Daily point

Today, the oil price has reached a new record : 112$ /Barrel !

At the beginning of this blog, the oil price was 107$ /Barrel, so in 2 month the price growth by 5$. So the price don't stop increasing before the end of oil ressources

21 april 2008:
Just one week after the last edition, the oil price increasy by one dollar per day it is today at 117$/ Barrel !

War For Oil ?

An historic study:

Oil and what it represents - energy - have always been a source of conflict.

For example, The Japanese attack on Pearl Harbor had its origins, in part, in a decision by the United States to limit oil exports to Japan in 1941 in response to the Japanese invasion of China.


At that time, Japan was very dependant of the United States production of oil.

Gulf War was an other consequence of the conflicts about oil, in fact, when oil extraction was developed in the 1930s, the strategic value of the region (Arabia Saudit etc..) increased significantly.

An old report of British government discover in January revealed that in 1973 Washington drew up a plan to seize oilfields in Saudi Arabia, Kuwait and Abu Dhabi to counter an Arab oil embargo against the West.

Furthermore, the intervention by the United States and its allies in Kuwait in 1991 was in large part motivated by a need to secure oil and to prevent Saddam Hussein from expanding his access to that.

Hitleer, in 1945, predict that oil will become an important resource and he said that if Germany didn't keep important oil resources they wouldn't be a big force.

Nowadays, countries try to find other energies, for instance Uranium. those countries with uranium would become among the most attractive. The top ten are: Australia, Kazakhstan, Canada, South Africa, Namibia, Brazil, Russia, USA, Uzbekistan and China.

So, energies are very important in today's societies, Yesterday it was "the black gold", but what will be the "gold" of tomorrow ?

War for oil is a cause of oil price increase.

USA, China, Europe oil dependence. the dictature of OPEC ?

"Oil dependence is defined as a dynamic problem of short- and long-run market power."

'The potential monopoly power of an oil cartel depends on its market share and the elasticities of oil supply and demand, while the economic vulnerability of oil-consuming states depends most directly on the quantity of oil imported and the oil cost share of gross domestic product (GDP).'

Those two sentences well resume and define the situation in USA, and in China, and in Europe...

Oil dependence is a danger.

the fact that OPEC still holds the majority of world oil and, in the future, will regain market share is important to highlight.

If a country, if the world doesn't want to suffer a real economic crisis, it's necesary to share the decision making in the global organizations.

there is a real monopoly because OPEC distributes and controls the major part of the oil market.

The control of the oil market is becoming like a dictatureship which is an other cause of the oil price increase.

the growth of oil prices.. and the others ?!

Gas prices hit record on low supplies

Retail gas prices surged to a new record above $3.30 a gallon Friday the 3th of April 2008 !

It's a direct consequence of the rocket in oil prices because, lots of industries try nowadays to use other energies that's why gas is more and more used these days.

It's very important to understand that gas, oil etc.. are in the same situation because stocks aren't unlimited, the demand increases more and more and this has consequences on the prices.

We'd better try to find an energy which could be illimited and not polluting if we want to pay low prices.

Is this idea unrealistic ?

We can hope that's not the case.

Oil's environnment impacts

What's energies can we choose for future, for reducing oil prices?

Today we can dream about a world without pollution but the post-oil-era might be even worse. Firstly, because oil isn't the only fuel which is polluting and because the solutions that replace oil and use renewable energies aren't always beneficial for the environment.

There're lots of energies to replace oil :

• Natural gas power
  
• Coal power
  
• Nuclear power
  
• Biomass and Waste power
• Water power
• Wind power

Natural gas power in deferment:
So, natural gas power has a better repartition in the world than oil.
Lot of layers can satisfy national energy needs.
The gas addict in Europe and US grow steadily, that's why gas power is in deferment.
There's also limits to gas transport because gas is volatile.




The revenge of coal power:
Coal power produces 40% of the world electricity.Because it's low cost. Coal could be future.
It's a come back to old energies. The USA and China monopolize the global world production. So it's a dynamic market.

Nuclear power :
In modern societies, nuclear power is unpopular because, people think that it pollutes. Furthermore, this kind of energy can't be used in poor societies because nuclear is expensive to developped.

Biomass and Waste power :
Biomass and waste powers are used a lot in poor countries. For example, wood is more and more employed to product power. Nevertheless, the problem is the fact the trees take years to grow. So, it appears difficult to foresee the future of biomass power.

Water power :
Water power has a big capacity, its future is optimist because it is more and more exploited particularly in Europe. Lots of investors are interested into Water power. It is the number one of renewables energies.

