There is more than twice as much oil in the ground as major producers say, according to a former industry adviser who claims there is widespread misunderstanding of the way proven reserves are calculated. Full Story »
Posted by Chris Finnie
Can be important in the long term if it is true: the thesis I gather is that currently the oil reserves are based on figures that governments and companies can reasonably stand up to(hence they are conservative figures) and what is probable is as much as twice that figure. Well what is the implication to the current oil price of the actual final figures? I think the current prices are determined by the current short fall in supply rather than influenced by that final figure, hence the actual oil reserves may not make an impact for us in the short term, but in the long term there are implications on environment that will have to be carefully assessed. The point that oil prices, oil reserve estimates, supply side constraints all play out to the advantage of the producers is made quite clear.
