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Page added on January 6, 2015
Energy Crisis As Early As 2016
Low oil prices today may be setting the world up for an oil shortage as early as 2016. Today we have just 2% more crude oil supply than demand and the price of gasoline is under $2.00/gallon in Texas. If oil supply falls too far, we could see gasoline prices doubling within 18 months. For a commodity as critical to our standard of living as oil is, it only takes a small shortage to drive up the price.
On Thanksgiving Day, 2014 Saudi Arabia decided to maintain their crude oil output of approximately 9.5 million barrels per day. They’ve taken this action despite the fact that they know the world’s oil markets are currently over-supplied by an estimated 1.5 million barrels per day and the severe financial pain it is causing many of the other OPEC nations. By now you are all aware this has caused a sharp drop in global crude oil prices and has a dark cloud hanging over the energy sector. I believe this will be a short-lived dip in the long history of crude oil price cycles. Oil prices have always bounced back and this is not going to be an exception.
To put this in prospective, the world currently consumes about 93.5 million barrels per day of liquid fuels, not all of which are made from crude oil. About 17% of the world’s total fuel supply comes from natural gas liquids (“NGLs”) and biofuels.
One thing that drives the Bears opinion that oil prices will go lower during the first half of 2015 is that demand does decline during the first half of each year. Since most humans live in the northern hemisphere, weather does have an impact on demand. I agree that this fact will play a part in keeping oil prices depressed for the next few months. However, low gasoline prices in the U.S. are certain to play a part in the fuel demand outlook for this year’s vacation driving season.
Brent oil prices are now hovering around $60 a barrel. In my opinion, this is quite a bit lower than Saudi Arabia thought the price would go and may lead to an “Emergency” OPEC meeting during the first quarter. But for now, I am assuming that Saudi Arabia is willing to let the other OPEC members suffer until the next scheduled OPEC meeting in June.
The commonly held belief is that Saudi Arabia is doing this to put a stop to the rapid growth of production from the U.S. shale oil plays. Others believe it is their goal to crush the Russian and Iranian economies. If the oil price remains at the current level for a few months longer it will do all of the above.
My forecast models for 2015 assume that crude oil prices will remain depressed during the first quarter, then slowly ramp up and accelerate as next winter approaches. I believe that by December we will see a much tighter oil market and significantly higher prices. In a December 24, 2014 article in The National, Steven Kopits managing director of Princeton Energy Advisors states that, “In permitting low oil prices, the Saudis seek to bring the market back into equilibrium. At present, our calculation of break-even system-wide is in the $85–$100 a barrel range on a Brent basis.”
Mark Mobius, an economist and regular guest on Bloomberg TV recently said he sees Brent rebounding to $90/bbl by the end of 2015.
Since 2005, only North America has been able to add meaningful crude oil supply. Outside of Canada and the United States (including the Gulf of Mexico), the rest of the world’s crude oil production netted to a decline of a million barrels per day from December, 2010 to December, 2013. More than half of the OPEC nations are now in decline. We’ve been able to supplement our fuel supply during the last ten years with biofuels, but that is limited since we need the farmland for food supply.
I believe the current low crude oil price could be overkill and result in the next “Energy Crisis” by early 2016. Enjoy these low gasoline prices while they last.
The upstream U.S. oil companies we follow closely are all announcing 20% to 50% cuts in capital spending for 2015. We will start seeing the impact on supply at the same time the annual increase in demand kicks in. Our model portfolio companies are all expected to report year-over-year increases in production, but at a much slower pace than the last few years.
A study released by Credit Suisse two weeks ago shows that U.S. independents expect capital-expenditure (Capex) cuts of one-third against production gains of 10 per cent next year. This would imply production growth of 600,000 bpd of shale liquids, and perhaps another 200,000 bpd from Gulf of Mexico deepwater projects. At the same time, U.S. conventional onshore production continues to fall. I have seen estimates of 500,000 to 700,000 bpd declines within twelve months. If these forecasts are accurate, U.S. oil production growth would be barely positive next year and headed for a material downturn in 2016.
North American unconventionals (oil sands, shale and other tight formations) have been almost all of net global supply growth since 2005. If unconventional growth grinds to zero and conventional growth is falling outright, the supply side heading into 2016 looks highly compromised. At today’s oil price, only the “Sweet Spots” in the North American Shale Plays and the Canadian Oil Sands generate decent financial returns to justify the massive capital requirements needed to continue development. Global deepwater exploration is rapidly coming to a halt.
