Just as Lord Bison (a.k.a. Jim Dakins) takes his finger out of the dike, and runs off in full retreat, the peak oil action gets exciting.
Marginal oil production costs are heading toward $100/barrel
Kate Mackenzie, FT Alphaville, 2 May 2012 (hat tip: Big Picture)
I hope Lord Bison remembered to bring his bolt action, and stew pot with him to his hideaway.Bernstein’s energy analysts have looked at the upstream costs for the 50 biggest listed oil producers and found that — surprise, surprise — “the era of cheap oil is over”
3 comments:
I haven't seen an oil usage chart for April yet to see if the recent spike caused a decrease in demand. The theory that non-traditional oil costs is what's really setting the overall price is an aspect I hadn't thought of before.
It makes sense but only if overall maximum output is enough to influence midEast oil.
PP: To my mind, too many moving parts to keep track of on the demand side. You also have subsituion effect for really low cost (likely temporary) natural gas.
I am not sure why the piece makes such a big deal about Saudi Arabia. There was a lot of talk about them smoothing out the supply curve during Libya, and as far as I can tell it never happened.
But your point - as I understand it- is valid. Knowing what the shape of the marginal cost of production would be helpful. To some degree it is the same phenomina as the oil price cealing that the global economy keeps bumping into described in a different fashion.
nice information
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