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Page added on September 21, 2015
OPEC Sees a Return to $80 Oil
The short-term outlook for oil remains murky, with calls ranging for oil to be anywhere between $20 and $70 a barrel before year-end. However, longer term the picture for crude is starting to come into clearer focus as two very distinct trends emerge: Demand is rising while supplies are falling. This has OPEC starting to turn decidedly more bullish on the oil market as it sees crude prices touching $80 a barrel by 2020.
That sinking feeling
The plunge in the price of crude is having a major impact on the oil industry, with U.S. producers really taking it on the chin. The price drop cut deeply into oil cash flows forcing the entire industry to pull back the reins on spending, leading to a screeching halt to U.S. oil production growth this year. That ended the dramatic upward trajectory of crude production in the U.S.
US Crude Oil Field Production data by YCharts.
With prices remaining low, the declines that started earlier this year are only expected to continue as we head into 2016. In fact, U.S. oil production is now predicted to slide by 400,000 barrels per day next year, which is the biggest drop since 1989. That decline is expected to be a key part of putting the crude oil market back into balance.
The cure for low oil prices
As production is declining, demand for oil is starting to accelerate. According to the International Energy Agency, demand for oil is growing at the fastest pace in five years as low oil prices spur demand for more crude. The IEA sees demand for oil rising by 1.6 million barrels a day this year, which is 200,000 barrels a day higher than its earlier forecast and more than double last year’s demand growth of 700,000 barrels a day. Meanwhile, it sees demand rising by another 1.4 million barrels next year. That’s 3 million barrels a day of incremental demand for an oil market that at its peak was oversupplied by around 2 million barrels a day. Given the outlook for falling production in the U.S. over the next year, there’s reason to believe that crude prices could rebound.
Having said that, OPEC doesn’t see a swift return to triple-digit oil. Instead, it forecasts a measured return to an $80-a-barrel level by 2020 — it projects crude prices to rise by $5 a barrel per year. That outlook, however, implies that crude would be in the $55-per-barrel range this year, not in its current $45-per-barrel range. That leaves room for some optimism as crude would appear to have more upside than downside.
That outlook meshes well with what others in the industry are suggesting as Core Labs and EOG Resources, for example, both see a recovery on the near horizon. Core Labs believes U.S. oil production is poised to fall by a half-million barrels per day by year-end and that next year we’ll see year-over-year production declines in the U.S. and Canada coupled with stagnate oil production in most other international markets outside of OPEC. This, according to the company, “may lead to a sharp recovery in crude oil prices and industry activity levels.” Meanwhile, EOG Resources sees that same outlook of production declines in the U.S. and in other non-OPEC nations, which when combined with reasonable demand growth, “gives a decent opportunity for prices to be a bit better than they are right now in 2016.”
Investor takeaway
OPEC seems very content to let the oil market fix itself. That appears to be what’s happening as oil production is noticeably declining in the U.S., with more slumps on the horizon both in the U.S. and around the world. Furthermore, oil demand is accelerating as the cure for weak demand is lower oil prices. It’s why OPEC doesn’t feel compelled to act as it believes the oil market is healing itself and that crude prices will be meaningfully higher by the dawn of the next decade.
52 Comments on "OPEC Sees a Return to $80 Oil"
Nony on Mon, 21st Sep 2015 4:13 pm
Futures curve sees WTI (Brent) at $59 ($62) in DEC2019. It is a rise over the $47 ($49) for current month ahead prices. But it’s quite a bit lower than $80. So maybe we can have both relatively low prices (not $100, not $80, but $60). And…sure have some contraction of US production also.
Davy on Mon, 21st Sep 2015 4:15 pm
NOoo, why was the Fed unable to normalize?
Nony on Mon, 21st Sep 2015 5:17 pm
I don’t know. (Honest. Don’t even understand the question.)
P.s. You are still unaware of the difference between micro and macro. (supply and demand versus monetary policy). Micro is pretty well understood and relatively nonpolitical. Not perfect, but close. You can see micro function in every environment: cocaine smuggling, oil markets, and silver and gold in ancient Rome. Macro is fluffier and more prone to political contamination.
