Monday, July 16, 2007

Poten & Partners Tackle Peak Oil

I'm always interested when what I call "the rest of the world" addresses peak-oil. This is certainly important for tankers. I hesitate to endorse Poten's view, however. The second sentence is fabulous - and confusing. I skipped a few lines on price and their charts. You can see those for yourself in the link I provided. I just didn't feel they added much. Two paragraphs is a start. I'm looking forward to more...

Prolonging the Peak
July 13, 2007
The notion of ‘peak oil’ has received frequent commentary for the past couple of years. Although often touted as a soon-to-be economic reality, its definition tends to remain subjective and it’s relevance in today’s oil market is quite nebulous. One interpretation of the term ‘peak oil’ would be to define it as the point at which it is no longer economically favorable to consume oil. Bearing that definition in mind, it is safe to assume that we have yet to reach this point. In the recently published, “Medium Term Oil Market Report,” IEA tackles the issues surrounding ‘peak oil’ and the general supply outlook over the next several years. The agency assesses that demand has risen nearly 4.0 million barrels per day since 2004, as shown in the chart below. There is even more tightness to be expected beyond 2010.

The IEA’s analysis suggests that new supplies are going to face an even harder time keeping pace with demand in the years ahead.

The IEA finds that the non-OPEC supply of oil from conventional sources in today’s market has essentially plateaued. The agency is suggesting that the obstacles facing
producers in terms of actual crudeoil recovery are only going to become greater in the longer-term. Thehurdles are more likely linked to scarceness of skilled labor and oil rigsas well as political considerations – a few components that are not necessarily aligned with the growth in oil demand. Sustained creativity and hard work by all parties will be necessary to avoid project delays that could prevent ample supply from being brought to market.

Link to original article

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