No more cheap oil No. 1

In the 21 April, Monday, The Wall Street Journal, it reported on the general state of affairs of crude oil price, price speculation, and future production. The following excerpts and musings make up rough energy market info on what drives agri-energy technology.

Adequate inexpensive fuels- "cheap" fuels have now gone the way of the penny stamp and the nickel candy bar- and agriculture are necessities we can sustain if we think hard about and follow through with corridor development.

The Wall Street Journal, "Saudis wary of new oil projects pending sales forecast," by Spencer Swartz, p. C6; 21 April M 08.

• bull market in crude oil just got a catalyst that could push prices even higher, if not prevent them from falling significantly.
  
• Saudi Arabia may be reluctant to develop new oil projects after 2009

--it has no plans to increase oil production capacity beyond the 11% it will add during 2009

--it is waiting on more predictability about crude oil consumption

--it fears output / consumption of biofuels will reduce demand, which decreases the profitability of new oil field development

--the data confirming or invalidating market changes may be "several years away."

• Asia and emerging markets are [wildcards].
  
• non-OPEC producers are unable to fill in the slack created by less OPEC production.
  
• Ali Naimi, Saudi Arabia oil minister- "All the latest projection- at least up to 2020- do not require [developing] anything higher [than the planned 11%]."

--Saudi Arabia hasn't, until now, laid out a timeline to when new capacity might be addedo "If you look at projections for demand, it has started going down."

[so Saudi Arabia and OPEC can work the politics of "over a barrel" as well as the degree of production.]

DrumBeat: April 18, 2008, Posted by Leanan at theoildrum.com/ tells about a few of the causes of $115+ per barrel crude oil-

• a Nigerian rebel group said Friday it had sabotaged a major oil pipeline operated by Royal Dutch Shell and vowed to step up attacks on oil installations. * Strikers at the major southern French oil port of Fos-Lavera vowed to remain on picket lines through Saturday. The strike trapped 23 vessels, including four crude oil tankers and six refined products tankers in the port.
  
• a similar strike in March lasted 17 days and forced four oil refineries with 603,000 barrels per day of combined capacity to curtail operations, helping spur a late spring rally in European diesel prices.
  
• a British union will launch a two-day strike on April 27 at Ineos Grangemouth refinery, forcing it to shut down with a reduction of delivery by the North Sea Forties pipeline system, which terminates there.

"All of the techniques [for estimating global oil reserves and production] seem to be converging to show a likely decline in production in the next few years, or even starting about 2005. Oil production data suggests that world oil production has been flat to slightly declining for the last two years, so it is possible the decline has already begun."

[Farm energy production / agri-energy production is highly unlikely to suffer from this kind of headache]

--to be continued