What will the oil price in the near future?

What will tell us these alarming events of the declining of world oil production, the low rate of new discoveries of oil, the lack of enough refineries for the future oil price? I am a geologist and not an economist. Therefore I will quote some phrases of an article  of Nelson Schwartz in Fortune magazine January 27th 2006::

Ready for $262/barrel oil?

"DAVOS, Switzerland (FORTUNE) - Be afraid. Be very afraid.

That's the message from two of the world's most successful investors on the topic of high oil prices. One of them, Hermitage Capital's Bill Browder, has outlined six scenarios that could take oil up to a downright terrifying $262 a barrel. The other, billionaire investor George Soros, wouldn't make any specific predictions about prices. But as a legendary commodities player, it's worth paying heed to the words of the man who once took on the Bank of England -- and won. "I'm very worried about the supply-demand balance, which is very tight," Soros saysU.S. power and influence has declined precipitously because of Iraq and the war on terror and that creates an incentive for anyone who wants to make trouble to go ahead and make it." As an example, Soros pointed to the regime in Iran, which is heading towards a confrontation with the West over its nuclear power program and doesn't show any signs of compromising. "Iran is on a collision course and I have a difficulty seeing how such a collision can be avoided," he says

To come up with some likely scenarios in the event of an international crisis, his team performed what's known as a regression analysis, extrapolating the numbers from past oil shocks and then using them to calculate what might happen when the supply from an oil-producing country was cut off in six different situations. The fall of the House of Saud seems the most far-fetched of the six possibilities, and it's the one that generates that $262 a barrel.More realistic -- and therefore more chilling -- would be the scenario where Iran declares an oil embargo a la OPEC in 1973, which Browder thinks could cause oil to double to $131 a barrel. Other outcomes include an embargo by Venezuelan strongman Hugo Chavez ($111 a barrel), civil war in Nigeria ($98 a barrel), unrest and violence in Algeria ($79 a barrel) and major attacks on infrastructure by the insurgency in Iraq ($88 a barrel).

Figure 22. Preditions oil price made up in 2002. The price of a barrel of oil should now be round $ 20!.

We have to be very suspicious concerning predictions on prices on oil as we have seen with this prediction of Goldman and Sachs in 2002. It should be at the moment according their predictions round $20 per barrel of oil. As we know it is today round $ 60.   Anyhow it is very likely that the price of oil will rise considerably in the near future. But there will be a moment that price of oil is not anymore the issue. When the moment comes that the gasoline do not arrive anymore at the gasstation the price is priceless!

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At the end of this update I will resume the main facts. Output in most Non-OPEC nations already has passed their respective peaks. Even for some OPEC members the situation is by no means rosy, they can no longer produce at rates to meet their OPEC-allotted quotas. Yet, the world’s reliance on lifting the OPEC (Oil Producing Exporting Countries)  exports is actually growing  The world importing countries will try to get the best part of the oilcake. Oil wars are on our doorstep!

Figure 23. Non--OPEC, non former Soviet Union world oil production is past its peak of oil production. For the USA reached its peak already in 1971)
 

A statement of an oil geologist:

"Nobody can change the geology, and forces of nature that laid down reserves of oil and gas over millions and millions of years. Could it be that we have been blinded by technological advances into thinking that there is some way to beat nature? The natural world has an uncanny ability to hit back at the arrogance of man, and perhaps a reassessment of reality at this point is called for, rather than a reliance on oil statistics that may owe more to political manoevering than geological facts".