Daily Oil Blog

Yes.The royalties from the land of north Dakota are making millionaires out of their residents that are sitting on oil.We’re talking about 1 out of 3 residents!What are royalties some of you may ask.It’s the price of letting some companies the right to develop the resource which in this case is oil.

And with the high oil prices this days, Americans will no doubt find relief once again the crude energy that they may have to drill in alaska are be in abundence in their backyard.And the oil is easier to refine compared to Alberta tar sands.This all come at a time when US exploration for oil seems to be going no where.

Big oil and gas companies already rushing into the region of north dakota for drilling and the results seems to be positive in the long run.The Bakken basin has been confirmed by the US government having a big oil formation.This would release American being beholden by Saudi Oil and also create fortunes for the local landowners there as well.

I guess the environmentalists will have a say on this matter.Meanwhile the royalties in Dakota will be around for some time.

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As you guys can see in recent weeks, the oil spike up to more than 110USD per barrel and to go to 120USD this year will not be much of a shock to most of us.Though I’m not a motorist in the small island I’m living, the high oil price will definitely cause a dent in my pockets in public transport like bus and train rides.

Please understand that Singapore is not Dubai that’s sitting on Oil reserves but is an importer of energy , maybe that’s why I’m worried about this precious resources dwindling and I’m not really a subscriber that oil is abiotic that grows like oil palm trees like my neighbouring country does.

Like any other big cities worldwide that are used to the conveniences of Oil economy , the power down will not just be going back to using candles and cycling, the effects will be more catastophic as the dismantling of the crude society starts to commence.The best bet when the time comes, it will be in stages rather than sudden shocks to the industrialised world

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After the first month of 2008 and now the first monday of february, one would think about how come the 100USD Oil barrel price is not broken and often the oil barrel supplies come to mind.If the decline of supplies continue than the price will shoot off the roof, this is a rational outcome as one guess if the saudis are cooking the numbers about the actual supplies.

After 911, it seems that there are 2 topics that’s bugging the minds of the public unless you stay in the middle east like UAE then maybe you will be prone to this problems.They are both terrorism and peak oil,it seems both are unrelated but a closer look they are unidentical twins.

Big powers like USA and China import Oil for their energy consumption and when Bush cited the addiction of Oil from Americans, we know the terror scenerio in the mid east that spread worldwide are more or less sponsored by petro dollars.So as Peak Oil is an impending crisis, terrorism will rise as oil prices goes up ,the sponsors will continue and expand the funding reaching a point when the world cannot ignore the threat happening at their backyards and grassroots public will start demanding their governments to be accountable of the actions of the terror misdeeds.

2020 seems far from the horizon but many uncertainty of events can happen in the following 12 years.The Hirsch report came to some conclusions about peak oil which I will go over the few key points:

a)Peak oil production will happen and will be abrupt and definitely highly disruptive to our modern way of life.

b)Intervention by the States will be required

c)Trillions of dollars will be employed to deal with the problem

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Sometimes I find the people are more interested in speculating and talking about conspiracies with no concrete evidence whatsoever because it empowers them with a world that is like a capitalist bullet train that’s going over the cliff with no driver to stop it.

The oil markets supplied by OPEC plus the enormous influence from powerful transnational companies does make a good receipe for a conspiracy plot.But it distracts us from the real issue, lower production and higher priced oil barrels that’s going to impact us the next decade.

Oil Crisis abounds 

With EIA latest forcast this year, we are seeing a probable crisis forming till end of the year that will carry itself forward to next year.

Reasons are:

World consumption in oil is going to rise higher than what the production of non-opec can supply and that leave Opec supply to offset the  higher oil prices.

EIA predication that worldwide oil production sets to double in 2009.

The facts are that oil peaked during the 70’s since the last century and people are still not awakened to this cruel reality that cheap and abundent oil are relics of the past.With this kind of mindsets from the masses both in the west and the rest of the world ,no wonder Conspiracy theories are becoming the opium of our century

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It seems like nowadays Libya is now starting to pull her weight around the world with her oil wealth making inroads to housing and other sectors except now she’s willing to throw 255 billions worldwide instead of just her domestic market.

Sovereign funds by nations  are now under scrutiny cause of national security and other economic concerns.Especially with the war on terror, Libya will be under the spotlight of US and other countries in regards of her investments.

Needless to say, Libya is sitting on the largest Africa oil reserves and because of  terror links was left untouched by western interest for 2 decades.This may not be so in the near future as Libya will be more involved in the struggle against terrorism if she does not want to be isolated further in the international arena.

The Oil factor in Libya will be a looming problem or a opportunity depending on what the new administeration after Bush sees it.But it will not be easy one to resolve considering US based their foreign policies now based not only on human rights abuses but also energy and other economic interests.

Libya presently has been extolled by the bush administeration as a reformed terrorist state hence bringing it 30 odds billions of barrels of oil reserves into the market.How will it develop with the rest of the world in the future will much depends on Libya part to renounce terror..

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As all of you may know,prices of the oil barrels have been on the increase this year with no sight of dropping below $50/barrel anytime soon.It seems likely that OPEC may raise production in 2008.

But a more pressing question boggling me is not whether the gulf region will raise production but whether OPEC can increase output.The much debated massive reserves that OPEC holds are already placed in doubts by many analysts.Privacy about the data that is not released add on to the public anxiety .

