Guess What Happened The Last Time The Price Of Oil Plunged Below 38 Dollars A Barrel?

31 Comments on "Guess What Happened The Last Time The Price Of Oil Plunged Below 38 Dollars A Barrel?"

makati1 on Wed, 9th Dec 2015 7:11 pm 



The US house of cards is shaking like no other time in history. When will they fall and how hard? We shall see.

Pennsyguy on Wed, 9th Dec 2015 7:33 pm 



Is it a coincidence that we are told that we in (another) War On Terror? Even as living standards drop in the US and Europe, people probably won’t want to “throw the bums out” if they think the are being protected from the evildoers under their beds.

makati1 on Wed, 9th Dec 2015 8:47 pm 



Exactly, Pennsyguy. Keep the piggies afraid and promise them protection from the big bad wolf. Meanwhile, put the butcher kettle over the fire and sharpen the knives. Ignorance is bliss.

Mark Bucol on Wed, 9th Dec 2015 9:22 pm 



This low price for an extended time is killing the small producers. A company I am familiar with had planned to drill several parcels in Texas and Colorado next year. Their latest well in TX was a money loser at $50 per oil or less, so they are putting their plans on hold, partly because they can’t raise any money to go forward. In a nutshell they are going out of business and dozens of other oil companies are likewise going down the tubes.
In less than a year US oil production will be falling like a rock, down to less than 7 million barrels a day by 2017 if current trends continue, IMO.

antaris on Wed, 9th Dec 2015 9:29 pm 



If it had not been for the money printing, US production probably would be about 4.2 mbd down from 5.0 in 2008

ennui2 on Wed, 9th Dec 2015 10:01 pm 



“Is it a coincidence that we are told that we in (another) War On Terror?”

Yes. Take off the tinfoil hat.

makati1 on Wed, 9th Dec 2015 10:05 pm 



For those who live in Europe and tohse who doubt a nuclear exchange is coming:

http://orientalreview.org/2015/12/09/grim-prospects-of-nukes-in-poland/

“The appearance of American nuclear weapons inside Poland – regardless of the rationale or explanation for that decision – will signal a radical and dramatic exacerbation of the military and political status quo in Europe, lowering the barriers to the use of nuclear weapons in this densely populated region of the world and, ultimately, precipitating a real return to the years of the Cold War, to years of military confrontation between NATO member states and countries that were not part of this militaristic bloc.”

Are we soon less than one minute from ‘midnight’?

GregT on Wed, 9th Dec 2015 10:29 pm 



for you ennui2:

“Conspiracy theory” is a term that at once strikes fear and anxiety in the hearts of most every public figure, particularly journalists and academics. Since the 1960s the label has become a disciplinary device that has been overwhelmingly effective in defining certain events off limits to inquiry or debate. Especially in the United States raising legitimate questions about dubious official narratives destined to inform public opinion (and thereby public policy) is a major thought crime that must be cauterized from the public psyche at all costs.”

“Conspiracy theory’s acutely negative connotations may be traced to liberal historian Richard Hofstadter’s well-known fusillades against the “New Right.” Yet it was the Central Intelligence Agency that likely played the greatest role in effectively “weaponizing” the term. In the groundswell of public skepticism toward the Warren Commission’s findings on the assassination of President John F. Kennedy, the CIA sent a detailed directive to all of its bureaus. Titled “Countering Criticism of the Warren Commission Report,” the dispatch played a definitive role in making the “conspiracy theory” term a weapon to be wielded against almost any individual or group calling the government’s increasingly clandestine programs and activities into question.”

“This important memorandum and its broad implications for American politics and public discourse are detailed in a forthcoming book by Florida State University political scientist Lance de-Haven-Smith, Conspiracy Theory in America. Dr. de-Haven-Smith devised the state crimes against democracy concept to interpret and explain potential government complicity in events such as the Gulf of Tonkin incident, the major political assassinations of the 1960s, and 9/11.”

http://www.globalresearch.ca/conspiracy-theory-foundations-of-a-weaponized-term/5319708

twocats on Wed, 9th Dec 2015 11:05 pm 



Shit is getting REAL up in HERE!

Woo-hoo! Got my popcorn, got my MREs, a little ammo and a lot of family all over the United States and beyond, so I say, let’s DO THIS!!

