Oil Price to Reach US$ 350 in Near Future
January 12, 2020 - Even though the oil price crossed another barrier earlier this week with US$ 320 a barrel, we have probably not seen the end of it. With the stumbling of the world's current oil production even higher oil prices are to expect in the future. When Saudi Arabia officially announced in 2013 that the oil production in Ghawar, the biggest oil field in the world, was significantly decreasing, the price for a barrel passed US$ 200. The current total world production of oil is 91 million barrels a day. To get down to the same oil price as before 2013, adjusted for inflation, an estimated world production increase of about 10% is needed.
This can only be achieved in three deposits in the world, Green River Oil Shale in the US, Athabasca Oil Sand in Canada, or Orinoco Oil Sand in Venezuela. However, all of them are extremely stressed at the moment with full capacity, which prevent them from increasing production for a lower oil price.
Some people also set their hopes for an increased output of the drilling in the deepwaters of the Gulf of Mexico. However, since the start of the production six years ago, it has not reached a substantial level to make a significant impact on the oil supply.
Even though the production eventually will increase at these sites, it will not match the current loss of production at conventional oil fields in the world, which means that we have passed the peak of world oil production. This will increase the oil price even more in the near future, some analysts believe it can reach as high as US$ 350 a barrel before the year ends. Hopes that were earlier set to find new reserves is now basically only focused on more efficient output from the three major sites.
US has made giant investments during the last decade in the Green River deposit, which is projected to reach a production of 1.6 million barrels a day this year. Since that is still not enough, US put a constant pressure on Canada for a higher output from Athabasca of another 1 million barrels a day, apart from current production of 3.7 million.
US is the country that consumes most oil in the world with about 22.5 million barrels a day. 71% of the total oil consumption in the US is used for transportation, which includes gasoline, diesel, jet fuel and residual fuel oil. Gasoline has been the dominant oil product for almost a century, and 40% of all oil consumed in the US end up in a fuel tank of a car.
The main adjustment to a higher oil price in the last decade has been the shift to less gasoline consuming cars, but so far only about 10% of the American car fleet consist of hybrids. The main reason for the slow transition to a more fuel-efficient fleet is still the lack of a competitive fuel to gasoline.
China is also suffering heavily from the high oil price for their economic growth. Analysts say an oil price at US$ 350 sets back their growth rate with 1.0% of GDP per year compared to the oil price before the Saudi Arabian peak. Even though China has more than doubled their oil consumption during the last 20 years, they are still per capita only using 2.7 barrels per year, compared to 24.4 for the US.
Argument: The world oil production is based on forecasts from the U.S. Energy Information Administration and Association for the Study of Peak Oil, and other relevant data. For the output of Athabasca consideration have been taken to numbers from the Canadian Association of Petroleum Producers, and the output of Green river is revised information from the study Oil Shale Development in the United States from Rand Corporation. With such a high oil price, heavily investments will most likely be made in the exploration of existing deposits of oil sand and oil shale. Predictions of the output of the deepwaters of the Gulf of Mexico are from The Oil Drum.
Questions: What other effects will the increasing oil price have on the everyday life? How will the developing countries manage when they will not afford to buy the oil needed and don't have the resources for alternatives?
Please note: This article is an updated version based on new development. You find the old article if you click here.
January 19, 2035 - According to the latest statistics presented this week, 1 million hydrogen-fueled cars have now been sold in the US. The figures for last year show an increase in sales by 50% from 2033.
January 8, 2035 - With a first prize of seven million US dollar and the intriguing plot of trying to fool or outsmart Arnold, the most advanced artificial intelligence in public use, the much hyped live show “Fooling Arnold” became the people’s choice this Saturday.
December 20, 2030 - The launch yesterday of the virtual realistic-looking human newscaster from Simple News gained rave reviews. Others have made several attempts earlier, but this sends the live newscasters in to a pretty shaky future.
