I suspect we are living in fool's paradise with unnaturally low oil prices. SUV sales are steady and air travel is booming. There must be a day coming up soon when it will be obvious we can't keep going at this rate. That day seems likely in the next decade.

A possibility is that due to reduced economic activity that oil prices will stay low even as supply declines. From say 95 million barrels to 85 the 75 then 65 perhaps as early as the year 2030. It's hard to see how nearly a billion internal combustion engines can keep going. That's cars, trucks, tractors, planes and generators. Perhaps cheap oil is a last meal for the condemned.

The only reason oil prices were unnaturally high was market speculators; who created an unnatural oil drought by patent collusion and withholding supply!?

Then held ordinary mums and dads as their financial hostages to be squeezed as hard as the so called "free market" would tolerate!

This price gouging financial blackmail has had its day, thanks to the Saudis and their new refineries!

If I had my druthers this sort of essential commodity speculation would, along with short selling, be made illegal!

If that obliges some inherently immoral people go out and do an honest days work, providing it doesn't kill them , so much the better!

Nicholis seems to want the prices to rise, as does Putin?

Sorry mate, but as long as the still untapped edmonton reserve is there with an estimated 1.8 trillion barrels of crude. I don't fancy your chances; or the longed for easy money/windfall/money for nothing profits?

Thankfully the US, China and other gas rich nations are turning to that as their substitute!

The day of the petrol competing battery is almost done thanks to GM and its Lithium ion beating new battery with doubles the range and recharge to 80% capacity, in the time it takes to take a comfort break.

Perhaps the oil barons can corner that market then virtually blackmail the people for their essential energy requirements?

And only possible due to gutless governments, with anything but the good of the people they allegedly serve in mind?

The cost of essential energy impacts on every facet of life, be it growing or transporting food or pumping the water needed to grow it!

Or as basic as just ensuring that you can use the toilet in the high rise! If essential energy rises much higher in cost, there'll be a lot of very full faces in many of the towers?

Bring on cheaper than coal thorium and cheap as chips endlessly available biogas.

We've had a bellyful of billionaire brokers, artificially created scarcity and captive markets!?
Rhrosty

A characteristic of the oil market is that minor, almost unnoticed changes somewhere in the production change can cause big swings in the price.

No analyst expects oil prices to stay low for very long, but the writer is hopeful in expecting the shale oil industry will decline. While he is correct to say that shale oil wells peak and fade very quickly, I believe the problem is that they keep on drilling more and finding more spots to drill, so no fading.

Saudi Arabia's lack of capacity, again as I understand it, is due to its failure to invest in expanding its facilities.

The volatility in oil prices was predicted by Colin Campbell,
Kenneth Deffreyes and others way back in the 1990s.
The low prices at present are due to a glut caused by the high prices
of the last few years being higher than the economy could pay.
The reduction in demand then forced the prices down to their present level.
I notice the author's article was on Oilprice.com and that same web
site published an article by another, whose name escapes me at the
present, who went into great detail about the finances of the major
oil companies.
All that was at the time that Shell was selling off its interest in
Woodside at the time in a program to raise funds to be able to pay a dividend.
That is a signal that things are not well in the industry.

Further to all that is that the price that the economy can afford
is lower than the breakeven price of the tight shale oil companies.
As someone said; "Goldielocks is dead" !
The tight oil companies are in difficulties at present prices and a
few have already become bankrupt.

How will it affect us ? Who knows, we will pay the TAPIS market price
(about $9 higher than WTI) so long as our "firm commercial arrangements" hold up.

There is a graph I would like to put here if it was possible as it
shows quite clearly that there is a problem.
The main points are that the year of the
highest amount of oil discovery was in 1964.
1983 was the first year that production exceeded discovery.
Discovery rate is now a small fraction of the 1964 figure.
Production is now about 4 to 5 times discovery.

The graph clearly shows that we are entering the terminal phase of oil usage.

It is amazing that Australia unlike the majority of first world countries, does not have a strategic reserve. Our own reserves are down to nothing and even if we did have any oil left the refineries are all finished.
On the front of a lot of trucks is a notice that says "without trucks Australia stops".
It should say "without diesel trucks stop."
All of our fuel now comes from Singapore and has to pass through the Straits in Indonesia. A very easy place to block.
Our gas which could run trucks is being shipped offshore and there is no infrastructure to distribute it here.
Well managed, pollies.

