This should definitely make some alternative fuels look a lot better...
And based on the current price, it is, unfortunately, not an unbelievable price.
And what do US automakers do to cope with this oil price, that could translate to around $3.50 - $4 at the pump?
Since the article will go away in a week or two, here are some excerpts:
Quote:
NEW YORK (AP) -- Oil prices could top $100 a barrel by the end of next year and remain above that point for years to come, the chief economist of Canadian investment bank CIBC World Markets said Tuesday.
Rubin said oil exports from OPEC countries, Russia and Mexico will likely decline by about 3 million barrels per day over the next five years. The biggest drop, he expects, will come from Mexico, a key U.S. supplier.
Rubin expects Mexican oil imports to the U.S. will dry up by about 2012. Some of that decline will be made up by imports from other parts of the world, but the lions' share -- nearly a third of all U.S. oil imports -- will come from Canadian oil sands, he predicted.
But replacing relatively easy-to-refine liquid crude with petroleum from oil sands is certain to increase costs, he said. By the end of the decade, Canadian oil sands are likely to represent the world's largest source of new oil supplies, he said. "We're basically replacing low-cost oil with high-cost oil," he said.
"Triple digit prices is not a spike," he said. "Triple digit oil prices is what is going to be required to maintain, let alone grow, world oil supplies."
The Alberta government has just commited to raising the amount of royalties that oil companies will pay, and, in turn, the oil companies have said they will slow or cease their planned developement of the sands.
Two things are likely to happen, not in any particular order;
1, The oil companies will continue with their developement of the sands,
In Japan, which relies on imports for nearly 100 percent of its fuel, [...] Japan has been weaning itself off oil for years. It now imports 16 percent less oil than it did in 1973, although the economy has more than doubled. Billions of dollars were invested to convert oil-reliant electricity-generation systems into ones powered by natural gas, coal, nuclear energy or alternative fuels. Japan accounts for 48 percent of the globe's solar-power generation -- compared with 15 percent in the United States.
This should definitely make some alternative fuels look a lot better...
And based on the current price, it is, unfortunately, not an unbelievable price.
And what do US automakers do to cope with this oil price, that could translate to around $3.50 - $4 at the pump?
Oil to Hit $70-$80, Says Strategist Who Called July Peak
"The commodity trade is over," Scott Bleier, founder of CreateCapital.com, declared on July 18, a bold call that has proven directionally accurate to date.
On Monday, Bleier reiterated his view that speculation played an oversized role in the commodity rally, which peaked in mid-July. But now, hedge funds are exiting the space (as detailed here) as the short-term uptrends for oil, gold, copper, and other hard assets have broken and the "hot money" sees better opportunities elsewhere.
While "headline risk" remains for commodity prices, the "liquidation will continue" for another 12 to 18 months, Bleier says, predicting oil will hit $70 to $80 per barrel by mid-2009.
Of course, as with any prediction, there are some uncertainties, and there are some events, such as a war, in, or near an oil producing region that can make this prediction go up in smoke.
