Oil prices are vulnerable to a perpetual state of shock,"
Belmont's report begins, due to a 'new era' of soaring
demand, depleting supplies and semi-permanent geo-political
tension, especially in the Middle East. "The $40 per barrel
peaks of the past decade could easily become the floor of
the next," Belmont predicts. "$70, $80 or even $100 per
barrel oil is not only possible, but probable in the coming
decade."
As the Asian economies continue industrializing, the report
points out, demand for oil will soar...or at least it
should. "Total global demand for crude oil is currently 80
million barrels per day (MBD)," says Belmont. "Of those 80
million barrels per day, America's population of 293
million people consume roughly 22 MBD. Meanwhile, Asia's
3.6 billion people - well over 12 times the size of the
U.S. population - consumed just 20 MBD. Should Asian per-
capita-consumption rise from its measly 7% of U.S. per-
capita demand to a mere 14%, the market would have to
supply an additional 20 million barrels of oil per day.
This is one-fourth of today's entire global demand...
"Let's look at it another way," says Belmont. "U.S.
consumption of crude oil is roughly 28 barrels per person
per year. South Korea's annual per capita consumption is
17 barrels and so is Japan's. These are both developed
Asian nations. China is rapidly becoming a developed Asian
nation, yet its per capita consumption of crude oil is only
1.7 barrels per year." But Chinese demand is racing to
catch up. Crude oil imports to China jumped a whopping 33%
last year.
But, says Belmont, the bull case for oil does not rest
entirely on the magnitude of demand, but also on the
rapidly changing structure of demand. Now that the Chinese
are maneuvering to secure long-term oil supplies, for
example, future supplies available to other buyers will be
reduced.
The Chinese are actively negotiating to secure long-term
supplies from countries as geographically and politically
diverse as Canada, Saudi Arabia, Iran and Russia. Indeed,
the Chinese and the Russians have embraced one another in a
kind of petro-political bear hug. "When it comes to the
classic relationship between a natural resource producer
and a natural resource consumer," says Belmont, "no two
nations appear more perfectly matched than Russia and
China. Russia produces far more oil that it consumes.
China consumes far more oil than it produces. Both share a
Communist past, a long border complete with road and rail
links, and a history of uneasy relationships with the
world's largest oil consumer: America."
This commercial relationship is spilling over into the
political sphere. For the first time ever, the Russians
recently agreed to hold a large military exercise together
with China on Chinese territory. The exercise will take
place in the second half of the year and will include
'state-of-the-art weapons', according to Russian Defense
Minister, Sergei Ivanov.
As these former Cold War allies draw closer politically and
militarily, they will also draw closer commercially - a
trend that is likely to divert a growing share of Russia's
vast oil supplies away from world markets toward the
thirsty Chinese economy. "Now the China has entered the
game," says Belmont, "America will find itself competing
for shrinking supplies at every level. Over the long haul
that can only mean one thing - higher prices."
Meanwhile, as China and the rest of the world ramp up their
oil consumption, oil production is peaking. The world has
consumed an estimated 1 trillion barrels of oil since the
drilling of the first well in the mid-1800s - almost half
of known recoverable supplies. And no new giant oil fields
have been discovered recently. In fact, discoveries of new
oil reserves peaked in the 1960s and have been declining
rapidly ever since. U.S. oil production peaked in 1970;
North Sea oil production peaked in 1999.
"Given the likelihood that world crude oil production
cannot rise much above 90 million barrels a day," observes
Kevin Kerr, the man behind the Resource Trader Alert, "and
the fact that world demand will easily reach 90 million
barrels per day by the end of 2007, there is little chance
of cheap oil returning. It is unwise to count on sustained
oil prices below $35 to $45 per barrel to ever return
again. You're far more likely to see $100 oil than $35 oil
again."
IN MEMORIAM: CHEAP OIL
By Eric J. Fry
The world will not run out of oil any time soon...just
CHEAP oil...
So says a fascinating report that bears the title: "The
Death of Cheap Oil." The report's author, Steve Belmont,
Senior Market Strategist for the Rutsen Meier Belmont Group
LLC in Chicago, lays out a compelling - and somewhat
frightening - case for much higher oil prices.
Admittedly, oil prices might retreat a bit over the near
term, as evidenced by yesterday's $1.20 slide to $45.28 a
barrel, but Belmont believes the price of crude oil will be
much higher by the end of 2006 than it is today. He bases
his bullish call on the inevitable - he believes - clash
between shrinking supplies and soaring demand. To preview
his conclusion: Buy long-dated call options on crude oil.
In Today's Rude Awakening we highlight the first half of
Belmont's argument: oil demand. Tomorrow we'll examine the
supply side, while also revealing Belmont's suggested
course of action.
"Oil prices are vulnerable to a perpetual state of shock,"
Belmont's report begins, due to a 'new era' of soaring
demand, depleting supplies and semi-permanent geo-political
tension, especially in the Middle East. "The $40 per barrel
peaks of the past decade could easily become the floor of
the next," Belmont predicts. "$70, $80 or even $100 per
barrel oil is not only possible, but probable in the coming
decade."
