Alexander's Commentary
Change of face - change of phase
A Future?
Climate-Change – Change of Climate
Oil-Around 2013
Finally there: The Campbell’s Atlas of Oil & Gas Depletion
New time arising
Ein heisser Herbst? (A hot Autumn?)
Where is this going? – 3
Where is this going? -2
Where is this going?
Is it important?
A Moment of Truth at Passing
The Iran Hoax
The 2012 Adventure
Solstice Greetings
Taking on the future
A new beginning
Twist and Turn
Fly-by-wire
Shale-gas: just a gas?
Little miracles, big wonders
Unconventional gas
Media-power
To Peak or not to Peak, is that the question?
Going on ...
Time for change
Economy; What Economy?
Media Noise Windfall Profit
The Winds of Change
Signs of the future?
Reality and Hope
Best Wishes
What goes around, comes around
A throughout, integrated view
Signs of change?
P.P.P. versus Need
Working for climate-change?
Good signs
Contradicting signals
All over again? The difference between perception and reality.
The paradigm, the mind-set and reality
Two minds
Positive inclination
Different values?
The long view
Leaping to the future
Contango
New signs of hope?
A message of hope?
Some good news anywhere?
A project gone awry?
Traces of light
Driving the markets II
Driving the markets
Meeting reality
Silence for the storm?
The times are changing
Refinery-runs
The Theatre
Some Questions, no answers
Ocean carbon sinks and returns
The good news, the bad and the ugly
A President speaks the truth!
Green masks
Saving us with or from bio-fuels?
The good news
Driving the oil-price?
A new dilemma?
Kenya: a new oil-frontier?
Forecasting a trend?
Some early signs for 2008
2007; A year to remember
The good news
A bit of a shock II
Fraud alert - bogus job ads
A bit of a shock
A simple but far-reaching idea
Hype, Realism, Convergence
Energy-security?
A touch of globality
Climate change and changing the climate
Refineries, Biofuels and internal demand
Figures, figures & figures
Pipelines, Biofuels & Reserves
Expectation, projections, contradictions.
Ponder
A box of Pandora?
Changing systems
A dynamical environment
Projections and reality
Changing reality
A different reality II
A different reality
PPP: Prices, poverty and politics
A whirling 2007
The year of shifting balances
One world, two systems?
Oil and development?
The year 2065?
Mixed signals II
Mixed signals
Trust
Awakening
A War on hold?
No Comment
Changing balances
Truth or Deception?
A fresh overview
Bigger picture first
National Interests vs. Shareholders Value
Fear??
'The Dialogue'
Consumption
Do we actually need to worry?
 

The long view

2009-03-20

The world has become a very different place over the last months: world trade is collapsing, quite a few countries are at the brink of or just saved from defaulting or bankruptcy, the US is printing ever more money and China is getting concerned about the future value of their dollar-nominated holdings. And the world is awash in oil.

Even with the curtailments installed by OPEC there is a global glut in oil and in oil-products. This has resulted in a low oil-price that, initially helped by short-selling and many other means, went down to the low thirties but is now seeking for a new equilibrium somewhere between the 40 and 50 dollar per barrel.

The search is for an oil-price that is high enough to allow a profit to be made notwithstanding the generally more expensive production these days and is also providing incentives for further exploration and new projects.

Whilst many projects that were planned or on the drawing board in the hay-days have been delayed or scrapped, first noises started to appear that were warning for the long-term effects of too low oil-prices, in the light of the world-wide depletion of many fields, which is currently estimated at 9 (!) percent. If there would not be enough new E&P projects, even in the face of reduced demand, this would set the scene for another bubble-and-burst speculative cycle.

As we have seen the dangers of the so-called “free-market”, which is only free for a few but put upon a whole lot of others, and the paradigm of “the market will sort it” has been shown to be good for only very few and disastrous for all the others, it is time to look for new ways.

In the light of this, it was very interesting to see that China did not bother to live by the rules of “the market” but made some very big, long-term and mutually advantageous deals with Russia, Brazil and Venezuela, ensuring it enough oil to feel secure for the future and providing those countries with much-needed funds.

Whilst the prices per barrel in these deals may not be very high, the security and stability the deals provide for both parties is a signal that long-term views are seen to be more important than short-term gains.

It is also this long-term stability that is being sought that drives the search for what can be termed a “reasonable price”, as currently is being proposed within OPEC. From the 75 dollar muted some time ago, it was now President Chavez that proposed the 50-dollar price within the assembly.

With a 50 dollar per barrel price most extraction initiatives will be profitable, taking into account the strongly retreating prices of steel, equipment, services and man-power, so future supply could be more secure.

Another great advantage of an agreed-to oil-price between consumer and producer-countries is that speculation and market-interference, -volatility and -manipulation is brought back to a minimum, and stability and long-term policies will have a better chance. And this will be very important for the future.

Whilst new fields have been found and some new provinces have been discovered, a long-term policy will be needed to cater for the needs for energy for the global economy in the long run.
The global economy has taken a heavy beating, but the need for energy will continue and recover. But the picture has become much more complicated and diverse, as the consumption-patters of the past will be gone forever, renewable energy is rising, depletion is getting bitingly real soon and the effects of the economic down-turn are just beginning to show and no-one has an idea how long it will take.

It is time for those with a long-term view to take over, now that those who only looked at quarterly gains have so spectacularly driven us against the wall.

Alexander

 

Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

read more ...
« November 2019 »
November
MoTuWeThFrSaSu
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30

Register to announce Your Event

View All Events