Daniel Yergin Thinks The Worst Is Over

IHS‘s Vice Chairman and author of best-sellers like ” The Prize“, Daniel Yergin, thinks the worst is over for oil prices.

Yergin has been an avid follower of the oil markets for decades. For those that aren’t aware of who Daniel Yergin is, he’s a Pulitzer Price-winning American author and a co-founder of the Cambridge Energy Research Associates (now part of IHS). He was one of the few economists to come out and attack the peak oil theory noting that there have been multiple times in the past people were concerned about the idea of running out of cheap oil.

Given the level of magnitude in this downturn and what technological advances have been achieved since the 07-08 period, it’s safe to say that Yergin has been right on his prediction. As part of IHS, Yergin is widely followed in the energy community and a highly regarded “expert”.

In a conference in Norway, Bloomberg reports that Yergin believes the worst is over.

He also noted that once the market “balances,” the next challenge will be to work off the excess supplies in storage. In light of the OPEC meeting this month, he notes that production capped at current levels won’t do much to balance supply and demand.

We are in agreement here with Daniel Yergin. There are definitely a few more wildcard in this overall mix that he’s leaving out, but supply is certainly decreasing. Venezuela, which will be covered in our OMD tomorrow, continues to see political unrest. In July, Venezuela produced nearly 2 million b/d, so any prolonged outages there would see a significant impact on global supplies.

As the oil (NYSEARCA:USO) markets move through the rebalancing phase, we could see continued volatility. September should prove to be an exciting month for traders as headline risks will provide positive price movements, while additional slowdowns in refinery throughput could see downward pressure on prices.

What do you think about Daniel Yergin’s comments on the oil markets? Let us know in the comment section below!

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49 Comments on "Daniel Yergin Thinks The Worst Is Over"

onlooker on Mon, 5th Sep 2016 7:38 am 



Daniel Yergin is the epitome of the irrational denial position to the common sense notion that we are fast depleting our main energy source and that this will create havoc in the Economic sphere. Again to casually say no downturn lasts forever and that prices are too low utterly misses the point that this is a systemic crisis and that simple economic tools cannot solve it. Just a mouthpiece for the Establishment which has been reluctant to acknowledge anything related to peak oil and its dynamic.

Cloggie on Mon, 5th Sep 2016 7:41 am 



Peak oil isn’t what it used to be.

The event isn’t called off, but the oil age is moving into overtime.

Cloud9 on Mon, 5th Sep 2016 7:44 am 



You cannot herd the sheep and gather new investors by saying the game is ending. It’s a confidence game, pure and simple.

Hello on Mon, 5th Sep 2016 7:56 am 



The game is not ending by a long shot.

Record energy consumption, record Co2, record environmental destruction, record population growth.

We’re just getting started. Once we’re done, no tree won’t be standing, no water will be clean, no bird will be flying.

We’re not fooling around, we mean business.

Davy on Mon, 5th Sep 2016 8:08 am 



“Downturns end, it is not a permanent thing” The words of a true snake oil salesman! If you believe downturns end then why not prosperity ends or civilizations end. There is far more evidence that civilizations end than the alternative he proselytizes. What is permanent and what isn’t? There is no reason why a downturn cannot be a permanent thing in the ending of a civilization. It is our pseudo scientist and false prophets in the economics trade that make us think we are a perpetual motion civilization

I know I am guilty of claiming a collapse is imminent for years now but tell me where is the bulk of the evidence? Are we looking at a future of growth and prosperity or one of decline and decay? I think that is clear to most sane participants on this board. My position has always been a focus on not if but when and how long. I do not deny the momentum of the status quo. I have been studying this remarkable force we call the status quo for years now. Yet, Nature is a far more potent a force and I do not think humans can continue to force Nature at all levels and continue to drive forward the momentum of the status quo.

We are entering a period of the inertia of decline, decay, and deflation. There is no reason oil is not a part of that. In fact oil is profoundly a reason for that inertia and that is the unintended consequences of decades unrestrained growth. There are trade-off in life. No one will argue against that statement. The key point here is how much time do we have before this charade of ever growing growth cycles ends? Time is a profound variable without control nor manipulation. It represents a constant but we often mistake this constant as our reality and that is a mistaken belief in immortality.

Cloggie on Mon, 5th Sep 2016 8:12 am 



“I know I am guilty of claiming a collapse is imminent for years now”

Peak oil, where art thou?

