Weekend: Goldman Says Saudi Oil Has Peaked

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Weekend: Goldman Says Saudi Oil Has Peaked By Nick Hodge | Sunday, July 10th, 2011 Welcome to the Energy and Capital Weekend Edition — our insights from the week in investing and links to our most-read Energy and Capital and sister publication articles. Sometimes we need to pause, reflect, and figure out what the hell it is we're doing here. We're not just rolling around in the surf... There is a thesis and carefully thought-out rationale behind all the information I and my fellow editors present to you in this newsletter. Our entire existence stems from a firm belief the world is running out of cheap oil. And our mission is to inform as many people as we can what that means for their pocketbook — and their way of life. Advertisement It's Cheaper than Coal... Cleaner than Natural Gas... and More Powerful than Nuclear! It can provide 130,000 times our annual electricity consumption — and the U.S. Government is bankrolling the whole thing! Now, meet the one company that's about to introduce it to the world. Click here to learn more.  So we're all on the same page, here's a snippet from our "About Section": Energy has become fundamental to the very basic functions of contemporary civilization. And it is imperative to the future growth, prosperity, social stability, and security of nations around the world. Without energy, everything comes to a grinding halt. Today energy is at a crossroads. Like a lit fuse, a catastrophe of immeasurable proportion is looming... And like the ancient phoenix, a great opportunity will rise from the ashes of this crisis. There will be those — like Energy and Capital subscribers — who will be given the foresight and vision to exploit the commercial opportunities of a post-oil economy. I share this with you for a simple reason... After sounding our warnings and offering preparedness tips for over five years, the peak of oil production is now fast approaching. Tullow Oil (LSE: TLW) warned this week output at its Ghana Jubilee field — currently producing about 120,000 barrels per day (BPD) — will reach peak production by the second half of this year. The world's most revered investment bank was out with even more damaging news. According to Thursday's Wall Street Journal: Goldman Sachs Group Inc. said oil supplies will become "critically tight" in 2012, largely because production leader Saudi Arabia won't be able to pump as much extra oil as many people believe. Robust global economic growth will continue to drive oil demand that outstrips supply, so "it is only a matter of time before inventories and OPEC spare capacity become effectively exhausted, requiring higher oil prices to restrain demand," Goldman said. Goldman maintains that Saudi oil production peaked in 2008 at 9.5 million barrels per day and will never reach that level again, and has raised its 2012 forecast price to $140 per barrel. Barron's has gone even further, saying: Despite the recent 20% decline from April highs, new highs on crude, heating oil, diesel fuel, jet fuel and gasoline seem likely over the next 12 months. Following some further easing over the summer, the second leg of the long-term bull market in petroleum–the first occurred in 2007-08–probably will begin this fall. As oil producers' spare capacity gradually declines to worrisome levels, the average monthly price could reach a record $150 per barrel by next spring, with spikes to $165 or $170. With this, $4.50-a-gallon gasoline will become the norm. That will put a huge dent in consumer wallets, while ramping up the desirability of fuel-efficient cars. This is exactly the event we've been saying would happen for years. For some, this may come as a shock. It's not like governments and major news outlets have been advertising the world is about to enter a state of terminally declining oil production. They remember what a mere 5% drop in supply did to the world after the OPEC oil embargo in the 1970s... If you want to learn about Peak Oil — what it means, how it'll affect you, and how to prepare — you're going to have to do it on your own. We've known that for some time. That's why we produce and publish this newsletter. And now that major banks and oil-producing nations are realizing this threat is real, you need to be aware of what's coming next now more than ever. So instead of rambling on, trying to prove to you the