Dear Slugcatcher,
With regards to your column this week indicating a downturn in oil price caused by a correction of supply, may I respectfully point out that the world is using approximately 80 million barrels of liquid per day. If my calculation is correct, this equates to approximately 560 million barrels of liquids per week.
To simply keep the status quo in oil price one of two things have to happen: either oil companies discover 560 million barrels of new reserves every week to replace those we are using OR as oil supply falls we either change technologies or we cut back our usage of liquids or both.
As none of these things seem to be occurring with any great haste it may be a bit pre-mature to predict an oil price turnover.
In addition, as the world continues to demand more and more oil, our reserves replacement hamster wheel will need to be spinning faster and faster.
The harsh reality is that the mass of humanity is moving more and more on a daily diet of liquid hydrocarbons and no viable replacement has yet been found.
I have no doubt in my mind that we will eventually find a new technology and migrate out of the crude oil age, which will either stabilise or collapse the price, but possibly not for a while yet.
Regards,
Michael Scott
Chief Executive Officer
Cooper Energy