Pennsyguy – I’m not going to go so far as to say either Paris or San Bernadino were false flags, and I even doubt any intelligence agency knew what was going to happen. But I wouldn’t be surprised if several months ago the United States (Pentagon or CIA) went to their contacts in Saudi Arabia who fund terrorists and said, “We’re not here to finally kill you. What we want is for you to push your assets to make some big moves as soon as possible. We need chaos, yesterday!” But meh, I’ve never really understood how this stuff works and I’m not that interested in it.

The real interesting stuff is how this downswing will play as compared to 2008-09. 2007 was a high-flying time when people had savings and assets (regular people), the economy was strong in general. This time is not the case. People have drawn down investments and only the wealthy have recovered. Most small, medium businesses are just coming out of their hidey holes. Also, as relates to peak oil, we had almost by definition a better quality base production in 2009. We’ve had six years of steady depletion of our super-giants, and from what I can recall the discoveries in the past decade have been somewhat mediocre.

“Resilient” is not how I would describe the majority of the world’s mega-cities. If the distribution of basic goods and services starts to break down, we could be talking a month or two to go from what we have now to, well, very bad.

sweet dreams!

makati1 on Wed, 9th Dec 2015 11:19 pm 



For those who might be interested:

“The global reset is not a “response” to the process of collapse we are trapped in today. No, the global reset as implemented by central banks and the BIS/IMF are the CAUSE of the collapse. The collapse is a tool, a flamethrower burning a great hole in the forest to make way for the foundations of the globalist Ziggurat to be built.

As outlined in my last article, economic disaster serves the interests of elitists.When you look at these actions by the Federal Reserve and the U.S. government in particular, questions arise. Is it “stupidity” that is causing them to sabotage the golden goose? Is it hubris and greed? Their actions are clearly facilitating a program of incremental implosion, yet they continue to ignore the obvious. Why?

The people who ask these questions are operating on a false assumption; they have assumed that the international bankers and the puppet politicians they control have any interest in protecting the longevity of the U.S. The fact is they do not. They have no loyalty whatsoever to the U.S. system, nor do they see the U.S. as “too big to fail.” This is utter nonsense to globalists. Rather, they see each nation and central bank as a piece in a game, much like chess. Some pieces have to be sacrificed in order to gain a better position on the board. This is all that the U.S., the Federal Reserve and even the dollar are to them: expendable pieces in a larger game.”

http://www.zerohedge.com/news/2015-12-09/global-economic-reset-has-begun

If you doubt this … open your eyes or better yet, wake up those two brain cells you have left and use them.

makati1 on Wed, 9th Dec 2015 11:29 pm 



A bit off topic, but…

Understanding “Radicalization”, “Terrorism” and Xenophobia in America

“… One of the problems is that nobody is asking the “terrorists” what motivates them and why they feel as they do. Doing so and then listening to their answers would be too hard to handle for uber-patriotic Americans who have been indoctrinated into the cult of American Exceptionalism … It seems that any information that might cause cognitive dissonance in us “sheeple” is carefully kept away from our fragile souls for political, economic or national security reasons … And thus we are deprived of the true facts of any case that is usually exaggerated by the propagandists in charge of “public enlightenment”. Therefore we consumers are forced to either adopt the approved story line or are left to develop our own theories based on inadequate information, and cunning campaign speech-writers or their ignorant presidential candidates do the same and are tempted to inflame their voters with conspiratorial versions of what will soon become the “conventional wisdom”. So, being too busy to do the time-consuming searches for the real truth, most of us accept the propagandist’s version that is then spread about on Fox News, CNN, or even NPR, MPR, PBS or at the local watering hole…”

Rogers and Hamerstein wrote:

“You’ve got to be taught to hate and fear; you’ve got to be taught from year to year.
It’s got to be drummed in your dear little ear. You’ve got to be carefully taught.

You’ve got to be taught to be afraid Of people whose eyes are oddly made,
And of people whose skin is a different shade. You’ve got to be carefully taught.