(Free after God calling for Adam)

N.B. There are quite a few right-wingers yearning for peak oil under the motto “worse is better”.

onlooker on Mon, 5th Sep 2016 8:24 am 



Again the Deniers on this board like to focus of timelines not met. Yet what Davy says is totally true. None of the sane in this planet can deny that the trajectory is of the D’s which Davy alludes too. We cannot overcome the underlying basis of our overshoot being a huge population with needs and wants and an Earth whose systems are weakening and fraying more with each day. Thus, the only questions remaining is how much and how fact will our collective fall be.

joe on Mon, 5th Sep 2016 8:25 am 



With the EUselss Merkel having cored out the future of a stable Europe, oil prices might be the lest thing on peoples minds. The obvious attempt to put Islamists on every border will only dampen oil demand, as population grows and poverty increases while we all slowly microwave ourselves. Yes, thats it for oil, the worst is over. We have outgrown the death of 20 of the 27 EUseless countries.
America thrives at 0% interest and rising, yes, we all need a stronger dollar because oil price rises and interest rate rises are the two hands around the neck of the average person. Billarry Trumpton doesnt give a f**k about you.
Dont worry though, the midterm trend is right where it should be, on the back of a drone heading straight for you.

Cloud9 on Mon, 5th Sep 2016 8:47 am 



One of the gifts I have been given is the opportunity to travel to places like Knossos and Mesa Verde. I have walked the Appian Way and heard the whisper of the wind through the ruins of Delphi. All of these sites exhibit the remains of extraordinary civilizations that have come and gone. All of these population centers were made possible by very simple and robust supply chains that were for the most part powered by human and animal muscle. Some came to an end because of climate change, earth quakes and pyroclastic flows. Others fell due to invasion, political and economic collapse.

The lesson here is, no matter how basic their infrastructure was, at some point it collapsed.

One of the lessons war in Syria and the economic collapse in Venezuela teaches us is that the local power grid is one of the casualties of chaos.

When I look at the just in time supply chains we have built and the universal dependence of electricity and the fact that we have moved from a paper economy to a virtual economy, I shudder at the frailty we have built into the system.

A volcano could blow Knossos off the face of the planet. A century’s long drought could dry up the water of Mesa Verde. An invasion and economic collapse could shut down Rome. But nothing has ever existed to facilitate rapid, relentless collapse like a failing power grid.

Rome went from a population of a million and a half to a few thousand over a period of years. When the grid goes down, Miami will do that in a matter of months.

ghung on Mon, 5th Sep 2016 9:34 am 



onlooker said; “Just a mouthpiece for the Establishment which has been reluctant to acknowledge anything related to peak oil and its dynamic.”

These power brokers, such as they are, can’t afford to open the giant can of worms that is limits to growth. They have no solutions, and trying to get ahead of these things involves stepping on a lot of toes while creating uncontrollable levels of cognitive dissonance. Easier to marginalise those of us who hold to reality, while pretending they’re in control of things.

Yergin has to believe he’s right.

brough on Mon, 5th Sep 2016 9:41 am 



Daniel Yergin, like many in the oil patch are looking for the elusive spike to come.
If it does come, I a have feeling in the pit of my stomach that it will be truncated by affordability problems. If he wants the spike to be sustained his banking and political pals will have to let out some more of the credit/debt rope. A rope the global economy will hang itself with, if it has’nt already.

rockman on Mon, 5th Sep 2016 9:42 am 



Cloggie – “I know I am guilty of claiming a collapse is imminent for years now” I’ve come to view the “collapse” predictions in the same light as those offering a future PO date. Just as the date has no relevance neither does collapse given that the word has no real definition. Years before the latest POD cycle the “Mad Max” theme was not uncommon. Eventually those folks were teased enough they dropped that angle and switched the the “collapse” verbiage since, having no defining metrics, they can’t be as readily challenged.

Sorta like being “a little pregnant”…the economies were “a lille collapsed” when oil was $100+/bbl but the full “collapse” will arrive when PO really kicks in…especially when we reach that magical PO date. LOL.

shortonoil on Mon, 5th Sep 2016 9:49 am 



The last time that the world found enough reserves to replace what it was extracting was in 2000. It has been going down ever since. In 2016 it will be practically zero.

https://assets.bwbx.io/images/users/iqjWHBFdfxIU/icbkDFACM4iA/v2/-1x-1.png

Obviously, Yergin is not allowed to look at a graph! Also, prices are not going to increase enough to save the industry, for the same reason that whales don’t fly. It would violate the laws of physics. The market is not going to rebalance for the same reason.

We have heard the same mantra for three years. Prices are going to recover, and the market is going to rebalance. This chant is starting to get a little old. If you have such a wondrous crystal ball Mr. Yergin could you tell us when all these miracles are going to occur.

