PARIS — Oil and natural gas production capacity should surge by 25% to 110 million barrels per day by the year 2015 – the result of investments in new and unconventional petroleum sources like oil-sand deposits and oil shale, .
The report flies in the face of most predictions of peaking oil output that is threatening economic stability. But the research firm's forecast, if accurate, “would ease the current perception of taut supplies that have driven oil prices up 25% so far this year and 285% since the end of 2001,” according to Investor's Business Daily. While presently, there are only approximately 2 million barrels worth of spare crude capacity – considerably less than the amount available just 10 years ago – Cambridge predicts there will be some 12 million by 2010.
The group's report does acknowledge the probability of continued oil production declines in the U.S. and Europe 's North Sea, but it anticipates considerable increases – especially among OPEC member nations.
Peter Jackson, CERA's director of oil industry activity, insisted that an increase in production has more than offset the aggregate disruption – thereby generating a net gain in spare production capacity.
“There is not really a supply problem in our view,” said report co-author Jackson , according to the Boston Herald. “We see no reason why any reasonable demand level won't be met.” Oil prices recently reached a record-high of over $75 a barrel. But those in-the-know don't think it'll stay there.
Saudi Arabia's oil minister Ali al-Naimi is warning that oil price hikes and global oil demand could soon disappear.
In fact, he is also warning that oil prices could easily “plummet” in the near future.
Ali al-Naimi said prices could plummet if an economic crisis drives industrialized nations to find other sources of energy, citing the 1980s – when oil prices dropped by 80 percent after such nations reduced their dependency on oil and turned to alternative energy sources.
''Global economic growth may not continue at the same good momentum for years to come,'' al-Naimi said at the opening of a four-day conference of Arab energy ministers in Amman. ''We should be careful and not take expectations as indisputable, especially the continuation of big demand for oil and its prices remaining at the same level or increasing,'' he said.
Oil appears to be hitting new highs — but not for long! We believe a major price decline is already in the works.
In fact, the U.S. government admits that crude oil inventories are at 7 year record high — with 343 million barrels of oil stockpiled in the U.S. alone!
Oil prices have been severely exaggerated through manipulation. We have been pounding the table stating that there is plenty of supply to meet worldwide demand, and soon those hedge funds that are now driving up the price of oil will be dumping their oil contracts like there is no tomorrow.
I am not alone in making this clarion call but certainly ahead of the pack. Recently Steve Forbes, editor of Forbes magazine predicts that skyrocketing oil prices are just temporary and that a massive price collapse will dwarf the Dot-Com crash that began in 2000.
British Petroleum recently reported that current oil reserves would last for at least half a century. And contrary to dire warnings that oil production has peaked and the earth is running out of oil, Daniel Yergin-chairman of Cambridge Energy Research Associates says there will be a large, unprecedented buildup of oil supply in the next few years.
Yergin says between 2005 and 2010 capacity to produce oil could grow by 16 million barrels a day-a 20% increase. At any given time, the oil industry has about a 30-year supply of “proven oil reserves.” Unfortunately, a lot of people take the “30-year supply of proven reserve” figure to mean that we will run out of oil in 30 years.
The report reveal that why many of the “doom and gloom” forecasts of “peak oil” are based upon a common misunderstanding about oil supplies. Forbes blames the oil price spike on rising inflation and aggressive buying on the part of burgeoning Pacific Rim countries.
In fact research tells me that this it the fifth time the world has “run out of oil.” Dire warnings of impending shortages like those we are now hearing about were also issued just after World War I. And the “permanent oil shortage” of the 1970's gave way to the glut and price collapse of the 1980's and on and on.
But despite recent price rises, we are now paying less for gasoline than people did in the 1980's or in 1935, after prices are adjusted for inflation.
