I'd say that was true about 10 years ago. OPEC is becoming somewhat a non-viable entity. They cannot even agree on output in the last meeting, forcing Saudi Arabia to basically cheat on their quotas. OPEC can set a price floor (within reason considering how Iran and others are dying for money right now), but it can't set a price cap. It used to be able to do both with ease.
I can't really disagree with you here, because the member countries are getting to the point of reaching that "peak oil" point (and that is localized peaks and NOT the "global" peak oil that gets discussed by those who describe the beginning of the end of oil)...
Yes and no. Russia and Canada basically go along because it's in their interests at the moment. But I'd still reckon that the impact of currency hedging is massive upon the price of oil. It could be argued either way based on the European debt crisis how institutional investors should go though.
On Russia, remember before the 2008 crisis when oil prices spiked to around 150$ per barrel?? Well, Russia was the reason for the prices eventually coming down because of the dozens of super-deep oil wells they drilled, and they can keep these quiet if there's a spill because they are on land, unlike when BP tried to replicate this drilling in the gulf of mexico, and we all know what happened there... So, Russia is now the worlds largest oil producing nation.
On Canada, the oil sands are canada's functional oil producing region, and you're right, it's not a great quality of oil as far as the scale goes. That is NOT all of Canada's oil. British Columbia has MASSIVE amounts of oil underneath those mountains that's undeveloped. Also, a few years ago they started working on developing oil fields in saskatchewan, but out of those two I'm pretty sure it's BC that's got the big ones.
Look at Alaska though, -
The World's Largest Oil Rig to Be Built in Alaska! | Drudge Retort
"Wednesday, June 22, 2011
The World's Largest Oil Rig to Be Built in Alaska!
BP has commissioned Parker Drilling to build the world's largest rig to drill the longest horizontal wells yet completed. The Liberty project, for which the rig is being built, involves drilling over 8 miles to reach pockets of oil offshore from Prudhoe Bay Alaska under the Beaufort sea."
Alaska alone apparently is slated to become the among the top oil producing areas in the world.
Egypt is a bit player in oil these days. Most of its oil production is domestically consumed. Furthermore, the riots in Egypt never affected the Suez which is arguably the most important aspect of Egypt in the oil argument. As for Libya, it seems that the market has priced in the lack of its low sulfur crude and compensated for its absence. The real issue of oil going up is it drags down growth across Asia, Europe and North America which in turn slows growth everywhere else. Which amusingly drives down demand for oil and its price.
Yes, this is correct... but I think you missed the point somewhat... so, just allow me some leeway here.
Here's the long-term strategy, since oil is effectively a finite resource :
- The US buys oil from the middle east, and the massive consumption rate for these countries will dwindle the levels of their resources, and in turn these countries ALSO invest in things like US T-bills, and so on.
- Let these countries drain their reserves for decades while quietly building the infrastructure for the big finds across north america, and use environmental rules to limit the competition to the biggest companies...
- NEXT, through manipulation of the prices of oil through various means, this causes unrest in the middle east through food prices... first was Egypt, which did nudge the price up SOME, which was enough to kick-start the revolutions next door, which were even larger because these neighboring countries saw the "success story" of Egypt (which BTW is under a martial law still)
- This unrest will eventually cause a failure in the supply chain of oil... this is the piece that will knock down SEVERAL dominoes in a single shot.
- From here the shortage of oil will immediately halt what is left of the american economy, and the economies of much of the rest of the world, and all the chaos that will ensue
- Then, to play the part of the saviors these people will come out, "well, we have a way to get the oil, but it will mean drilling in some nature preserves, so we can't have any environmental liability"
- After the world war dies down the world will start to rebuild under a "new world order" because the people will be willing to do anything to end the horrors.
For the final part of that quote, yes, the depression this time IS a global one... and we've only really seen the tip of the iceberg... but look at how it works, as Gerald Celente points out... back in the 30's it was :
- Depresssion
- Currency wars (we are here)
- Trade wars
- Real wars
Not sure about "completely." It costs Saudi Arabia something like $2 to drill a barrel of low sulfur oil. Canadian tar sands is well above that as are Texas fields. Furthermore, unless we were able to get all of that oil out at once, OPEC would still be somewhat more of price setter.
Ya, but you're going to be paying about 150-200$/barrel for oil at that point... Last number I heard was 47$ / barrel for canadian oil to produce.
Oh, and the last point you are missing here : Once the saudi's get taken out, they are no longer going to be an oil producing nation.... the middle east is going to go back to being groups of nomadic camel riders.