[Aug. 16, 2014] "Billions in oil investments at risk from low prices"
"The majors have a potential capital spend of $548 billion (328 billion pounds) over the period 2014-2025 on projects that require a market price of $95/barrel," CTI said, adding that $357 billion of this is earmarked for as yet undeveloped, high-cost ventures. (Cancellation or deferral) is becoming increasingly necessary as near term cash flows are not sufficient to maintain both dividends and capital expenditure plans."
Low Prices = $95 per barrel? DONE. The remaining oil may as well be on Mars...
Those who don't profess a "belief" in global warming will likewise be monkey-hammered for their unfounded "belief" in Wall Street's ability to manage their money. Facts and reality have a funny way of not giving a damn what people think about them. These dunces were robbed twice by the same casino, yet they still keep throwing money at it, so global warming clearly is the least of their denialistic tendencies. Only an infantile society incapable of facing truth, thinks that facts and reality can be chosen from a fucking menu and then served up with their daily infotainment enema.
Peak oil theory predicted the cost of oil would rise dramatically, past the peak. As it turns out, it rose 1100% in just 9 years from 1999-2008. That's a staggering 32% annualized rate of growth per year. And as discussed below, it was all subsidized by globalization. Globalization has merely obfuscated the fact that the SUV-oriented lifestyle is no longer sustainable and as we see in the chart below never was scalable across the planet.
July, 2014: World Sets New Oil Production and Consumption Records
"Oil demand in the developed countries belonging to the Organisation for Economic Co-operation and Development (OECD) decreased 5.3 percent over the past five years, while demand in non-OECD countries increased 20.3 percent."
May, 2014: The Fracking Boom is Over
"Write-down of two-thirds of US shale oil explodes fracking myth. Industry's over-inflated reserve estimates are unravelling, and with it the 'American dream' of oil independence"
$100/Barrel Oil is an Illusion
Both the demand side and supply side of the oil price are massively subsidized by globalization. Globalization's capital surplus and imported deflation in tandem make 0% interest rates possible and hence subsidize history's cheapest cost of exploration capital without any comparison. Meanwhile, the recurring trade imbalance subsidizes both consumption and fiscal deficits - which in turn pay for the global military presence required to keep the oil flowing. Without all of that in place, the ability to supply and demand $100/barrel oil goes away.
As the price of oil rose steadily for the past 15 years, the viability of ever-more expensive oil extraction sources rose continuously. These higher cost wells and tar sands have massive fixed costs which implies commensurately massive operating leverage. Above the break-even point, these projects are extremely profitable. Below the break-even point, they are extremely bankrupt.
Rising wedge consolidation against the primary trend (down) on decreasing volume
Barring WWIII which would trigger the inevitable economic collapse, the next major move is down.. Either way, the uptrend was broken in 2008: