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Oil Price

i wanna ask a noob question.

if speculation in oil futures does not result in physical hoarding of the oil itself. how then does speculation in futures drive up spot oil prices ? 

 

watch our China wanted 50% state own vehicle out of road when near Olympics. If situation still bad, they could stop all private cars as well.

 

i like the first factor you stated.........

Centaur      ( Date: 24-Jun-2008 14:29) Posted: there are other factors contributing to high oil prices such as huge volumes of speculation and economic/political uncertainties in the middle east besides the normal supply/demand theory Snappers      ( Date: 24-Jun-2008 13:37) Posted: increase of supply by saudi didn't inject much of stimulation to oil price..  most of the countries are increasing the oil price, more ppl will spend less on travelling, petrol, going out, etc..  but still oil price remain at an astonishing price..  if the demand of oil is not increasing at an alarming speed, then price of oil should not be escalating; in my opinion....  hmmmm.... wonder what went wrong....

 

there are other factors contributing to high oil prices such as huge volumes of speculation and economic/political uncertainties in the middle east besides the normal supply/demand theory

Snappers      ( Date: 24-Jun-2008 13:37) Posted: increase of supply by saudi didn't inject much of stimulation to oil price..  most of the countries are increasing the oil price, more ppl will spend less on travelling, petrol, going out, etc..  but still oil price remain at an astonishing price..  if the demand of oil is not increasing at an alarming speed, then price of oil should not be escalating; in my opinion....  hmmmm.... wonder what went wrong....

 

increase of supply by saudi didn't inject much of stimulation to oil price..  most of the countries are increasing the oil price, more ppl will spend less on travelling, petrol, going out, etc..  but still oil price remain at an astonishing price..  if the demand of oil is not increasing at an alarming speed, then price of oil should not be escalating; in my opinion....  hmmmm.... wonder what went wrong....

 

Future generations will use new environment friendly alternatives,
rather than oil.

 

So 2044 is the year to look for. Remember to enjoy life years before this because it might be the end of the world without oil, if no alternatives! I might be still be around but very old then.Very sad for our future generations if there is no oil or alternatives!

Snappers      ( Date: 23-Jun-2008 00:31) Posted: you are good...  i didn't even think of doing the calculation you had indicated... lookcc      ( Date: 23-Jun-2008 00:12) Posted: calculation errors: - NOT 5 + 72...shud b 12.5 + 72 = 84.5, say 85 billion barrels  n  shud be 260 - 85 = 175 billion barrels (NOT 183 billion)  n  175/7.2 billion barrels per yr = 24 yrs (NOT 35 yrs) which works out to be end of year 2044......tt is from 01-01-2021 + 24 years = 31-12-2044............36 years 6 mths fron now.

 

the big thorn is will israel attack iran??? if that happens, then oil px wud shoot up bcos then iran will not be able to supply oil for months, mayb even years...hope for the best.

 

yesterday nigeria's main militant group announed that it wud halt attack on nigeria's oil fields effective midnght tis tuesday to allow peace efforts to go ahead, also irag wud be delivering oil as the 3 groups have sort of agreed on terms of sharing its earnings....oil px shud decline, shudn't it???????

 

Oil climbs despite Saudi pledge

Crude prices rise amid supply disruptions in Nigeria; traders shrug off Saudi effort to ease fears.

SINGAPORE (AP) -- Oil prices rose Monday as investors shrugged off Saudi Arabia's pledge to increase its oil production if needed, focusing instead on disruptions to Nigerian supply and heightened Middle East tensions.

Saudi Arabia said Sunday it will produce more crude oil this year if the market needs it. The kingdom announced a 300,000 barrel per day production increase in May and said before the start of the Jiddah meeting that it would add another 200,000 barrels per day in July, raising total daily output to 9.7 million barrels.

The announcement had already been factored into oil prices, analysts said.

"The meeting was mildly positive but it wouldn't really deliver anything that would give a heavy correction in oil," said Mark Pervan, a senior commodity strategist at the ANZ Bank in Melbourne, Australia. "They pledged production increases that the market thought was base case."

Light, sweet crude for August delivery rose $1.29 to $136.65 a barrel in Asian electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract rose $2.76 to settle at $135.36 a barrel Friday.

Saudi Arabia's pledge fell far short of U.S. hopes for a specific increase. The United States and other nations argue that oil production has not kept up with increasing demand, especially from China, India and the Middle East. But Saudi Arabia and other OPEC countries say there is no shortage of oil and instead blame financial speculation and the falling U.S. dollar.

Analysts said the meeting helped provide some clarity as to the size of spare OPEC capacity available. Saudi Arabia said it is willing to invest to boost its spare oil production capacity above the current 12.5 million barrels per day planned for the end of 2009 - if the market requires it.

"I think where the market may be a little more comforted, which could see prices drift lower in the medium term, is more clarity and scope on OPEC capacity," Pervan said.

Total worldwide crude production is about 85 million barrels per day, but analysts say supplies remain tight amid disruptions to production from Nigeria, Africa's largest producer.