Davy on Mon, 21st Sep 2015 5:31 pm
NOoo, they don’t know either that is the problem and the reason your macro/micro explanation is lame. Your tools are failing you NOoo and you can’t figure out why.
shortonoil on Mon, 21st Sep 2015 6:21 pm
“The IEA sees demand for oil rising by 1.6 million barrels a day this year, which is 200,000 barrels a day higher than its earlier forecast and more than double last year’s demand growth of 700,000 barrels a day.”
The IEA missed their demand projections by the widest margin in history last year, but we are supposed to believe (just because they said so) that everything is going to turn wonderful for the industry (just because they said so)!
“SARAH KENT
Updated Sept. 11, 2014 8:18 a.m. ET
The International Energy Agency Thursday trimmed its forecast for the rise in oil demand this year for the third month in a row, calling the recent slowdown in demand “nothing short of remarkable.”
WSJ”
“In fact, U.S. oil production is now predicted to slide by 400,000 barrels per day next year,”
How many barrels of oil did it take to produce that 400,000. If it was shale, maybe 350,000.
All this demand growth they are projecting must be coming from the collapsing Chinese economy, and the dying world trade. With the FED backing out of a 0.25% increase in rates (that they have been talking about for seven years) things must be doing absolutely great.
Who wrote this article; Pollyanna’s sister?
Nony on Mon, 21st Sep 2015 7:08 pm
Davy, you are addressing a macro question when I have been referring to micro. You don’t understand the difference.
Boat on Mon, 21st Sep 2015 7:09 pm
Poor Short is scratching his head because demand is picking up because of cheap prices. Amazing. By Goodness there must be something wrong with the reporting.
Short, let me give you a little tip. Americans can spend more on fuel if they have to but when prices are cheap we will go for a drive in the finest sense of American traditions.
Davy on Mon, 21st Sep 2015 7:41 pm
NOoo, it is you that doesn’t know the difference. Life is not an arbitrary division in an economist mind. The only way you can interpret reality is through your Econ 101 abstractions. Of course you have common sense and normal knowledge but your world view is Econ 101.
That world view is proving a failure. You can’t answer why the fed is unable to normalize but you can claim all is well nonetheless. That is telling me something right there. Disconnected reality found in delusional attitudes appears like this. What should be done by you is reality testing with multiple disciplines that are science based not pseudoscience.
Davy on Mon, 21st Sep 2015 7:46 pm
Boat, I am American and you are not speaking for me and the traditions I hold dear. You are speaking of the traditions of the ugly American that which you idealize.
big momma on Mon, 21st Sep 2015 8:24 pm
forward contracts have NOTHING to due with predicting future prices. forward contracts are only for the exchange of paper for physical goods at a future date at an agreed upon price based on today’s information.
Makati1 on Mon, 21st Sep 2015 9:14 pm
“OPEC Sees a Return to $80 Oil” soon to be followed by the Greatest Depression around the world.
More unicorn shit.
rockman on Mon, 21st Sep 2015 9:32 pm
momma – Good point. But an update: the oil futures market gave up the pretense that physical oil (even if contracted on paper) was part of the trade. In the past one had to buy a new contract (at whatever the price was at the closing of the old contract) and physically swapped the paper. Now they don’t even pretend there’s real physical oil involved (but there is still a tiny bit of physical oil in some trades). Now a simple wire transfer from the loser of the oil price bet to the winner is made. Last time I saw the numbers there was upwards of 1 BILLION BBLS OF OIL being traded daily in the market.
IOW why pretend there’s physical oil backing up trades on 1 billion bbls of oil on a day when less the 10% of that oil actually exists?
MrNoItAll on Mon, 21st Sep 2015 9:38 pm
Davy — Let Nony and his sidekick Boat live in their respective “all is well” dream worlds for a little longer. A big fat dose of dreadful reality will be slapping them up the side of the head soon enough.
