[Tanada]

$this->bbcode_second_pass_quote('GASMON', '')$this->bbcode_second_pass_quote('', 'O')il will cost less and less as time passes by, because we could afford to consume less and less.

[Pops]

Oil will cot less not because of increases in supply but decline in demand.

I've said that over time the economy will deflate as the energy slaves expire, one consequence of that is the nominal price of oil will necessarily fall rather than rise even as the supply falls. More and more people less and less able to pay.

Here is one thread:
post1147217.html?hilit=%20price%20of%20collapse%20#p1147217

[ennui2]

I don't see it falling as much as having an absolute ceiling, which is true of any commodity. That ceiling is likely to be well above what it is today or has been in the past.

[ROCKMAN]

pstarr - I still prefer looking at yearly average oil price...maybe even as far as a two year moving average. Everyone remembers the $147/bbl spike but the economy doesn't have the ability to change very much over a few months period. So instead of that spike look at the 2008 average: $98/bbl. Then as I've pointed out elsewhere, look at the 2009 average price: $58/bbl. Of course oil started out in 2009 under $40/bbl and ended around $70/bbl. But the economic mass is just to big to shift very quickly month to month IMHO as witnessed by the fact that the global economy (excepting Chins of course) could buy much of that sub $40/bbl oil.

And I especially like the yearly average game because it allows me to point out that the yearly average price of oil was essentially the same before the '09 price crash and the collapse we just experienced. Coincidence? Financial karma? Evil plot by TPTB?

[ralfy]

$this->bbcode_second_pass_quote('ennui2', '')$this->bbcode_second_pass_quote('ROCKMAN', 'T')echnically speaking isn't there less oil reserves left in the world today, selling for $55/bbl

[Pops]

$this->bbcode_second_pass_quote('ennui2', 'I') don't see it falling as much as having an absolute ceiling, which is true of any commodity. That ceiling is likely to be well above what it is today or has been in the past.

[ralfy]

It should be noted that oil consumption outside the U.S., Japan, and EU kept rising, likely supported by QE.

[Pops]

Right Ralfy, goes to show that one gallon to a $2/day Foxcon employee is vastly more useful and therefore valuable that one gallon more to an American.

[shallow sand]

Hope ROCKMAN is correct. Makes sense. However, one can also probably argue a 10-14 year cycle since US became a net importer

Inflation adjusted average annual price in 11/14 dollars from 1946-1973 range $19.41 to $27.48

1974-1985 $44.71 to $107.37

1986-2003 $17.26 to $41.79

2004-2014 $47.05 to $100.01

2015-? Will we see another 1986-2003??

[ennui2]

$this->bbcode_second_pass_quote('ralfy', '
')According to the EIA, U.S. shale oil is expected to peak after only a few years. Also, producers have to sell oil at a higher price to pay for their costs.

[Tanada]

$this->bbcode_second_pass_quote('ennui2', '')$this->bbcode_second_pass_quote('ralfy', '
')According to the EIA, U.S. shale oil is expected to peak after only a few years. Also, producers have to sell oil at a higher price to pay for their costs.

[ralfy]

$this->bbcode_second_pass_quote('ennui2', '
')
That's probably right. The boom will probably peter out within 5 years. However, I have no doubt that the fossil fuel industry will be continuing to pursue every last avenue, including tar sands, CTL, the arctic and methane-hydrates. I used to disregard these things, but I've learned not to.

[Tanada]

WTI, Brent, Natural Gas, Gasoline for blending, Copper, Silver, Gold Platinum...basically the main 8 commodity energy and metal products all went down today. This is not an Oil problem, it is an economy problem, IMO.
$this->bbcode_second_pass_quote('', '
')Energy Futures

OIL 53.85

-0.27 -0.50% 218396
BRENT 57.55

-0.35 -0.60% 144439
NAT GAS 2.914

-0.18 -5.82% 106046
RBOB GAS 1.4353

-0.0184 -1.27% 4535
METAL FUTURES
Symbol

Price

Change

%Change

Volume
GOLD 1182.70

-17.70 -1.47% 66835
SILVER 15.67

-0.606 -3.72% 23251
COPPER 2.8265

-0.0275 -0.96% 20123
PLATINUM 1208.90

-9.20 -0.76% 388

[sparky]

.
One of the thing which underlies oil pricing is this kind of stuff
drilling is a science , but predictably stuff happen !!
a great view of a drilling bit in action , it indicate the kind of mud pressure used

https://www.youtube.com/watch?v=1HiBeLRsJoM

[joyfulbozo]

i am the one who is not affected by oil prices... am happy with oil pension checks :D

[ROCKMAN]

Pops - You like looking at numbers and here's another approach I thought of this morning. Curious if you see the data the same as I do:

Lets plot a metric: price function demand…PFD: million bbls consumption/$ per bbl. So when prices were higher: PFD = 90 mmbbl/$95/bbl = 0.95. And today: PFD = 90 mmbbl/$60 = 1.5.

Here are some historical points. Using inflation adjusted oil prices, of course

http://inflationdata.com/Inflation/Infl ... _Table.asp

1980: PDF = 0.59 ($107.37/bbl)
1985: PDF = 1.01 ($59.10/bbl)
1990: PDF = 1.59 ($47.79/bbl)
1995: PDF = 2.73 ($25.96/bbl)
2000: PDF = 2.05 ($37.55/bbl)
2005: PDF = 1.40 ($60.45/bbl)
2008: PDF = 0.86 ($100.01/bbl)
2009: PDF = 1.45 ($58.76/bbl)
2010: PDF = 1.14 ($77.11/bbl)
2011: PDF = 0.97 ($91.39/bbl)
2012: PDF = 1.01 ($88.95/bbl)
2013: PDF = 0.98 ($92.41/bbl)
1/6/14: PDF = 0.87 ($104/bbl)
1/9/14: PDF = 1.04 ($90/bbl)
1/1/15: PDF = 1.64 ($55/bbl)

Of course since the numbers aren’t out yet I had to assume consumption numbers for 2014 so I stuck with the last one we had: 90.4 mmbopd.

The obvious should be obvious: the higher the price of oil (adjusted for inflation) the higher the price of oil the fewer bbls per $’s spent. IOW PDF is 1 or less. And when prices go down PDF increase beyond 1. No big surprise there. But now hopefully someone with time will fill this metric out and post the global recessions on it and see if we see a similar (and perhaps more meaningful) relationship to the global recession cycle. Notice the lowest PDF (1980) proceeded the greatest recession since the great depression. And one of the highest (1995) preceded good economic times especially in the US. And what trend do we see starting in 2012: progressively lower PDF as we approached the oil price collapse. Just as we just saw starting in 2005 which proceeded the 2008 recession. Since 2011 matters held fairly steady around 1 but then began slipping and by the beginning of 2014 we were once again well below 1. And today…BAM!...way back up to 1.6. Notice PDF from '08 to '09: 0.86 to 1.45. today. Which doesn’t necessarily mean we’ll see consumption increase in 2015. It takes time for the global economies to rebound. Remember in 2009 the world consumed less $58/bbl oil then it did $98/bbl in 2008.

[Tanada]

This kind of looks like data for the economic utility of oil, the more you use at a lower price the better your economy expands.

[Pops]

That's good ROCK. It would also be interesting to see this plotted against futures prices or the stock market as well - or even against oil prices alone - would a low PDF today mean a lower oil price in a 14.32 months?