It has been an interesting five days over which, most notably, analysts at Goldman Sachs opined on Monday that the Chinese government will in all likelihood employ more tightening measures on the economy but their impact on the burgeoning economy’s oil demand for is likely to be “limited.”The Goldman guys believe a far greater near term risk will come from the “current exceptional strength in diesel demand, which could push Chinese oil demand to new highs in November and December.” Fair dues I say, but not the best of expressions when talking about Ireland.
As further details about its imminent bailout are awaited not many in the City were keen to commit further funds towards crude futures. However, some city types I know were fairly cool about both the fate of the Irish and the connection of the country's troubles with an equities overhang on either side of the pond.
From Goldman analysts, the Irish and the Chinese to the ITPOES who were at it again last week. ITPOES are of course, the (UK) Industry Taskforce on Peak Oil and Energy Security, who warned the British government again last week that a new "peak oil threat" is likely to be felt in the UK within the next five years.
The ITPOES came into being in 2008 led by none other than the inimitable Sir Richard Branson. Their latest report, which is part rhetoric, part fact, is titled Peak Oil Implications of the Gulf of Mexico Oil Spill and was released on Friday (Available here).
Deepwater drilling, they say, is expected to constitute 29 per cent of new global extraction capacity by 2015, up from only 5 per cent. The result is that any future delays or problems associated with deepwater drilling in wake of the BP Gulf of Mexico accident will have much greater impact on supply than is the case today. Wonder whether that implies the end of "cheap oil" rather than the nearing of "peak oil."
© Gaurav Sharma 2010. Photo: Oil Rig, Santa Barbara Channel, USA © Rich Reid / National Geographic