We didn’t think so!

http://www.thehillsgroup.org/

rockman on Mon, 5th Sep 2016 10:04 am 



brough – “…like many in the oil patch are looking for the elusive spike to come.” Not a difficult expectation given that such spikes/busts have been a constant in the oil patch for over 150 years since Col. Drake poked the first hole. The only sustained period of price stability was from the 40’s thru 60’s when the Texas Rail Road Commission functioned as the only truly effective “oil cartel” the world has experienced.

Predicting oil price bottoms/peaks takes very few brain cells. Calling the magnitude and timing a very different matter.

Kenz300 on Mon, 5th Sep 2016 10:25 am 



Big Oil’s Nightmare Comes True – EcoWatch

http://www.ecowatch.com/california-climate-policy-1988157045.html

The oil companies and the auto companies need to get their collective heads out of the sand and realize that the world is changing with or without them.

Climate Change is real….. it will impact all of us…

It is time to move away from fossil fuels and embrace alternative energy sources like wind, solar, wave energy, geothermal and second generation biofuels made from algae, cellulose and waste. They need to change their business models and move from being OIL companies to ENERGY companies. The auto industry needs to move from just building compliance vehicles to embracing electric vehicles and start putting development and advertising behind them..

The world is moving to embrace alternative energy sources…….. the fossil fuel companies can transform themselves into “energy” companies or they can die a slow death.

As Climate Change impacts more people there will be a bigger backlash against fossil fuels.

Clean energy production with wind and solar…….

Clean energy consumption with electric vehicles……

Northwest Resident on Mon, 5th Sep 2016 10:37 am 



When I look at the picture of Yergin posted with this article, I see the face of delusion, of utter cluelessness. He epitomizes the all-too-human trait of denial, of molding and twisting fact to fit his preconceived notions of what “should be”, versus what is. And Yergin is not a stupid man, far from it. We can honestly suspect that Yergin is a man trapped in his “safe” world view by the terror of what is coming, a terror that he almost certainly is aware of on an unconscious level but incapable of recognizing. And the only way to push that terror away is to keep repeating the comforting lies, to proclaim those lies as truth and to strive in convincing others that his “safe” world view is the real one. To do otherwise would be to submit to the horror that awaits just outside the safe confines of his delusional inner sanctum.

onlooker on Mon, 5th Sep 2016 10:50 am 



I think NW your describing what many around the world are feeling right now and how they are choosing to cope with it.

Truth Has A Liberal Bias on Mon, 5th Sep 2016 10:54 am 



DY is a fucking retard

Davy on Mon, 5th Sep 2016 10:56 am 



NR, remember a year or so ago Yergin responded on our board to another article where we roundly crushed him in the humiliation of group criticism. He came on here boasting about his credentials and how smart he was. He is a loser with a capital L. If I see the reference to his book “The Prize” anymore when mainstream media introduces him I will PUKE!

Northwest Resident on Mon, 5th Sep 2016 11:20 am 



Yeah Davy, Yergin is the Neville Chamberlain of the peak oil denier brigade. Highly educated, credentials that would probably fill five pages of single-spaced typing paper, oil industry plaques and awards for “fine thinking” plastering the walls of his house. None of which enable him to see the cold, hard truth.

Apneaman on Mon, 5th Sep 2016 11:39 am 



“He was one of the few economists to come out and attack the peak oil theory noting that there have been multiple times in the past people were concerned about the idea of running out of cheap oil.”

So? It has no bearing on peak oil either way if there were 10,000,000 inaccurate predictions or none at all. People keep falling for these illogical arguments. It reminds me of the coin question. If you’re going to flip a coin 100 times and the first 99 flips have come up heads what are the chances the next flip will be tails? 50-50 same as every flip, but the majority of folks will think the chances are greater for tails – they’re not. Previous coin flips have no bearing on the next flip. Same for predictions. Weather something is accurate or inaccurate is not based on the number of previous predictions. So Danny boy is an economist. If anyone is looking for an abysmal record of failed predictions look no further than the record of that secular priestly class. Batting 0 for 1000. All them econ 101 economist made predictions that globalization was the cure for all of humanity’s woes back in the 1990’s – how’s that working out? How many predicted 2008 or any crash ever? If you made economic predictions by a coin toss you would have better record than their pseudoscience……. by 50%.

Cloggie on Mon, 5th Sep 2016 11:42 am 



@rockman – you seem to attribute a quote made by Davy to me. I could indeed have made these kind of remarks between 2007-2013, but not in 2016, now that I have a slightly more relaxed view regarding the timing of peak oil.

onlooker on Mon, 5th Sep 2016 12:07 pm 



Yes DY, got all his awards and earned his credentials with brains and maintains them by selling out to what the Establishment wants to hear or because he refuses to analyze without bias information that undeniably refutes his assertions.

