Steffens comments make some sense. In a market as active as oil with demand unlikely to moderate and supply liable to wild swings prices may indeed surge back, but that's the oil market for you. If you don't have to bet on it, don't..

So low oil prices due to an oversupply of fuel are an indication of high oil prices due to an undersupply of fuel? This is ideology, not logic.

What occupies and motivates the Saudis are other oil producers, and the maintainence as much as possible of their market share.

And given they can produce a barrel of raw crude for around a dollar, at almost any price!

Not good news for the Russians!

However, what preoccupies the Saudi oil minister more than just about anything, is the new oil fields in Edmonton Canada, which are estimated to rival the Saudi's entire known reserves.

This is why The Saudis are flooding the Market, in order to maintain or grow market share, and or, dry up investment money for the Edmonton and other promising prospects.

Finally, lets not forget what we possibly have at home, and thanks to international activism, have locked away, what could be another equally large Saudi/Edmonton sized hydrocarbon reserve to our immediate north!

How much oil and gas do you think a prospect the estimated size of Victoria might hold?

And let's not forget, virtually sulfur free traditional Australian sweet light crude, leaves the Ground as virtually ready to use diesel! Or that passing NG through a simple catalyst produces liquid methanol; an excellent substitute for high octane petrol!

And what possible rationalization could there be for locking it away, even as our reserves of petrol have shrunk to as low as one weeks worth?

what would happen to Saudis oil Fields if their refineries and or pipelines were hit by a few Russian supplied cruise missiles?

Lee Kwan Yu, predicted we would become the poor white trash of Asia!

And only because we stubbornly refuse to use the brains we were born with!

We should emulate the likes of pragmatists like Lee Kwan Yu.
Who almost single handedly, produced the Singaporean economic miracle, and just crack on developing our own indigenous supplies!

And in so doing, guarantee our own very long term portable energy supplies!
Rhrosty.

And flooding the market also dries up critical funds for ISIS, who indubitably have their eye on Saudi oil Fields and the income they produce.

And given that is the case, the oil crisis if there is to be one, might occur before 2016.

I mean, what do you think would be the outcome if a few Russian supplied missiles hit Saudi pipelines or oil refineries?

The Russians wouldn't do that would they, after all, they have no history of supplying rebels or miscreants, with missiles or armaments, have they, even where that suits their purpose! Da?

And therefore it makes perfect sense, for allowing our own petrol reserves to sink as low as just one weeks worth; after all, these essential supplies are completely secure aren't they?
Diesel subs anyone?

As lamb chop chewing Sam Kickovitch might say, you know it makes perfect sense!
Rhrosty.

I think this is potentially more alarming than climate change. An unlucky few get flooded or burnt out but everybody will feel the effect of less oil, noting it takes 10 kilojoules of fossil fuel energy to produce and deliver 1 kj of food. Whether or not the price swings back or stays low there will be less litres. People now buying SUVs are using up a finite commodity given that most possible fuels (synthetic, deepwater oil, cellulosic etc) will be too expensive to develop at affordable prices.

The optimists say 'we'll adapt'. I think they're right the middle classes will live like Cubans that's how. Old cars, open top trailers for public transport and not going out much.

I think a few more people are starting to believe what I have been
nagging you all about for some time.
These large swings in oil price are a sure sign of peak oil.
It was all so predicable.
Rhosty, our large oil fields up north, just where are they and what
companies found them ?
There have been plenty of wells drilled here and there but nothing
substantial that I have been able to tell.
I hear stories of capped wells here & there that the evil oil companies
have left so they can rip off Australia.
If so why would they drill in the first place ?

Of course those tight shale fields around Coober Peady are real
enough, but will be really expensive oil by the time they get enough
water there. Origin is not rushing in to get started. They will be
waiting for much higher prices.

No we are up the well known creek without a paddle and it won't get
better until we can wake up the politicians.