This whole economic bubble upon which the Nony’s and the Boat’s of the world base their realities is getting ready to pop, and there is nothing that can prevent it.
For TPTB, it has ALWAYS been about buying a little more time. By NOT raising the rate a puny 25 points, the Fed bought a little more time, but they also sent a crystal clear signal that the global economy is extremely fragile, so much so that even a slight tilt one way or the other will be enough to capsize the boat we’re all in and dump everybody overboard.
I am even more convinced that there is no way we get out of this year without a major economic crash, but who knows, maybe it will be early next year. Too soon, either way. And when that happens, the illusions will be crushed and the weeping and gnashing of teeth will commence in earnest.
And this time, there will be no new magnificent new oil discovery to propel the world economy out of the downward spiral. We are living the final bust of a long drawn out 200-year boom/bust cycle. This time, the bottom of the downward spiral will take us into deep dark chasms where untold horrors will play out.
So let Nony and Boat and the rest of the Nony sockpuppets frolic and live out their fantasies. Pity them for their ignorance and their inability to perceive reality.
MrNoItAll on Mon, 21st Sep 2015 9:41 pm
rockman — They’re doing the same thing with gold. Last I read, there is approximately 40 times more “paper gold” being traded than actual physical gold exists. And not JUST oil and gold, but probably every other major commodity as well.
Nony on Mon, 21st Sep 2015 11:12 pm
The futures strip represents the Vegas odds. Just like a sports contest. Saying that the predictions are not perfect is stupid. Football over/under is not perfect either (huge variance actually). But it is not consistently under or over. If it were, you could make riskless bets.
http://level2energy.com/tag/futures/
Read the second story. I link it indirectly so you can see the cute cat picture. Imagine that is me. 🙂
Bloomer on Mon, 21st Sep 2015 11:16 pm
Decade long high oil prices has operated like a brake on the global economy. Now that the brake has been lifted, the economy will take off and has room to run. While I am genuine concerned that a hyper carbon economy will accelerate the enviable climate disaster, low oil prices will create the needed growth to keep the economy afloat.
apneaman on Mon, 21st Sep 2015 11:39 pm
Nony says – “Saying that the predictions are not perfect is stupid.”
Un fucking believable
MrNoItAll on Tue, 22nd Sep 2015 1:17 am
Nony, here’s a perfect prediction. The world as you know it is going to end very soon. And, for that matter, is in the process of ending right now, in slow motion for the time being but pressure is and has been building. When my prediction comes true, you’ll know it. Until then, party on, never stop believing that technology and Econ 101 will solve every problem. Your happiness and peace of mind will be short lived, but blissful during its duration, I’m sure.
Makati1 on Tue, 22nd Sep 2015 5:08 am
At best, the US will be a 3rd world country by 2020. At worst, it will be radioactive dust. I am hoping for a position somewhere in between, for my grand kids sake, but I have no power to change anything in the US. I just watch the play. the Intermission is over. I think we are entering the last act and the fat lady is spraying her throat for the grand finale. We shall see.
Davy on Tue, 22nd Sep 2015 6:51 am
It is so hilarious the anti-Americans are waking up to the reality the US may be the last man standing before all the dominoes topple over over. It is clear emerging markets and the brics are setting up for a self-destruct. Of course the developed world will not survive that economic process but it is the anti-Americans that predicted the collapse of America and the decouple of the brics. That was supposed to happen and it appears it won’t. Ha ha ha!
In any case Asia will be a picked over locust field once globalism fails and its 4BIl people scramble to find food when there is not enough. Europe, North America, and Russia will fare much better. South America, and Russia probably the best unless climate change wrecks their situation. Asia is going down and hard. All population centers of any size are extremely vulnerable.
simonr on Tue, 22nd Sep 2015 7:42 am
Shouldnt it be RICS now, rather than BRICS
Davy on Tue, 22nd Sep 2015 7:45 am
Yea, Simon, great point Brazil is ugly now.
Kenz300 on Tue, 22nd Sep 2015 7:58 am
Electric cars and bicycles are the future…….