December 18, 2020 - This year shows strong growth for wind power when the total global installed capacity added a record 62,000 MW, making the total capacity more than 680,000 MW. Wind power is by far the renewable source with the largest growth in worldwide capacity during the last decade.
December 15, 2030 - There's no doubt what the most popular Christmas present will be this year. Influenced by the launch of the first manned mission to Mars next month, you will most likely get a present with stars, a gift card for a spacetrip.
November 19, 2040 - Today was a historic day for Iceland when their President this morning at a symbolic ceremony officially shut down the last gasoline pump in the country. Iceland is a model country when it comes to the fuel transition from gasoline to hydrogen and became today the first country in the world to complete it.
September 21, 2050 - At a press conference today it was announced that the first tourist heading for Mars will be the 38-year-old US businessman Patrick Clifford. He will leave the earth in the launching window of June 2052 and set his foot on the surface of Mars in November, together with the other 6 astronauts assigned for the mission to further explore the planet.
September 12, 2035 - Are you kidding? Is it possible to beam myself? No, of course not, but you can now make a 3-D projection of yourself anywhere in the world. The first product for real teleimmersion has been released, the Telebeamer.
September 5, 2035 - More than 20,000 quadriplegics around the world have now got a BCI, a Brain Computer Interface. It gives them the ability to control their environment, from driving their own electric wheelchairs outside their house, to make their own dinner.
Comments:
Nanotechnology will replace oil-based materials, probably within the next 15 years. Hydrogenengines en micro-thermonuclear fusion will emerge within 10 years, along with other means. Materials and energy will become very cheap. For propulsion synthetic fuel is under development.
Posted by: furture
Yay, this means that the Russian Federation will be able to make profit and become a true superpower in the next decades =)
Posted by: Andrei
Oil never reach 180$
Posted by: b
2020? I don't think so. Oil WILL hit $180 one day, but not until some time in the 22nd century, unless 99942 Apophis hits Earth in 2036.
Posted by: Roy
The article says that the oil price will be US$150 in 2020. During the oil crisis in 1979 the oil price reached US$39.50 a barrel, which adjusted to inflation will be around US$150 in 2020. In 1979 the crisis was due to controlled production, in 2020 it will be because of lack of supply, which will most likely make the market even more shaky.
Posted by: Pontus Edenberg
In my openion Oil futures will hit nearly $500 USD per barrell by 2010. This is mainly due to steady demand and increasing money supply.
United States 8 Trillion Dollars, 8% YoY Growth
China 34 Trillion Yuan, 19% YoY Growth
India 36 Trillion Rupee, 18% YoY Growth
Russia 10 Trillion Rubles, 27% YoY Growth
European Union 9 Trillion Euro, 8% YoY Growth
Posted by: Mark
Well seeing how this article says it will reach $100 by 2010 and it already has in 07 i would say over $200 by 2020 maybe $300.
Posted by: Jeremy
umm. how about like next 5 years. it being $105 in April of 2008 already.
Posted by: Mattew
Stupid sheeple. There is no shortage of oil. Even Opec has admitted that. Also, no such thing as supply and demand anymore.
Posted by: Bob
maybe it will be 180 within a year or two, considering May of 2008, gas is $120 a barrel
Posted by: d
Its over $200 a barrel now. :P
Posted by: Joe
this sounds completely plausible to me, just a couple years ago oil was around 60$ May 22 2008 it broke records at 135$ many analysis say 180$ in less than a year, In 20 Years? with the modernization of China and India, This sounds like a likely senerio. However, a world war or economic depression would set in even before prices got that high
Posted by: john
I think oil will get close to $200 a barrel by the winter (modest forecast). Depending on the election I think we are going to see $8 by next year. I think the current administration, OPEC, and Domestic Oil Companies are detecting "peak oil". I beleive demand needs to drop about 6% every year in order to hide this, and that will only happen on a temporary basis with $8 USD gas here in America. Or if the 10 Iraqi Oil Fields went into full production again. That would hide it too for the next 2-3 years so the next Administration can get blamed, and anyone currently in the Federal Government who has their fingers in the oil industry can relax on the liquidated assests of these companies while the rest of the country gets hit with the real recession. My opinion we need federal subsidies to individual consumers and auto recyclers to aggressively change the overall type of vehicles Americans drive. Its better to loose a painful amount of money now then have several years of economic stress. Remember in the 80's when we thought the Japanese Yen would be the dominant currency for decades to come?
