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Page added on March 4, 2016
Oil likely to recover to $55 in 12 months
Oil prices are likely to recover after 11-year low to USD 55 per barrel from the current USD 34 in 12 months, following gains in the latter half of 2016, according to a report.
However, weakness in the price of crude oil is likely to continue in the short-term, with the market yet to see the end of the downside momentum, according to a research report by UBS Wealth Management’s Chief Investment Office (CIO).
The oil market is still oversupplied in the first half of 2016 after supply expanded 2.7 per cent in 2015.
Prevailing market surpluses require accelerated supply curbs to rebalance the oil markets.
Market participants fear that the lifting of restrictions on Iranian oil exports might increase global oversupply even further in the short run.
A quick return of additional Iranian oil barrels would require accelerating supply curbs, including more company defaults, to rebalance the markets, which could keep prices sliding below USD 25/bbl in the short run, the report said.
However, in the longer term, the effects of declining energy investment are slowly becoming more visible.
The CIO expects it to shrink by 0.7 million barrels per day (mbpd) in 2016, with demand expanding by 1.1-1.2 mbpd. This should help cut the current oversupply of 1-1.5 mbpd.
The market could be balanced towards the end of the year, allowing Brent crude oil prices to reach USD 55/bbl at the end of 2016, the report said.
Risks to our expected price recovery come from a sharp increase in OPEC supply and/or weaker oil demand from emerging Asia, which would push the market’s rebalancing into 2017.
“Low Brent crude prices remain an immediate challenge for oil exporting nations in Middle East and North Africa, and in particular for government budgets.
“The price recovery that we see in the second half of 2016 should support the region in the near term, but economic reforms will still likely have to be implemented as oil prices are unlikely to move back to triple digit levels anytime soon,” said Simon Smiles, Chief Investment Officer for Ultra High Net Worth at UBS Wealth Management.
According to the Chief Investment Office, high-grade Gulf sovereigns like Qatar, Abu Dhabi and Kuwait should be more resilient to oil shocks than many other emerging market energy exporters.
Their high production means they needed lower oil prices to balance their budget and has enabled them to accumulate ample foreign exchange assets.
By contrast, Saudi Arabia, Nigeria, and some other emerging market oil exporters in Africa, Latin America and the Middle East have lower fiscal buffers and require much higher prices to balance their budgets.
http://economictimes.indiatimes.com/articleshow/51253881.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
54 Comments on "Oil likely to recover to $55 in 12 months"
john orr on Fri, 4th Mar 2016 4:42 pm
Haven’t even read it cos the title says author doesn’t know either cos no one predicted current price…
Truth Has A Liberal Bias on Fri, 4th Mar 2016 5:10 pm
According to short and the Etp model a market increase on the price of oil breaks the laws of physics.
J-Gav on Fri, 4th Mar 2016 5:21 pm
Who could possibly believe this BS?
Truth Has A Liberal Bias on Fri, 4th Mar 2016 5:45 pm
Air conditioning season in Saudi Arabia will very quickly take 900,000 barrels a day off of their crude oil exports.
geopressure on Fri, 4th Mar 2016 7:05 pm
-900K BOPD Saudi Exports falling due to increase in domestic consumption (air conditioning)…
-600K BOPD Kirkuk-Ceyhan Pipeline down
-250K BOPD Anther Nigerian Pipeline down
-400K BOPD Colombia’s #2 Pipeline is down
-100K BOPD Peru Pipeline lost in landslide
-250K BOPD Pemex lost gas-lift abilities @ Cantarell
-85K BOPD Jubilee 2 week maintenance shit-in
-Iran never increased Exports, not a single extra shipment has been made because Israel is blocking it via their influence over shipping vessels (despite reports to the contrary).
-Libya’s Exports still @ +/-400K BOPD (Low) & their export terminals have been torched.
