Will We Ever See 100$+ OIL?

(edited)

Will we ever see 90 to 100USD plus oil?. Both Opec and Russia are fighting to keep oil up, looking at fundamentals I would say HELL NO, we will not see oil prices higher then 70 dollars since that is the sweet spot for both producers and consumers-- even for producer countries that are struggling economically (https://youtu.be/f7DF1Hg1CiI). Am I missing something, please let me know?

 

UPDATE: should have been more specific, regarding the timescale (1-5 years), my mistake. A lot of people started posting ridiculously long term predictions ie, what oil prices will be in 50 years time.

Edited by Abdkreem

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The 'fundamentals' have not been determining the price of oil for a few years now...

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Fundamentals win in the long run. Fundamentals say that US shale peaks soon, OPEC keeps fighting and takes back market share, the global economy perks up (being very conservative with that), climate legislation is thrown to the side/ignored, and and total world oil production falls short of demand due to current factors becoming more prominent. Permabears are wrong when they say we are in a long-term well supplied market. My prediction is for oil to stay above 60 for H2 of this year and above 70 for next year. 

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The United states has 10 years of oil reserves left, less and less as they ramp up production. 

 

Enjoy energy independence while it lasts. Peak oil was supposed to happen a decade ago but new technology created new reserves of recoverable oil and pushed the peak back for a while. Oil is still finite, and the mide east is chewing through their reserves too. Alternative energy sources will stretch out how long reserves can last but  I assure you in 100 years oil will be worth more then gold. We will never completely replace oil, at least not with something as good. 

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11 hours ago, Abdkreem said:

Will we ever see 90 to 100USD plus oil?.

Yes.  USA keeps printing $$$.  Even without the rise in price of oil $1 in real money, inflation alone will see $100/barrel.

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2 hours ago, Keith boyd said:

The United states has 10 years of oil reserves left, less and less as they ramp up production.

USA has had 10 years of oil reserve for the past ~~80 years.  If you state higher numbers of reserves(by company), you quickly get taken over by the bigger boys.  This was proven back in the beginning of the oil patch.  Since then, NO ONE says how much oil they actually have(until they have zero of course).

Shale has become so prolific with so many new players, even the USA's "ONLY" 10 years of reserves, using a smaller number of older companies, have risen to 15 years because ALL companies are required to report at least some of what they know they have for Securities exchange commission issues. 

Nationalized oil reserves, say Saudi Arabia, are closer to reality than the USA so called "proven" reserves. 

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Saying that oil cant go back to or over $100/barrel shows a total ignorance of history. With existing geopolitical risks it is not an if but a when question

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Its just clear to me that we are in a managed market. Geopolitical risk is very high and yet we have low oil prices. Because both the producers and consumers don't want oil above 70USD.....

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(edited)

37 minutes ago, Manfred Kruger said:

Saying that oil cant go back to or over $100/barrel shows a total ignorance of history. With existing geopolitical risks it is not an if but a when question

Sure it can go over the 100$ mark, can go over the 200$ mark also. But the chances of this happening are getting slimmer by the month. Each month more oil is located and getting drilled. Guyana, to South Africa, to Brazil, and there sure is a lot of tar sands keeping everyone in check.

Is best to get to know your enemy and cut off your supply. KSA circa72. I think the US knows we must be energy independent or we'll bleed lots of cash to our enemies.

Edited by Old-Ruffneck
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2 minutes ago, Abdkreem said:

Its just clear to me that we are in a managed market. Geopolitical risk is very high and yet we have low oil prices. Because both the producers and consumers don't want oil above 70USD.....

That would be Incorrect thinking. Consumers can sway the price slightly, but what's keep price in check is more supply than demand worldwide.

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16 minutes ago, Abdkreem said:

Its just clear to me that we are in a managed market. Geopolitical risk is very high and yet we have low oil prices. Because both the producers and consumers don't want oil above 70USD.....

Geopolitical risk "high".... In what alternative universe?  It is no more higher today than before.  In fact it is lower as OPEC supplies as a percentage less and less.  The only people the risk is partially greater for is S & E Asia.

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20 hours ago, James said:

Fundamentals win in the long run. Fundamentals say that US shale peaks soon, OPEC keeps fighting and takes back market share, the global economy perks up (being very conservative with that), climate legislation is thrown to the side/ignored, and and total world oil production falls short of demand due to current factors becoming more prominent. Permabears are wrong when they say we are in a long-term well supplied market. My prediction is for oil to stay above 60 for H2 of this year and above 70 for next year. 

Even if climate legislation is thrown out, renewable energy is now cheaper putting oil into a structural decline. 

We are almost certainly in a long term well supplied market.

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12 hours ago, Keith boyd said:

The United states has 10 years of oil reserves left, less and less as they ramp up production. 

 

Enjoy energy independence while it lasts. Peak oil was supposed to happen a decade ago but new technology created new reserves of recoverable oil and pushed the peak back for a while. Oil is still finite, and the mide east is chewing through their reserves too. Alternative energy sources will stretch out how long reserves can last but  I assure you in 100 years oil will be worth more then gold. We will never completely replace oil, at least not with something as good. 

