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buffalonate (49.03)

Oil Prices in 5 Years?



April 17, 2011 – Comments (5)

I just watched an oil executive on CNN talking about how India and China will increase their oil demand by 10 million barrels per day in 5 years.  I was wondering if we would have close to enough oil to fill that demand.  In the U.S. oil demand decreased 2% last year in a growing economy due to more efficient new cars.  Our new cars are so much more fuel efficient I think you can safely assume that we will continue to reduce our demand every year just by buying new cars and retiring old ones.  Also big rigs and corporate and government fleets make up 25% of our oil demand and they are rapidly switching to natural gas.  Natural gas is so much cheaper that I think you can expect half of our transportation fleet to be switching to natural gas in 5 years.  They are also currently pushing a natural gas transportation bill through congress that has a lot of support.  I think you can safely estimate that we will reduce our oil demand by 15 to 30% in the next 5 years.  The U.S. is also expected to increase its oil production by 40% in the next 10 years due to horizontal hydraulic fracturing in Texas, Colorado, and North Dakota.  Iraq claims that it will be the world's largest oil producer in 10 years when its oil infrastructure gets built out.  There are also huge deposits of oil currently being drilled deep off the shores of Brazil.  I was wondering if there was some oil expert out there who could give an educated guess as to what the oil prices will be in 5 years given all of these variables?     

5 Comments – Post Your Own

#1) On April 17, 2011 at 6:35 PM, patternpro (< 20) wrote:

it's anyones guess. technological advances could derail oil completely or maybe conditions will worsen, nothing is done  and it trades much higher. All ur points are valid but, with oil u have to always be on ur toes. i wouldn't think the average price of light sweet crude would be below 100 in 5 yrs.  In all honesty it could be anywhere between 30-200/barrel depending on events unknown.

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#2) On April 17, 2011 at 8:40 PM, RonChapmanJr (30.08) wrote:

Only God could answer this question.  Experts couldn't tell you where it will be in a year, much less in 5.  Here's my guess - it'll be higher than it is today.  Peak oil is real and will influence prices from here on out.

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#3) On April 18, 2011 at 8:40 AM, BillyTG (29.45) wrote:


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#4) On April 18, 2011 at 11:20 AM, Melaschasm (70.28) wrote:

I agree with the first comment. 

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#5) On April 22, 2011 at 1:07 PM, chk999 (99.96) wrote:

You have a bunch of different trends, some of which make oil more expensive, like population grown and decline of existing fields and some trends that make it cheaper like more efficient cars and a switch to nat gas.

What the outcome of all these trends added together is? Who knows. My vote is higher oil prices, but how much higher? Again who knows? 

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