We were supposed to have been running out of oil in the seventies. Almost 5 decades later, we are still be being warned how "fragile" oil supplies are. Crying 'wolf' at regular intervals hasn't seemed to work; just like global warming and cries for very expensive, inefficient renewable energy, which, seemingly, we are supposed to call for every time we get the warnings about oil running out. Scare-mongering and control is the name of the game.

ttbn! Sorry to disabuse you but.....
“Treasury’s last Inter-generational Report contains, hidden away on page 91, a simple stunning statement: Australia’s oil will be gone by 2020. The timing could not be worse. By 2020 Peak Oil is likely to have rendered oil imports precarious and costly. And without oil, modern civilisation doesn’t work.”
Peak Oil by Country
https://decolonialatlas.wordpress.com/2015/05/23/peak-oil-by-country/

Robert,

Perhaps, but can we believe these reports? We have the wool pulled over eyes so much these days by people and organisations we used to be able to trust, that it's hard to know what to believe.

ttbn!
Trust me

Robert LePage..
Concentrate. ttbn was talking about world supplies.. your forecast is for Australia and isn't strictly correct.. the report is talking about easy-lift oil. There is still plenty of shale oil in Queensland, but its uneconomic at present prices and likely to remain that way for many years. Your forecast also probably doesn't include the off shore stuff such as in the Timor sea.

No one talks about peak oil any more. The concept was dying before the shale oil boom. The price collapse would have killed it totally.

Curmudgeon: concentrate, The link I gave was for peak oil by country, worldwide.
I urge you to study the info from this link,
http://anz.theoildrum.com/node/3657
and as for shale oil, this is a good economic con almost as good as the derivatives scam.
It is only still going because of the immense amounts of money borrowed to pay for it and keep it going.
The words Ponzi scheme spring to mind.
The guvmint should take over the gas industry, stop exporting it, build terminals in all coastal cities and towns, set up distribution centres and supply the truck industry after suitable conversions.
They will find that stuffing a $US into a fuel tank does not move you very far and the same goes for filling the tank with digital dollars.
You may remember this conversation when you are on your bike.

Robert,

Hang on a sec. Why should I trust you when the source you referred me to is someone calling himself "aeldric", an anonymous poser as per OLO. Just as I don't know if Robert Le Page is real, who the is "aeldric" that I should take what he says as gospel.

And Curmudgeon is right: I was referring to world supply, and I have always been under the impression that what we produce in Australia is chicken feed compared to our requirements.

It wouldn't be chicken feed if the great Barrier Reef, wasn't a Great Big Sacred Cow!?

I mean we have just days of strategic reserve and are at and end of a supply line that could be shut down in just minutes, if there was enough ill will directed at it?

Robert is right, we have copious quantities of Gas and there is not a vehicle currently plying our highways , byways and railways that can't be re-tuned to run on it as CNG!

And we have enough cheaper than coal thorium to power the world for around 700 years; or our own industries for thousands, if kept here for that just that purpose and the huge commercial advantages that would confer on us!

Given the patently missing political will, able to make enough biogas to power our entire domestic energy demand for eternity!

But that may harm the commercial interests of some very powerful people and their tame, [coal and greed is good, he must be Obeid] pollies, and we can't have that now can we?

Sectional political outcomes, feathering the nest or personal interest, is far more important than the national interest?

[Had any taxpayer funded jaunts lately?]

Were all of that that not so painfully obvious, we would see some very different energy supply outcomes?

By their fruits, [or the lack thereof] we shall know them?
Rhrosty.

Robert Le Page - no your original reference specifically said Australia. Your reference to peak oil by country would now be hopelessly dated - this stuff has died - and shale oil is a con only in your own mind. As I said the Queensland deposits are uneconomic but the Canadian oil sands stuff has turned Canada into a major exporter. My strong advice to you would be to read up.. and I've spent way too much time on this..

ttbn: I have a birth cert that says I am real. Do you have one for “ttbn”?

Curmudgeon; we can only agree to differ. I have been studying peak oil for about 8 to 10 years now and I am convinced.
And for shale, see below.
Shale Oil Output Heads for Record Drop After U.S. Drilling Swoon
http://www.bloomberg.com/news/articles/2015-07-13/shale-oil-output-heads-for-record-drop-after-u-s-drilling-swoon