You’ve got to be taught before it’s too late, before you are six or seven or eight,
To hate all the people your relatives hate. You’ve got to be carefully taught! …”

Some on here are still wearing those blinders and rose colored glasses and will never see the real world. Too bad.

makati1 on Wed, 9th Dec 2015 11:30 pm 



Ref to above: http://www.globalresearch.ca/understanding-radicalization-terrorism-and-xenophobia-in-america/5494578

theedrich on Thu, 10th Dec 2015 4:40 am 



Humpty Dumpty had a great fall.  (And by the way, Mr. Dumpty was not an egg, which is not mentioned in the rhyme.)  The thing the bribe-ocrats and the MSM Ministry of Propaganda is not telling us, however, is what Gail Tverberg, among others, has long been mentioning:

“All the King’s horses and all the King’s men
Could not put Humpty together again.”

Davy on Thu, 10th Dec 2015 4:44 am 



“Instead of fixing our problems after the last crisis, we just papered them over with lots of money printing and lots more debt. And of course all of this manipulation just made our long-term problems even worse. I really like how Peter Schiff put it recently…”. I see a disconnect here with “fixing our problems”
There is no fix. There is no fix for the status quo. The status quo has a path it must follow. It has followed that path.

It does not matter it took what could be considered the wrong path. The status quo had no “right” path. The problems are with the status quo system itself. What happened with the actions that prevented the collapse in 08 were only extend and pretend policies that believed we can continue on with the status quo in “any form”. There is no other system or reformed status quo that would work. Growth is central to the system and we are at the end of status quo growth. We can talk social fairness. We can talk ecologically less damaging but only within the status quo. Without the status quo there is no management of these other issues. We know from history how power concentrates and along with it wealth.

This “fixing” is really just about buying time. We could say buying more time or less time. Maybe we bought some more time with the QE and rate repression maybe not. What was the alternative? The only alternative I can see from the 08 crisis is we could have begun the rebalance then. We could have allowed a recession to start then. We don’t know any more today or then if a recession could have bought us more time I like to call a long emergency of rebalance. We don’t know now if the recession that may be upon us in 2016 will not usher in dangerous and deadly collapse. Dangerous and deadly collapse is a risk today and it was no different in 08.

The system is clearly near limits of growth. Without growth this complex system that requires growth will decay and collapse. When will the decay break the system? It is possible we could have allowed a recession in 08 and ushered in a long emergency of crisis and rebalance. Instead we bought more time that benefited some at the expense of others and the environment.

Unfortunately without that 08 crisis rebalance initiation we continued on with the mal-investment across the board from commodities to development. This mal-investment was global especially in China and the US. In this sense extending and pretending post 08 crisis was a waste. This is especially true where large developments took place destroying valuable land with development with no future.

We extended and pretended with population. We allowed 80MIL a year more people to add another half BIL to an already overpopulated planet. A recession in 08 may have initiated a crisis that would have started the rebalance with population.

I see recession and crisis as our only hope to starting a rebalance and adjustment to the realities of overshoot and limits of growth. In that respect we could have begun “fixing” our problems. Any other “fixing” would only have been another version of extend and pretend that the status quo can continue by any brand. Any other policies post 08 other than rebalance ones may have been more fair or less destructive growth but the point is the meme was still growth and development without rebalance.

Rebalance requires decline. Decline means decay and all the difficult results that occur when decay begins. We will have to allow for abandonment, dysfunction, and the irrational. We will have to shed economic activity and population. This will be ugly, painful, and deadly. There is no other way to deflate a bubble our species has become with a system that feeds us all.

I myself believe from a macro point of view a recession that likely would have turned into a collapse process in 08 is better than a collapse process that will likely start next year. In actuality the collapse process started in 08. In 08 the wealth transfer began. This process has been in motion. This fact makes it more likely a collapse process initiation with a stronger drop and duration before stability returns is more likely next year. We delayed tough medicine and now we will have to take a higher dose of decay quicker.

I myself benefited from 8 years of status quo. I downsized, honed my collapse attitude, and begun serious prep work. I now feel that I am competent with prep and ready for the short term. I am ready to help others. My longer term prep of permaculture grass fed grazing is almost in place. I am under no illusion whatsoever that these preparations will save me. So many others are going to be swept away by descent. There is no reason whatsoever I will not get washed away by the deluge also. I tried and I have something now that will likely have value in the coming rebalance.