As the Asian economies continue industrializing, the report
points out, demand for oil will soar...or at least it
should. "Total global demand for crude oil is currently 80
million barrels per day (MBD)," says Belmont. "Of those 80
million barrels per day, America's population of 293
million people consume roughly 22 MBD. Meanwhile, Asia's
3.6 billion people - well over 12 times the size of the
U.S. population - consumed just 20 MBD. Should Asian per-
capita-consumption rise from its measly 7% of U.S. per-
capita demand to a mere 14%, the market would have to
supply an additional 20 million barrels of oil per day.
This is one-fourth of today's entire global demand...
"Let's look at it another way," says Belmont. "U.S.
consumption of crude oil is roughly 28 barrels per person
per year. South Korea's annual per capita consumption is
17 barrels and so is Japan's. These are both developed
Asian nations. China is rapidly becoming a developed Asian
nation, yet its per capita consumption of crude oil is only
1.7 barrels per year." But Chinese demand is racing to
catch up. Crude oil imports to China jumped a whopping 33%
last year.
But, says Belmont, the bull case for oil does not rest
entirely on the magnitude of demand, but also on the
rapidly changing structure of demand. Now that the Chinese
are maneuvering to secure long-term oil supplies, for
example, future supplies available to other buyers will be
reduced.
The Chinese are actively negotiating to secure long-term
supplies from countries as geographically and politically
diverse as Canada, Saudi Arabia, Iran and Russia. Indeed,
the Chinese and the Russians have embraced one another in a
kind of petro-political bear hug. "When it comes to the
classic relationship between a natural resource producer
and a natural resource consumer," says Belmont, "no two
nations appear more perfectly matched than Russia and
China. Russia produces far more oil that it consumes.
China consumes far more oil than it produces. Both share a
Communist past, a long border complete with road and rail
links, and a history of uneasy relationships with the
world's largest oil consumer: America."
This commercial relationship is spilling over into the
political sphere. For the first time ever, the Russians
recently agreed to hold a large military exercise together
with China on Chinese territory. The exercise will take
place in the second half of the year and will include
'state-of-the-art weapons', according to Russian Defense
Minister, Sergei Ivanov.
As these former Cold War allies draw closer politically and
militarily, they will also draw closer commercially - a
trend that is likely to divert a growing share of Russia's
vast oil supplies away from world markets toward the
thirsty Chinese economy. "Now the China has entered the
game," says Belmont, "America will find itself competing
for shrinking supplies at every level. Over the long haul
that can only mean one thing - higher prices."
Meanwhile, as China and the rest of the world ramp up their
oil consumption, oil production is peaking. The world has
consumed an estimated 1 trillion barrels of oil since the
drilling of the first well in the mid-1800s - almost half
of known recoverable supplies. And no new giant oil fields
have been discovered recently. In fact, discoveries of new
oil reserves peaked in the 1960s and have been declining
rapidly ever since. U.S. oil production peaked in 1970;
North Sea oil production peaked in 1999.
"Given the likelihood that world crude oil production
cannot rise much above 90 million barrels a day," observes
Kevin Kerr, the man behind the Resource Trader Alert, "and
the fact that world demand will easily reach 90 million
barrels per day by the end of 2007, there is little chance
of cheap oil returning. It is unwise to count on sustained
oil prices below $35 to $45 per barrel to ever return
again. You're far more likely to see $100 oil than $35 oil
again."
Mike
Active member
imported post
In MN, we have "E85"... per gallon, it's about the same cost as gasoline, but the mileage is slightly worse, and only a limited number of vehicles are made to run on it.
I have mixed feelings on ethanol. Remember, they gotta burn fossil fuels in large quantities just to produce ethanol, so that's not exactly "clean", either. Hydrogen is as clean as clean gets with just water as exhaust, but again, it requires a fossil fuel input in order to crack the hydrogen from water to produce the H2... and there's no infrastructure to handle it... and no pipelines capable of transporting it without leaking.
We've got our work cut out for us if we want to extricate ourselves somewhat from this oil problem.
Oh yeah, one more thing - regular gasoline in this state is 10% ethanol. So we're doing our part here... when will the rest of you get your act together?
In MN, we have "E85"... per gallon, it's about the same cost as gasoline, but the mileage is slightly worse, and only a limited number of vehicles are made to run on it.
I have mixed feelings on ethanol. Remember, they gotta burn fossil fuels in large quantities just to produce ethanol, so that's not exactly "clean", either. Hydrogen is as clean as clean gets with just water as exhaust, but again, it requires a fossil fuel input in order to crack the hydrogen from water to produce the H2... and there's no infrastructure to handle it... and no pipelines capable of transporting it without leaking.
We've got our work cut out for us if we want to extricate ourselves somewhat from this oil problem.
Oh yeah, one more thing - regular gasoline in this state is 10% ethanol. So we're doing our part here... when will the rest of you get your act together?
imported post
Ewwwwwwww! Ethanol. Yeah, we have that crap here. Crappy octane, too...supposedly because of the thinner air. (I don't buy it..doesn't make sense...my turbo likes those carbon chains...regardless of air molecule density!)
