Thursday, April 03, 2008

Peak Oil Update

Thursday 3rd April 2008
Money Week
Could oil hit $160 a barrel – next week?
by Dominic Frisby

...Of the 65 largest oil producing countries in the world, up to 54 have passed their peak of production and are now in decline, including the USA in 1970/1, Indonesia in 1997, Australia in 2000, the North Sea in 2001, and Mexico in 2004.

We are not finding enough oil to replace the oil we consume. It is that simple. Only politicians and statisticians complicate it.

So what’s this imminent supply squeeze?

‘Zapata’ George points out that the extreme cold spell in February in Alberta in Canada meant that the tar sands couldn’t be mined. One refinery in Edmonton had no oil to refine, while the larger Strathcona Refinery was running at significantly reduced rates due to ‘operational problems’.

He then mentions Australia, where there are currently gasoline shortages. BP and Shell have apologised, citing ‘constraints on imports’ – ie they’re not getting the oil - leading to ‘unprecedented level of fuel shortages’. At the moment, the four biggest oil refineries in Australia are not operational.

Meanwhile, says George, the Chinese have done deals worldwide where they will agree to pay market rates, but have the right of first call on oil production. Chinese oil demand went up by 6.5% in February, and their oil imports have risen by 18.1%.

In brief, the Chinese are getting the oil, while Canada and Australia are going short. ..

That's an "I told you so," class.

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