Posted by: Scott
The pricing of oil is too difficult to predict. There are too many variables involved for any long term accurate forecast. The price of a barrel of oil has increased by 100% plus since April of last year, 2007. The government has asked the auto industry to up the estimated mpg of future vehicles. However, the price of gas continues to rise, therefore dampening any economic relief at the pump, but a predictable profit margin for "Big Oil."
I do think that alternative fuel sources will come on-line by 2020, but only after the US government, "Big Oil", and the auto industry agree upon when the launch day is here. We can send a man to the moon, split an atom, and experience the type of technology boom, specifically nano-tech, yet, we cannot deliver an alternative fuel source for everyday use..I dont think so! We have it on the books now, we have prototypes now, however, until "Big Oil" can "own it" and guarantee the same profit and growth margin to share holders..it wont happen. This is not about improving the quality of life for the everyday family.....its about control, money, power, and greed..and its shameful.
Tracy M. Jordan
Posted by: Tracy M. Jordan
It is worse than shameful. Oil hit $140+ a barrel this past month and has settled at about $130. There's no shortage of oil but a distinct shortage of intellect across the population.
Posted by: jp
In 2020 oil will be considered as a waist material and owners of oil have to pay to get rid of this very polluting material. Due to recycling techniques it is more efficient to regenerate plastics out of existing plastics instead of new material out of oil.
Posted by: Eric
This post is cliche at best and ridiculous at worst. First off any prediction for a commodity price more than a year out is probably wrong. Secondly, past predictions for future oil prices have been laid to waste by new finds and a tendency towards exaggeration.
There has to be something more interesting to predict than higher oil prices in the future. Maybe you can tell us when the next recession will hit.
Posted by: dj
As ths is my first post to this list I do not really know the various perspective of the readership. Given that the price of oil currently sits (October 09) at $81 per barrel with the US in the worst economic condition since the 1930's. As the economies of the world begin to ramp up as is already happening in China and India the modest supplies will quickly hit the production ceiling. For those who have been researching the actual production of oil worldwide, we hit a maximum production of approximately 73 million barrels per day in 2005 and have not surpassed it since. I see the price of crude hitting $100 a barrel by the end of this winter with $150 oil by the summer of 2010. The main problem with this is that at these prices the US economy will again hit the skids with a corresponding decrease in demand and a possible retrenchment back to $100 a barrel during the 2nd half of 2010.
Posted by: Zev Paiss
DJ said:
I'm not sure when he posted this, but it looks like his question has been answered. Looking back, it is obvious that high oil prices triggered the current "Great Recession" of 2009.
Posted by: Earthbound Misfit
Zev, you and a few others (very few) seem to have a good grasp on the situation. The Deniers have their heads somewhere that the sun doesn't shine. Are they afraid of living in a world without personal vehicles:
Where energy will be as expensive as food, or maybe more expensive.
Where gas will actually cost MORE than a gallon of "renewable" milk?
Where their self-image is NOT represented by what they drive?
The world is going to go through a gut-wrenching change over these next 20-30 years, and gas prices are not going to stop at $8 or $10 per gallon. It is going to be interesting...
Posted by: Anonymous
Intimately, the article is really the freshest on this worthw hile topic. I concur with your conclusions and will thirstily look forward to your forthcoming updates. Just saying thanks will not just be enough, for the phenomenal clarity in your writing. I will immediately grab your rss feed to stay privy of any updates. Pleasant work and much success in your business efforts!