In 20 years, it is unlikely much oil will be used for energy and if the price rises much, biological alternatives for chemical feedstocks become attractive.

I would be very surprised if oil gets back over $70/barrel in real terms other than in shock conditions.

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6 hours ago, Manfred Kruger said:

Saying that oil cant go back to or over $100/barrel shows a total ignorance of history. With existing geopolitical risks it is not an if but a when question

Sure, but only until the shock subsides, and that will push markets to seek alternatives that much faster. At $5/gallon for gas, electric cars look really cheap.

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5 hours ago, Bill the Science Nerd said:

Even if climate legislation is thrown out, renewable energy is now cheaper putting oil into a structural decline. 

We are almost certainly in a long term well supplied market.

Sorry but no, despite the over all global economy, oil demand is still rising, renewables are NOT cheaper than oil on many different scales, and you are completely wrong to say we are well supplied long term. Looking at other posts from you I seem to think you have strong confirmation bias. There’s not enough oil being produced to supply us sufficiently for the next ten years!!

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1 hour ago, James said:

Sorry but no, despite the over all global economy, oil demand is still rising, renewables are NOT cheaper than oil on many different scales, and you are completely wrong to say we are well supplied long term. Looking at other posts from you I seem to think you have strong confirmation bias. There’s not enough oil being produced to supply us sufficiently for the next ten years!!

I think the conformation bias is on your side. Even the EIA shows that wind and solar make up 64% of planned new generation in the US this year and battery electric vehicles continue to show very strong growth in a shrinking car market. China and Europe are following similar paths. Some important people, not just me, think wind, solar, and BEVs are the near future. All of which eat into oil demand.

With new wind and solar contracts coming in at $20/MWh, it is getting very hard to argue that any fossil fuel is cheaper even on just marginal cost.

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I should have been more specific when I made this thread. I am talking about short to mid term ie 1-5 years. 

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19 minutes ago, Abdkreem said:

I should have been more specific when I made this thread. I am talking about short to mid term ie 1-5 years. 

That one's relatively easily answered: Very unlikely without a cataclysmic oil market event such as a war with Iran.

High oil prices would probably be a long term catastrophe for the oil industry, not for supermajors as they can diversify into renewables but for everyone directly involved in the oil industry yes. It's unlikely that the major oil industry players on a national level would allow such a price point. They like it in the range of 60-80 (Brent). Anything beyond or under that is dangerous territory. People won't stand for >$100 oil any longer since in many cases, they can turn to alternatives (no matter what oil fans here might say about this it is true).

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4 minutes ago, David Jones said:

That one's relatively easily answered: Very unlikely without a cataclysmic oil market event such as a war with Iran.

High oil prices would probably be a long term catastrophe for the oil industry, not for supermajors as they can diversify into renewables but for everyone directly involved in the oil industry yes. It's unlikely that the major oil industry players on a national level would allow such a price point. They like it in the range of 60-80 (Brent). Anything beyond or under that is dangerous territory. People won't stand for >$100 oil any longer since in many cases, they can turn to alternatives (no matter what oil fans here might say about this it is true).

Absolutely when you have oil stricken producers demand oil not exceed 70-80 USD, it is obvious that this is the sweet spot. 

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1 hour ago, Bill the Science Nerd said:

I think the conformation bias is on your side. Even the EIA shows that wind and solar make up 64% of planned new generation in the US this year and battery electric vehicles continue to show very strong growth in a shrinking car market. China and Europe are following similar paths. Some important people, not just me, think wind, solar, and BEVs are the near future. All of which eat into oil demand.

With new wind and solar contracts coming in at $20/MWh, it is getting very hard to argue that any fossil fuel is cheaper even on just marginal cost.

Oh dear another thread about to be hijacked by another AGW messiah. This is happening too much on these threads.

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26 minutes ago, James Regan said:

Oh dear another thread about to be hijacked by another AGW messiah. This is happening too much on these threads.

Nice attempt to change the subject from the economic deficiencies of fossil fuels.

Let me know when new natural gas generation come in under $40/MWh

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(edited)

2 hours ago, Bill the Science Nerd said:

I think the conformation bias is on your side. Even the EIA shows that wind and solar make up 64% of planned new generation in the US this year and battery electric vehicles continue to show very strong growth in a shrinking car market. China and Europe are following similar paths. Some important people, not just me, think wind, solar, and BEVs are the near future. All of which eat into oil demand.

With new wind and solar contracts coming in at $20/MWh, it is getting very hard to argue that any fossil fuel is cheaper even on just marginal cost.

Globally, oil makes up only 4% of the fuel used for power generation, majority is nat gas (26%) and coal (41%). So even with wind and solar making up 64% of the planned new generation, that doesn't displace oil hardly at all. Renewables and nat gas will mainly displace coal. Nat gas has already been displacing coal in the US over the last 20 years since it burns twice as clean and is cost effective. This is how the US has reduced it's carbon dioxide emissions by 12% since 2000 (nobody talks about this though).

