O Lord, please let there be another boom, and I promise not to pi$s this one away.

[Slava]

Originally Posted by VladtheImpaler

I guess there are some benefits to not abdicating your government to idiots... I was at the Premier's dinner last year - another dolt in a long line of dolts. And I am right wing.

Other than Sergei Makarov I didn't know there was such a thing as a russian right winger? I thought that they were all far to the left!!

[Cowboy89]

Originally Posted by Envitro

Try 20 months, at most. The only way we don't hit $200 oil is if someone magically comes up with an alternate, cheap energy source that will power all power grids, vehicles, and machinery. Good luck...

20 months? I don't even seeing the US increasing their economic Output to 2007 levels within that timeframe and that would be absolutely necessary for oil to even begin to approach the levels reached last summer. There's a lot of evidence that hedge funds and derivatives traders speculated it up to $150 after it hit $100 on fundamentals.

It was this mentality that ended up with a $4.7 Billion Budgeted deficit. I put budgeted in italics because the budget was full of "If ifs and buts were candy and nuts" assumptions regarding optimism on cost controls. So if this ends up being a $6 billion deficit this year and we don't get back to surplus in the next couple of years that completely wipes away the sustainability fund and has us back in debt. If we want to manage money prudently we should use conservative long term commodity price assumptions in the budget and have a manditory policy of putting excess revenues into savings and keep the "Rich province, poor (Insert special interest of choice)" type people's hands off the cash.

[Shazam]

$200 oil would spell the end of the world economy.

If anyone truly believes we're heading to $200 oil, move to an acreage, drill a well for water, put on some solar panels, buy as much guns and ammo as you can, and learn to grow your own food.

[macker]

Originally Posted by Shazam

$200 oil would spell the end of the world economy.

If anyone truly believes we're heading to $200 oil, move to an acreage, drill a well for water, put on some solar panels, buy as much guns and ammo as you can, and learn to grow your own food.

$200 will happen. That is one thing I know for sure. Oil reserves are depleting by 6% per year so what does that give us 20 -25 years or being more optimistic 30 -35 years and we aren't finding any new oil. Mexico is out of oil within 7 years not to mention other major fields in decline. Supply and demand. Also in inflationary times people move to hard assets and that is what we are beginning to see happen here. I agree that inflation is going to force us to live differently.

[Slava]

Originally Posted by Shazam

$200 oil would spell the end of the world economy.

If anyone truly believes we're heading to $200 oil, move to an acreage, drill a well for water, put on some solar panels, buy as much guns and ammo as you can, and learn to grow your own food.

You forgot to mention that you need to do this all without oil

[Shazam]

Originally Posted by macker

$200 will happen. That is one thing I know for sure. Oil reserves are depleting by 6% per year so what does that give us 20 -25 years or being more optimistic 30 -35 years and we aren't finding any new oil. Mexico is out of oil within 7 years not to mention other major fields in decline. Supply and demand. Also in inflationary times people move to hard assets and that is what we are beginning to see happen here. I agree that inflation is going to force us to live differently.

Well then, stock up, and lock and load!

[VladtheImpaler]

Originally Posted by Shazam

Well then, stock up, and lock and load!

[Mr.Coffee]

Originally Posted by macker

Natural gas is comming back up off of the mat and had a 3.5% move today alone....in the next 6 months it is going higher....as for Oil it is the same supply and demand issue that existed this time last year and it likely won't go to $140 in the next year or two but I can't see it not going back to that level in the next 3-5 years. Short term it should be pulling back as should our dollar.
http://www.eia.doe.gov/emeu/ipsr/t14.xls
Could be worse things to have in our ground.....

2009 World Proven Crude Oil Reserves : BBLS
1. Saudi Arabia : 266
2. Canada 178
3. Iran 136
4. Venezualia 99
others :
US 21
China 16

Gas ain't going up, pending no new major geopolitical issues or natural disasters to place pressure on it.

With the unlocking of shale gas technology, one has to be awfully concerned regarding the price of gas, current demand levels, and the oncoming onslaught of supply. Furthermore, assuming the cost structure in Canada can be dropped, you'll continue to see the industry purge conventional plays bringing new gas on and keep storage levels at their max (which is currently the situation).

