{"id":3713,"date":"2008-06-07T00:30:20","date_gmt":"2008-06-06T23:30:20","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/contributions\/general\/the-first-signs-of-peak-gas\/3713\/"},"modified":"2008-06-07T00:30:20","modified_gmt":"2008-06-06T23:30:20","slug":"the-first-signs-of-peak-gas","status":"publish","type":"post","link":"https:\/\/rinf.com\/alt-news\/contributions\/general\/the-first-signs-of-peak-gas\/","title":{"rendered":"The First Signs of “Peak Gas”?"},"content":{"rendered":"

\"gas.jpg\"By Andy Rowell | <\/strong>Consumers the world over are beginning to protest at the huge gasoline prices they are paying at the pump. But whilst the world goes crazy over the oil prices, there are worrying signs about what is happening in the gas market that could also spell disaster.<\/p>\n

But it\u2019s the oil price that is currently attracting all the attention. Last month, the Indonesian President Susilo Bambang<\/a> Yudhoyono postponed an official visit to <\/span>Europe<\/span> amid nationwide protests against fuel prices increases. \u00a0<\/span>In <\/span>Europe<\/span>, French<\/a> fishermen continued to blockade several strategic <\/span>ports, whilst their counterparts in Spain<\/a> and Portugal also threatened protests.<\/p>\n

In the UK, truckers converged on London to ask for a reduction in fuel duty, whilst Prime Minster Gordon Brown<\/a> held urgent talks with the oil industry. Over in America<\/a>, the oil price was said to have forced many trucking companies to the verge of bankruptcy.<\/p>\n

But as oil continues to hover just under record levels, there are daily warnings that the days of cheap oil have gone forever and the price of oil may soon be $150 or even $200 a barrel by next year.<\/p>\n

There is also a daily debate as to what is actually causing these unprecedented prices. An increasing number of influential voices are saying it has nothing to do with the actual supply of oil but it is down to speculators exploiting the volatile market.<\/p>\n

OPEC, which is under fire from many commentators for not increasing <\/span>production more, argues that the market is already adequately supplied and that $35 per barrel of the recent increase can be put down to speculation.<\/p>\n

Other voices agree, such as Jeroen van der Ver, head of global oil giant, Shell, who argues that the record oil prices are due to \u201cmarket sentiment\u201d rather than a shortage of supply. \u201cWhat we say and what we see is there are no physical shortages,” he says. \u201cThere<\/a> are no tankers waiting in the Middle East, there are no cars waiting at gasoline stations because they are out of stock. This has to do with psychology in the markets and you cannot forecast psychology.\u201d<\/p>\n

His view is shared by George Soros, the multi-billion dollar financier, known as the man who nearly “broke the Bank of England”, in the early nineties. Soros<\/a> argues that it is financial speculators that are largely responsible for driving the crude oil price. \u201cSpeculation… is increasingly affecting the price,\u201d he said. \u201cThe price has this parabolic shape which is characteristic of bubbles,\u201d he said.<\/p>\n

Political action on speculators is increasing. Last week a senior German politician proposed a worldwide ban on oil trading by speculators. Uwe Beckmeyer, the head of transport for the Social Democratic party, the junior partner in Chancellor Angela Merkel\u2019s ruling coalition, argued that the recent 25 per cent rise in oil price had nothing to do with underlying supply and demand. \u201cIt\u2019s pure speculation,\u201d he said, adding that his party would be calling for joint measures<\/a> by the G8 to prohibit leveraged trading on energy contracts.<\/p>\n

Also last week, in America, Senator Jeff Bingaman, the chairman of the influential <\/span>Senate Energy Committee, asked the top futures market regulator in the US, the Commodity Futures Trading Commission, for more information about how much impact speculation was having on the oil futures market. Bingamen<\/a> then complained he had been given \u201cglaringly incomplete\u201d data by the CFTC, \u00a0<\/span>which argued that speculative trading was not to blame for recent price rises.<\/p>\n

If speculation is not to blame, what is? Some argue that it is the weak dollar. Steve Hanke, professor of applied economics at Johns Hopkins University in the US argues that \u201cTwenty-five percent of the increase in oil prices<\/a> is strictly due to the fact that the dollar has gone down by 25 percent, because oil all over the world is priced in dollars.\u201d<\/p>\n

However, others are now arguing that the high oil price is down to good old simple economics. Demand has outstripped supply over the last couple of years and so the price has increased, on the back of roaring demand, especially from China and the Middle East. \u201cThe high-priced energy environment is being driven by the fact that demand has outstripped supply,” President George<\/a> Bush’s Energy Secretary, Samuel Bodman, said this month: \u201cWe have sopped up all the available spare oil production capacity in the system.\u201d<\/p>\n

Others concur. One of the authoritative arbiters of how much oil there is the International Energy Agency, that is currently in the middle of its first attempt to comprehensively assess the condition of the world’s top 400 oil fields. <\/span>Although the findings will not be published until November, according to the Wall Street Journal the IEA is \u201cpreparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand.\u201d<\/p>\n

Fatih Birol, the International Energy Agency\u2019s chief economist, said the oil industry had entered \u201ca new energy world order\u201d where it was harder to keep supply and demand in equilibrium. \u201cWhat has happened in the last few years has not been in line with economic theory,\u201d he says.<\/p>\n

For years the IEA predicted<\/a> that supplies of crude would gently increase in line with demand increasing to some 117 million barrels per day by 2030. But not anymore. Buried in the IEA website are figures that up the theory that the supply of oil is in real trouble. Since the beginning<\/a> of 2004, oil\u2019s price has gone from $33 per barrel to over $130 per barrel. In the same period, demand<\/a> has increased by some 4.3 million barrels per day to 86.5 million barrels per day, whereas supply<\/a> has increased by only 2.2 million barrels per day to 85.6 million. Supply is already struggling to keep up with demand, let alone reach over 100 million barrels a day.<\/p>\n

The bottom line is that demand is now outstripping supply, giving credence to the peak oil pundits that the days of cheap oil over, and the global economy could be heading for a nasty shock. \u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

By Andy Rowell | Consumers the world over are beginning to protest at the huge gasoline prices they are paying at the pump. But whilst the world goes crazy over the oil prices, there are worrying signs about what is happening in the gas market that could also spell disaster. But it\u2019s the oil price […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[64],"class_list":{"0":"post-3713","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-general","7":"tag-world-news"},"_links":{"self":[{"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/3713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=3713"}],"version-history":[{"count":0,"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/3713\/revisions"}],"wp:attachment":[{"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=3713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=3713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=3713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}