Iran nuclear enrichment is a hot topic nowadays given washington concerns about the persian country real motives of building nuclear facilities.America southern neighbour Venezuela doesn’t seem like a positive note for the Bush administeration energy woes given Chavez anti US stance. Along with Iran, the duo seems to be bent on lowering production and raising price per barrel.

Hence the outlook of 2008 may start off with a air of pessimism in the oil markets that will see many traders going long and the public paying more for their airfares and road trips.

US and other countries that’s so fossil dependent to run their economies have to look for new sources of energy and discover groundbreaking technologies that’s going to drill deeper, cheaper and even cleaner

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With the closing of ASEAN summit, singapore PM lee highlighted the rising oil price concerns as this will impact the social fabric of the society with the lower income groups being the most vulnerable.

Indeed, many leaders in Asia pacific region are concerned about the rise in oil price in the recent months.With ASEAN integrated economically, this will have an adverse effects of the mass populace who are living in the poverty level that needs abundant and cheap energy to uplift their plights.

Singapore being the most successful economies in South East asia is a reflection of how high energy price will impact on our living costs bringing food and transportation up.A successful economy cannot resolve the problems that is dependable on oil imports for her energy needs.

Mynammar seems to be sore thumb in the human rights issues and I believe the Oil politics is an important factor that ASEAN cannot ignored in the medium and long term prosperity of the region.It’s really a difficult route to tread between human rights and economic progress,

ASEAN summit has got all their chefs ready for the new kitchen with all the food and spices ready, now where’s the cooking oil?

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This is the fifth day of deepavali festival, a hindu faith and I decide to talk about India involvment in Oil.Rise of india is a ‘Jaggernaut’ force that no one can stop.

The hindu god named krishna also called jagganath, in religous procession, devotees will throw themselves into the wagon which the statue Krishna was placed subjecting themselves to the god.Hence the word Jaggernaut came about which mean a strong advancing force which will crush anything in front of it

India has been growing 10% the last 2 years and only behind china by 1% .Growing resurgence has seen many smart indian returnees from abroad into the IT sector.This spillover to her energy sector boosted her increase in petro engineers too.

However all this means much more energy India will need to harness to propel her ever growing economy compared to 2 decades ago. National company like ONGC(Oil national and Gas company) is doing her part to drill oil worldwide just her IT cousins Infoysys are doing a good job at outsourcing software development.

In-situ combustion(ISC) process employed by ONGC help to recover heavy crude oil are expected to be increase in the future as the Oil is getting more difficult to drill as it gets deeper. The company will be awarded large blocks of oil in exchange for her efforts in Venezuela and other mid east countries as time goes by.

Venezuela seems to be the dark horse in the oil market controlled by Chavez administeration now.She holds more than 1 trillion barrels of heavy oil but more than
50% cannot be recovered by today’s technology.

Will India engineers save the world from huge oil price increase?Maybe in the short term
but even they can’t turn the tide of decreasing oil reserves and produce new oil.

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I was thinking that most drivers don’t really care about spot oil prices , life goes on for many of us especially for people like taxi drivers who depended on their vehicles for a living.They may grumble on about the government lack of power to cap the fuel price.But seriously no one really not the man in the street anyway have much control over the oil price.

So does gasoline prices really reflect on our rising crude oil cost.Latest statstic shown this was not really the case, as consumption are less due to high oil price tend to lead to a  not so high gasoline.You see we are still paying more just that it’s lesser than a few months back per gallon.

Why more?It’s more than last year per gallon, people tend to view gasoline prices in short term view for few months most of us anyway except maybe for oil analysts.This is a myopic vision that will not serve us well if oil contiune to move up.Then the gasoline  prices will move  up faster than what we can absorb.

As oil supplies gets tighter, I wonder how much will the gasoline goes up?5 dollars per gallon , 10 dollars or more?One thing for certain by end of next year, if things do not change, hitting 3 dollars per gallon will not seem to be a crude joke

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It’s been some time since oil has broken 80USD a barrel, it will not be too far off in thinking that it will hit 100usd.When one look at the peak oil production at global scale,the price of  oil ever increasing seems coming more real.

If USA ever think of attacking Iran, price will definitley shoot up to 130USD a barrel .Talk about being in harmsway for the civilians pockets.It’s definitely not positive for most of us who travel daily to work and import their food from overseas.

Down here in Singapore, our bus fares have already been adjusted this month,public transportation is a norm cause the high price of owning private vehicles in our island state.

I believe small economies survival like ours depends on big countries like China and USA  management of their energy resources.In China now, there’s an exercise that one should plant trees depending on how much carbon one use for travelling planes or cars.

The 3 top exporters of oil to USA is nigeria ,mexico and canada as of today.One may think  USA imported the most oil form mid east, it may be so in the past but not the recent years.OPEC petroleum imports has been dropping since the 1960’s.

Canada seems to be the best option for the energy sources for USA, not forgetting China is going to move into the act too investing in the oil sand region.Nigeria and mexico are beset with problems so they are out for now.

The last 5 years have seen a spike in  25% in petroleum imports from Canada to USA.This has prompted oil companies to realise the potential in canada as a source of energy to USA.The next battle for energy will be fought in Canada and this will not be fought with guns

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