-Venezuela’s Exports are falling every day
-Russian Exports are not going to be increasing
-Saudi Exports are not going to be increasing
-The US has already used bribes, blackmail & extortion to encourage all countries & all operates to increase production, there is no increased production capacity left… Anywhere… that will make an impact in 2016…
-Though the EIA claims that US Production is holding steady @ 9 Million BOPD, the number of crude-by-rail shipments & pipeline revenues suggest that the Baaken’s production has fallen 42% from the peak. US Production is >500K BOPD less than what the EIA is claiming & in STEEP DECLINE…
-There will be more surprises such as pipeline issues that we lean of tomorrow & the next day…
There is already talk of a fuel shortage in Asia…
China & India are seeing 3 Million new cars being purchased PER MONTH!!!
Obama & the EIA claim that the SPR & Commercial Storage are both overflowing, but it’s funny that this overflow with no where to put the crude oil has caused the prices to GO UP, not down… This is because the Futures Traders in Chicago who set the price of oil all know that the contents of the SPR & Commercial Storage were spent creating a fake oil ‘Glut”…
Refineries are shutting down in Australia & Taiwan because there is no crude oil to process…
In the US, the cost of Airline Tickets has been increased to limit flying & decrease Jet Fuel Demand…
The Zika Virus was exploited (if not invented) partially for the purpose of reducing global air traffic…
Refineries that are devoted to making Jet Fuel have been shut down in the US to free-up more crude for gasoline…
US Rig Count has dipped below 500, falling by 13 more rigs this week…
On top of all this, Demand has Exceeded Supply since summer of 2014, but the contents of the SPR & Commercial Storage were utilized to hide this fact…
—
Well over 200 Million BBLs of open short interest in Crude Oil @ the CME Group… Hedge Funds were planning on the “fake overflow” of PADD#2 of the Commercial Storage to cause a panic selloff that would allow them to cover (buy) their needed 200+ Million BBLs to close out these short positions (that were used to bring the price down)… If the EIA report this coming Wednesday does not trick enough traders into selling 200+ Million BBLs of crude on the open market, at low prices, then we are going to see an EPIC SHORT SQUEEZE… Probably the largest short squeeze in the history of markets… If no one will SELL these hedge funds 200+ Million BBLs, then the Hedge Funds will scramble to BUY these shares at the lowest price possible – 200+ Million BBLs worth of Buy orders will appear out of nowhere… I’m sure you can imagine what that will do to the oil price…
—
So will we see $55/BBL Oil in 2015???
Ugh, Yeah… We’ll see $55/BBL before the end of the month…
—
If Supply & Demand were allowed to work naturally we would be looking at $155/BBL Crude by the end of the first 1/2 of 2016…
Obama will not stop though… he will be limiting advancement of crude oil prices as much as possible… He still has some tricks up his sleeves, you can write that down…
I expect to see a HUGE surge in violence in the US & Europe, primarily on the roads & highways… This will encourage people to stay at home, the us limiting gasoline demand…
—
Why is Obama doing this? for the purpose of limiting Russia’s revenues??? I thought that for a long time, but it turns out that Russia is but a innocent bystander… Obama has been holding the price if crude oil down because of the Citizens United Court Decision that allows limitless campaign contributions. Obama is trying to limit the amount of excess capital in the pockets of Republicans & Republican dominated industries… There is a direct correlation between the price of oil & Republican Campaign Contributions… That is why Obama has forced oil prices down so low… He is doing the exact opposite of what George W. Bush did in the lead-up to the 2008 Election – which was allow oil prices to soar & put more money into the pockets of the oil & gas industry & royalty owners…
geopressure on Fri, 4th Mar 2016 7:09 pm
Here’s a monthly chart of the WTI front-month futures price…
http://finviz.com/futures_charts.ashx?t=CL&p=m1
You can compare for yourself what George W. Bush did with oil prices & what Obama has done with oil prices leading up to election years…
Obama was hoping to hold the correction off until the 2nd half of 2016, but it ain’t gonna happen… The Oil price is about climb like it has rocket strapped to its ass…
Boat on Fri, 4th Mar 2016 8:03 pm
geopressure,
Lay off the drugs dude.
rockman on Fri, 4th Mar 2016 8:54 pm
Always interesting to see how they say there’s an oversupply of 30 to 45 million bbls per week. And this has been going on for at least a year. So where is all this production going that’s not being consumed? IOW they are saying there’s been at least 180 million bbls of oil that must have gone into storage in just the last 6 months…maybe as much as 220 million bbls. Given that the largest oil storage facility on the planet, Cushing, has a max capacity of around 88 million bbls (and already has a lot of oil in it) where are these other 3 or 5 super and very stealth storage farms hidden. And where are they building the next 3 to 5 sites that will be needed to hold the next 6 months of “oversupply”?