Bazz, I know Rundle oil shale project was producing oil, profitable at $70 a barrel.

I was off sailing, but I heard the refineries refused to buy it, & the project folded.

I also know that in the later part of WW11 development work started on harvesting oil from the same deposits, but was dropped immediately after the war.

There was no greenie stupidity back then, so I can only assume oil was so cheap it was hardly worth harvesting.

There is oil there to be had, but for some reason, we don't want it.

Hasbeen, during the war shale oil was produced at Glen Innes but it
ended at war end.
The shale at Glen Innes would not have been deep and I remember on TV
someone picked up a piece and lit it.

The shale that the tight oil comes from is known as source rocks
which is the place where the oil originated, and they are
much deeper than ordinary oil pools. That conventional oil had
migrated up from the source shale rock.

I think they will have big trouble at Coober Peedy getting access to water.
In the US they bring it in by road tankers and are destroying the
roads and bankrupting the local councils. They need many millions of
gallons per well to frack multiple times.
They then have to dispose of the contaminated recovered water.

I have seen comment that the tight oil support business is so large
and developed in the US that the cost of duplicating it in other
countries would be make the oil far too expensive.

Because the politicians are so far out of touch, that if there is a
crunch, the uproar over food shortages as well as having to walk to
the shops will see the greenies just shoved aside.

Bazz, Can't help you there mate, given I'm recalling an article from complimentary industry Publications that came along with the shareholders reports.

I was employed as an analyst in the minerals recovery industry and the power industry between 68 and 87.

As memory serves, the mid seventies publication concluded there were 5 billion barrels of sweet light crude in the Townville trough alone; and significantly more just a little further out.

As memory serves, there was a reported Scandinavian enterprise interested in obtaining an exploration licence for the larger trough further out.

In any event, there have been hundreds of reports of unexplained mystery oil slicks up and down the Great Barrier reef, (the size of Victoria) since before the turn of the last century.

I mean we're fairly certain of 5 billion barrels of virtually sulfur free sweet light crude in the easily accessed shallow Townsville trough; and recovering just that much oil even at today's low prices, would more that pay for any subsequent exploration and exploitation of all other significant adjacent finds.

We used to have a mines dept, and a government that paid drill teams to explore for minerals at promising sites; and indeed, the reason we have so many profitable coal mines.

But sigh, that was back then when we still had a few pragmatists in Government.

Look traditional Australian sweet light crude leaves the well head as almost ready to use diesel, needed only a little chill filtering to remove a few sand particles, and the soluble wax content that blocks the injectors on cold and frosty mornings. (diesel subs anyone?)

Oil slicks are almost always damaging to the reef, particularly those that don't come from shipping.

Drilling into and removing the source of this contamination, is the only way (reef lovers?) to prevent it endlessly reoccurring!
Ideology and dogma should never ever trump reason and logic!
Rhrosty.

Tectonic adjacent small earthquakes, surely explains the source of the many reported unexplained mystery oil slicks, which have to be comparatively shallow in order to leak, and therefore easily recovered.

Mystery oil slicks was all that lead to the earliest and most significant oil discoveries!
One would've thought, being reduced to just one weeks worth of fuel reserves, would have lead to quite frantic exploration activity?

I mean, for all practical purposes, we are defenseless without significant oil reserves.
And or, that being obliged to import as much as 91% of it, would have lead to pragmatic bipartisan agreement to explore and exploit our own still possibly significantly large reserves; even if that was undertaken as an exclusive Government responsibility; as it is the case in many Middle east countries or Norway.
An outcome that reduces the Ideological mantra, that government has no business in business, to risible rubbish!

Nothing whatsoever is gained by not looking or indeed, inventing all the excuses under the sun for failing to do so!
And in that context, woefully, abjectly failing Australia, and all her peoples.

Look, it may be no great shakes to peddle from Launceston to Hobart; (it's all downhill) Tasmania's two biggest cities.

