The University of Applied Sciences Bremen, Department of Applied Business Languages and International Management, invited me to give a speech about the oil market. As an alumnus, I was delighted to do this.
This is a short description of my presentation.
Demand, especially from China, has risen over the past 20 years. Peak Oil, the geological restriction that limits our abilities to increase global crude oil production, curbs supply. Hence, we are in a seller´s market. Peak Oil pushed Big Oil into costlier production areas, e.g. Canadian tar sands and deepwater offshore. This pushed up the floor price for crude oil.
Furthermore, this allows OPEC, especially Saudi Arabia, to control the oil price via controlling OPEC´s crude oil production. Saudi Arabia wants a minimum oil price of $100 per barrel. If the price falls below this floor, the Saudis will simply curb production.
In addition, I showed another scenario based on the research of Matthew Simmons. If Saudi Arabia doesn´t have any more reserve production capacity and crude oil demand still rises, even the Saudis can´t control the market any more. Oil prices will spike until demand is curbed.
This is the pdf file: Stefan Schaller on Peak Oil