Obviously they aren’t defining “oversupply” as significantly more oil being produced then is being consumed because those two volumes are very close. They seem to be defining it by price. What they really mean IMHO is that the supply dynamic will be in balance BECAUSE oil will be selling for $55/bbl.
Essentially they are saying that they know what the price of oil SHOULD BE. IOW cheaper oil then that price is an oversupply and a higher price would thus be a shortage.
As silly as all that sounds it’s the only way I can see that in their eyes there’s an oversupply of oil when the world is consuming almost every bbl being produced. That small amount going into storage every week is insignificant compared to the 650+ million bbls being consumed weekly.
Perhaps they confuse an oversupply of oil (by their assumed definition) with a “surplus” of oil. IOW a big surplus is much more oil being produced then consumed and an oversupply is so much oil being sold that the lack of competition drives prices down. Thus a surplus of oil has to be stored somewhere but an oversupply doesn’t because it’s being consumed.
That’s the only way their claims make sense to this dumb geologist. LOL.
geopressure on Fri, 4th Mar 2016 9:08 pm
Is there a point I made that you would like to disagree with, Boat?
Truth Has A Liberal Bias on Fri, 4th Mar 2016 9:38 pm
The over supply in oil is less than the margin of error in measuring production For example, if you can’t tell me what production was today until three months from now and your margin of error is 4% don’t tell me that the price of oil at tomorrow’s market will be lower than it was at todays because we’re running a 2% oversupply. It’s all BS and market confidence that moves oil price. No real ideas based on hard data. When this market gets unfucked the price is gonna be straight up.
Boat on Fri, 4th Mar 2016 10:03 pm
Rock,
“Thus a surplus of oil has to be stored somewhere but an oversupply doesn’t because it’s being consumed”.
Oversupply and surplus is not consumed. By definition.
Boat on Fri, 4th Mar 2016 10:14 pm
geopressure on Fri, 4th Mar 2016 9:08 pm
Is there a point I made that you would like to disagree with, Boat?
What part of glut don’t you understand. Can you read charts?
GregT on Fri, 4th Mar 2016 10:16 pm
Oversupply;
a greater supply of something than is needed
eg: A large percentage of Americans have been oversupplied with food.
Boat on Fri, 4th Mar 2016 10:42 pm
Greg T,
“A large percentage of Americans have been oversupplied with food.”
Why is it you care?
GregT on Fri, 4th Mar 2016 10:48 pm
Boat,
“Oversupply and surplus is not consumed. By definition.”
Because you are as usual, out to lunch.
GregT on Fri, 4th Mar 2016 10:56 pm
Boat,
“What part of glut don’t you understand. Can you read charts?”
Some people prefer to think Boat, rather than merely parrot what they’ve been told to believe.
onlooker on Fri, 4th Mar 2016 11:08 pm
They’re is no glut. Prices are this low because consumers cannot tolerate higher prices. As Rockman as often said. Price will always accommodate supply/demand dynamics. This is basic Eco 101. Oil futures pricing is different it is based on expectations. So no matter how often you cornies talk about glut does not make it true.
dooma on Sat, 5th Mar 2016 12:24 am
Here are some people who won’t be buying cars in the near future…
“China said it expects to lay off 1.8 million workers in the coal and steel industries, or about 15 per cent of the workforce, as part of efforts to reduce industrial overcapacity, but no timeframe was given.”
http://www.smh.com.au/business/china/china-expects-to-lay-off-18m-workers-in-coal-steel-sectors-20160229-gn6xqr.html
Boat on Sat, 5th Mar 2016 1:37 am
onlooker on Fri, 4th Mar 2016 11:08 pm
They’re is no glut. Prices are this low because consumers cannot tolerate higher prices
Lol, the world paid high prices for 6 years. What ended the high prices was over production. You doomers are some herd mentality no chart reading crash hoping cult followers.
