2008 will see many new records for oil prices as already yesterday the price did hit $100 per barrel at the New York Mercantile Exchange (NYMEX).
This represents both a record price and a psychological barrier as never before did the prices hit these levels. During the two oil shocks, the record was of $90.46.
According to experts, oil prices might reach $120 or even $130 this year. This is a serious signal for alternatives and energy efficiency.The reasons for such prices are all too common as the usual suspects in this kind of cases are present : a cold winter in the Northern Hemisphere, political instabilities (this time in Nigeria) and a weakened dollar.
The ever increasing demand of Asian giant countries like China and India also increase the gap between supply and demand.
In 1998, the oil prices were below $11 ; in 2003, they were around $25. When I was writing my overview of the oil industry in January 2006, oil prices were around $65. Last year the prices were between $60 and $99.
The French daily le Figaro proposes today a great graph (picture right) displaying the oil prices since the 19th century. As one can easily see, the trends we are witnessing nowadays were never seen before.
As the Financial Times states it :
With a single small deal, an independent trader on Wednesday secured his place in market history by pushing oil prices briefly to the unprecedented level of $100 a barrel.
Some observers questioned the validity of the price mark when it emerged that the peak was the result of a trader – one of the “locals” who trade on their own money – buying from a colleague just 1,000 barrels of crude, the minimum allowed, industry insiders said. The deal on the floor of the New York Mercantile Exchange was at a hefty premium to prevailing prices.
Soaring oil prices will undoubtedly make alternatives like solar thermal, wood energy or geothermal more competitive.
Renewable energies are a great way to decrease one’s heating fuel consumption in housing.
The most oil-consuming economic sector in OECD countries is transportation. Carpooling and public transportation systems might be more and more used.
This surge in oil prices shouldn’t be considered as a threat but as a huge opportunity to prepare ourselves to peak oil. This can help us in decreasing progressively our consumption of this fossil fuel and enable us to go toward a greener future.
Further reading :
- IHT : Oil breaks through $100 a barrel level for first time ;
- Financial Times : Independent trader claims $100 oil record
Pour plus d’information :
- Les Echos : Le pétrole inaugure la nouvelle année à 100 dollars le baril ;
- Le Figaro : Le pétrole atteint 100 dollars