Less worry about the price of oil…..
shortonoil on Tue, 22nd Sep 2015 8:19 am
“Poor Short is scratching his head because demand is picking up because of cheap prices.”
Poor Boat can’t even read a graph! Demand is not increasing, “projected” demand is increasing:
https://www.iea.org/oilmarketreport/omrpublic/
Between 2’nd quarter 2014, and 2’nd quarter 2015 there was a 1.97% increase in consumption reported by the IEA. That pathetic increase occurred as a result of a 55% decline in price. That is not an increase in demand IT IS A GOING OUT OF BUSINESS SALE!!! Petroleum consumption is no longer responding in any meaningful way to price declines. A 1.97% increase in demand driven by a 55% decline in price signals an absolute train wreck ahead for the petroleum industry. That 1.97% increase according to the Etp Model does not even account for the extra energy it took to produce it! The Etp Model indicates it took an extra 2.51% for the year.
The price of petroleum is no longer high enough to provide for the replacement of reserves that are now being extracted. A third of the industry is losing money on every barrel they produce, and that price is going even lower in the future:
http://www.thehillsgroup.org/depletion2_022.htm
The quality of petroleum has now fallen so far it can not enough sustain its own production. It no longer provides enough energy to power economic activity equal to its cost. The industry cheerleaders will continue to extrapolate ridiculous meaning from disastrous results as the industry begins to routinely shut their doors.
http://www.thehillsgroup.org/
Boat on Tue, 22nd Sep 2015 8:45 am
Short, from your own link
Global oil demand growth is expected to climb to a five-year high of 1.7 mb/d in 2015, before moderating to a still above-trend 1.4 mb/d in 2016 thanks to lower oil prices and a strengthening macroeconomic backdrop.
Poor Boat can’t even read a graph! Demand is not increasing, “projected” demand is increasing:
Short, you are so full of shyt. The world market has been growing by over a billion barrels per day for years and you simply say it hasent. I have never in my life met people who are so hard headed. Then people who can’t read for themselves believe you idiots. No wonder we have world wars. Idiots with no reasoning power.
World wide the use of oil goes up over 1 billion barrels per day per year which is close to long term average growth. Period, end of discussion. Quit trying to confuse people
Boat on Tue, 22nd Sep 2015 9:05 am
Poor Short has lost his mind. And still has a following. The sign of the times, the sign of the end.
Global oil demand growth is expected to climb to a five-year high of 1.7 mb/d in 2015…hmmmmmmmm 5 year high? growth at a 5 year high? But But what if the 5 year high is revised down. hmmmmmmmm So 1,7 mbpd projection is then 1.3. Does that mean consumption still grew 1.3? Well yes. Oh shyt, here comes short….no no no short the economy shrank and the lack of btu’s from some tank busted and it’s all a mess now. Thank goodness we have you to see us through.
Maybe BC was right about the end of the crash happening. He gave it 6 months. We have 4 months and 1 week left till total chaos.
BobInget on Tue, 22nd Sep 2015 9:28 am
Today’s troubled market , inspired by VW’s pollution scandal is actually counter intuitive.
Anti pollution devices when working properly,
use MORE, not less fuel per distance driven.
Old enough to recall early days of catalytic
converters being removed by law breaking muffler installers? I am.
Once new soft-ware is emailed to thousands of VW dealers world-wide. TDI’s performance will suffe,r along with fuel mileage.
I recall my disappointment when I went from a 2008 Jetta VW diesel (that blew blue smoke when quickly accelerating) to a 2013 Golf with no smoke but 5% poorer milage. My good feelings about not polluting (I thought) were tempered by the fact of using an extra gallon of fuel each week.
Every mechanic that works on the 50 MPG, 2008 TDI offers to buy the car. (my daughter now owns) living in Oregon, not California where all that blue smoke is not tolerated.
shortonoil on Tue, 22nd Sep 2015 9:41 am
“Short, you are so full of shyt. The world market has been growing by over a billion barrels per day for years and you simply say it hasent.”