Apneaman on Sat, 5th Mar 2016 2:59 am
Boat, to have consumers there needs to be jobs – something the world has been hemorrhaging for the last 2 years. Notice the link in the comment above yours? How’s the economy doing in texass? Plenty of recent mac&cheese and Ramen noodle consumers I hear.
Bloomer on Sat, 5th Mar 2016 3:06 am
The elephant in the room is the depleting oil fields. Sure the Saudis can open the spigots up further, but that just drains their oil reserves faster. I have no ideal what the price of crude will be next month or next year. However, I do believe we are setting ourselves up for oil supply shortages and likely another global depression which will follow.
rockman on Sat, 5th Mar 2016 5:53 am
A lively and relatively civil discussion. Well done, folks.
I see some differences that I doubt we can overcome. First, definition of demand: some say it’s what consumers want to buy, can afford to buy and a new one…need to buy. What they want to buy us easy…that’more oil then has ever or will ever be produced…essentially infinite. What they need to buy is either meaningless because that is someone’s judgemental call. Or what is required for their economy to sustain itself which also seems meaningless since “sustain” can mean anything one judges to be necessary.
So some won’t agree but for the Rockman “Demand’ will always be what the world can afford to buy…IOW what it is consuming today.
So what does supply mean? Again multiple definitions out there: the max global production capable, the actual volume being bought as well as consumed and the volume being produced that is either consumed or sent into storage.
So max production capability: meaningless because, by definition, no one knows what that volume is today. Some say we’re there today but some of those same folks said that when we were producing 5 mm bbls per day less. In essence since none of the major oil producers will document such numbers that metric has no resolution.
So now it’s either consumed or a combination of consumed and sent to storage. As pointed out earlier using the article’s volume of “oversupply” of 1 to 1.5 mm bopd then someone needs to show us where 400+ million bbls of oil have been stored over the last year. And continues to have 200+ million bbls added every 6 months. The largest tankfarm in the world at Cushing hasn’t even seen 1/10 of that volume gain in the last year. Yes…some increases in stored oil but not that much. More important: much of that oil has been bought by speculators hoping to flip it for profit so technically it should be classified as “consumed”: when the Rockman sells his oil it matters not if it goes into such storage or a refinery. And more important: the refineries and speculators are competing for his oil and that does not produce lower prices.
So a sh*t load of words to get back to the simple statement: supply and demand are in balance: the producers are selling ever bbl they are producing and consumers (including the speculators) are buying every bbl they can afford. Which explains why production and consumption are both at a record high.
A that leaves “glut”…another word with multiple definitions by our happy family here. Which also puts that metric into the useless category. But it seems like many who favor that term really define it not volumetricly but by price. IOW regardless of the amount of oil that is being produced/sold/consumed/stored oil at $30/bbl is a “glut” and oil at $90/bbl is’t a “glut”. In fact at sims high price I would expect these same folks to declare a ” shortage” even if every buyer is able to acquire every bbl they can AFFORD to buy.
So perhaps we should accept that we should agree to disagree and get back to discussing what’s really important: will President Trump be able to make Mexico pay for that border fence? LOL.
Boat on Sat, 5th Mar 2016 6:45 am
Rock,
We’ll give this another try. At some point oil will not go into storage and the tanks around the world will begin to empty. Prices will be much higher with that sceniaro. Since 2014 oil over supply has stayed steady and the tanks have been filling to historical levels. This has driven the price down.
This is simple supply and demand dymantics at work.
Boat on Sat, 5th Mar 2016 6:50 am
Apneaman on Sat, 5th Mar 2016 2:59 am
“Boat, to have consumers there needs to be jobs”
Iraq and Iran have plenty of oil jobs.
shortonoil on Sat, 5th Mar 2016 6:51 am
“If Supply & Demand were allowed to work naturally we would be looking at $155/BBL Crude by the end of the first 1/2 of 2016…”
The price of crude fell 70%, and demand went up less than 3%; now who exactly is going to be buying this $155 oil? It looks like the industry was short of customers at $30, but they are going to have more of them at $155??