I'm only interested in how clean the gas burns in my cylinders; the "rear end load" is inconsequential.
Oil...hmm....Iraq: territory of the United States..?
Ewwwwwwww! Ethanol. Yeah, we have that crap here. Crappy octane, too...supposedly because of the thinner air. (I don't buy it..doesn't make sense...my turbo likes those carbon chains...regardless of air molecule density!)
I'm only interested in how clean the gas burns in my cylinders; the "rear end load" is inconsequential.
Oil...hmm....Iraq: territory of the United States..?
imported post
It's funny to me how a race car pretty much runs on alchol and you can't seem to get your turbo to roll over. I noticed commercial high performance engines do have this problem. It could be just the brand of your car or your catalatic converter is plugged but again thin air and alchol do make people dizzy, so it could be the ratio needs to be adjusted and a high proformance engine needs more alchol to run. I don't know, but most things do take a fossil fuel to create.If the rear end load is inconsequential why are we being forced to use it? I think I read some legislature some where that ethanol may become the only fuel clean enough to burn in the bigger cities in the future.Corn is a cheap fuel and our government and laws don't want us to drink it, so why not the car.
It's funny to me how a race car pretty much runs on alchol and you can't seem to get your turbo to roll over. I noticed commercial high performance engines do have this problem. It could be just the brand of your car or your catalatic converter is plugged but again thin air and alchol do make people dizzy, so it could be the ratio needs to be adjusted and a high proformance engine needs more alchol to run. I don't know, but most things do take a fossil fuel to create.If the rear end load is inconsequential why are we being forced to use it? I think I read some legislature some where that ethanol may become the only fuel clean enough to burn in the bigger cities in the future.Corn is a cheap fuel and our government and laws don't want us to drink it, so why not the car.
G
Guest
Guest
imported post
teknobucks, What happened!? Is all this market stuff getting the best of you? You look pale. And you look like you lost a lot of weight - anorexic!
teknobucks
Active member
imported post
Wonder Woman wrote:
had to dither down a cool oldanimated gif into that pathetic image....back 2 my old self now...LOL.
tek
ps: check your yahoo mail
Wonder Woman wrote:
hahaha.....could not stand it myself!
teknobucks, What happened!? Is all this market stuff getting the best of you? You look pale. And you look like you lost a lot of weight - anorexic!
had to dither down a cool oldanimated gif into that pathetic image....back 2 my old self now...LOL.
tek
ps: check your yahoo mail
imported post
Mike wrote:
I'm buying another PT here (the convertible Dream Cruiser), so I can compare its performance to mine. Pretty much. I made some mods to mine, but close enough.
The turbo is spooled much more frequently to compress more air into the intake, so it seems to have it all figured out. Still, though, it doesn't have the power it did at sea level.I lived near the fastest drag strip in the country and now I am at 6,400 ft; I am afraid to see what my 1/4 mile time is here!
Does the "you don't need high octane with thinner air" argument sit right with you? Maaaaaybe with a naturally aspirated engine, but I still don't see it.
Mike wrote:
Its computer does eeeeeeverything and adapts to a variety of conditions (including how I drive...none of that soft-shifting stuff here). It seemed to have the altitude figured out by the time I hit NM. I think I will call around and see if there is anything that needs manually adjusted or tweaked now that you mention it.
I'm buying another PT here (the convertible Dream Cruiser), so I can compare its performance to mine. Pretty much. I made some mods to mine, but close enough.
The turbo is spooled much more frequently to compress more air into the intake, so it seems to have it all figured out. Still, though, it doesn't have the power it did at sea level.I lived near the fastest drag strip in the country and now I am at 6,400 ft; I am afraid to see what my 1/4 mile time is here!
Does the "you don't need high octane with thinner air" argument sit right with you? Maaaaaybe with a naturally aspirated engine, but I still don't see it.
imported post
LOL! Actually Rolo, Colorado has thin air, so there should be less resistance in the great Rocky Mountain State. Kind of like when the Rockies hit a ball out of mile high stadium. The same should occur when you put the peddle to the meddle! I would watch what you load the car with. Too much hot air inside may cause the car to lift in a thin air situation. Therefore, said car, maynot touch the ground causing loss of traction.Giving the owner the impression that it is not firing right.
LOL! Actually Rolo, Colorado has thin air, so there should be less resistance in the great Rocky Mountain State. Kind of like when the Rockies hit a ball out of mile high stadium. The same should occur when you put the peddle to the meddle! I would watch what you load the car with. Too much hot air inside may cause the car to lift in a thin air situation. Therefore, said car, maynot touch the ground causing loss of traction.
Giving the owner the impression that it is not firing right.
teknobucks
Active member
imported post
Rolo??
what did the clown do 2 your dice??
does this mean u will be clowning around a bit more...LOL
tekno
Rolo??
what did the clown do 2 your dice??
does this mean u will be clowning around a bit more...LOL
tekno