May 16 (Bloomberg) -- Goldman Sachs Group Inc., the world's biggest securities firm by market value, raised its New York crude-oil price forecast for the second half of this year by 32 percent, citing supply constraints.
Goldman now forecasts West Texas Intermediate, the benchmark crude grade traded in New York, will average $141 a barrel in the second half of the year, up from its previous forecast of $107. Prices will rise further in 2009, averaging $148 a barrel, the bank said.
"The trend in the growth of oil supply has fallen to 1 percent per annum, compared with global economic growth of about 3.8 percent, today's Goldman report said. ``Given this imbalance, long-term oil prices will need to rise.''
"The trouble is accelarating." - James Kunstler
"Nobody expected prices of oil to quadruple since 2001, and double since last year." James Kunstler.
But now, for the first time a securities firm is starting to display a modicum of sanity and intelligence, their Harvard MBA employees have begun to sniff and flirt with reality in terms of the oil price. This blog predicted $150 by Christmas in advance of this announcement though, but at least they're closer to a reality track than they were. And as the first professional financial institution to do this they deserve a round of applause...I guess from an army of the Peak Oil bloggers. And on The Oil Drum website there is consensus now that 'Peak Oil' has entered the mainstream [Peak Oil Media: Our President on Energy, Kunstler on Glenn Beck last night, and GWB Does Dr. Evil], it's part of the Media's vocabulary now, although it's still in an adoption phase and the Media are still doing the baby talk stuff until they can understand what they're talking about. Interestingly, James Kunstler appeared in the last week on CNN - looking shaggy but somewhat sage-eg (if there is such a word), and I emailed Jim today saying:
I predict that you are going to become a major celebrity commentator (you are within an already large community of converts). But I think you can probably provide a huge leadership role as this mainstreams and possibly lay out action plans that more and more people might decide to turn to as the shit splatters off the world's oil machinery.
I also said:
I'm really enjoying your book, you rogue (you - well, your character has just bedded woman number 2 - well written scene tho) but it's a story I wish I had more time to read. I will probably be finished with it this weekend. I followed an oil drum link to you on CNN.
Jim's response was he wanted to know what impact racism was having on the country, and whether the government was doing an effective job. I referred him to the recent 'Xenophobia' which of course is nothing of the sort, it is masked massive mob robbery. And I told him that the South African government can be summarised by our President holding hands with a dictator that has essentially bankrupted and ruined a neighboring country, but they're still choms.
During the drive home I found myself asking: what is news? The answer is: News is bullshit. It's essentially meaningless. I have written extensively about Peak Oil, I wrote a magazine article in January 2006, and have commented extensively on the topic. Yet despite what I do each day, not a single person has approached me or even broached the topic. Not a single time. If anything I have been nudged and pressured to blog - as a whole - even less. And yet a few individuals have been saying this for a long time, and of course, now that it is happening, now that it is a foregone conclusion, there's this sense in the news media (as we see with Kunstler on CNN) of, "Oh yes, Peak Oil. Yes well of course that explains it." La di dah.
The extent that news basically reflects 'what everyone is thinking' but in fact knows nothing of value, provides no insight, provides no new news (I mean, think about what the word NEW and NEWS means for fuck sakes) makes it - in terms of what it is today - a meaningless and useless commodity, like entertainment, only less so. I believe we are going to see larger and larger amounts of people who awaken out of our delusional movie-world mindset becoming disenfranchised with the shtick they're being sold, and turning to blogs for real information, real commentary, real help in fact, because they know that they don't serve some mysterious agenda, that they are free to air and merely attempting to establish sanity - well, some blogs - in the social order. Someblogs that do this are:
The Marmot's Hole
The Oil Drum
No Impact Man
Global Public Media
James Kunstler's Blog, in particular his Clusterfuck Chornicles updated each Monday.
As I've said before, we will soon not be in a position to be able to afford what Jim calls 'irony'. There's some acceptance of what is happening, people are making jokes about high oil prices, like the 94.7 Mansfield's traffic porn joke today (watch people screwing while you fill up/get screwed). That is going to change. There is going to be such a radical shift from party mode to Oh Fuck mode, the jokers are going to catch a cold before they catch on that suddenly no one is laughing. Very suddenly. The serious conversations that have been ignored for a long time, by commentators like myself, are going to start to filter through and change the public mindset, and public mood. I'm used to these projections and predictions. Many aren't, and they are going to struggle with the mood shift. There will be denial and struggle to accept this forced transition. From convenience living, from consumerism, from indepedence, to the opposite of all these things. No one is used to it. Enforced discipline isn't fun. People will become depressed, there will be suicides, there will be rising chaos amongst people who don't have cars or computers. And those who do, the middle class, right now are going to start feeling their wealth erode, the way an iceberg melts and is reduced to melt water that gets lost in the ocean. That house you are living in? Say goodbye.
Unfortunately, for our collective stupidity and intransigence, we completely and utterly deserve this state of affairs. And you will see, as it becomes a chronic and impossible situation, just how stupid we have been, and to what extent we deserve the whirlwind we are about to reap.