I know our shop views gas over the short-term at least to dip down as low as $2/mcf... but the days of $11 gas are awfully bleak with this shale gas stuff coming on.


edit- also w/ regard to the whole $200/bbl thing... I always think back to the book "1000 barrels a second" by Peter Tzerkian and to his whole analogy to energy. The world used to be dependent on whale blubber until humans started killing them off and they were harder & harder to find. This eventually evolved into oil & gas as our primary means for energy, should the price go to ludicrous levels due to a lack of supply, it will be easier to see other energy forms take a more central stage in how society shapes itself.

So my point (or... I guess Peter's) would be $200 or not... there is a price level that stimulates massive societal changes.

[CrusaderPi]

Originally Posted by Mr.Coffee

Gas ain't going up, pending no new major geopolitical issues or natural disasters to place pressure on it.

Well thank God we can count on neither of those two things happening.

[Daradon]

Originally Posted by Shazam

I'll be bold and say that we won't see $140 oil again for another 20 years, if ever.

I'll take that bet in a second, if you want to be bold, lol.

[Daradon]

Originally Posted by Shazam

$200 oil would spell the end of the world economy.

If anyone truly believes we're heading to $200 oil, move to an acreage, drill a well for water, put on some solar panels, buy as much guns and ammo as you can, and learn to grow your own food.

How would it spend the end of the world economy? Things seemed to be humming along fine under 140 oil.

Yes I understand that goods and services are all delivered by machines that use oil and therefore their prices are influenced by oil, but you're forgetting that in this time, those machines will be getting more efficient too. They'll be using less energy. Not tons less, but enough to offset costs to transport these goods.

However, the price of oil will still go up because demand will continue to go up as the world not only continues to get more populated, but gets far more industrialized (China and India for example). Our innovations in technology won't really help us use less oil in total, just make it more economical as an energy source again.

$200 will be seen, and it won't ruin the economy, it'll drive it.

Unfortunately, I'm not sure what that will mean for the earth...

[Shazam]

Where were you the last few months? Things didn't "hum along"!

We saw a rise in oil prices.

We then saw a contraction in the worldwide economy, which led to a contraction in demand for oil.

What do you think will happen the next time oil rises like that?

Oil demand is not inelastic, which is what you seem to think.

Do you think that derivatives trading had nothing to do with the rise in oil price?

[VladtheImpaler]

Originally Posted by Shazam

Do you think that derivatives trading had nothing to do with the rise in oil price?

Do you know what derivatives trading is?

[Azure]

Originally Posted by Shazam

Where were you the last few months? Things didn't "hum along"!

We saw a rise in oil prices.

We then saw a contraction in the worldwide economy, which led to a contraction in demand for oil.

What do you think will happen the next time oil rises like that?

Oil demand is not inelastic, which is what you seem to think.

Do you think that derivatives trading had nothing to do with the rise in oil price?

So you're saying the health of the world economy depends on a stable oil price?

[Shazam]

Originally Posted by VladtheImpaler

Do you know what derivatives trading is?

No. Can you fill me in?

[Shazam]

Originally Posted by Azure

So you're saying the health of the world economy depends on a stable oil price?

No, it depends on a low oil price. Division of labour requiring cheap energy... yadda yadda... Econ 101... * zzzzz *

[VladtheImpaler]

Originally Posted by Shazam

No. Can you fill me in?

I don't know anything about derivatives either. You were talking like you actually knew something though.

[Slava]

Originally Posted by Shazam

No. Can you fill me in?

I'm not sure whether you're being serious...but basically a derivative is a security where the price is derived from the price of something else.

I guess I won't go into more detail than that here, mainly because I'm not sure whether you really want to know.

[SeeGeeWhy]

Originally Posted by Shazam

No. Can you fill me in?

Its like gambling, except you have no idea what the probability of the possible outcomes are... and in some cases, you don't even know what the probable outcomes themselves are.

[Slava]

Originally Posted by SeeGeeWhy

Its like gambling, except you have no idea what the probability of the possible outcomes are... and in some cases, you don't even know what the probable outcomes themselves are.

Well the first derivative isn't the problem per se. Its the other derivatives that get layered on top of each one to help "smooth things out". Then the outcomes turn into a tangled mess and eventually it all blows up.