"The oil summit really has not done much to temper oil pricing," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "It was a modest output increase and hardly really compensates for the disruption out of Nigeria."

Royal Dutch Shell PLC said Friday that it cannot meet contractual obligations to export oil from a Nigerian oil field following a militant attack Thursday. Nigerian oil workers also reportedly decided to strike at a Chevron Corp. facility beginning Monday.

But oil prices might find some relief from Sunday's announcement by Nigeria's main militant group that it would halt attacks starting at midnight Tuesday. The Movement for the Emancipation of the Niger Delta declared a unilateral cease-fire, saying elders in the restive southern region had asked the fighters to allow peace efforts to go ahead.

The group's attacks have sliced about one quarter from Nigeria's normal oil daily oil output, helping buoy crude prices in international markets.

"The market will see if indeed that cease-fire holds for a bit of time," Shum said.

Also supporting oil prices were worries about heightened tensions between Israel and Iran, after Pentagon officials said Friday a large-scale Israeli military exercise in the eastern Mediterranean early this month could have been a demonstration of Jerusalem's ability to attack Iranian nuclear facilities.In other Nymex trading, heating oil futures added 4.72 cents to $3.8189 a gallon while gasoline prices rose 1.27 cent to $3.4519 a gallon. Natural gas futures rose 19.8 cents to $13.192 per 1,000 cubic feet.


 

 

ha ha, bought 2 for the support loh, may acc later to see the coming announcment heart striking or not. cheers.

 

JEDDAH (Thomson Financial) - Saudi Oil Minister Ali Al Naimi said on Sunday the world has enough crude to last 'many decades' and that his country will invest massively to allow production of 15 million barrels a day.

'The world has enough petroleum reserves, both conventional and non-conventional, to meet oil demand for many, many decades to come,' Al Naimi told a summit in Jeddah of top consumers and producers.

'Concerns over long-term supply shortages seem to be playing a role in strong futures prices, though I believe these concerns are badly misplaced,' he added.

In contrast, US Energy Secretary Samuel Bodman told the meeting that 'production had not kept pace with growing demand for oil, resulting in increasing -- in increasingly volatile -- prices.'

Al Naimi said Saudi Arabia's production capacity will rise to 12.5 million barrels per day (bpd) by the end of 2009 and another 2.5 million bpd could be added if demand warranted.

Projects underway will see 'the kingdom's maximum sustained production capacity rise to 12.5 million bpd by the end of next year,' he said. It currently has output capacity of 11.3 million bpd.

'In addition, we have identified a series of future crude mega increments totalling another 2.5 million bpd of capacity that could be built if and when crude oil demand warrants their development,' the minister said.

The projects include a 900,000 bpd boost in Zuluf, 700,000 bpd in Safaniya, 300,000 bpd each in Berri and Khurais and 250,000 bpd in Shaybah, Al Naimi said.

The kingdom plans to add two million bpd of refining capacity over the next five years.

Al Naimi told a press conference there was no timeframe for these projects.

'We have no doubt that if there was a need we are capable of implementing them in a very short time, less than three years each,' he said.

'These are massive investments, which over the next five years will total 129 billion dollars between the upstream and downstream segments of the industry,' Al Naimi said.

He added that 60 billion dollars will be used for upstream projects and 69 billion dollars for downstream projects.

Al Naimi emphasised that record prices were not reflecting the true state of market supplies. The price of a barrel of crude has doubled from about $70 to nearly $140 over the past year.

'Between the second quarter of 2007 and the second quarter of 2008, global demand rose by an estimated 800,000 (barrels) to 1.2 million barrels per day.

'At the same time, global oil supplies rose between 1.4 and 1.6 million barrels per day, substantially more than the increase in demand.'

He added that forward cover -- a key market measure for how long oil inventories would last if production stopped -- had increased from 52 days to 54 days over the past 12 months.

'Clearly something other than supply and demand fundamentals is at work here, and a simplistic focus on supply expansion is therefore unlikely to tame the current price behaviour,' Al Naimi said.

However, in a gesture to appease consuming nations at Jeddah and dampen high prices, oil-powerhouse Saudi Arabia said it would boost oil output to 9.7 million barrels per day.

That is the highest daily production for Saudi Arabia since 1981, when it pumped a record high of 10 million barrels per day.

http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/22/afx5141230.html

 

 

you are good...  i didn't even think of doing the calculation you had indicated...

lookcc      ( Date: 23-Jun-2008 00:12) Posted: calculation errors: - NOT 5 + 72...shud b 12.5 + 72 = 84.5, say 85 billion barrels  n  shud be 260 - 85 = 175 billion barrels (NOT 183 billion)  n  175/7.2 billion barrels per yr = 24 yrs (NOT 35 yrs) which works out to be end of year 2044......tt is from 01-01-2021 + 24 years = 31-12-2044............36 years 6 mths fron now.

 

calculation errors: - NOT 5 + 72...shud b 12.5 + 72 = 84.5, say 85 billion barrels  n  shud be 260 - 85 = 175 billion barrels (NOT 183 billion)  n  175/7.2 billion barrels per yr = 24 yrs (NOT 35 yrs) which works out to be end of year 2044......tt is from 01-01-2021 + 24 years = 31-12-2044............36 years 6 mths fron now.

