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Saturday, July 26, 2008

OIL SCARCITY Cause...a Lesser Known Fact..and How to Make Money

We, as consumers of Oil, are worried about the end-prices of the gasoline/petrol.

But here's a lesser known chilling factor ..... LESSER & LESSER OIL RESERVES THAT CAN BE PROFITABLY UTILIZED ARE BEING DISCOVERED !
Check out the bar graph from hubbertpeak.com (Dr. Campbell's, I believe?) :


My take : We are on borrowed time vis a vis crude oil....it's all past discoveries. (gray shaded bars)

White shaded bars are future discoveries that have yet to be extracted.....we know the reservoirs there based on S.P., Resistivity, gamma and other geophysical logs. But, it's still to be run to production.

But, since it is only natural human psychology to only think in terms of 5 to 10 years, at the max., lot of specialists think it's over........

THE GLOBAL OIL CRISIS HAS JUST STARTED....yeah, it will be eased, just like crude oil's dropping $/barrel -wise ....but it's just a temporary respite 'cuz a few OPEC countries, led by the Saudis are revving up the oil production.

But within 5 years......DEMAND WILL FAR OUTREACH SUPPLY.


But, here's a silver lining behind every cloud :
Petro-stocks/funds, etc will be SWINGING WILDLY, one can make money buying & selling on a short-term basis.
IF THEY KNOW THE RESERVOIR POTENTIAL THE COMPANY HAS BOUGHT ;-)

Tuesday, July 22, 2008

Historic Blunder made with regard to a Deal

Currently, I've gotten into this habit of talking in riddles, so here goes :

No...I'm not opposing the deal itself. As it might be of strategic interest vis a vis India's N.E. 15,000 feet + A.P. border areas taking into account certain strategic placements of certain...
probably adding more 50 would have made a difference.

But what has ANGERED 95% of neutral Indians is the way in which it was achieved. And which has been revealed clearly by the media, for after all we are a democracy.
Which raises doubts as to does this foreign power wants us to totally remain within their control and hence a weak country? How much right do we really have to exercise our own free will in case there A.P. is threatened, not just the regular infiltrations that are occurring every day.

The same foreign policy mistake has been done by this foreign power vis a vis the following countries which it did not trust :

  • Japan......a stronger Japan would have meant a bulwark against China & N. Korea.
  • France, Germany & other European countries.....which would have served as a bulwark against an Eastern Socialist country that is now rapidly growing in power. There would have been no need of a Missile Defense Shield at all.
  • A few of its southern neighbours.....now some real totalitarian regimes seem to be cropping up real fast.

" A bogeyman thought of a thousand times becomes the truth"...adapted from somebody else's quote.

Hope that doesn't become the case with this country now grappling with an Oil Crisis...

...or lack of intelligent foreign policy makers, shall I say.

OIL PRICE ESCALATION AMID CONFLICTS IN OIL RESERVE ZONES

Last posting, pointed out that 62% of Oil Reserves fall within SEVERE CONFLICT ZONES.

Now, juxtapose that with the "Hubbert Peak for World Oil" a theory propounded in the 1950s by Dr. M. King Hubbert is a Theory now widely accepted last few principles being :
1.Oil Production rises to a peak which can never be surpassed;
2. Once the peak has been passed, production declines until the resource is depleted.

I believe, we are extremely near the peak.

Of course, there WILL BE TEMPORARY SPURTS IN OIL PRODUCTION WITH DISCOVERY / PROFITABLE EXTRACTION OF OIL FROM RESERVES....

Note : Canada & other countries do have large oil reserves, but they are NOT PROFITABLY EXTRACTABLE.

Check out this graph from source : hubbertpeak.com




Note that negative figures mean NO OIL can be PROFITABLY EXTRACTED.
Positive figures = show number of years that oil can be PROFITABLY EXTRACTED.

Well, the graph, that's by Dr. Campbell, a geologist, shows an even grimer picture, doesn't it ?

I'd say, even 90% of the WORLD'S OIL RESERVES WHICH CAN BE PROFITABLY EXTRACTED FALLS WITHIN SEVERE CONFLICT ZONES.

Conflict zones where the majority of people are fluent with Avtomat Kalashnikova 47 & its variants , as also Katyushka ( Russian sense o' humour, I say) rockets...as say a Bengali is with fluently juggling deals with "real estate developers"....or a Marwari kid with day trading...or a young kibbutznik to infiltrate behind the opposite lines.

I say, this portends a SEVERE CRISIS !

....unless macro-managed, THE ESCALATIONS WILL RISE.

RESULTING IN STEEPER CRUDE OIL PRICES , "OIL SHOCK" and of course, the resultant CHAIN-REACTIONS >>> inflation, economy collapse for a few countries ( 10% at least).

This is because, when demand even for a temporary very short period exceeds supply, the market PANICS.

Message for all the auto e-mail receivers : BTW, I keep on changing / adding my auto
email postings as per my blogs, do it in a hurry. I got some 100+ on my list of all hues
and colors... including the White House, some senators to even quite a few socialists.
For example, my apologies if this reaches Feroz, and he gets annoyed for some reason...do e-mail me to let know which blogs auto-posting you would like to receive or not receive. For example, Feroz, you might want to receive getricheasily.blogspot.com but not this, do let me know. Cool, man, Take it easy....

