No more cheap oil, No. 2

This continues from yesterday's post-

The Wall Street Journal, p. C10; 'The Mother of All Bubbles'? by Gregory Meyer.

• the speed of the ascent of the price of a barrel of crude oil to nearly $117 has forced banks and brokers to repeatedly revise their oil price forecasts up-ward.
  
• some analysts continue to warn that oil prices may fall to $80 per barrel as the world's oil supply and demand balance rights itself- could be seen by June [2008].
  
• $50 per barrel could be reached if pent-up supply in Iraq, Nigeria, Venezuela, and other producers makes it to market.

[Historic political / religious conflicts are major stumbling blocks to that happening.]

• pricing sentiment seems to ignore the signs of a supply surplus through the end of 2008.

Tim Evans, energy analyst, Citigroup: "There is no supply-demand deficit."

[but] global demand is expected to be 1.3 million barrels per day higher in 2008 than 2007.

Michael Lynch, Strategic Energy & Economic Research, thinks the supply / demand situation justifies a price of $30 - 40 per barrel

• local and geopolitical events double that price.

"We are stuck in this rut of an upward market until something major changes in the macro picture," advises Adam Robinson, energy research analyst, Lehman Brothers.

theoildrum.com comments on a The Wall Street Journal article - "Oil Officials See Limit Looming on Production," posted by Gail the Actuary on November 19, 2007

"A growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day. Some predict that, despite the world's fast-growing thirst for oil, producers could hit that ceiling as soon as 2012."

[We started refining oil about 100 years ago] "with a finite amount of oil, and this is gradually being depleted. As it gets depleted, it becomes more and more difficult to extract economically, so production tends to decline [and prices quickly climb]."

"The WSJ article quotes Randy Udall:

Randy Udall, co-founder of the U.S. chapter of the Association for the Study of Peak Oil and Gas, has written that these unconventional oil supplies are like having $100 million in the bank, but 'being forbidden to withdraw more than $100,000 per year. You are rich, sort of.'"

"This is a good way of understanding our current problem. There is a lot of oil in the ground [North Dakota, Alaska, offshore Florida, Brazil], but it is complex oil to get out. It is expensive, and requires a lot of trained workers. We are rapidly reaching the point where we cannot pull as much oil out of the ground, because the 'easy oil' is gone, and the remaining oil is in difficult locations and is hard to extract."

Fuel for action, if not thought.