[Graeme]

Major reports point to oil supply turmoil and price volatility

Major energy reports published this year are pointing to a significant rise in the price of oil due to supply constraints sometime over the next three years – the only disagreement is how soon.

So far 2010 has seen three international reports considering the future of oil production, demand and prices. These were published by high profile groups that command widespread respect – in turn, a collection of UK industrialists, the US military and a joint effort between Europe’s most recognized insurance company and a politically connected think-tank.

Largely ignored by the media, and considered separately online as they came out, it is interesting to do a compare-and-contrast between documents produced for widely different audiences on each side of the Atlantic.


Taken together, then, these reports suggest the world will be entering into a period of turmoil due to oil supply issues as early as the beginning of 2011 or as late as 2013. This will be marked by a time of rising oil prices, simply due to demand. By 2015 oil output will be in decline and the world will collectively have to make structural changes, or else face outright economic decline, because less oil will be coming to the market at any price.

energybulletin

[Revi]

This gives us a timeline. I think that we'll bein trouble some time around the end of next year, or 2012...

Meanwhile gas is down to $2.53 around here. Go figure!

[Newfie]

Yup on the go figure. My energy stocks have taken a real beating.

Oil prices fall as growth outlook dims

http://www.cbc.ca/canada/newfoundland-l ... onday.html

Oil prices fell Monday as uncertainty about the prospects for global growth and a stronger U.S. dollar overcame worries about production disruptions in the Gulf of Mexico during hurricane season.

Crude for October delivery closed down 72 cents at $73.10 US a barrel on the New York Mercantile Exchange while in Toronto, the S&P TSX energy index of oil and gas companies ended down by .03 of a point to 270.50.

S&P/TSX energy index 3-month chart.S&P/TSX energy index 3-month chart.

The Canadian dollar closed down .32 of a cent to 95.03 U.S.

Crude prices rose earlier Monday amid concerns that tropical storm Danielle is strengthening in the Atlantic. Late Tuesday, the storm was upgraded to a hurricane and forecasters predicted it would become a major one over the next few days.

Danielle was 2,120 kilometers east of the Lesser Antilles islands. That's far from land, about halfway between Africa and the Caribbean, and whether it would enter the oil production area in the Gulf of Mexico was not clear.

Victor Shum, an energy analyst at Purvin & Gertz in Singapore, predicted crude prices will stay at around $75 US a barrel in the near term, with a floor provided by production concerns amid the hurricane season.

While there have been predictions of relatively strong hurricanes this year, the forecasts have yet to be fully realized.

"Despite this sluggish start, we suspect weather should lend an element of support to prices at least through September, but the market is in danger of breaking down if the hurricane tally remains minimal by September's end," said a report from MF Global in New York.

Government measures to cool the Chinese economy — usually predicted as the main source of increased energy use — were also seen as limiting oil prices.

"The rise in demand in China will remain disappointing in the months ahead," said analysts at Commerzbank in Frankfurt.

"This supports our skeptical view on oil prices and we still anticipate a fall in prices to around $70 a barrel by the end of the year.

Read more: http://www.cbc.ca/canada/newfoundland-l ... z0xUPTroEo