Were demand growth muted, this might not matter. Demand for liquid fuels goes up year-after-year. It even increased in 2008 during the “Great Recession” and ramped up sharply during 2009 and 2010 despite a sluggish global economy. Low fuel prices are increasing demand today and my guess is that, with U.S. GDP growth now forecast at 5% in 2015, we could see demand for fuels increase by close to 1.5 million barrels per day this year. The current IEA forecast is for oil demand to increase by 900,000 bpd in 2015.
If this plays out, the oil markets will be heading into a significant squeeze in the first half of 2016.
The last extended period of low oil prices was 1985 to 1990. In 1985, when oil prices collapsed similar to what’s happening now, the world had 13 million bpd of spare capacity, with 7 million bpd in Saudi Arabia alone. OPEC was well-positioned to comfortably meet any increase in demand.
Today, just about all of the world’s discretionary spare capacity resides in Saudi Arabia and amounts to an estimate 2 million bpd. Lou Powers, an EPG member and author of “The World Energy Dilemma,” has said that Saudi Arabia will have difficulty maintaining production at over 10 million bpd for an extended period. If we do swing to a supply shortage, Saudi Arabia may find itself in the position of needing to run the taps full out for much of 2016. In such an event, the world will be headed right back into an oil shock and we will see much higher oil prices than $100/bbl.
Low oil prices will hurt the unhedged upstream companies, but they will hurt the oilfield services sector the most. I’m expecting the onshore active rig count to drop by 30% by mid-2015. Oil price will need to firm up for several months before the upstream companies commit to higher spending levels. That said, the high quality drillers like Helmerich & Payne (HP), Patterson-UTI Energy (PTEN) and Precision Drilling Corp. (PDS) will be fine since a lot of their high end rigs will keep working on long-term contracts. By 2016, they will have gained market share.
Remember, North America and deepwater are the only places with meaningful production upside. If crude oil prices move below $60/bbl and stay there for even six months it could prove catastrophic to non-OPEC supply. At some point, OPEC action may become necessary.
“But perhaps not by the Saudis. Russia’s position is comparable to Saudi Arabia’s. Either could cut production by meaningful quantity, but the Russians need the incremental revenue more. Saudi Arabia would be right to argue that any calls for production cuts should be directed to Moscow. OPEC could cut production to prop up prices and increase revenues. But for now, a better strategy (for Saudi Arabia) would be to hang back, deflect criticism, and let events play out. If the Russians are thinking clearly, Moscow will cut first.” – Steven Kopits the managing director of Princeton Energy Advisors.
The best news for all of us is that Iran may be quite willing to put an end to their nuclear enrichment program a few months from now. I believe this is the real reason for what Saudi Arabia is doing.
By Dan Steffens for Oilprice.com
27 Comments on "Energy Crisis As Early As 2016"
Davy on Tue, 6th Jan 2015 7:51 pm
He lost me in the usual MSM and standard econ 101 black fog. I see a new period with new parameters revolving around descent not growth. Without a basic growth environment demand rebound will be constrained beyond price influence. IOW demand may not return then we must look at new rules of the game. I realize this view of a paradigm shift to descent has never happened so there is no way to discuss this in the normal channels.
This oil and economy situation reminds me of the population debate which is always forecasting a population increase of so much for so many years. You rarely hear a view that population growth is finished. It is just not part of the language at the level that has mass coverage. These discussion of the end of growth are not acceptable so expect dysfunction and irrational outcomes. If you are playing a game by the wrong rules strange things happen.
J on Tue, 6th Jan 2015 8:06 pm
Yeah, the word growth appears so many times I’m getting dizzy. He even inserts it incorrectly into this sentence: “If unconventional growth grinds to zero and conventional growth is falling outright”
After having declared already that conventional is in decline…
Makati1 on Tue, 6th Jan 2015 10:10 pm
The oil pimps are all running scared. The low oil prices are goring their sacred cows. Expect the panic to get worse as the year goes on. Exciting, isn’t it?
rockman on Wed, 7th Jan 2015 5:21 am
M – Yes, exciting: we’ve already begun looking for some of those gored cows that might be picked up cheap. Every dark cloud has a silver lining in the oil patch…even lower oil prices.
Go Speed Racer on Wed, 7th Jan 2015 5:57 am
All that fracked oil was too costly for the economy. Now the economy is getting weaker because it can’t afford fracked oil. Just another way of looking at EROEI realities… you could bring oil back from the moons of Saturn just that would be expensive oil. The economy would pay it a little while, but then the economy couldn’t afford it and demand would be reduced. Prices would fall and no more rockets to Saturn for oil. Looks like fracking has lousy EROEI.