“According to short and the Etp model a market increase on the price of oil breaks the laws of physics.”
What the Model says is that if price rises above this curve:
http://www.thehillsgroup.org/depletion2_022.htm
enough demand destruction will set in to bring it back to curve. It says that the long term trend for oil prices is downward, and will continue downward until oil producers can no longer make money producing oil. After that they stop pumping oil, and start raising a garden.
Boat on Sat, 5th Mar 2016 7:59 am
short,
“It looks like the industry was short of customers at $30, but they are going to have more of them at $155”?
Global oil demand is fairly stable during periods of growth and recession. Check out a world consumption oil chart and you will see this. Regardless of price. Even a huge crash like 2007 resulted in small demand destuction percentage wise.
shortonoil on Sat, 5th Mar 2016 10:00 am
“Global oil demand is fairly stable during periods of growth and recession. Check out a world consumption oil chart and you will see this. Regardless of price. Even a huge crash like 2007 resulted in small demand destuction percentage wise.”
Check out the EIA data set. Between 1960 and 2112 oil production, and consumption both rose by an average of 2.51% per year, from 7.66 Gb/yr to 27.80. The price rose from $2.88/ barrel to $94.05. Now where exactly is the stable in those numbers?
All that you are relaying in your data is that the Supply/Demand issue for oil is BS. The price of oil has followed its production cost for 52 years. Until 2012 consumption matched supply regardless of price. That changed in 2012, and by 2014 production was out stripping demand; inventories started to increase, and are still increasing.
You have inverted the relationship; the price of oil is determined by the strength of the economy; the strength of the economy is determined by oil’s ability to power it. Oil’s ability to power the economy is declining. Oil can no longer power enough economy to keep demand equal to its supply. The economy can no longer afford to pay the full production cost of producing oil.
http://www.thehillsgroup.org/
rockman on Sat, 5th Mar 2016 10:11 am
It is really simple: the amount of oil that has increased in storage is insignificant to the daily global consumption. And in addition most of that newly stored oil was purchased by speculators and not by producers IOW much of that oil sent to storage actually put UPWARDS pressure on oil prices. Had none of those speculators NOT BOUGHT THEIR OIL SENT TO STORAGE the only others buyers would have been the refiners. That would given the refiners MORE negotiating leverage…not less. An real current example: with India on the verge of beginning the fill up of their three brand new storage facilities with Persion Gulf oil is that going to put upwards or downward pressure on the price of oil? The logic of the “oil going into storage is pushing prices down” must say that the many millions of bbls going into India’s facilities will push the global oil price lower.
Of course it will: removing commodities from the market place always creates lower prices. LOL.
marmico on Sat, 5th Mar 2016 10:26 am
The price of oil has followed its production cost for 52 years.
What a fuctard.
The cost of production did not increase 10 (20) fold in real (nominal) dollars between 1970 and 1980.
GregT on Sat, 5th Mar 2016 10:36 am
Oil is not like any other commodity. It is the primary energy source that drives industrialism and all economic activity.
The world’s economies are not slowing down due to a surplus in oil production. It is affordability that matters, and the energy available to power our economies.
penury on Sat, 5th Mar 2016 11:17 am
Greg T I am afraid that you nailed it this time
” The world’s economies are not slowing down due to a surplus in oil production. It is affordability that matters, and the energy available to power our economies.”
onlooker on Sat, 5th Mar 2016 11:26 am
Yes and it is the interplay of the economy and the availability and affordability of oil that will define to a large degree our circumstances on this winding road downhill.
ellsworth on Sat, 5th Mar 2016 11:31 am
GregT’s above comment also made me suddenly understand how oil does not follow typical supply/demand curves as shortonoil tries to explain.