But a completely different kettle of fish to rely exclusively on (green choice) peddle power, to go from Adelaide to Darwin, or Sydney to Perth, or indeed, move still fresh food and produce; or manufactured goods to all points of the compass in between!

And given the current state of play, one can be fairly certain none of our (poorly advised?) erstwhile pollies actually know what led to the most significant early oil discoveries; or very much science for that matter?
Rhrosty

Bazz,

I think that you'll find that the shale oil was at Glen Davis north west of Lithgow and that production started in 1907.

See:http://www.australiansteam.com/Wolgan%20Shay.htm

"I think this is potentially more alarming than climate change. An unlucky few get flooded or burnt out but everybody will feel the effect of less oil,"

Are you serious ? lol

"Professor Hans Joachim Schellnhuber, director of the Potsdam Institute and climate adviser to the German Chancellor and to the EU, has said that in a 4-degree warmer world, the population “carrying capacity estimates [are] below 1billion people”."

http://www.smh.com.au/environment/too-hot-to-handle-can-we-afford-a-4degree-rise-20110709-1h7hh.html#ixzz3Fp3TYCNM

Oversupply in crude markets could take months or even years to fix depending on when producers outside OPEC cut their output, Abu Dhabi-based The National reported, citing comments by U.A.E. Energy Minister Suhail Al Mazrouei.
“We are experiencing an obvious oversupply in the market that needs time to be absorbed,” the newspaper reported Mazrouei as saying in e-mailed comments. The United Arab Emirates supported the November decision by the Organization of Petroleum Exporting Countries to maintain production, The National reported Mazrouei as saying.

Brent crude, a pricing benchmark for more than half of the world’s oil, tumbled 48 percent last year, the most since 2008. OPEC decided Nov. 27 to maintain production instead of cutting output to eliminate a surplus left by increased supplies from the U.S. to Russia. “Depending on the actual production growth from non-OPEC countries, this problem could take months.

Valley Guy first;
Of course it is serious, have you not yet realised that there is not
enough economically available fossil fuels to warm the planet like
the IPCC & others have alleged ? That was shown by the Upsalla Unis
Global Energy Systems Group years ago.

Is Mise;
Ah yes of course Glenn Davis !

Rhrosty;
Well let us form a company to rescue the Great Barrier Reef from oil
spills and paint the drilling rigs green !

I am afraid, that as the politicians have been ignoring the first
warnings they were given in the 1980 & 90s it is now too late to do
other than go into a form of low tech economy.
So long as we can still make and recover scrap steel and some other
important metals we might be able to keep existing plant operating.

Everything will become local, even electricity generation.
Keeping the internet going will almost certainly be impossible.

What say you Rhrosty ?

Valley Guy;
I just went and read that article to which you gave the link.
Did you notice the date ? July 2011.
There has been quite a bit of no change since then.
I just cannot see any point in worrying about global climate change.
Here in Australia we might have starved by then ! Hi !

Given that oil is a finite resource its obvious that sooner or later we will start to run out of it

Crowie and others;
I have for a long time expected that peak oil would be confirmed with
large changes both up and down in oil prices. I always thought that
Kenneth Deffreys opinion that there would be a number of cycles would
be what to expect.
However it now looks like there might only be either one or two cycles.
We could be on the verge of a significant wind down.

This article by Gail Tverberg makes interesting reading.

http://tinyurl.com/ktt79rd

I would like to hear others opinions.

It seems to me that the current collapse in oil prices is just a blip which will soon right itself.
We can analyse this as much as we want but in the end its all about countries and corporations trying to make as much money out of the worlds dwindling supplies of oil as they can before it runs out.