Davy on Wed, 7th Jan 2015 6:46 am
Speed, it is not just fracked oil but much of the conventional easy to get oil that is too expensive. The fracked oil was part of the crashing gold rush that will make serious financial waves. It represents the poster girl of speculation and fleecing. Yet, MENA oil of the good ole conventional type is also too expensive in a systematic sense of having its host need more EROI than even this high EROI oil is supplying. Venezuela is a case in point of a squander on a national scale.
Oil of all kinds is and was too high for the global economy and especially the financial system. The high prices allowed speculators to misallocate a mind numbing billions into operations that are supplying oil that is too expensive for the aggregate economy. Short’s analysis with its historical and scientific oil value decline hits the nail squarely in the current situation. Even Short admits oil is underpriced per value.
What is happening now is the central banks are losing control of their debt stimulus policies. The central banks pants are down with their low interest rate policies. What could be worse than a recession with interest rates as low as they go? OOH, negative rates??? Well they only do something when the body has a pulse. Really all these central bank shenanigans have created disequilibrium far and wide from the oil price to the value of the dollar. We had stable disequilibrium while the central bank’s policies were effective. When diminishing returns became so strong with these policies did a pullback came “maestro” the current situation.
You can’t stop these financial drugs cold turkey without consequences and you can’t keep doing them or you have an overdose situation. That is a rock in a hard place predicament. If we see another QE it will be ineffective and further destabilizing. How this will occur is unclear but the point is these policies have done broad damage over a wide spectrum so something could pop anywhere. I am of the opinion this popping was going to happen regardless.
It may or may not have been advantageous shortly after the 08 reboot of a paralyzed financial system to embrace debt reduction policies. Maybe a depression would have maintained BAU. Another issue is AGW and BAU. It may be better to have a collapse now for AGW mitigation. If post 08 policies occurred creating a stable but sick BAU AGW mitigation might have been delayed years. So many questions in uncharted waters.
I do think a significant recession post 08 would have had advantages of getting the debt healing process going while we still had quality resources. Instead we squandered many high quality resources on the wrong investments. We could have been investing in adjustment and mitigation policies for the bumpy descent. Yet, it is very possible there would have been little adjustment and mitigation once things started to unravel. In that case we bought 6 more comfortable BAU years. Damn the 1%ers that not only were comfortable but prospered but the facts are even the 99%ers are generally not stranded, cold, and or hungry currently…well most.
This high price oil is a symptom of depletion and a cause of systematic disequilibrium along with debt, repression policies, and oil national’s bloated budgets. These three conditions have robbed the economy of any kind of stable growth. It is still debatable if any other recovery of any kind could have occurred post 08 but we should admit the central bank policies chosen were drug abuse and addiction not healthy policies.
Davy on Wed, 7th Jan 2015 9:23 am
The carnage is starting.
http://www.zerohedge.com/news/2015-01-07/first-shale-casualty-wbh-energy-files-bankruptcy-many-more-coming
bobinget on Wed, 7th Jan 2015 9:41 am
Keep your eyes on the last paragraph.
Summary of Weekly Petroleum Data for the Week Ending January 2, 2015
U.S. crude oil refinery inputs averaged over 16.4 million barrels per day during the week ending January 2, 2015, 43,000 barrels per day more than the previous week’s average. Refineries operated at 93.9% of their operable capacity last week. Gasoline production decreased last week, averaging 8.7 million barrels per day. Distillate fuel production decreased last week, averaging 5.2 million barrels per day.
U.S. crude oil imports averaged about 6.9 million barrels per day last week, DOWN by 205,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 7.3 million barrels per day, 4.6% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 760,000 barrels per day. Distillate fuel imports averaged 265,000 barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) DECREASED by 3.1 million barrels from the previous week. At 382.4 million barrels, U.S. crude oil inventories are well above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 8.1 million barrels last week, and are well above the upper limit of the average range. Finished gasoline inventories DECREASED while blending components inventories increased last week. Distillate fuel inventories increased by 11.2 million barrels last week but are in the lower half of the average range for this time of year. Propane/propylene inventories fell 1.6 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories increased by 9.9 million barrels last week.