Posted by: trikapalanet
by 2015 this could become a reality. The earth is going to have a lot of changes in the future. we will probally have to spend billions even trillions just to fix the mess of cleaning the earth and providing basic nessseties to people and it will take many, many yrs because we were stupid not to start using cleaner methods of energy. I wouldn't be suprisped if our decendatns in the future will still be cleaning our crap by 2200
Posted by: Anonymous
your guys are all wrong..
hope u didn't get into the future trading of oil..went bust easily if u think the oil price will hit record high this year...
(tricks made by US government)
Posted by: ye
Oil prices to drop dramtically. Oil derivitive created by combining other alternative fuels. Middle East to collapse. Sheiks and other mideast nations now desert slums.
Posted by: Orion Prime
Well this shows the human psychology to over state the things.
Oil was never above $80 (the currrent price) in absolute terms. The recession have made our moods down
my bet - Oil
normal - 80
recession - 60
boom - 100
Posted by: Lucky
Certain countries have become wealthy because of oil dependency. That will change in the near future when a giant leap occurs to other forms of energy for propelling vehicles and warming homes.The huge undustries constructed through oil (such as car manufacturing)will not
collapse but will adapt.
Posted by: Charles Pitt
Fossil oil resources will decrease by 2020 similar to what the article states. However, biofuel and ethanol production will increase to replace them. Genetically improved energy plants will cover large land areas and new technologies will enable us to exploit oil out of any kind of biomass.
As a consequence, unfortunately, the pressure on rainforests and natural habitats will dramatically increase with people wanting to convert them into agricultural land. The world food prices will skyrocket. Famines in developing countries will be a serious problem.
Posted by: Leo
I hope that pretty much everyone realizes that many things we haear about on tv and other sources of information, very much of a brainwash US government placing out there, they don't want people to know the truth because if all of us find out the real truth, the huge panic among public would kick in really quick.
Posted by: Alexander bunin
i dont know there is no dates posted anywhere on this site this is absurd in this day and age that there are no dates to be found other than future dates no date on the article no dates for the comment.. get a real web site in real time..
Posted by: LADAGOSTA
GE is already testing aircraft engines with Algae Fuel. The Algae can also be produced to burn all blends at the fuel pump. I hope that happens soon so we can all say to these idiots at these oil Companies to "Kiss My ASS"
Posted by: Chris Hayward
I always learn something new from your post!
Posted by: instant income cash machine scam
if we get past 2012, does it matter?
Posted by: Hopi1
i say oil should be gone before 2020 or 2014 bc its a fossil fuel and soon fossil fuels be gone like a cleaner future i think of trillions of things can happen
Posted by: matt
i say oil should be gone before 2020 or 2014 bc its a fossil fuel and soon fossil fuels be gone like a cleaner future i think of trillions of things can happen
Posted by: matt
i say oil should be gone before 2020 or 2014 bc its a fossil fuel and soon fossil fuels be gone like a cleaner future i think of trillions of things can happen
Posted by: matt
OIL SHALE and the Tar sands will guarantee fuel prices are as high as they ever get in our life time..
Posted by: Clarkson
Fairies will sprinkle magical dust all over the world and the oil problem will be solved! Either that or there will be a massive population dieoff and we'll live in caves and eat each other, before 2050.
Hands up all those who believe in Fairies (this includes nanotech)!
Posted by: Nazz
What I think is more important than oils replacement is the infrastructure needed to support future green tech.The reason know one is investing In hydro and bio is there's to much money to still be made on oil and all it's derivatives with no structure to distribute quickly the advancements in other techs. Solar energy is the only real replacement option IMO for the long term....we've only begun to tap its potential. Fed needs to subsidize the infrastructure for hydro and then let's see what happens.
Posted by: Fred