Crude Oil Prices Today

Crude oil prices for today are holding stubbornly around the $75 to $80 a barrel range and seem to be building a base for yet another thrust to the upside. While crude oil prices for today are well below the peak 2008 price of $147 a barrel they have not fallen as far as one might at first think that they should have during the worldwide economic slowdown/recession.

There are several reasons for oil prices being so resistance to downside price pressures. One is that the peak oil theory must now be taken seriously. While there is still plenty of oil left in yet to be developed or probably even yet to be discovered oil fields around the world all of the cheap to drill and transport oil has been placed under development. Drilling deep in hard to access remote places, especially deep beneath the sea, is tremendously expensive. You can’t expect oil companies to recover and distribute this oil unless the crude oil prices for today justify the effort and expense.

Another reason for the upward pressure on oil prices is the hard fact that many of the world’s leading oil fields are in a serious state of decline. For example, Britain’s North Sea oil field, once highly productive, will not even supply Britain’s own oil consumption needs today. Britain is now a net importer of oil.

Then there is Mexico. The once great Cantarell oil field is in a tragic state of decline. Within two to three years Mexico will probably have to stop exporting oil as it will need all that it can produce, and probably more, just to serve domestic needs. This is bad news for cash strapped Mexico and bad news for cash strapped America, as Mexico is the third leading exporter of oil to the United States. The leading oil exporter to the US is Canada and Second is Saudi Arabia. Replacing the oil we now import from Mexico will be a challenge.

A key reason that crude oil prices for today have remained so stubborn to the upside is that even though the recession has reduced oil consumption somewhat the reduction has only been on the order of 2%. The main reason for this is that growth has remained robust in China and India. Together these two huge countries account for about one third of the world’s population. With the growth rate in both countries high and with many millions of their citizens reaching middle class levels demand for oil has remained strong. Just the increase in the number of automobiles on their roads accounts for robust demand for crude oil related products, like gasoline, engine oil, and plastics.

With all of the above factors working together crude oil prices for today, even at $80 a barrel, will probably seem cheap within two years. In spite of what our great leaders try to tell us there is really no short term or easy solution to a looming world wide shortage of crude oil. In America, we will have to make drastic changes in our lifestyles to prevent a total meltdown of our economy and living standards. Time is very short for us to make the drastic adjustments that will be necessary in order to avoid disaster.

While Nuclear power is probably our best option to replace oil consumption in electricity generating power plants the Nuclear power plants that we have now are getting old and expensive to maintain. New Nuclear power plants take at least ten years to plan, permit, and construct. Getting enough energy from alternative energy sources, like solar power and windmills, sounds nice but with current technology those power sources could replace only a small fraction of the energy we now get from crude oil.

Crude oil prices today will become a topic that will be on almost everyone’s mind by 2012. For many, 2012 will indeed seem like the end of the world as we know it.