Saudia Arabia Says $200 Oil In 2 Years…(palm goes to forehead)

From Reuters

OPEC Saudi Arabia was warning that oil prices could spike beyond the $150 record high we saw in 2008 due to the “blow to investment in expanding capacity”…the culprit…the financial crisis. (Note: “financial crisis” seems to be the culprit to every giant money-making entity on the planet whose looking for funds…).

Oil prices are at a 6-month high of $60/barrel…anyone else getting peeved at seeing +$2.30/gallon?!  Yesterday “energy ministers” (sounds scary) met in Rome to discuss their dismay. They say producers need $75/barrel to get investment going again.

Remember last summer when we were all being warned to cut back on our consumption…ease demand to improve prices? Well…we did…but I guess too much to keep OPEC happy? Can we really ever win at this?!

The International Energy Agency predicts investment in oil and gas exploration and production will fall 21 percent in 2009. Paolo Scaroni, CEO of Italy’s Eni said one solution might be to create a global oil agency representing producers and consumers that would combat price volatility and ensure investments keep flowing into the energy sector. Hmmm…another big “regulatory” agency….

Again….palm goes to forehead….But talking about oil…is often a colorful talk…here are some of my favorite comments from that article..

Henry Blodget said: Just shows how preposterous our current energy “policy” is….scrimping and saving waiting for oil to go to 75…Then all the new exploration fuels fears of over-supply and it drops back to 50 and then stop new production because it’s no longer viable…We need to put incentives in place that make new production investment feasible at much lower levels. And we need a gas tax, so the economic rationale for consumers will stay stable as well. If oil goes to 200 it will kill the global economy again. Then we’ll be back in this stupid sputtering loop.

Jay said: … the true rulers of the universe. People won’t give a shit after we just boycott it all together.

Frank Saffold said: When will the US Energy Department pull its head our of the sand and seriously assess the recent projections by several eminently-qualified world-class petroleum geologists that world crude oil production is peaking if it has not already done so?

Kenneth said: It sounds like a threat from a group of idiots. You either toe the line or else.

Eric said: Does no one realize that the spike in oil last year partially contributed to the financial crisis we’re experiencing? When prices went up it depressed demand for goods via a trickle down effect, affecting the whole economy.

Deano said: More scare tactics from the boys in S.A. They are doing what they can to talk the price up because they know the end of big oil’s reign is coming soon. They should have thought of that before allowing oil to hit $140/barrel last summer, resulting in the “waking” of the sleeping giant (the U.S). Now hybrids and other fuel efficient vehicles abound and the demand for fuel is heading south fast.

lala said:…we are awash in oil – currently. Global oil consumption is forecast to fall the fastest in 28 years (IEA stat). There are literally boatloads of the brown stuff floating around. ..The biggest Saudi oilfield and the biggest Mexican oilfield are have both been experiencing major declines in the last 3 years. We may not be at Peak Oil but we have passed the peak for “Cheap Peak Oil”. Last year at this time we were looking @ $100 boe/d on its way to $140 boe/d crude prices. The U.S was screaming for more energy infastructure (from refining capacity to more actual oil). Fast forward a year and as a country the U.S has decided to spend (waste) billions on failing industry (see GM and Chrysler). While failing to add anything other, than a push for green technology, in energy infastructure. Whether it takes 1 year or 4 years, oil will again be over $100. You can count on it . The issue is whether the U.S government chooses to do anything to mitigate this or continues to just push “green solutions”?

There were many more beyond that…but I’m running out of space…

Post YOUR comments below…Do you think OPEC is really in such a bind? How do YOU feel when you fill up now that we are creeping back up to $3/gallon??

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