Most of the equity in a petroleum company is based on its reserves. As the price goes down the equity of the company goes down. With a price drop of 55% there is now a substantial portion of the world’s petroleum producers that now have a net worth of ZERO. The total worth of the industry is now less than half of what it was in January of 2014.
The industry is now in very serious trouble, and you can’t see why?
You are completely, totally, unequivocally deluded!
Makati1 on Tue, 22nd Sep 2015 9:49 am
short, many here don’t really understand economics or finance other than they got a paycheck that didn’t bounce … this week. That the equity value of resources varies with the going sales price is beyond their understanding.
I have the same problem explaining to my about-to-be retired friends that their house is only worth what someone will pay them when they want to sell. Not what they think it should be worth. Many who are counting on their home being their retirement plan, are in for a nasty shock. It is worthless if no one will/can buy it.
BobInget on Tue, 22nd Sep 2015 9:54 am
Two percent of 19 million barrels p/d is a shit load of oil. Short.
Demand keeps growing, as Mr Boat says.
Short is right about one thing, oil prices are too low to sustain increased production to match current demand much less projected.
Shortonoil keeps saying that because oil is too cheap BTU’s produced are insufficient to keep up this vast conspiracy called ‘oil bidness’.
Again, I need to point out transportation conveyances, from Choo-Choo’s to Cars to Aircraft are getting more fuel efficient by the year. Heating and cooling fuel consumption has halved in the last ten years as have refrigeration devices.
I hasten to point out how little electric power is
generated by oil today as compared to the good old days. Natural Gas is is (for a time) abundant and cheap. NG does now for the oil and electrical power industry what oil did only a decade ago.
If operators need to replace diesel power with wind or PV for pumping of oil or water, they will.
marmico on Tue, 22nd Sep 2015 10:39 am
The quart shy of oil is a fuctard. You should review his “Available Net Energy” model from 2008. I wonder how many morons purchased that paper for $59.99?
How many barrels of oil did it take to produce that 400,000. If it was shale, maybe 350,000.
Prove it in the data fuctard. Rig count down 60%, completion count down 35% and a barely a year over year downward blip in distillate demand.
Davy on Tue, 22nd Sep 2015 10:48 am
Marmer, I noticed I need to stay out of your way on days when the market is foul. Today is a particularly foul day AND it is Tuesday which is normally a great day. So much for that dead cat bounce. You must be really irritable. It shows in your comment. Most of us here appreciate good comments from either side but yours are really going down hill in quality and tone. Is something wrong? This is a friend reaching out a hand as a friend. Can I help you in any way?
shortonoil on Tue, 22nd Sep 2015 10:53 am
“Two percent of 19 million barrels p/d is a shit load of oil. Short.”
A two percent increase in sales on a 55% decline in price is a net zero for the industry. If you cut the price of horse shit by 55% sales would improve by more than 2%. At its present growth rate, and if this relationship is anywhere near linear, in one year the price of oil would have to be $19.80/ barrel for the industry to sell what it would be producing. $19.80/ barrel does not even cover the lifting cost for most of the industry.
The industry can not survive for long unless there is a major wash out in the near future. Oil can no longer command a high enough price to justify producing a substantial portion of it. What part of not understanding that the industry is not going to continue to lose money just so there is gas at the pump for you don’t you get? You are confusing them with that fat guy that flies around with a pack of reindeer.
The petroleum industry is now in serious trouble; so is the civilization that is based upon it!
BobInget on Tue, 22nd Sep 2015 11:11 am
Marmico,
Tight shale rock will still viable When oil gets realistically priced. If a person is pumping water up a steep hill or high rise, one need not confine
one’s energy source to hydro power alone.
Two things to say at this point.
1) Iran and Saudi Arabia and Russia and UK and USA and ISIS are currently fighting over oil and gas access. (with a little religious politics thrown in with oil greed)
Kindly either refute this or stop fiddling with decades old ‘scientific papers’ that ignore historic events on the ground.
2) Notice, for a year I’ve been warning of a ME refugee crisis.