Furthermore, I assume you're correct in saying that EVs show very strong growth. But globally only 20% of liquids demand goes to cars. The rest is plastics, heavy duty transportation, marine, aviation, etc.  You said yourself that you don't see oil getting over $70 a barrel which means gasoline will stay cheap keeping ICE vehicles cheap. So even if by 2040 EV technology is cheap enough for it to have 25% of the car market, liquids demand stays over 95 MBOED.

I agree with you 100% that renewable power and electric vehicles are part of our future. I just think your timeline is a little aggressive. It will continue to be a transition keeping oil demand high. Also, as mentioned earlier in the thread, reserves are not a good indicator of available oil. Per SEC rules, oil companies can only project 5 years of reserves and technology keeps improving that makes reserves continue to increase. 

To answer the question in the thread though, barring anything crazy, I don't see oil over $100 in the next 5 years. Not with US shale capacity and OPEC able to bring production back online.

A lot of info listed above comes from the BP and Exxon Energy outlooks (links below). Highly recommend for anyone and everyone.

https://corporate.exxonmobil.com/en/Energy-and-environment/Energy-resources/Outlook-for-Energy/Energy-supply#testUncertaintyProjections

https://www.bp.com/en/global/corporate/energy-economics/energy-outlook/demand-by-fuel/oil.html

http://www.globalcarbonatlas.org/en/CO2-emissions

Edited by nathan_john
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1 hour ago, nathan_john said:

Globally, oil makes up only 4% of the fuel used for power generation, majority is nat gas (26%) and coal (41%). So even with wind and solar making up 64% of the planned new generation, that doesn't displace oil hardly at all. Renewables and nat gas will mainly displace coal. Nat gas has already been displacing coal in the US over the last 20 years since it burns twice as clean and is cost effective. This is how the US has reduced it's carbon dioxide emissions by 12% since 2000 (nobody talks about this though).

Furthermore, I assume you're correct in saying that EVs show very strong growth. But globally only 20% of liquids demand goes to cars. The rest is plastics, heavy duty transportation, marine, aviation, etc.  You said yourself that you don't see oil getting over $70 a barrel which means gasoline will stay cheap keeping ICE vehicles cheap. So even if by 2040 EV technology is cheap enough for it to have 25% of the car market, liquids demand stays over 95 MBOED.

I agree with you 100% that renewable power and electric vehicles are part of our future. I just think your timeline is a little aggressive. It will continue to be a transition keeping oil demand high. Also, as mentioned earlier in the thread, reserves are not a good indicator of available oil. Per SEC rules, oil companies can only project 5 years of reserves and technology keeps improving that makes reserves continue to increase. 

To answer the question in the thread though, barring anything crazy, I don't see oil over $100 in the next 5 years. Not with US shale capacity and OPEC able to bring production back online.

A lot of info listed above comes from the BP and Exxon Energy outlooks (links below). Highly recommend for anyone and everyone.

https://corporate.exxonmobil.com/en/Energy-and-environment/Energy-resources/Outlook-for-Energy/Energy-supply#testUncertaintyProjections

https://www.bp.com/en/global/corporate/energy-economics/energy-outlook/demand-by-fuel/oil.html

http://www.globalcarbonatlas.org/en/CO2-emissions

Don’t forget to throw HEP 16% of the worlds power generation and that’s a whopping 71% of renewables.

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6 hours ago, James said:

Sorry but no, despite the over all global economy, oil demand is still rising, renewables are NOT cheaper than oil on many different scales, and you are completely wrong to say we are well supplied long term. Looking at other posts from you I seem to think you have strong confirmation bias. There’s not enough oil being produced to supply us sufficiently for the next ten years!!

Spot on.

https://community.oilprice.com/topic/6751-predatory-green-capitalism-is-monetizing-the-air-and-its-going-to-cost-you/

... If we measure the full lifecycle costs and environmental burdens of the Good Things (all electric vehicles, etc.), we find that replacing all the existing stuff on the planet will actually increase CO2 immensely--the reduction is trivial while the CO2 emitted in the extraction, processing, manufacture, transport and maintenance of the replacement stuff (i.e. "Growth") will vastly increase CO2, as will all the green capitalists' private jets.

 

 

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3 hours ago, nathan_john said:

Globally, oil makes up only 4% of the fuel used for power generation, majority is nat gas (26%) and coal (41%). So even with wind and solar making up 64% of the planned new generation, that doesn't displace oil hardly at all. Renewables and nat gas will mainly displace coal. Nat gas has already been displacing coal in the US over the last 20 years since it burns twice as clean and is cost effective. This is how the US has reduced it's carbon dioxide emissions by 12% since 2000 (nobody talks about this though).

Nicely stated.  

Graph from here:

electricity-global7-19a.jpg

 

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