Boat on Sat, 5th Mar 2016 11:33 am
http://www.weforum.org/agenda/2015/02/whats-driving-the-oil-price/
In 2014 the chart shows not the lack of demand but the beginning of long term over supply.
If you can’t see the obvious I can’t help you.
geopressure on Sat, 5th Mar 2016 11:57 am
Don’t be tricked into changing the definition go glut, right before the price of oil is about to go up…
geopressure on Sat, 5th Mar 2016 11:59 am
You guys are easily manipulated…
Boat on Sat, 5th Mar 2016 12:13 pm
geo,
oil is about to go up…
Up is what price?
So you feel the drop in production will more than compensate for new Iran production?
What price will the DUCs get fracked?
shortonoil on Sat, 5th Mar 2016 12:15 pm
“In 2014 the chart shows not the lack of demand but the beginning of long term over supply.
If you can’t see the obvious I can’t help you.”
The 2014 chart shows that the price fell 70%, and no one wanted to buy any additional oil. That is; all this additional supply did not do one thing to improve the economy. Additional supply is no longer a driver of the economy. When one looks at where that additional supply came from, Shale, it is certainly not a surprise. High test camel pee is not an economic juggernaut producer. It takes energy to power an economy, and as we have been saying for the last few years Shale is not an energy source. It is a feedstock.
It is reasonable to state that the world has run out of any additional oil that is worth taking out of the ground. When the present fields operating are worked out the oil age will be over.
http://www.thehillsgroup.org/
Boat on Sat, 5th Mar 2016 12:29 pm
short,
Try looking at the link. Price was not in the chart.
rockman on Sat, 5th Mar 2016 1:53 pm
Condensate, like the Eagle Ford production, is not a refinery “feedstock like NGL. Condensate is OIL. OIL that is vital for refineries to blend with the heavy oils to provide the most efficient/profitable cracking. Before the shale boom US refineries had to import light oils for blending. Just as Venezuela recently had to import light oil half way around the world from Libya.
And back to the point some still can’t grasp: the increase in both oil storage capacity (which has been huge the last 5 years) and the amount of physical oil going into storage hasn’t been due to a LACK of buyers but due to a surge in buyers…the physical oil speculators.
From Reuters: http://www.reuters.com/article/oil-storage-kemp-idUSL8N13S4ZQ20151204
Dec 3 2015: “Oil producers may be struggling as a result of low prices but the oil storage business has never been in better shape.
U.S. refiners, traders and logistics companies added an extra 11 million barrels of working storage capacity for crude oil between March and September, according to the U.S. Energy Information Administration.
Since September 2011, total capacity for storing crude in the United States has expanded by almost 87 million barrels, 19 percent, the EIA reported on Monday (“Working and Net Available Shell Storage Capacity” Nov. 30).
Most of the extra capacity has been added at tank farms and other offsite locations (+84 million barrels) rather than refineries (+2.5 million barrels) where space is often constrained.
The biggest additions have come in states on the U.S. Gulf Coast (+50 million barrels) with most of the rest in the Midwest (+32 million barrels) especially around the NYMEX delivery point at Cushing (+18 million barrels).”
The increase of storage oil isn’t an indicator of a LACK OF DEMAND. It’s an indicator of INCREASED DEMAND by physical oil speculators. Which is exactly what we’ve seen the last 10 years: prices go down and speculators buy and store oil. Prices go up speculators sell oil and storage volumes fall. Imagine how low the oil price would be today if global oil price speculators had not bought and stored many millions of bbls of oil.
Consider how India will soon be filling its brand new storage with almost 40 million bbls of UAE oil. While not a huger number that’s almost half the volume of the world’s largest oil storage facility at Cushing. That’s about 40% of the total global daily production. Some estimate that physical oil speculators account for as much as 60% of current US oil storage. That 60% of over 460 million bbls of oil in US storage. That’s over 250 million bbls of oil taken out of the market place where refiners compete for their share. That’s almost 8% of yearly US oil production.
shortonoil on Sat, 5th Mar 2016 2:57 pm
If they can’t make fuels out of it, it is a feed stock. It does nothing to power the economy. The southren EF is gas, and the central part is condensate. Condensate is 92% pentane – API 93.5.
http://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/energy/images/eneene/sources/petpet/images/refraf1-lrgr-eng.png
GregT on Sat, 5th Mar 2016 3:13 pm
“What price will the DUCs get fracked?”