world is running out of oil by compiling quotes and pieces of reports that acknowledge Peak Oil is real, I'd like to instead call you to action. You see, the time for debating this topic is over. Cheap and easy oil is about to be gone forever. Now is the time to prepare. So if you don't do anything else this weekend, spend a few minutes viewing our new Peak Oil survival guide. When oil crests that $150 mark again, you'll be glad you did. Call it like you see it, Nick Hodge Editor, Energy and Capital P.S. Part of being prepared for Peak Oil also means knowing where the last remaining valuable supplies are going to come from. The U.S. and Canada are showing a bit of promise with new shale technologies. And Brazil's got a few offshore fields left to exploit. But the bulk of tomorrow's oil will come from East Africa, the untapped part of the same geologic structure that gave the Saudi's all their oil. One company is already there searching for it.   Geothermal Profits: Cleaner than Gas and More Powerful than Nuclear Editor Jeff Siegel discusses the only pure play geothermal stock that Uncle Sam is about to send much, much higher. Energy Investing 101: It Begins and Ends with Batteries Editor Nick Hodge tells readers in this investment webinar about the groundbreaking development in the battery storage sector... and why oil companies are shakin' in their boots. 60 Million Barrels of 'Nice Try': Obama's Latest Economic Gimmick In two days, Southern Sudan gains independence. They already produce 500,000 barrels of oil a day. When the U.S. repeals its sanctions, these small wildcatters will surge... Time to Short the "Unsinkable" Stock: Apple: Sales for this "Titanic" Toy Store are Finally Coming Up Short The last time this "bullet-proof" tech player missed expectations, it fell 58%! Here's how to leverage the next tumble. Housing Bottom 2011: I'd Bet My Job on This... Analyst Ian Cooper explains why the latest "housing bottom" callers are still wrong and offers two ways to profit from further decline. 84-Year-Old Port and the Dalai Lama: Releasing Dopamine Moments of enlightenment happened over 84-year-old bottles of port and on white sand beaches. And I'd like to share one of them with you today. Untapped Billions: How Play the African Oil Boom Fresh off an expedition to Kenya, Editor Christian DeHaemer explains how East-African oil assets can earn early investors potential triple-digit gains. The Ultimate Energy Bet: Nat Gas: Natural Gas Profits During a Supply Glut It's true. Savvy Investors will profit during the natural gas supply glut. Keith Kohl tells you how. Uranerz Energy Could Pop On Russell Inclusion: Last Time It Popped 233% Analyst Ian Cooper takes a look at a uranium stock given a second chance by the Russell Indexes, and offers other ways to profit from bargain basement prices for the element. The Revaluation of the Iraqi Dinar: How the U.S. Plans to Make Trillions Analyst Greg McCoach reveals evidence of the U.S. government's secret plan to make trillions off the revaluation of the Iraqi dinar, and tells investors what they can do to protect themselves and establish security for the future. Hydraulic Fracturing: Marked for Death or an Inevitability?: The Fracturing Debate Rages On Keith Kohl takes a hard look at the inevitable growth of hydraulic fracturing, offering investors the smartest way to profit from the controversial activity. Related Articles Peak Oil is Past Tense Weekend: Through Our Looking Glass Canada's Peak Natural Gas Crisis Peak Oil Investments Cheap Oil for Your Grandkids Your grandchildren will still be pumping cheap fuel into their cars 50 years from now... And it's all thanks to this Canadian oil company. Find out how they just tapped the world's last great oil reserve. From the Archives... The Fracturing Debate Rages On 2011-07-08 - Keith Kohl Italian Solar Soars 2011-07-08 - Brianna Panzica Would Come with a Compromise 2011-07-08 - Brianna Panzica Oil Prices May See Further Rise 2011-07-07 - Brianna Panzica GM and Westport Plan Natural Gas Vehicles 2011-07-07 - Brianna Panzica Economic Releases for the week of Monday, July 11th, 2011: Jul 12 - Trade Balance Jul 13 - MBA Mortgage Index Jul 13 - Treasury Budget Jul 14 - Core PPI Jul 14 - Business Inventories Jul 15 - Michigan Sentiment Jul 13 - Export and Import Prices Jul 14 - Retail Sales Jul 15 - CPI Brought to you by Wealth Daily

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