Now that the crisis is more evident, no one is ‘connecting the dots’. To admit there is even a crisis we would need to ask, Why?
Refugees are direct product of wars.
Now tell me why, for the last years we have ignored the plights of Sudanese oil war refugees?
Let everyone here know why if the US and KSA
let millions die in Yemen for control of that pitiful nation’s oil, it’s somehow OK?
Maybe that’s more then two things, sorry to have wasted you time.
GregT on Tue, 22nd Sep 2015 11:21 am
Boat said:
“Global oil demand growth is expected to climb to a five-year high of 1.7 mb/d in 2015, before moderating to a still above-trend 1.4 mb/d in 2016 thanks to lower oil prices and a strengthening macroeconomic backdrop.”
Which is a direct quote from here:
https://www.iea.org/oilmarketreport/omrpublic/
Of course what Boat won’t quote from the same summary:
“‘Oil prices sank to six-year lows in August as a supply overhang grew and concern deepened over the health of the global economy, especially in China. After rebounding on a slew of economic and fundamental data, prices turned volatile in September. Brent was last trading at $48.10/bbl with NYMEX WTI at $45.20/bbl.”
“Oil’s latest tumble is expected to cut non-OPEC supply in 2016 by nearly 0.5 mb/d – the biggest decline in more than two decades. Lower output in the US, Russia and North Sea is expected to drop overall non-OPEC production to 57.7 mb/d. US light tight oil, the driver of US growth, is forecast to shrink by 0.4 mb/d next year.”
As usual Boat, you are the one that is completely full of shit.
BobInget on Tue, 22nd Sep 2015 11:35 am
Respectfully, Shortonoil.
Do you concede ANY international oil wars?
Do you maintain oil producing nations Syria, Russia, KSA, Iran, USA, UK, not to mention Israel are spending billions fighting over farmland?
Do believe our current ‘oil glut’ genesis had a little something to do with Iran/Saudi/Russian/US/Uk/Syrian/Iraq proxy war?
Did tight oil production in the US surpass expectations? Did domestic shale cut balance of payments? Did so called ‘fracking’ give great boost to an economy on the verge?
As drilling crews are laid off, scattered around the world, can US production pick up next year?
IMO, US production may never repeat past performance. When imports resume nine or ten million barrels a day instead of todays bloated 7.5, it’s rinse and repeat.
A lower rig count today spells far higher, economy killing prices tomorrow.
shortonoil on Tue, 22nd Sep 2015 1:18 pm
“A lower rig count today spells far higher, economy killing prices tomorrow.”
One one hand you are arguing that demand must go up; for demand to go up there must be additional production; or there would be nothing to bring about an increase in demand. If production goes up price must go down; if the last year is any indication that is a 55% reduction in price for a 2% increase in demand. There is no way to have an increase in production without an increase in demand. Consequently there is no way to have an increase in demand without an increase in production. If production increases, prices crash to the point that producers can no longer stay in business. If demand increases production must increase, and there is no way that producers can stay in business.
This has nothing to do with Syria, Saudi Arabia, Russia, or China. Without petroleum the economy crashes, and without additional price there will be no additional petroleum. When production goes down, as it must for petroleum producers to continue producing petroleum, the economy goes down. A lower rig count spells lower production which kills the economy, not a higher price.
This has nothing to do with spooks, terrorist, or dictators across the pond. It is simply depletion at work, and because of it there is no way that petroleum can continue to power a growing economy. Soon, it will not be able to power any economy at all because there will not be anyone reaming who can afford to produce it.
Depletion is driving extraneous factors, extraneous factors are not driving depletion.
Apneaman on Tue, 22nd Sep 2015 1:58 pm
“Did so called ‘fracking’ give great boost to an economy on the verge?”