Total products supplied over the last four-week period AVERAGED 20.2 million barrels per day, up by 2.6% from the same period last year. Over the last four weeks, motor gasoline product supplied AVERAGED over 9.3 million barrels per day, up by 5.5% from the same period last year. Distillate fuel product supplied averaged over 3.9 million barrels per day over the last four weeks, UP by 7.2% from the same period last year. Jet fuel product supplied is up 2.6% compared to the same four-week period last year.
Northwest Resident on Wed, 7th Jan 2015 10:17 am
Davy — Just saw that over on ZH. No surprise. Somebody had to be first.
That company (wbh) will be followed by a long list of others. It will be raining pink slips soon enough, with a LOT more pain to follow.
No telling how far down the collapse hole this trend will drag the world once it really picks up speed, which it will do over the next couple of months is my guess.
It is going to be VERY difficult to NOT notice all of the many laid off and unemployed oil industry workers as they form their mile-long lines outside of the unemployment offices. With no new boom coming over the horizon to offer hope for the future, I expect that some of those unemployed oil workers are probably going to have a few things to say. They will NOT be shuffled quietly into the “no longer in the work force” statistical category where the U.S. Government hides all the millions of other unemployed in America. Oil workers on food stamps is NOT going to be a minor issue easily avoided or papered over. I don’t expect thousands and thousands of laid off oil industry workers and their families to pass quietly into the night, to just suck it up and accept their fate. Rather, I expect a major squeaky wheel demanding attention.
The “illusion of all is well” can’t hold for much longer, and when it disintegrates and reveals the true rot that it has been hiding, we all better be ready.
shortonoil on Wed, 7th Jan 2015 10:54 am
“Oil prices have always bounced back and this is not going to be an exception.”
This is a little like the old farmer trying to milk a dead cow. When asked why he was doing that he answered, “she always gave milk before”. There has been some fundamental changes in the old cow, the value of oil to the economy is declining.
Prior to 2012 (the energy half way point) the price of oil was dominated by supply and demand. The value of oil to the economy was always greater than the price; it was always a very good buy for the consumer. After 2012 the equation changed, the price of petroleum is now controlled by its maximum value to the consumer, and its price will not exceed that value:
http://www.thehillsgroup.org/depletion2_022.htm
The recent price crash has undoubtedly resulted from Central Bank monetary policies. It allowed investment in supply that would have otherwise not been worth taking out of the ground. It helped support prices that the economy, under normal market conditions, would have not been able to afford. This appeared as excess supply in the market, when in actually it was overpriced oil.
The old cow is dead, and we are now in the last stage of the oil age. The price will now adjust its value to the economy regardless of how many barrels Saudi Arabia pumps. On the way down the highest cost producers will be continually priced out of the market. No amount of jaw boning by industry analysts, or fiat money masquerades will change the course of depletion. The consumer will buy what they can afford, and not on barrel more. Reality has come knocking, and a lot of people had better wake up, and go answer the door!
http://www.thehillsgroup.org/
Plantagenet on Wed, 7th Jan 2015 11:04 am
People seem to forget that KSA is VERY CLOSE to peaking.
Once Saudi peaks the game is over
bobinget on Wed, 7th Jan 2015 11:10 am
NOTE: How this bullish EIA report was received:
http://www.livecharts.co.uk/MarketCharts/crude.ph.
A decrease of three million barrels inventory is reflective of increased demand, Not oversupply, as
we are being lead to believe.
As for 20.2 million barrels p/d burned up, a 2,6% increase over last year is also indicative of stronger demand..
Germany’s economy is showing hopeful signs of life.
Greece, leaving euro and returning to devalued
drachma.
China’s November oil imports reportedly 52% higher then October but slightly lower then November.
France experienced the worst act of terrorism EVER. Twelve dead including two cops. Four more
critical. European Anti Islamic feeling were running high BEFORE this morning’s murders.
Being a peaceful Muslim in France just became much more difficult.
bobinget on Wed, 7th Jan 2015 11:16 am
Short term outlook, EIA
U.S. Petroleum and Other Liquids
U.S. weekly regular gasoline retail prices averaged $2.78/gal on December 1, which marked a decrease of $0.21/gal since the beginning of November and the lowest weekly price average since October 4, 2010. U.S. average regular gasoline retail prices have fallen for nine consecutive weeks and are down by 25% since their summer peak in late June. Falling Brent crude oil prices have been largely responsible for falling retail gasoline prices. EIA expects that the current low crude oil prices will contribute to further declines in gasoline prices, with the December price expected to average $2.61/gal.