Davy on Mon, 5th Sep 2016 12:28 pm 



Clog, I have a more relaxed view of peak oil. This has been more than offset by abrupt climate change and the decay and deflation of the global economy. The combination of the three can not end well for humans. When you are in an extinction process and have all the systematic problems we have how can one sit back relaxed and optimistic?

Anonymous on Mon, 5th Sep 2016 1:03 pm 



What Danny Jerkin ‘thinks’ is immaterial. He gets paid to hear what the investor\ruling classes what to hear, and want US to hear. Don’t think the elites are immune to groupthink, herdthink, or good-times-are-just-around-the-corner speak either. Danny and others like him, are shills for the status-quo, and nothing more.

speculawyer on Mon, 5th Sep 2016 1:39 pm 



DY says the price is going back up?

That must mean the oil price will stay low for many more months.

Cloggie on Mon, 5th Sep 2016 1:46 pm 



Davy, my “relaxedness” is solely confined to the date of peak oil.

JimW on Mon, 5th Sep 2016 4:16 pm 



It’s not a matter if Oil will peak. It will. Or that demand will fall. It will. It’s a question about what happens when they do. A smooth transition to a Utopian life using alternatives has no basis in reality. It is already risky to invest in capital-intensive projects. What about the risk of crashing world-wide economies? We better wake up before the Exxon-Mobils of this world quietly liquidate their assets, buy back their shares and go out of business. Now what?

speculawyer on Mon, 5th Sep 2016 6:26 pm 



This time when the high prices come back, we will have an alternative. There will be fairly wide assortment of affordable plug-in cars.

Due to the lower price, I presume that Plug-in hybrids will sell better than pure electrics. But somewhat affordable long range pure EVs are coming. The Chevy Bolt with a 200 mile range is coming before the end of the year for $37500 before incentives. Yeah, that is still pretty pricey but driving on electricity is much cheaper than gasoline. And as I said above, plug-in hybrids will probably be the choice of most.

Lucifer on Mon, 5th Sep 2016 6:36 pm 



Who cares what DY says, the earth will burn soon anyway and most people will end up in Hell.

shortonoil on Mon, 5th Sep 2016 6:37 pm 



“Davy, my “relaxedness” is solely confined to the date of peak oil. “

Is what you are calling Peak Oil when the little that still exists can no longer be pumped out any faster?

https://assets.bwbx.io/images/users/iqjWHBFdfxIU/icbkDFACM4iA/v2/-1x-1.png

The world has hit Peak Oil because there will never be any more oil than what is now known, and that will only be available if the price doesn’t go down any further.

Unfortunately, it is heading down, and those reserves are going with it.

http://www.thehillsgroup.org/depletion2_022.htm

At somewhere around $20 there will be almost no oil, because most of the industry will be bankrupt, or shut in from social disintegration. There is at most about 5 years for most of the world. The richer nations may extend that somewhat by cannibalizing their own civilizations. But the end of the oil age is at hand, and only a fool would deny it.

http://www.thehillsgroup.org/

Cloggie on Mon, 5th Sep 2016 7:07 pm 



“The world has hit Peak Oil because there will never be any more oil than what is now known”

Peak oil is not about reserves, it is about production rate.

I really must urge you to study the phenomenon of the Pork Cycle, economics 101 really.

https://en.wikipedia.org/wiki/Pork_cycle

bahamased on Mon, 5th Sep 2016 7:18 pm 



Pork Cycles, I like it

Now where can I find both a male and female barrel of oil so they can breed and give us a bunch of baby-barrels

jjhman on Mon, 5th Sep 2016 7:24 pm 



I remember not so many years ago when we all laughed heartily at DY’s price predictions. We used to call the price in oil in “Yergins” because he was low by multiples of the price.

That was then. This is now. He also predicted that oil output would be on an “undulating plateau” for some years before there were shortages and that is exactly what we have seen since about 2005.

So my impression of him is that he has a pretty good eye for the short to medium term price and flow of oil but, like everyone, mcan be wrong. My guess is that his “talent” is underlined by a too strong belief in the cornucopian meme and that he has no interest in the larger implications.

shortonoil on Mon, 5th Sep 2016 8:35 pm 



“Peak oil is not about reserves, it is about production rate. “

Do you understand the relationship between rate that oil is removed from the ground, and how much of it is in the ground. If it isn’t in the ground AND available, how fast that you can remove it is irrelevant. Below $20 you can’t remove it.

That would sort of be Peak Oil ; wouldn’t it?