Wind power :
This energy is expensive because it is difficult to stock it. This energy is "aware" because, in ten years, the electricity supplied by it has grown up by 12.

To take the environment into account !

Is a global increase of the world oil demand possible ? So the most important question is : how many resources are available for the future ? how much long can we even chose oil ? We know that today there is approximately 4000 gtep (gigatonne equivalent petroleum) with 3000 hypothetics gtep.
With this approximation we are safe for 4 centuries but if we consider china and it incredible growth, this resources will disappear in 50 years. So have a break and take a time to read this global point about oil issues.
Today oil is everything, with oil you can :

• drive
• fly
• have heating
• get dressed

So it's not surprising which in few decades, oil is becoming dominant in economy and industry. The first thing we think about oil is the transport field. Oil is a necessary fuel to move but it allows us to have heating or electricity .Oil is the first component to produce plastics too.

Here it is a graph which show us the oil uses in 2004:


No you can see that already in 2004,In the United States, transport uses approximately 80% of their oil resources. In France it accounts for 60%. So in both cases, it takes more than half of their oil global consumption.
A point about china which has already developed its industry (10% ).

Impact of high oil prices on Global Economy !

To my mind, it's very important and interesting to understand the real impact of high oil prices on Global economy!

In fact, Oil prices still matter to the health of the world economy.

The main cause of that, is the policy of OPEP.

The result of OPEC supply-management policies contributed to the global economic downturn in 2000-2001 and is dampening the current cyclical upturn.

So, there are logical economic and political consequences.

You can read the entire Study here:

-->http://www.iea.org/textbase/papers/2004/high_oil_prices.pdf<--

It's a document written by
"International Energy Agency "
May 2006

American oil consumption

It seems logical that American people use a lot of oil for instance, in their cars, but also for their industries, so we found this video on the web which explains how we can understand and change American attitude to oil consumption.
The speaker on the video analyses the situation in the USA and tries to provide answers about how to revitalize the economy without the oil business.



It's an old video (2005) but it isn't out of date nowadays !

Analysis of the video:

First, we can see that the speaker is very optimistic because, even if he starts with showing the negative effects of the oil consumption on climate changes, he says that oil will be replace by other energies if countries like The United States try to do what he says.
The speaker begins with treating the historic point of view of the American oil consumption, for example, he speaks about the importance of oil for the industry, especially for IBM in 1970.
He speaks about the fuel war, not between the countries but between objects wich use fuel, for example, there is a war between Cars and Industries. To my mind, it is very original to show that viewpoint.
The speaker analyse the situation in the future, in 2025 and his analysis is optimistic because for him, the USA could survive without oil.

It's interesting !! isn't it ?

Different consequences

Can anyone stop the rise in oil prices?

An economic point of view:

Mr. Fitzpatrick says part of the increase comes from new investors and speculators entering the oil markets. "Now, we're seeing pension funds, equity funds, people who feel th

ey need a commodity component in their portfolios," he says. "They are unencumbered by numbers, by history."

An ecologic one:

Despite the high prices, energy demand continues to be strong. Some of this is weather-related: Cooler than normal temperatures have kept demand for home heating oil strong in the Northeast. "It's been a long, cold end of winter," says Mr. Felmy.

A diplomatic and economic one: The growth of China.

Globally, demand remains strong as well. The main forecasters continue to predict that China will represent a third of growth in demand. Some of the Chinese appetite comes from work on filling a strategic petroleum reserve of up to 750 million barrels of oil.

A report !

Oil is becoming more and more expensive everywhere in the world.

So, What happens ? Is it new ? What are the consequences at different levels?

Which energy sources will we use in the future?

American scientists have published an important report:

Oil become increasingly rare, because of the development of China in recent years, but this is not the only cause.

They say that despite forecasts of a change to nuclear power, oil will continue to play a key role. According to the International Energy Agency demand will increase by 1.9% a year, from 80 m barrels a day in 2007 to 120 m in 2020. By then Arab countries will produce 41% of global supplies rather than the present 25%.

To conclude, Arab countries continue to monopolize the oil market.

graph

As you can see on the graph, in ten years, the oil prices had growing up.

The prices go over the threshold of 100 $ per barrel.
It's frightening, but we are here to help understanding why it is happening !

Hello

Hello everybody,
we are students at the Institute of technology in Lyon (france).In our opinion, the oil price increase is an issue we have to worry about, so we are going to investigate in order to understand this subject.