and again, oil prices are heading up…. updated oil price chart
CRUDE OIL PRICE CHART by the WHAT MATTERS WEBLOG - click for higher resolution
How do you feel when recalling these headlines from the past few years?
Why are oil prices so high? (Tuesday, 28 September 2004, BBC NEWS)
Oil price tops $50 for first time (Tuesday, 28 September 2004, The Independent)
Oil Prices Break $50 Milestone on Supply Worries (Tuesday, September 28, 2004, The Washington Post)
Oil prices have climbed above $40 for the first time in 13 years as markets remain concerned over tight supplies. (May 12, 2004, CNN International)
High Oil Prices could be here to stay(Apr 21, 2006, msnbc.com)
Oil prices at 100 usd a barrel are no longer an unthinkable prospect (Sep 4, 2005, Forbes)
Until now we´ve had one year off from reasonably priced oil. However, when taking a look at the oil price chart, you can easily see that oil prices are about to return to where they had been before the outbreak of the Great Recession. On the one hand the recent recovery of oil prices indicates that the world economy is gradually warming up again after almost two years of economic disaster. On the other hand, this means that global oil consumption will rise again as the world´s engines of growth - the U.S. and Europe, China and India - are running again, or at least close to it.
We have to face it. This planet does not have enough oil to fuel our energy-thirsty economies for much longer if we continue to increase our consumption.
The oil price chart shows us that oil prices are following a general and pretty obvious long-term trend: rising to a level that will force us to conserve energy and innovate our way out of this mess.
In July 2008 when oil prices were at the record level of $147 a barrel, it took a recession of such a scale and magnitude not seen since the Great Depression in order to bring oil prices down.
The next time the price of oil is about to climb above $150 per gallon, we can´t rely on a fierce recession to make gas more affordable again.
Those who believe in advances in exploration and drilling techniques to save us and our wasteful lifestyle are wrongheaded. Peak Oil is close, it´s just a matter of years depending on the strength of economic recovery. But the point is that even if we were able to compensate for the declining output at existing oil fields - which is virtually impossible due to underinvestments in the oil infrastructure on the side of oil industry and socialization of large oil companies in many parts of the world - we’d fail to meet future energy demand which is about to double and triple until mid-century as hundreds of millions of people around the world enter the new middle class and change their consumption habits. Switching from a bowl of rice to a BBQ steak, driving to work instead of cycling, switching on the air conditioner during summer, lighting up the house at night, …. is all wonderful since an increasing number of humans benefits from these amenities, but the byproduct will be an extreme increase in energy consumption.
Therefore, it is vitally important to reconsider the way we produce energy, next to conserving it. No single alternative energy source is capable of challenging oil at this point. But we need all kinds of energy we can get - coal (dirty & clean), nuclear, oil, natural gas, biofuels from non-food crops, solar, wind and marine energy to generate enough energy to run the world economy. With regard to climate change and the threat of dependence on oil from the Middle East, it makes sense for us, economically and environmentally to get as much energy as possible out of renewable, domestic sources of energy.
I expect that it will still take some time for oil prices to reach levels seen in July 2008. The economic recovery in the U.S. and in Europe has not yet taken off and nasty surprises might be just around the next corner. (credit card debt, budget deficits…) China - though stabilizing Asia through its robust growth - is far from capable of stemming the burden of pushing up global groth rates on its own.
As you can see when going to the page “Energy Charts” (http://www.whatmattersweblog.com/energy-charts/), China just accounts for about 5 and a half percent of world GDP while the U.S. accounts for almost 19%.
On November 10th, the International Energy Agency (IEA) will release its World Energy Outlook 2009. You will be able to read a summary with commentary from me right here. I also recommend you to check out my summary of the World Energy Outlook 2008 which can be found here:
http://www.whatmattersweblog.com/energy/
Yesterday, crude oil prices rose above $77 a barrel for the first time in 2009. More on this from CNNMoney: http://money.cnn.com/2009/10/15/markets/oil/?postversion=2009101519
October 17th, 2009 at 12:50 AM
Yes oil will rise, I agree. But I can’t disagree more about the restart of economy. Economy is dead once for all!! She will never restart again. The peak of everything will shut it down anyway… The data strongly show that we are still sinking while traders and bankers are pumping big huge fat stock exchange buble twice the size of the Sun!
October 18th, 2009 at 7:44 AM
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