Gulf of Mexico Oil Spill Blog Jeff Rubin $147 a Barrel

Jeff Rubin $147 a Barrel

jeff rubin

Jeff Rubin: latest views on BP oil spill, shale gas, oil sands and peak oil

Oil prices are at a two-year high, and a big part of this is surging demand from China. Platts reported this week that China’s oil demand surged to an all-time high in November and demand for the first 11 months of 2010 is up nearly 11 per cent over 2009. The Chinese government has even moved to raise the price of domestically refined oil to keep demand (and inflation) in check. Expect prices to rise into triple-digit territory in the first quarter of 2011, says economist-turned-writer Jeff Rubin, author of award-winning Why Your World Is About to Get a Whole Lot Smaller. He also believes that in 2011 we’ll surpass the $147-a-barrel mark that we reached in July 2008.

It has been about 18 months since Rubin’s book came out and since that time a lot has happened around the world, including the BP oil spill. I figured I’d get an update from the former chief economist of CIBC World Markets. My Q&A with him, which I had a chance to do last week, can be read here in the Toronto Star.

I found his thoughts on shale gas most intriguing: “Is shale gas the sub-prime mortgage market of the natural gas market? Is this one giant con and investors are being conned into thinking there’s a huge supply of gas at $4 when it really costs $7 or $8 to bring it to market? In the fullness of time economics will assert itself, just as it did in the sub-prime mortgage market.”

source: Clean Break  » Blog Archive   » Jeff Rubin: latest views on BP oil spill, shale gas, oil sands and peak oil

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One Response to Gulf of Mexico Oil Spill Blog Jeff Rubin $147 a Barrel

  1. Sandy Steubing says:

    Dear Dr. Rubin:

    I’m having increasing difficulties planning for the future in an energy descent world. I know prices will go higher and the global delivery system will become undependable. This will impact most aspects of the way I now live.

    What I don’t know is when the supply/demand gap will impact our economy to the extent that it seizes like an engine with no oil. There are some things like the purchase of food that I’d like to put off to a penultimate time. In other words just before the crash.

    You probably don’t feel comfortable answering this question but those of us who are not so knowledgeable would really appreciate your thoughts. No one will hold it against you if you come in short or long of the mark.

    If you could give us a range of dates; for example you feel somewhat confident that we have 18 relatively safe months of a viable economy. Starting in mid 2012 we’ll have 3 years during which a crash has a great than 10% chance of occuring and each year the percent will increase. If no crash by 2015 then there’s a better than 50% chance of hyper-inflation and massive delivery uncertainty until 2020. This is my best guess but it’s surmised from reading between the lines.

    Because future predictions are so questionable, I’m trying to assemble an aggregate answer from a number of informed sources. With your background in economics, you are most certainly an informed source.

    Thank you for reading this. Any answer you can provide will be most welcome.

    Sandy Steubing,
    Albany, NY

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