Liquid Fuels Consumption
Total U.S. liquid fuels consumption rose by 470,000 bbl/d (2.5%) in 2013, the largest increase since 2004. Consumption of hydrocarbon gas liquids (HGL) registered the largest gain, increasing by 190,000 bbl/d (8.5%). In 2014, total liquid fuels consumption is expected to remain unchanged, with declines in the consumption of HGL, residual fuel oil, and other oils offsetting increases in distillate fuel and jet fuel. Total consumption is forecast to grow by 140,000 bbl/d in 2015, with HGL and distillate consumption accounting for most of the growth.
Motor gasoline consumption grew by 160,000 bbl/d (1.9%) in 2013, the largest increase since 2004. EIA expects gasoline consumption to remain mostly unchanged during the forecast period, as modest increases projected for 2014 are offset by small declines in 2015. This projection shows that continued improvements in new-vehicle fuel economy offset highway travel growth.
Distillate fuel consumption increases by 120,000 bbl/d (3.1%) in 2014, reflecting colder-than-average first-quarter weather and economic growth. Distillate consumption rises by an additional 90,000 bbl/d (2.2%) in 2015. Some of the growth in distillate fuel consumption in 2015 comes from Annex VI to the International Convention for the Prevention of Pollution from Ships (MARPOL Annex VI), which is an international agreement that generally requires the use of fuels below 1,000 parts per million sulfur by marine vessels in most U.S. waters, unless alternative devices, procedures, or compliance methods are used to achieve equivalent emissions reductions.
(electric power, railroads and ships)
Residual fuel oil consumption, which falls to an estimated 240,000 bbl/d in 2014, is projected to decline further to 210,000 bbl/d in 2015, which would be the lowest level on record.
Davy on Wed, 7th Jan 2015 11:16 am
Yeap Bob, corn porn says bad news is good news. Thanks for the encouragement on this cold raw winter day.
bobinget on Wed, 7th Jan 2015 11:37 am
Shortonoil says: ‘this time it’s different’.
If so we should call in our troops from 27 countries
protecting our oil supplies.. After-all, ‘we won’t be needing it any longer’.
Maybe, but numbers tell a different story.
OR, maybe it’s like any ‘Holy Book’ people are likely to deny unwanted negative information and cultivate positive.
I’m the positive type.
German, US employment numbers are good, not great but OK.
Europe is in a deflationary environment.
European banks, little doubt, will begin buying bonds.
Austerity simply ran its course and this is the sad result. Look for European recovery in late 2015.
Look at residual damage.
US and Canadian E&P’s injured but not fatally.
China, Venezuela, Ecuador, Iran, Iraq, Russia finally
united out of necessity. Because of China’s insatiable, never ending need for oil, this time certainly IS different.
GregT on Wed, 7th Jan 2015 11:38 am
Cold raw winter day Davy?
Maybe you should consider moving 1500 miles northwards. 41′ F here today and rising. Should be quite pleasant by this afternoon when the Sun comes out. 🙂
Northwest Resident on Wed, 7th Jan 2015 11:44 am
“we won’t be needing it any longer”
Just the opposite. We’ll be needing every single drop of it, whatever we can get and wherever we can get it. And so will everybody else. Eventually, humans being what they are, there will be fighting over what remains. Actually, that is already occurring just on a somewhat subdued level. Before long, subtlety will be thrown out the window and we’ll get to see some real fighting — some of us will probably get caught up in it, or our friends or family members will. Ultimately, we’ll all be heavily impacted.
I don’t think this is “Holy Book” stuff. Those on the Corny side like to think so, obviously, since that helps them to diminish the hard realities we are facing. But pure fact, science and logic are painting quite a different picture than the one you are portraying in your most recent post above, bobinget. Do you really believe what you just wrote?
GregT on Wed, 7th Jan 2015 11:48 am
“there will be fighting over what remains. Actually, that is already occurring just on a somewhat subdued level.”
Only somewhat subdued NWR, depending on your location. Millions have already been displaced, or brutally murdered.
Davy on Wed, 7th Jan 2015 11:50 am
Greg, 11 degrees here with 20 knot wind gusting to 26. I was going to get the skid steer out and do some brush work but this kind of cold is just not great for equipment. Instead I am going to work on cabin issues. I need to do some insulation work on a few drafty spots. Got my caulk gun and a little can of foam insulation. The wood stove is cranking. I love warming my ass on a hot wood stove. That is my enjoyment of the day. Now that is a simple enjoyment an ass warming by the wood stove.