Keith McClary on Mon, 5th Sep 2016 10:40 pm 



short wrote: “The last time that the world found enough reserves to replace what it was extracting was in 2000. It has been going down ever since. In 2016 it will be practically zero.” It’s worse than that. Your linked graph shows there have only been 3 years since 1985 when discovery has exceeded consumption.

rockman on Mon, 5th Sep 2016 10:58 pm 



Cloggie – Sorry. Had cataract surgery on right eye last Tuesday and still a bit cross eyed. LOL

“Do you understand the relationship between rate that oil is removed from the ground, and how much of it is in the ground.” Well, Venezuela is doing a great job these days proving there no such f*cking relationship. LOL.

peakyeast on Tue, 6th Sep 2016 12:19 am 



@rock: The relationship is there, but there is also the socalled above ground factors – often referring to political problems. In this case its both political and economical.

But, I know you knew that already 🙂

I can recommend getting surgery on both eyes that will help the crosseyedness.

Its a little like drinking beer – you must always drink an even number otherwise you will be out of balance. 😉

Cloggie on Tue, 6th Sep 2016 2:01 am 



“Had cataract surgery on right eye last Tuesday and still a bit cross eyed.”

Hope you recover soon. My father had such an operation once and enthusiastically told me afterwards that it was as if for years he had carried colored cellophane candy paper before his eyes without realizing it.

anarky321 on Tue, 6th Sep 2016 5:35 am 



oh Danny…the worst hasn’t even started yet

shortonoil on Tue, 6th Sep 2016 7:12 am 



“The relationship is there, but there is also the socalled above ground factors – often referring to political problems. In this case its both political and economical.”

It all boils down to the fact that we now have a civilization that is being held together with bailing twine and duck tape. The machinations of a few central bankers is like trying to tie the front door closed during a hurricane with a piece of packing string! It may work until the roof blows off!

Cloggie on Tue, 6th Sep 2016 7:19 am 



New economic data (IFO prognoses) just in concerning trade balance surpluses in 2016 of the top economic international players:

1. Germany $310B (+$25B)
2. China $260B (-$70B)
3. Japan $170B (?)

http://www.spiegel.de/wirtschaft/unternehmen/export-deutschland-ueberholt-china-beim-leistungsbilanzueberschuss-a-1111090.html

In 2016 Germany will overtake China again.

In absolute terms, German export remains flat $1.1T:

http://www.tradingeconomics.com/germany/exports

Where China contracts from $2.3T to $1.8T (that’s a lot in 1 year):

http://www.tradingeconomics.com/china/exports

Not sure what Yergin would have to say on the matter.

Davy on Tue, 6th Sep 2016 7:32 am 



Clog, that is the worst of information in a bifurcating global world to be number one in exports. Basically Germany is setting itself up for a big economic fall. We know China is facing the worst of all with its huge export driven economy. What is so horrible about China is the disruption this mad dash to the largest export economy has produced. They have destroyed their ecosystem and disrupted their social fabric. They have created huge megaregions which will not be supportable in a failing global world. Germany is much better place than China but it is in a bad position with a large population with high dependence on complexity. You are not impressing me with your numbers you are exposing just how far into overshoot your northern Europe is, Holland included, with both overpopulation and over dependence on consumption for complexity

Sissyfuss on Tue, 6th Sep 2016 8:22 am 



Well, at least Lucifer is consistent with his observations.

Mark Ziegler on Tue, 6th Sep 2016 9:32 am 



That would be good for corporations and investors but that is about all. Rising energy costs will hurt the ordinary consumer and take us all down the road to recession and depression. The ordinary person is tired of hearing about the problems of the rich banks and investors.
Let us begin to build a national rail system. The automotive industry can change for the good of the people.

speculawyer on Tue, 6th Sep 2016 10:40 am 



Hey, Rockman, I hope your recovery from surgery goes well! We need your continued wisdom.

shortonoil on Thu, 8th Sep 2016 1:03 pm 



“Cloggie – Sorry. Had cataract surgery on right eye last Tuesday and still a bit cross eyed. LOL”

Hay ROCK, I’ve got one of those coming up in a few weeks. We’ll both be sitting around starring at our left hand with our right eye. They say it doesn’t hurt a bit, and does wonder for your sight. They also say that you won’t be able to find your way home either. The whole thing makes me a little suspicious.

Don Stewart on Thu, 8th Sep 2016 1:55 pm 



Cataract Surgery
My experience is that it clears up everything except self-deception.
Don Stewart

shortonoil on Thu, 8th Sep 2016 3:49 pm 



Thanks Don?

I feel better already. Have you got a big ball of string that I can borrow?