At a higher price than will allow for economic recovery. Our economies still cannot recover with ~$30/bbl oil.
Attempting to use the simplistic eCON-101 supply/demand equation does not work in this scenario. The modern school of economics was borne on the ideology of infinite exponential growth in affordable supplies of energy. That model was broken in or around 2005, and there is no known substitute for what oil does for us in our economies.
Peak conventional oil is in the rearview mirror. We have already entered into the new era of decline.
Nony on Sat, 5th Mar 2016 7:21 pm
Condensate is oil and yields a high fraction of gasoline (usually what a refinery is optimized to run). Yes, there is a sweet spot of gravity (too light is worse, too heavy is worse). But it is still all oil. A liquid, mixed compound hydrocarbon. 10 years ago, condensate often traded at a premium. And it still may trade at a premium compared to very heavy, sour crudes.
Flint Hills bulletin from last Friday:
EF greater than 60: 19.25
EF 50 to 60: 24.25
EF less than 50: 25.75
WTI: 32.5
It’s all oil, purchased off the same bulletin, by a refinery complex/distributor (Flint is part of Koch and buys for their own plants as well as for trade).
This cat piss stuff is really silly. If you people don’t know the difference between an ultralight crude and propane, then you are brain dead. Then again you ARE peak oilers. And are still hanging in there even after TOD closed shop.
Nony on Sat, 5th Mar 2016 7:25 pm
Greg, the Rockman doesn’t care whether the economy recovers or not. He just cares about how much people are willing to pay for oil. It’s not personal, just business.
If the economy is SHIT and people still pay 100 bucks for oil (2012), then…yeehaw! If the economy is cranking (1999) but people are paying sub 20, then…sadness.
dooma on Sat, 5th Mar 2016 8:30 pm
“U.S. oil production is declining, but how fast will it fall?”
http://www.marketwatch.com/story/shale-oil-production-is-finally-falling-but-unclear-how-fast-2016-02-26?mod=MW_story_latest_news
GregT on Sat, 5th Mar 2016 8:59 pm
“Rockman doesn’t care whether the economy recovers or not. He just cares about how much people are willing to pay for oil.”
Thank-you for passing on the blatantly obvious Nony. People don’t generally work to lose money.
twocats on Sun, 6th Mar 2016 1:25 am
Rock – you make convincing arguments about supply and demand.
“Global oil demand is fairly stable during periods of growth and recession. Check out a world consumption oil chart and you will see this. Regardless of price. Even a huge crash like 2007 resulted in small demand destruction percentage wise.” [boat]
welcome back boat. Although that was true on a global scale, that certainly hasn’t been true in the US. Starting around 1982 (once we got past the oil embargo scares) US consumption went up about 1 million bpd on average every 4.6 years until 2004. Since then it’s gone down 1 mbpd every five years up to 2014 (not sure about the last two off-hand). That’s a very significant shift in demand in the US, don’t you think? If it had been a year or two, but we are going on 12 years. I don’t know if price or supply is the reason, I’m just saying its a yuuuge change 🙂
On the supply/demand topic: I’m not sure the demand for oil has much at all to do with supply of oil. Think about it. Could be the economy has lost its natural alignment and has wobbled of course from the happy state where the developing world made stuff for the developed world and everyone was “happy”. The developed world seems to have lost its ability or desire to consume, and the developing world can’t figure it out for shit how to become consumerist countries.
International Companies have found really good ways to make a lot of money without paying many people very much, so good paying jobs aren’t as easy to find anywhere. That’s a factor.
I mean I WANT to find a way to pin all this malaise onto Peak Oil. I’m a peak oil doomer for heavens sake. Maybe its the debt issue. I don’t know, I really don’t, and no one has given a convincing argument one way or another.