I have been up your way before. Nice country. I could easily live there if I was not in an urban area. I was curious where you and the wife are moving. Sounds like you are heading out of the urban area into the rural. I think you are making a wise prep decision beside the bonus of an increase in your spiritual wealth of being closer to nature.
Northwest Resident on Wed, 7th Jan 2015 11:52 am
GregT — Exactly! Subdued — as in, “subdued” from my and your perspective, as in, it hasn’t affected many of directly — yet — and the MSM does a very good job of not reporting on it, for the most part. But that is all about to change, I suspect. In fact, as I constantly post on this forum, I suspect that there are all kinds of harsh realities that we have been insulated from that will soon be coming home to roost, very near term most likely.
Davy on Wed, 7th Jan 2015 11:56 am
Bob, do you really believe Europe will ever recover let alone in 2015?! Europe is on the downward spiral and we will soon see pissed off people in the streets. We can call that a recovery of spirit of people tired of being shafted by the 1%ers and the TPTB. Corruption in Europe is terrible. The reason people tolerated it in the past was their traditional good life. Just wait and see what happens when that is no longer the case.
GregT on Wed, 7th Jan 2015 11:59 am
“I love warming my ass on a hot wood stove. That is my enjoyment of the day.”
Beats the hell out of 3 hours of gridlock to drive 20 miles to the office. I don’t care what the temperature is.
Looking forward to a simpler life, the insanity here is really starting to drive ‘ME’ insane. Hope I’m not too late.
GregT on Wed, 7th Jan 2015 12:02 pm
Ya NWR,
I picked up another thousand rounds yesterday. If it is never needed for more serious circumstances, it will be enjoyed at the range.
bobinget on Wed, 7th Jan 2015 12:04 pm
Plant speaks true. KSA has opened up spigots
full tilt boogie in a last ditch effort to subdue Russia,
and Iran. This cannot be good for water-cut.
Remember Saudi (and US) efforts to overthrow Syria’s Assad regime failed. That part of the ongoing proxy war with Iran and Russia is all but over. Today’s battleground centers around Libya, Iraq Nigeria, Yemen and the Saudi heartland.
I’ll guess we see a palace coup or Saudi Spring
or hit and run attacks on choke points, before Galwar runs out.
WE have no idea when (not if) KSA will produce more salt water then oil. A decade is not out of the question. One thing is certain. Pushing water-cut
at this time is shortening any oil field’s life expectancy.
bobinget on Wed, 7th Jan 2015 12:39 pm
Asia, Europe, certainly Mid-East cultures have in past five, three, one thousand years seen much worse. Only today’s refugee situation approaches horrors of WW/2 population displacements.
And yes Europe recovered two world wars last century that, let’s not put too fine a point on it, were more difficult then today’s misguided finance policies.
Sure, over five thousand have died for Putin’s ambitious plan to bring back USSR.
Compare that horror to WW/1’s battle of the Somme
An estimated 1,000,000 men were killed or wounded, including about 485,000 British and French troops. That’s fucking one million in a single battle. We just don’t know how to throw a real war like that anymore. (at least in Europe)
So don’t sell highly motivated , educated, skilled,
Europeans short. “There will always be an England”
and France and Germany even Italy and Greece.
rockman on Wed, 7th Jan 2015 1:22 pm
“Oil prices have always bounced back and this is not going to be an exception.” Of course they will. Just like they did when prices cratered from the $107 peak in 1980 to around $35/bbl in 1986. It only took 18 years to “bounce back up” to stay consistently above $40/bbl in 2004.
Come on 2032…can’t hardly wait for that bounce. LOL. Actually I don’t think it will take another 18 years. OTOH no one, and I mean no one, thought it was going to take 18 years in 1986.
Makati1 on Wed, 7th Jan 2015 6:56 pm
Davy, weather here in Makati, as usual, lows in the 70s, highs in the 80s and partly sunny with a chance of showers later. The only change is when a typhoon passes by. Rainfall is about 60″ annually with a dry season starting soon that limits the rain to showers or maybe a thunderstorm every few days.
Rainfall at our farm location is ~120″ per year and pretty evenly distributed over the 12 months. Same temperature range. Our water system will be be a cistern with two spring backups and a river down the hill.
Hope to break ground this year for the farm house but have to cut a drive into the property from the paved road first. That is about 1/4 mile long and passes through two other properties. Then get the electric company to bring power in until we get the solar panels and other backups in place.
I too hope we have a few years before all of that becomes impossible. But, if necessary, we could build the typical native “nipa hut” and life off the land.