Williston, North Dakota, is a bleak little city in the vast American prairie. It's dusty in the summer and frigid in the winter. Elk hunting is one of the few sources of entertainment. But despite its drawbacks, Williston has seen its population more than double within a short period of time.
The city is so overcrowded that new arrivals often have no place to stay but in their motor homes, which, at monthly parking fees of $1,200 (€880), isn't exactly inexpensive. And more people continue to arrive in this nondescript little town.
The reason for the influx is simple: Geologists have discovered a layer of shale saturated with natural gas and oil deep beneath the city. The Bakken formation, spanning thousands of square kilometers, has become synonymous with an American economic miracle that the country hasn't experienced since the oil rush almost 100 years ago.
North Dakota now has virtual full employment, and the state budget showed an estimated surplus of $1.6 billion in 2012. Truck drivers in the state make $100,000 a year, while the strippers being brought in from Las Vegas rake in more than $1,000 a night. President Barack Obama calls the discovery of Bakken and similar shale gas formations in Texas, Colorado, Pennsylvania, Louisiana and Utah a "stroke of luck," saying: "We have a hundred years' worth of energy right beneath our feet."

The future of the American energy supply was looking grim until recently. With its own resources waning, the United States was dependent on Arab oil sheiks and erratic dictators. Rising energy costs were hitting a vital nerve in the country's industrial sector.

But the situation has fundamentally changed since American drilling experts began using a method called "fracking," with which oil and gas molecules can be extracted from dense shale rock formations. The International Energy Agency (IEA) estimates that the United States will replace Russia as the world's largest producer of natural gas in only two years. The Americans could also become the world's top petroleum producers by 2017.

Peak oil, an event based on M. King Hubbert's theory, is the point in time when the maximum rate of extraction of petroleum is reached, after which the rate of production is expected to enter terminal decline.[1] Peak oil theory is based on the observed rise, peak, (sometimes rapid) fall, and depletion of aggregate production rate in oil fields over time. Mostly due to the development of new production techniques and the exploitation of unconventional supplies, Hubbert's original predictions for world production proved premature.[2] Peak oil is often confused with oil depletion; peak oil is the point of maximum production, while depletion refers to a period of falling reserves and supply.
Some observers, such as petroleum industry experts Kenneth S. Deffeyes and Matthew Simmons, predict negative global economy implications following a post-peak production decline and oil price increase because of the high dependence of most modern industrial transport, agricultural, and industrial systems on the low cost and high availability of oil. Predictions vary greatly as to what exactly these negative effects would be.
Optimistic[2] estimations of peak production forecast the global decline will begin after 2020, and assume major investments in alternatives will occur before a crisis, without requiring major changes in the lifestyle of heavily oil-consuming nations. These models show the price of oil at first escalating and then retreating as other types of fuel and energy sources are used.[3] Pessimistic predictions of future oil production made after 2007 stated either that the peak had already occurred,[4][5][6][7] that oil production was on the cusp of the peak, or that it would occur shortly

Crowie said:
It seems to me that the current collapse in oil prices is just a blip which will soon right itself.

Yes, it is expected that the price will start rising near the end of
this year. It will be caused by the fall in the number of new fracked tight oil wells.
The first thing to note is that it will never run out !
Eventually it will be too expensive to burn in a car so you can go
to the shop to buy a couple of litres of milk. You WILL walk.

The important point to note on the fracked tight oil wells is they are
a temporary extra supply that should have enabled us to adapt to the
new energy situation.
Unfortunately our politicians refused to believe that the peaking
of conventional oil in 2005 was anything more significant than a
statistical blip.

579:
It is the rising cost of tight oil wells that will limit production.
The cost is rising because the first wells were in the best locations.
As the wells only last about three years with decline rates around
40 to 60 % a year, the next wells are drilled in adjacent areas but
gradually they have had to move into less productive areas.
They improved the economics a bit by use of multi well pads but it is
only a temporary help.
Permanent decline is certain around 2020, but the other limitation is
the poor profitability of the tight frackted wells and the drying up
of finance.
There is a lot of information on the economic problems of tight shale oil.