The who's who of the oil industry have given ominous predictions about oil demand outstripping supply in the near future.
From the National Petroleum Council:
The findings suggest that, far from being temporary, high energy prices are likely for decades to come. "It is a hard truth that the global supply of oil and natural gas from the conventional sources relied upon historically is unlikely to meet projected 50% to 60% growth in demand over the next 25 years," says the draft report, titled "Facing the Hard Truths About Energy."MSN MoneyCentral's soothsayer Jim Jubak writes in The oil squeeze has just begun:
"In geoeconomic terms, the biggest impact will come from increasing demand for oil and natural gas from developing countries," said the draft report, a copy of which was reviewed by The Wall Street Journal. "This demand may outpace timely development of new supply sources, thereby pressuring prices to rise."
The study, which was requested by U.S. Energy Secretary Samuel Bodman in October 2005, was conducted by the National Petroleum Council, an industry group that advises the secretary.
"World will face oil crunch in five years."In the IEA's July 2007 Medium-Term Oil Market Report (available via the WSJ), they reach the conclusion of Peak Lite:
That's not exactly the kind of headline you want to read when crude oil is already at $73 a barrel. When things are this bad -- crude prices are up 12% in the past two months as of July 12 -- you don't want to hear that they're going to get worse.
Yet that's exactly what consumers -- and investors -- should expect, the International Energy Agency said in its latest Medium-Term Oil Market Report, issued July 9. The market for oil will get even tighter over the next five years. (And in case you're looking for a way out, natural-gas markets may be even tighter.)
Despite four years of high oil prices, this report sees increasing market tightness beyond 2010, with OPEC spare capacity declining to minimal levels by 2012. A stronger demand outlook, together with project slippage and geopolitical problems has led to downward revisions of OPEC spare capacity by 2 mb/d in 2009. Despite an increase in biofuels production and a bunching of supply projects over the next few years, OPEC spare capacity is expected to remain relatively constrained before 2009 when slowing upstream capacity growth and accelerating non-OECD demand once more pull it down to uncomfortably low levels.Now the former chairman of Shell has come out with harsh words of his own:
Oil industry 'sleepwalking into crisis'
Lord Oxburgh, the former chairman of Shell, has issued a stark warning that the price of oil could hit $150 per barrel, with oil production peaking within the next 20 years.
He accused the industry of having its head "in the sand" about the depletion of supplies, and warned: "We may be sleepwalking into a problem which is actually going to be very serious and it may be too late to do anything about it by the time we are fully aware."
The Independent, Oil industry 'sleepwalking into crisis', David Strahan and Andrew Murray-Watson, 17 September 2007
Rigzone.com, US Petroleum Industry Draft Sees Energy Demand Soaring, Bhushan Bahree, Monday, July 16, 2007
MSN Money, Jubak's Journal, The oil squeeze has just begun, 7/17/2007 12:01 AM ET