It really is no longer important to point fingers back at 08 and the direction we took. It is important to say there was no fixing anything. We can say it may have been a mistake to extend and pretend. We can say the 08 extend and pretend was unfair and benefited a few. Some of those few that benefited were scoundrels. In the big picture it really doesn’t matter. 8 years is an ass pimple in modern human history. Let’s begin now to face what is ahead and quit looking back. We are on the cusp of a dangerous descent that will kill off 9 out of 10 people in one or two generations at best. The worst case is a violent and messy drop within just a few short years. Let’s get started.

theedrich on Thu, 10th Dec 2015 5:46 am 



Davy, you write quite sensibly,

“I see recession and crisis as our only hope to starting a rebalance and adjustment to the realities of overshoot and limits of growth.”

But as you know, our and the other Western governments will do anything to keep Wily E. Coyote running in levitation mode as far past the cliff edge as they can manage.  All the while they will be accepting bribes from every moneyed ThirdWorld potentate around — bribes to accept more of the overflow from non-Western sewers.  Allahland countries will exacerbate their practice of blaming their own corruption and failures on the West, thereby assuring yet more surprises for Ø and his successors from the new “refugees.”  New technomagic in whatever field (except nuclear weaponry) is not going to alleviate these or any other of the oncoming pressures.

Our only hope, as the Latin proverb says, is to have no hope (unica spes nullam spem habere or Virgil’s Una salus victis nullam sperare salutem [“for the conquered, the only hope of rescue is to have no hope of rescue”] in Æneis 2:354).  Or as an old (apparently American) proverb has it, “It’s not about who’s right, but who’s left.”  Whether politically correct or not, such proverbs are incapsulations of repeated human confrontation with reality.  Since our social systems have put all of their faith, hope and love into a “growth” heavily seasoned with Puritan religious delusions, it is now hard to envision any kind of a future other than madness and war.  Few of us want to recognize just how ominous the current situation really is.

rockman on Thu, 10th Dec 2015 6:12 am 



Not that I disagree with every point made by this piece but I just don’t like it when anyone spins bullsh*t while trying to make appoint. The last time oil was at $38/bbl (inflation adjusted) it had not “plunge” from some high level. In late 2003 oil was at that price level but the last time prices were significant above that level IT WAS 18 YEARS EARLIER IN 1985 when it fell from $59/bbl to $31/bbl. During that almost 2 decade period prices floated around that level. Until 1998 when it dropped to $17/bbl. That 2003 price level wasn’t a “plunge”: it represent at 100% increase over just a 5 year period.

Simply put: this is 2015…not 2003. If one wishes to use analogies at least try to base them on dynamics that make some f*cking sense. LOL.

Davy on Thu, 10th Dec 2015 6:42 am 



Well, Thee, I think once the bottom falls out no government will be keen on allowing any kind of migrants that will contribute to the list of needy. I think we are getting close to a closed border policy. This will not necessarily mean closed borders because borders can only be locked down so tight in our interconnected world. I see an about face on immigration policies. It will take crisis to do this.

Too many people are under the cornucopian meme that the status quo is functioning and there is a way to keep it functioning if and only if we do this or that policy. Many believe population growth a good thing and many see immigration as part of that need to keep growth going.

The cornucopians will have everything they believe in turned upside down when the next recession hits. This is because when the next recession hits all those mal investments, overcapacity, and dangerously extended economic chains will be realized. Bad debt, poor attitudes, and bad decisions don’t go away. They can be extended and pretended. They can be ignored for a time. They are a reality and reality cannot be controlled. Reality can be hid from for a time.

We are close to a reality testing. We are going to be tested on all fronts from social, economic, and environment. This process is in motion but only slightly. It will be different from the current decay process because once a crisis break occurs dangerous destructive decay will be let loose. It is the combination of so many problems all at once that will end the status quo. How quickly the status quo decays and collapse is a big question no one knows except that we can make it collapse sooner rather than later by furthering the poor decisions and attitudes.

We have a window of opportunity. We can look at this like a space craft that must enter a particular orbit to reenter the safety of earth’s atmosphere. In our case this reentry is not safety but less danger. A proper reentry is nothing more than an issue of time and amount of pain issue. When populations are stressed the key variable is the duration and degree of that stress in regards to survival. We have a narrowing range of less dangerous outcomes.

