Peak Oil - The pressure mounts

Six years ago, the British sector of the North Sea was producing more than two million barrels of oil a day. The change since then has been dramatic - UK production in all offshore fields is 30% down on 1999 and dropping daily. North Sea output will fall until the resource becomes physically too difficult to extract - perhaps in 20 years' time. In resource terminology, North Sea oil has "peaked".

More than 50 countries - including 10 large producers, such as Britain, Mexico, China, the US, Norway, Indonesia and Oman - are now seeing their oil production levels decline. The combination of demand growth and supply declines suggests that the world is roughly where North Sea oil was in 1999 - close to its production peak.

While rich countries could buy time as supplies declined, that would not be an option for long, says Richard Douthwaite, a former UK government economist. To survive on the other side of a global oil peak, Douthwaite says, economies will have to be drastically restructured. "The real danger is that banks will jack up interest rates to stop inflation. The cost of business will inevitably rise. All prices in the economy will have to change because everything is dependent on oil. Every price in the world will have to change to reflect the carbon content of goods, and the new cost of energy."

(2005-10-21 19:23:20 SGT) [Energy] Permalink

$60 oil on weaker demand

news.yahoo.com, reuters.com :

Oil prices held around $60 on Friday after a 2.2 percent slide the previous day as U.S. oil and natural gas stocks swelled, revealing weaker demand in the world's top consumer. "Sentiment in the natural gas market has turned decidedly bearish on the basis of demand destruction - and it may take a westerly turn by Hurricane Wilma or frigid temperatures to turn the tide," said JP Morgan in an energy report.

Some analysts said supplies of fuels such as heating oil, which fell last week but remained higher than this time in 2004, could still spell higher prices as the northern hemisphere approaches winter. The UK Meteorological Office has predicted a colder-than-average winter for much of Europe, while forecaster EarthSat said this week that the U.S. Northeast - the world's largest heating oil market - would be chillier than last year.

(2005-10-21 14:14:15 SGT) [Energy] Permalink

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