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Canada export agency sees $70 oil as unsustainable
Jeffrey Jones, Reuters
Canada's export agency has raised its 2009 oil price forecast, based on recent gains, but its chief economist said on Tuesday he does not believe the fundamentals support current levels just shy of $70 a barrel.

Export Development Canada, a federal financing agency, now sees an average price for West Texas Intermediate oil of about $55 a barrel, up from its last forecast of $47. The higher price would lessen an expected skid in the value of Canada's petroleum exports.
(9 June 2009)

$70 oil menaces budding recovery
Steve Hargreaves, CNNMoney
As oil prices rise, some say already weak consumer spending is in danger of taking an even harder hit.
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Two weeks change a lot in the oil markets.

At the end of May CNNMoney.com ran a story asking if $60 oil will kill any economic recovery. 'No," most analysts said - consumers could shoulder $60 crude, and analysts didn't see prices going much higher.

Now oil is touching $70 a barrel. Goldman Sachs recently said it sees crude at $85 by the year's end. With the economy still on life support, oil is drifting dangerously close to being the wet blanket at the recovery's party.

Many say consumer spending - which accounts for over two thirds of the nation's economic activity - takes a big hit when crude hits $100 and gas $3 a gallon. Some say it's more like $125 crude and $4 gas. Others say that during a recession $80 is the breaking point.

But putting a number on it is almost beside the point. The higher it goes, the more it hurts.
(9 June 2009)

Proposition: global effort to model largest oil fields
Various, Oil & Gas Journal
Oil is the world’s most important commodity, and the need to understand the long-term supply is widely recognized. In some way, all energy projects—whether they involve conventional or green alternatives—will be measured against oil. Some of the most pressing questions facing the future of oil supply are:

.... Answers to any of these questions are predicated upon a reliable and credible forecast of global delivery capacity. The need for answers becomes more urgent as excess productive capacity shrinks and oil remains the primary and cheapest source of energy (Fig. 1).1 Primary contributing factors to the present inadequacy of energy investment are price volatility and uncertainty of future delivery capacities, which are the byproducts of tightening supply.

The authors confirm the work of others that the energy future depends upon a handful of irreplaceable and aging fields, many of which are in unknown states of depletion. It is time for the world to better understand global oil productive capacity in order to take appropriate measures.

Modeling giants

The authors propose that the key to this understanding is the modeling of the largest fields. Should government and industry fail to understand the future supply from these fields, there is a potential for large shortfalls of productive capacity without adequate alternative replacements having been put in place. As the world has experienced on several occasions, even small shortfalls can cause large price increases. Failure to understand when and at what volume oil supply will be insufficient is not acceptable.

The key observation behind this proposal is that over time the proportionate contribution of large fields to world oil supply has been generally consistent. Fig. 2 illustrates the percent of the cumulative daily production through time from giants. For the past 3 decades, the giants have represented around 60% of the total.

The authors propose that modeling the range of productive capacity from the largest fields in the world (321 of the top fields) provides the basis to answer the questions posed at the opening of this article. The scale of the proposed undertaking is easily managed. This model would provide a high degree of reliability for 50% of the world’s production—the portion that is assumed irreplaceable and the primary driver for future deliverability. As these largest fields diminish in productivity there is little prospect that the loss of their capacity will be offset by new discoveries. The historic trend is that new discoveries do little more than keep pace with depletion of nongiant fields.
(June 2009)
See Understanding peak oil - Why we need the national academy of sciences to study peak oil (petition) at Energy Bulletin.