Bob, how about kept it from tumbling further? As the bar gets lower for the masses, little victorie are just that, little victories. Little victories in a losing war. Bob, I think if you took a break from oil related research and concentrated those skills and time on an every growing number of your less fortunate fellow citizens you would surely find that many no longer give a fuck as the “economy” is now something for the haves which they are not. Do you know how bad moral has to be for that many Americans to throw in the towel? At this point, no amount of propaganda will bring these folks back – only jobs for them and/or wages beyond subsistence. If one is only viewing things through one’s portfolio stats, then one has a very incomplete and narrow picture indeed. These masses of impoverished are growing and could soon be legion. This is now global. Many are desperate for employment and are tired of hearing the recovery lies. Fat happy privileged folks should pray they do not become organized. You know, like in France in the late 1780’s.
India menial job postings get millions of applicants
Jobs require only fifth-grade education
“About 2.3 million people applied for the 368 jobs with the government of Uttar Pradesh. Hundreds of candidates with doctorates and other advanced degrees applied for the jobs that pay about 16,000 rupees ($319 Cdn) a month and require a fifth-grade education.
The massive number seeking the menial jobs reflects high unemployment levels in the state — India’s most populous — and across much of the country.”
http://www.cbc.ca/news/world/india-menial-job-postings-get-millions-of-applicants-1.3233662
2 years ago – much worse now.
Applicants For Jobs At The New DC Walmart Face Worse Odds Than People Trying To Get Into Harvard
“A new Wal-Mart store in Washington D.C. has been inundated with applications for associates.
The store is currently combing through more than 23,000 applications for 600 available positions, reports NBC Washington.”
http://www.businessinsider.com/wal-mart-receives-23000-applications-2013-11
Boat on Tue, 22nd Sep 2015 5:01 pm
Short,
Without petroleum the economy crashes, and without additional price there will be no additional petroleum.
This scenario just happened. During dropping prices Russia, Iran, Iraq and Saudi all increased production. The result? Fracking among other competitors are shutting down oil drilling.
Bring it gang. More oil at less price. This is confusing to short how this could happen.
apneaman on Tue, 22nd Sep 2015 6:11 pm
Boat, as much as I hate any kind of argument from authority or bringing up education levels, I think it applies in your case. You are clearly out of your depth here. You do not seem to even understand the argument. This is independent of any cognitive bias and motivated reasoning. Which is also hindering you.
Makati1 on Tue, 22nd Sep 2015 6:28 pm
The density of some exceeds that of lead.
Boat on Tue, 22nd Sep 2015 7:41 pm
Apeman,
Your so right. I understand so little of your reasoning. Underemployment and unemployment has more to do with adding employees that are not needed than anything.
GregT on Tue, 22nd Sep 2015 8:14 pm
“Underemployment and unemployment has more to do with adding employees that are not needed than anything.”
That would be exactly the case from back in my oilfield days. The government mandated that the oil companies had to employ local workers. Whether they were needed or not.
Boat on Tue, 22nd Sep 2015 8:25 pm
GregT,
What country are you from? Sounds socialist.
apneaman on Tue, 22nd Sep 2015 9:27 pm
There you go again Boat, going off on some weird nonsensical tangent – seriously strange. Big picture boaty, you don’t see it because you don’t want too. Limits to growth and all it encompasses, you cannot even fathom the possibility that it could happen, let alone is. This is why you stick to a few happy econ 101 charts and stats. Remain safely in the abstract and ignore or downplay the very obvious physical realities like thermodynamics or AGW. Alarmist you once called it. Sure thing boat, tell yourself.
Record U.S. land area burned by wildfires in August
“More than 4 million acres of U.S. land were charred by wildfires in August, setting a new record for area burned in the month, NOAA reports.
Scorching temperatures and drought conditions helped create tinderbox conditions in the Pacific Northwest, where many of the fires occurred.
So far this year, over eight million acres have burned, the most on record. The active season fits into a long-term trend towards more destructive wildfire activity.”
https://www.washingtonpost.com/blogs/capital-weather-gang/wp/2015/09/22/record-u-s-land-area-burned-by-wildfires-in-august/
MrNoItAll on Tue, 22nd Sep 2015 11:33 pm
Boat said: “Russia, Iran, Iraq and Saudi all increased production.”