Tuesday, July 15, 2008

OIL SCARCITY & GEOPOLITICAL CONSEQUENCES

I was scouring the Net for almost an hour to find an image like this....maybe I was searching in the wrong places, because it doesn't generally take this much time.

Source of this image : Oil and Gas Journal...found it on the Net.



Any way, a picture tells a thousand words, as they say.

A careful analysis of this pic tells a chilling story :

  • In this globe of almost 200+ nations, the top 20 countries hold 95% of the world's oil.
  • Corollary : If, even 10 of them form a strategic partnership, they can hold the whole world AT RANSOM. Very chilling, indeed.
  • SEVERE CONFLICT ZONES hold 62 % of the world's oil !!! I did the maths...add up Saudi Arabia + Kuwait + Iraq + Iran + UAE + Qatar + Libya + Nigeria (do check the news, please) =799 billion barrels. THAT IS = (799/1292) x 100 = 62 %. (Maybe I dropped 1 or 2 billionbarrels somewhere, go find it...am not responsible for the consequences ;-)
  • Corollary : 62% in 8 countries that are SEVERE CONFLICT ZONES where nobody is winning. This means from "mass psychology" - intensification of conflict. This will INCREASE OIL PRICES like anything.
  • Europe holds almost no oil ! Though the European Union's GDP is now about 2 to even 3 times that of the richest nation, U.S.A. I project their moneypower + unity might helpthem, this based on some calculations I did which are still inside my head -)
  • U.S. consumes 25% of the world's oil. But they hold just 2% of the world's oil. But I notice their population is increasing at a fast rate, thanks to rapid rate of immigrationand population growth. I think the country is headed for a big problem. Well quitefrankly, I don't have an answer for their problems. And even if I did, shouldn't I be paid $$million$$ for that ;-)
  • The projected #2 and #3 greatest oil-consuming nations in the years to come, that is India and China have insufficient oil vis a vis their demands. Severe inflation will hit these 2. Though there may be temporary let ups.

But, in these uncertain times, only a handful of people who can gauge the WILD UPS AND DOWNS of the market will MAKE A HUGE AMOUNT OF MONEY. (no peace of mind for them,though).

This is fact, dunno if it's good or bad.
I'm just a neutral analyst, BTW.

Wednesday, July 2, 2008

GLOBAL ECONOMY REVIVAL SOLUTION...Problems & Solutions


1 Single Economic Problem can be solved most successfully by a Specialist.

Multiple Economic Problems, inter-connected, factors that have to be considered(economic,global security,geopolitical,"mass psychology",national considerations) can only be solved by a Generalist. Reason: A Specialist has a 1-track mind, a Generalist keeps his mind open.

Here are the PROBLEMS of the Global Economy right now...and in the persisting future. WARNING : Problems will sometimes seem to disappear, but only TEMPORARILY :

  • Crude Oil is $140 / barrel. My prediction of it touching $200 / barrel (made in January 2008) now seems to be an accepted fact arrived after much calculations by the world's leading economists with Ph.D.'s, MBA's & what not under their belt.
  • $140/barrel to upwards to $200/barrel will cause severe . The Money has to come from somewhere - where from ? The Banks, the Reserves, the Gold, Forex.
  • Deficit.....$ trillion deficits by many countries....Apply Common sense. You owe the bank lotta money, the collector's gonna come some day, ain't it ? The deficit & amount owed by certain countries is mind-boggling....obviously the big manufacturers will stop having confidence in selling their stuff to these countries.
  • Deficit Corollary. The relative devaluation of certain currencies will cause investors to flee certain markets....the stock markets will plunge drastically.
  • Stock Markets Over-valued. This is especially true with respect to some developing countries where Foreign Investors (Institutional or Direct or otherwise) come flocking, make a "fast buck", buy/sell within months, and disappear to some other green pastures. Their own citizens are most to blame, buying and selling in hordes. These countries' stocks are highly over-valued. Obviously, they'll crash. Some have now crashed to realistic levels.

I've run out of time...could carry on & on.

So let me offer hasty SOLUTIONS :

  • Deficit should be cut down at all costs. Increase tax. Encourage small businesses, instead of just appeasing the big monopolistic ones. This is especially applicable to developing countries.
  • Oil rationing should be made part of a nation's policy. A radical thought, but any other short-term solution ?
  • Developing nations' oil/gas companies should be privatized. To cut down on unnecessary costs.
  • Human population Control.....In many sense, this is the numero uno problem.
  • Over-reliance on specialists should be stopped IMMEDIATELY. Entrepreneurs, businessmen and even a few Under Grads might be able to offer "out of the box" solutions.

IN CASE THE DEVELOPED NATIONS FORGET....this was the way they became RICH NATIONS. U.S.A., European Countries, Asian Tigers took the lead not through a structured system.

But how do you recruit for part-time/freelance these generalists?

Very easy....let the countries' authorities apply Open Source Intelligence or OSINT , commercial I mean...(readers who don't know the meaning can search extensively via Google Search)
http://chitika.com/publishers.php?refid=debajyoti