'Sky's the Limit' for Crude, says Peak Oil Advocate: Buy Drillers, Avoid Majors

Listen very carefully to Chris Nelder. I believe he is 100% right.

No rational person disagrees with the peak oil theory, the only controversy is with regard to the timing- did peak oil hit in 2005 or will it hit in 2025, 2050?

The greenies and democrats will not allow the lifting of the offshore ban. So no added oil there. Meanwhile the pacific basin and surrounding nations will greatly increase their oil imports over the next ten years and beyond. Goodbye cheap crude...hello pain!!

Yes, and all the computer were suppossed to die on 1/1/00. This is funny. There are literally thousands of oil fields that haven't seen drilling. We will convert to another energy source globally we'll before a end in oil supply is ever realized.

Disproving/not believing in peak oil is not the same as being pro-oil. We'll still need oil to transition and construct the future energy systems. Solar, wind, nuclear, and clean coal are all fine but they don't make up for actual PRODUCTS made out of petroleum processing.

trust me, you will see technology evolve real fast, should this guy be right...

By the way: I would say Nelder is a lot more credible as a technology expert than an investment adviser. Drilling may have a great medium-term future, but why would it not eventually become a commoditized business? Whatever "tricks" the most talented drilling companies know, others will eventually figure out. Where there is a growth business, competitors pile in. Is there any scarce commodity that limits the players in oil drilling? Steel? Skilled workers? All the inputs to the oil drilling business are scalable. He probably has a legitimate point in his bearishness on integrated oil companies. I view them as good medium term plays, however, because of their cheap valuations. They can potentially "die a graceful death" (i.e. one in which the shareholders still do OK) by buying up stock with their profits so that they can shrink their market cap and debt in tandem with their shrinking business. (If you want to irritate a leftist buffoon- just tell them that Exxon and the other multinational oil companies are not "big oil", and are dying.)

this guy will get his 15 minutes of fame and be gone in a year or two. Technology gets better and more oil is discovered daily.

Henry: Sure there are all sorts of places not yet drilled for oil. But the fact is that we are using much more oil than we are discovering each year. New fields are found, but they are in general small to medium at best and in places (e.g. deep water) where development and production costs are high. Demmlae: The dems will fold on the drilling issue. Remember how they gave up on gun control when it was hemhorraging their standing in Middle America? A couple weeks ago I saw an ultraliberal, Congressman Abercrombie of Hawaii, say we need to go ahead and drill. I wonder if the sky high price of gas in Hawaii had anything to do with that? The left flank of the Dems, e.g. Pelosi, have been trying to do the two-step on this, advocating drilling for oil in places it doesn't exist, and pushing for renewables which are indeed the future, but will only make a dent in our energy supplies by 2020-2030, and will not be the mainstay of our energy economy for 50-75 years.

Liono2911 you are correct that is why it is so essential to conserve oil.

Yes there is some logic in here, but c'mon folks, DO NOT THINK with OPEC and speculation/price fixing that there isn't an invisible hand at work. Until we break that hand then "no way jose'", we're spinning our wheels thinking about supply and demand and peak this and blah blah blah. Get the monopoly out of the way through renewable energy (or other demand side alternatives) and BINGO. As it has been said a million times, we cannot drill our way out of this.

This guy is right sort of, there will be $200 -$300 and maybe even higher oil in the future. What he doesn't account for is the integration of alternative energy into the market place (hybrid, fuel cell, LNG, solar, wind, etc) that will drastically reduce the need for crude oil. So if the demand is greatly reduced the supply will likely be reduced to make oil exploration and production worth while thus $300 / barrel oil. Alternative energy solutions won't have a major influence for many years to come however, I believe there is enough oil reserves in the world to meet demand for the time it would take for alternative energy to take over as the dominant energy sources for world consumption.

hes right drillers own the candy store folks .

You're all sheep. You believe what you hear from the top and all jump off the cliff together. The oil cartel is no different than the diamond cartel. They both control supplies to suit their own needs. OIL is no where near full capacity. It's a myth. Watch what happens when Obama gets into office. He'll re-instate the capital gains tax on speculative oil trading... as well as houses. Once the capital gains taxes have been re-instated, the speculators will be removed from the markets and you won't see these drastic inflationary pressures in the commodities markets. The only reason why prices on commodities are so high is because ththere's no consequence to speculating.

I think Chris has it right, and politics has nothing to do with it. The political pundits just don't get it. This has nothing to do with Pelosi, or Bush, or McCain, or Obama. The world is just using oil faster than it is finding it. Mexico is depleting it's 5 major fields, and will be looking to import oil within 4-5 years, and Mexico is the US's number one supplier. Sure, all these new oil discoveries will help, but they will make up for what is being depleted.

Now that the science of Peak Oil is "settled", and everybody believes it because the price of oil is up 1500%, it's time to question the consensus. I've owned oil stocks heavily for 10 years now, lived in the Gulf, and worked for an OPEC producer. I like oil stocks, but know oil prices can collapse for unexpected reasons. I have to laugh when somebody says oil will never go under $100/bbl. These are the same people who said a few years ago that oil would never go OVER $100/bbl. What is interesting to me is oil's relationship to Gold and nat gas. Since oil is priced in dollars, some of its gains aren't "real". Gold is at 6.5x Crude, which is as cheap as it's been in at least 20 years. Nat Gas, is as cheap as it's been in a decade to crude. I would argue that either oil prices have to come off, or more likely, Gold and Nat gas are going to skyrocket. Either way, the crude trade is done. If you have to own an oil stock, buy a refiner.

We probably can't drill our way out of this mess but we can't "conserve oil"either. Oil is a global commodity and if US demand decreases any price drop will only encourage more consumption in the developing world. At this point oil consumption is still closely linked to GDP which is why China, India, and other countries subsidize it's use. In the not-too-distant future, China will become the worlds largest consumer and this will happen in lockstep with thier economic growth. Oil conservation wil only effect the supply and the price is the entire world cuts back, not just the US or the developed world.

Besides offshore drillers...oilsands are recommended to be big, like BQI who own a ton of drillabe acreage in Canada.

Oilsands companies are also big bets. Like BQI who owns a ton of drillable acerage in Canada and was touted by Cramer.

The reason for the big run up in oil is to bring the US standard of living down by transfering a lot of our money to countries that have only oil to offer. Make no mistake oil is a renewable energy source since it is a product of the earths intenses pressure and heat. Too bad the collection points are in the part of the world they is less than stable. Anyone that can actually think for him/her self cannot possibly believe that oil is from the mighty t-rex! If so why the hell is there so much oil in the middle of the oceans?? Thought they were warm blooded creatures. Plus how many damn barrels of oil does a t-rex produce. Wake up America before it is too late. Time to turn to wind, solar, water and the mighty atom and let the middle east choke on the oil.