We have the opportunity currently to make some changes. There are few changes but these changes are vital. They primarily revolve around food and fuel conservation and alternatives. We can do a lot of mitigation and adaptation much of which is with attitude and lifestyles. These will only be significantly possible post crisis and we need plan B’s now for this. The majority of what is coming we have no control over. If nothing else we should embrace with humility this part of the equation. It is only through humility as a global people we can accept the horrible things ahead.

If we can humble ourselves from our exceptionalism we may accept our failures individually and collectively. If we can agree we as a global people are the problem it will help us face these horrible things. I know there are those of you that say this will not happen and we are not capable of it. I am saying in crisis there is change.

This coming crisis will be forced upon us involuntarily. If we have a narrative for this we have the possibility of making better choices. Better choices are critical now more than ever. If we have no answers and instead point finger of blame and beat the drums of war we will likely go extinct at worst at minimum enter a bottleneck of marginal survival of very few. This is why at no other time in history has man faced such a profound existential point. We are right there right now and our survival is in the balance.

If nothing else we must have some kind of meaning out there when all of our support systems fall apart. Again it is the degree and duration of a fall that can take us to the brink. If we can lower the degree and shorten the duration of the worst we may have a chance. Does it matter anyway? That is an individual thing. As a species it does. All species strive for survival by nature.

farmlad on Thu, 10th Dec 2015 7:02 am 



Neither do I like it when anyone has to use (inflation adjusted) bullsh*t while trying to make a point.

You know full well that this drop in price has a more in common with the 2009 drop. With the world’s oil fields in a more depleted state then back in 1985.

shortonoil on Thu, 10th Dec 2015 7:50 am 



“Analysts at Goldman Sachs are even more pessimistic than that.”

Goldman is probably pessimistic because money is moving in the wrong direction as far as they are concerned. The recent price plunge has some interesting ramifications that unless they were looking at an energy model of petroleum production they completely missed. Even though the consumer section of the economy is getting less energy from petroleum than it ever has, per BTU it is now paying less for what it is getting than it has since 1973. That effect is moving money from the the production side of the economy to the consumer side.

This is strictly an artifact of the monetary system, and can not be fixed without replacing the system. It has been that system that has made the likes of Goldman Sachs fabulously rich. Beginning in 2012 when petroleum passed through the energy half way point the rules of applied economics got turned around. Instead of money moving up the economic ladder, it started moving down. Even though everyone is getting poorer, the production side is getting poorer faster than the consumer side. That probably does not sit well with investment banks.

We would like to inform you that this trend will continue; and there is not one single thing you can do about it!

http://www.thehillsgroup.org/

noobtube on Thu, 10th Dec 2015 8:14 am 



The man from the Phillipines is on a roll today.

Can’t be a good sign of things to come for ‘MURICA.

Will 2016 be a repeat of 2008?

rockman on Thu, 10th Dec 2015 8:17 am 



laddie – “You know full well that this drop in price has a more in common with the 2009 drop.” True: isn’t that exactly what the f*ck I just explained: the current price drop has nothing in common with the oil price in 2003. LOL.

BTW nothing in my post is “bullsh*t”…just well documented FACTS. If you have some FACTS, instead of OPINIONS, that refute anything in my post please share: I’m sure everyone here would appreciate it. LOL.

beamofthewave on Thu, 10th Dec 2015 12:20 pm 



I am just grateful for this short reprieve, makes it easier to live on my pension.

apneaman on Thu, 10th Dec 2015 12:24 pm 



Billions of Barrels of US Oil Set to Disappear. Poof.

“As the American shale-oil boom, a.k.a. American Oil Revolution, was accelerating back in 2009, the Masters of the Oil Universe demanded and got an accommodation from the Securities and Exchange Commission: it was made easier for the oil companies to claim as hard assets, for purposes of valuing their companies and borrowing money, the value of all the oil they estimated to be “in reserve,” which is to say lying somewhere under the ground they had under their control.

The oil companies’ estimates of their own “proven reserves” were astronomical, of course. In the careful words of one expert observer, David Hughes, “There was too much optimism built into their forecasts.” Translation: They lied.