They did — by an insignificant amount when compared to total global production. And keep in mind, they are pumping flat out from the legacy fields and assorted currently developed fields that they already have. The meter is pegging toward empty on a lot of those major oil fields.
You said: “without additional price there will be no additional petroleum” — so true. What oil is left requires too high a price — too high energy input to get the needed energy out — it is a losing proposition.
It sounds like you know full well that the current economic and oil realities guarantee we’re on the tail end of the Age Of Oil. And with everybody pumping flat out at prices too low to allow reserve replacement, that tail end is growing shorter by the day.
But hey, you get relatively cheap gas prices for now. That’s awesome, Boat.
shortonoil on Wed, 23rd Sep 2015 7:07 am
Boat said: “Russia, Iran, Iraq and Saudi all increased production.”
Yes they did, and their income stream is less than half of what it was 18 months ago. What exactly is your point: that they are going broke trying to produce oil? That is exactly what we said was going to happen 18 months ago!
Petroleum production is the process of extracting energy from the earth, it is not the process of putting black goo in a barrel. Until the difference is understood, there is nothing understood about petroleum production.
http://www.thehillsgroup.org/
BobInget on Wed, 23rd Sep 2015 9:12 am
23-Sep-2015 13:10:17
(John Kemp is a Reuters market analyst. The views expressed are
his own)
By John Kemp
LONDON, Sept 23 (Reuters) – Gasoline sales to U.S. motorists
rose by more than 5 percent in July compared with the same month
a year before, according to the U.S. Energy Information
Administration (EIA).
Gasoline sales are rising at the fastest year-over-year
rates for more than 14 years as demand surges.
Continued economic expansion, rising employment and cheaper
fuel are putting a record volume of traffic on U.S. roads as
well as encouraging motorists to upgrade to larger and more fuel
hungry vehicles.
Gasoline sales were up 5.1 percent in July 2015 compared
with July 2014, according to the EIA’s Prime Supplier Report
published on Tuesday (http://link.reuters.com/pyv65w).
Sales for the first seven months as a whole were up 4.4
percent compared with 2014 (http://link.reuters.com/myv65w).
The Prime Supplier Report is based on a census of around 200
firms that produce, import or transport across state boundaries
selected fuels and sell the products to local distributors,
local retailers or end users.
Prime Suppliers account for substantially all fuel delivered
to local distributors, retailers and end users in the United
States so the census provides a comprehensive picture of demand.
Fuel consumption is being boosted by more traffic on the
roads. Vehicle-miles travelled were up 3 percent in the first
half of the year compared with 2014, according to the Federal
Highway Administration.
Motorists are also opting for larger vehicles. Car sales
fell almost 3 percent in the first eight months of 2015 but
sales of light trucks, which include sport utility vehicles,
surged by 10 percent, according to WardsAuto.
Light trucks typically use nearly 40 percent more fuel for
the same journey, according to U.S. government statistics, so
the changed sales mix is boosting consumption (“Summary of fuel
economy performance” 2014).
Fuel sales in California, where gasoline prices have jumped
sharply as a result of refinery problems, have lagged the rest
of the nation.
Gasoline sales in the state for the first seven months rose
by 4 percent, compared with a nationwide average of 4.4 percent.
In North Dakota and Oklahoma, where state economies have
been hit by the downturn in oil and gas drilling, fuel sales
have actually fallen compared with 2014.
But for the country as a whole, prime suppliers’ gasoline
sales volumes are rising at the fastest year over year rate
since 2001 and before that the late 1980s
(http://link.reuters.com/ryv65w).
ghung on Wed, 23rd Sep 2015 9:22 am
Thanks, Bob. Thelma and Louise are alive and well, for now.
Davy on Wed, 23rd Sep 2015 9:33 am
Bob, the other corns are loath to give me an answer to why the fed can’t normalize maybe you can. Bob, maybe you can explain what is going on with China and the death of the commodity supper cycle.
You are so invested in the status quo you refuse to contemplate demand destruction, commodity supply destruction, and financial deflation. You can’t contemplate the end game of the status quo because you are so invested in it.