Boat on Sun, 6th Mar 2016 4:05 am
twocats,
“I mean I WANT to find a way to pin all this malaise onto Peak Oil. I’m a peak oil doomer for heavens sake. Maybe its the debt issue. I don’t know, I really don’t, and no one has given a convincing argument one way or another”.
I am interested in energy much more than malaise
Davy on Sun, 6th Mar 2016 6:39 am
I have been following this topic of peak oil intimately since 2000. For me back then it was more about collapse in general. I was already living on a farm thinking about resilience, sustainability, and collapse. As time went on around 2005 with Kunstlers “Long Emergency” and Heinberg’s “Peak Everything” along with several other books I became energized about Peak Oil. The internet was developing then with blogs as a way to bypass the mainstream media’s corrupted narrative.
Back then I was too focused on Peak Oil and energy in general. Around five years ago I started to read Korowicz and his combining of systems analysis to global problems and predicaments. Besides the environment, which gives us the chance for life at all, energy and the economy have to be the focus. Oil has to be the central focus with the energy complex and the financial system with the greater global economy. Globalism operates because of both symbiotically and produces our food and shelter.
We are all dependent on globalism through delocalized locals. Delocalized locals is another concept for complex interdependence of multiple locals on the majority support of a greater global support system. Our current arrangement is total dependence on an earth size system. Our societal drive for efficiency and greater prosperity has been at the expense of resilience and sustainability of all locals with ever expanding complex systems of support.
We are now to the point where a global economic system and energy supported global industrial consumption is required for survival. The word required is important here. There are no alternatives to safe and comfortable survival anymore anywhere. This energy supported industrial life support has now hit limits and diminishing returns at every resource and network level. Every local is part of these limits either through overconsumption per sustainability and or overpopulation.
There are locals that are more sustainable with less consumption and population issues but still exposed to a global collapse through forced population migrations from those that are not sustainable and resilient. The dangers of global industrial accidents both locally and with multiple global impacts are a danger to all. There is really nowhere to hide and no one is safe.
Oil is central to these dangers because of Peak oil dynamics. Depletion is now a problem. The financial system is the other central danger. It is the global financial system that allows a global economy. It is the confidence and the liquidity from that confidence that allows multiple dispersed locals to trade and exchange. It is that financial system now that is the most immediate danger because of destabilization of fundamentals that allow it to function. This destabilized financial system is now disrupting oil as a segment of the economy which is symbiotically affecting the economy.
Oil depletion is affecting our industrial society and is the root cause but not the immediate danger. The immediate danger is now a vicious cycle of economic demand and supply destruction. Currently the oil supply appears fine but it is the oil supply potential and the economy’s ability to afford oil that is now in a vicious cycle of destruction.
Our economy likewise appears stable with only traditional business cycle issues but the reality is we no longer can afford growth. We have across the board malinvestment from the abstract of networks to the physical industrial machinery of global man. We have people making and consuming the wrong things in relation to what allows longer term survival. Too many people are a central part of this but it is also how we live. The products we consume and the damage they do to our all-important environment. This is all combining and converging in predicaments and problems that are catch 22 traps. We are trapped in the end of a lifecycle as a species in its species ecosystem and the disruption of the greater earth ecosystem. This is a powerful global combination and ensures collapse because both our species ecosystem and the greater earth ecosystem are now in dangerous decay.
So in reality it has now become all of the above in regards to collapse potential. Everything is wrong with us now. Oil and the economy are central to this but in reality it is everything from the physical to the abstract. We do not live as we should for sustainability and survival. These poor social traits both physical and abstract are now systematically and structurally unmovable to reform. The greater ecosystem that allows civilization has been disrupted beyond stable and is now in dangerous runaway change.
Change here on out will be destructive with unknown consequences. The time frame is unknown because of the multiple different scenarios that could break systematically. Where this happens first is unknown for the same reasons. What is certain is we will all collapse together eventually in some process of time and place in a particular scenario of degree and duration. It is our fate per natural law and it is necessary by the balance the global ecosystem maintains over and above the human ecosystem.
JuanP on Sun, 6th Mar 2016 8:00 am
50!