It is as if you and I, on applying to the bank for a loan, were able to claim as assets all the money we intended to make in our lifetime. “$20 million over 20 years, you say? Why then a $10 million loan should be no problem.” And so it was for the fracking industry, which never could have got started without oceans of cheap borrowed money.

Remarkably, at the time the SEC snuck two tiny limitations into the newly permissive rule, so niggling that no one thought them worthy of mention. To be, um, legitimate, these claimed assets had to be 1) profitable to extract under current market prices, and 2) actually extracted within five years. Profitability went away a year ago when oil prices collapsed from over a hundred dollars a barrel to under 50. Despite the fact that quarterly assessments of assets, including oil reserves, are required, bankers and hedge funds and operators used smoke and mirrors to avoid the Draconian restructuring that the new prices required. But now the five years have run out.”

http://www.dailyimpact.net/2015/12/10/billions-of-barrels-of-us-oil-set-to-disappear-poof/#more-3141

apneaman on Thu, 10th Dec 2015 12:26 pm 



Billions of Barrels of Oil Vanish in a Puff of Accounting Smoke

http://www.bloomberg.com/news/articles/2015-12-10/billions-of-barrels-of-oil-vanish-in-a-puff-of-accounting-smoke

apneaman on Thu, 10th Dec 2015 1:00 pm 



Peak Oil: are we seeing the real one?


http://cassandralegacy.blogspot.ca/2015/12/peak-oil-are-we-seeing-real-one.html

shortonoil on Thu, 10th Dec 2015 2:44 pm 



“Billions of Barrels of Oil Vanish in a Puff of Accounting Smoke”

“and there is not one single thing you can do about it!”

apneaman on Thu, 10th Dec 2015 2:49 pm 



And a 1001 economist will cry in unison

“who coulda known?”

as per usual.

GregT on Thu, 10th Dec 2015 3:20 pm 



“I am just grateful for this short reprieve, makes it easier to live on my pension.”

Canadian Pension Funds Bled Billions After Oil Price Crash: CCPA Report

http://www.huffingtonpost.ca/2015/11/22/canadian-pension-funds-oil-prices_n_8586022.html

Falling oil prices worry institutional investors

“Pension fund executives, money managers and consultants are keeping a close eye on the potential downward pressure on financial markets and institutional portfolios due to recent sharp falls in the oil price.”

http://www.pionline.com/article/20150112/PRINT/301129980/falling-oil-prices-worry-institutional-investors

theedrich on Fri, 11th Dec 2015 3:24 am 



Thank heavens for the reality checks that Rockman provides.  Taking into consideration his critique of the above article, it seems that the main source of the writer’s hemorrhoid agony is not the fact that the oil price has been “plunging,” but that it has not risen to, or stayed at, the vertiginous $100+ levels temporarily experienced a while ago.

As some have reported about the rising suicide rates in the Alberta oilpatch because of “falling” oil income, that deadly problem actually arose because, during the fat years, far too many squandered their fat salaries instead of saving for the future.  Nothing new here.  Just the same old behavioral patterns of people who think the laws of nature have now changed.  Patterns also shared by economists and liberals.

Newfie on Fri, 11th Dec 2015 5:15 pm 



I’m moving to Manila. 😉

Apneaman on Sun, 13th Dec 2015 12:43 pm 



When Does Inequality Decrease?

“The US ruling class have arrived at the conclusion that educated and skilled graduates are surplus to requirements in the neoliberal phase of capitalism. Globalisation means that sector of the workforce can increasingly be supplied from overseas on a cheaper basis; and by saddling American students with crippling personal debt, the public funding of higher education can be shrunk significantly.”

“One major reason that increased government spending on things like infrastructure repair advocated by prominent economists is so vigorously opposed by big business and their political/media shills is precisely because it would employ large amounts of people, thus creating a labor shortage and driving wages up.”

“Despite the widespread circulation of the apocryphal Tytler nostrum, there has never yet been a society brought down because of too much wealth held by its middle class combined with too many restrictions placed on elite wealth accumulation.

There is a cycle here. By their rapaciousness, elites hollow out the very society that is the source of their wealth -”

“Inequality is not a spur to greatness, it’s a sign of decay. That’s a message to the present-day US (and most of the West in general).”

http://hipcrime.blogspot.de/2015/12/when-does-inequality-decrease.html