 

based on Snappers' figures, 13.6 million barrel per day = 4.964 billion barrels/yr, say 5 billion....from july tis yr to end 2010 saudi arabia to meet global demand, wud need to produce 12.5 billion barrels.....then from 2011 to 2020 saudi arabia's has to produce 19.5 million barrel per day = 19.5 x 365 = 7.118, say 7.2 billion barrels/yr, multiply tis by 10 yrs = 72 billion barrels (2011 to 2020). Hence to meet global demand from july 2008 to dec 2020 saudi arabia output need be 5 + 72 = 77 billion barrels and saudi arabia having 260 billions barrels of reserve oil...tis works out tt as at 01-01-2021 it still has 183 billion barrels (260 - 77) n tis can last until end of yr 2043....tis is  35 years from end of tis year.......and tis is provided no new wells r found in the world or no new type of energy is invented or discovered.

 

if like that then not a very good sign liao....

Livermore      ( Date: 22-Jun-2008 15:53) Posted: Existing oil fields in Saudi Arabia could actually be in decline Snappers      ( Date: 22-Jun-2008 15:50) Posted: if goes up 200 bucks then i think opening a bicycle shop will sure make money.. gotta see how the meeting goes today when saudi have kopi session with the OPEC kakis..  talks that saudi may sell oil to parties thru some "special" deals which may stabilse the oil price..  saudi main concern is the US..  they are hoping that US will stabilise the greenback as saudi's currency fluctuates along with the greenback..  saudi is not only the top foreign supplier of oil to the US - the world's largest energy consumer - but also essentially the sole source of liquidity in the oil market..  to meet global demand for oil, saudi will need to produce 13.6 million barrels a day by 2010 and 19.5 million a day by 2020.. presently, saudi is producing 8 million barrels a day..  saudi has more than 260 billion barrels of reserve oils..  in 1938, saudi discovered a huge oil area and more areas were discovered soon after..  from 1938 till now (2008), 70 years on and saudi is still able to meet the global demands for oil..  there are still untouched area of oil land in saudi.. let's hope today's meeting will yield some good news..

 

Existing oil fields in Saudi Arabia could actually be in decline

Snappers      ( Date: 22-Jun-2008 15:50) Posted: if goes up 200 bucks then i think opening a bicycle shop will sure make money.. gotta see how the meeting goes today when saudi have kopi session with the OPEC kakis..  talks that saudi may sell oil to parties thru some "special" deals which may stabilse the oil price..  saudi main concern is the US..  they are hoping that US will stabilise the greenback as saudi's currency fluctuates along with the greenback..  saudi is not only the top foreign supplier of oil to the US - the world's largest energy consumer - but also essentially the sole source of liquidity in the oil market..  to meet global demand for oil, saudi will need to produce 13.6 million barrels a day by 2010 and 19.5 million a day by 2020.. presently, saudi is producing 8 million barrels a day..  saudi has more than 260 billion barrels of reserve oils..  in 1938, saudi discovered a huge oil area and more areas were discovered soon after..  from 1938 till now (2008), 70 years on and saudi is still able to meet the global demands for oil..  there are still untouched area of oil land in saudi.. let's hope today's meeting will yield some good news.. lookcc      ( Date: 21-Jun-2008 12:28) Posted: Will it go up to $200????  When will it go down to $100????

 

if goes up 200 bucks then i think opening a bicycle shop will sure make money..

gotta see how the meeting goes today when saudi have kopi session with the OPEC kakis..  talks that saudi may sell oil to parties thru some "special" deals which may stabilse the oil price..  saudi main concern is the US..  they are hoping that US will stabilise the greenback as saudi's currency fluctuates along with the greenback..  saudi is not only the top foreign supplier of oil to the US - the world's largest energy consumer - but also essentially the sole source of liquidity in the oil market..  to meet global demand for oil, saudi will need to produce 13.6 million barrels a day by 2010 and 19.5 million a day by 2020.. presently, saudi is producing 8 million barrels a day..  saudi has more than 260 billion barrels of reserve oils..  in 1938, saudi discovered a huge oil area and more areas were discovered soon after..  from 1938 till now (2008), 70 years on and saudi is still able to meet the global demands for oil..  there are still untouched area of oil land in saudi..

let's hope today's meeting will yield some good news..

lookcc      ( Date: 21-Jun-2008 12:28) Posted: Will it go up to $200????  When will it go down to $100????

 

u r very observant......and U.S. energy secretary said tis saturday that insufficient oil production, not speculation, is driving soaring crude oil prices....like tis , got chance tis sunday saudi arabia, kuwait n iran cud agree 2 increase output 2 bring oil px down....china already played its part.

 

I can only tried to save some petrol by free wheeling my car. Adjust the accelarator line.

I also notice that my neighbours go out less. Last year, if I come in at 11pm, can find parking space.

Now, as early as 8:30pm, the car park is full.

We are definitely greener now, I hope.