[sparky]

.
Once again , what oil are we talking about ?
for me , oil is , at normal temperature and pressure ,an hydrocarbon liquid which float on water
lighter , it's the whole shebang of "condensates " .....heavier ,it's tar juices

as for the price oil , it's what the client can pay , that might be pretty much anything ,
in the case of a country at war ,
the government would pay a ridiculous price unrelated to normal term of trade just to obtain some

[ROCKMAN]

First, thanks to all for participating in the poll about the price of oil on the date of global PO and years subsequent.

And, of course, the answer to the question is simple: there is no f*cking answer. LOL. I don’t mean to be too bitchy but has everyone been asleep the last 10 years? Did the price of oil increase from $30/bbl to $145/bbl in 2008 because we had passed (or were fast approaching) the date of GPO? Did the price of oil decrease from $145/bbl to $38/bbl in 2009 because we realized the date GPO hadn’t happened and wouldn’t for many years? Did the price of oil increase from $38/bbl in early 2009 to over $115/bbl in the next several years because had passed (or were fast approaching) GPO? Did the price of oil decrease from $115/bbl to $30/bbl in the last year because we realized the date of GPO hadn’t happened and wouldn’t for many years?

So if the price of oil increases again to $100+/bbl in the next 5 years will that be because we’ve passed the date of GPO (or are fast approaching it)? The price of oil over the last 10 years has had nothing to do with the date of GPO. The price of oil was been set by the primary buyers of global oil production…the refineries. And the refineries set the price they would buy oil based their projections of how much refinery product at what price the consuming public would accept. And the public obviously doesn’t decide how much refinery products they buy or the price based on their estimate of the date of GPO.

When GPO is reached (if we aren’t already there today) the price of oil might be $30/bbl (as it is today) or it might be $145/bbl as it was back in 2008. As always the price of oil will be set by the affordability of oil. Just as there was an “affordable” supply of $100+/bbl a couple of years there can also be an “affordable” supply of $30/bbl in the future…just as there is today.

It still amazes me that regardless of which camp some folks fall in (GPO is upon us vs GPO is decades away) there are those who think there will be a major sea change just because that magical GPO date is reached. Consider the extreme sea changes we’ve seen in the price of oil in just the last 10 years: it doesn’t matter which camp you’re in: your expectations have been proven entire erroneous at least once.

A wise man is one that knows the answer to a question. A very wise man is one who knows he can’t derive the answer to every question. Or as we crudely saw in the oil patch: “Sit down…strap yourself in…and shut the f*ck up”. LOL.

[sjn]

ROCKMAN, agree entirely. However: What determines the global affordability of oil, or any other commodity? And then: Why has global affordability (of oil) been so volatile for the last decade? Finaly: What is likely to occur as the quality of resources declines, weather becomes less predictable (due to Climate Change brought about as a result of the FF boom), and costs rise? IMHO, the answers to those questions describes the POD.

[ralfy]

Probably average income earned (for most, less than 10 dollars a day, and for many only around 3 dollars daily). The current middle class (a fraction of the world's population) are relying on them to earn more because much of the former's wealth consists of numbers in hard drives whose value can only continue increasing as more goods and services are sold by the businesses that they work in or that they invest in.

For volatility, the cause is a combination of peak oil leading to higher energy production costs coupled with fallout from financial speculation due to incredible levels of credit created (whose value can only be maintained given increasing production and consumption of goods and services, which means more cheap oil produced and sold).

As for the result of a decline in resources, etc., the last link in this post might help:

has-the-danger-of-peak-oil-passed-t72293.html#p1296507

[sjn]

ralfy, indeed. Meadows, et al. Nailed it.

[ROCKMAN]

sjn/ralfy - You get it...it.s the POD. But within the POD it's all about economic health. Oil ran $100+/bbl for years because the global economy could afford it...whether we had reached GPO or not. And oil is now $30/bbl because that's what it can afford...whether we're at GPO today or not for another 30 years.

Again to get away from the date obsession let's go back decades ago when no one would argue we were at or close to GPO: in the late 70's the inflation adjusted price of oil was above $100/bbl. Those prices had nothing to do with GPO.

[ennui2]

$this->bbcode_second_pass_quote('pstarr', 'T')his last price spike was also caused by a specific non-stated yet obvious geologic and production slow/shutdown.

[ROCKMAN]

Let's be very clear: no oil price spike (1973, 1979, 2008, 2012 or at any other time was the result of the world reaching PO. No one can argue against that point given we're producing more oil today then ever before. IOW we have yet to reach global peak oil. We might've there today...we might not be. Some decades down the road it may be clear. I don't really give a f*ck how anyone explains those price spikes. They were caused by the POD. But one thing for certain: they were not caused by GPO.

The oil consumers have never had all the AFFORDABLE OIL they wanted...and never will. But they have always had the oil the could AFFORD TO PURCHASE. And they always will. Just as they can today when the world is producing 95 million bopd. Just as they will be able to acquire all the oil they CAN AFFORD sometime in the future when the world can produce no more then 75 million bopd. And when that day comes oil might cost $100/bbl....or $30/bbl as it is today. The last 15 years should have made the disconnect between the price of oil and the global production rate crystal clear.

And yes: there will be many so entrenched in their own PO mythology that they could never accept the reality just presented.

[sjn]

ROCKMAN, this discussion of GPO date has given me a thought. We get caught up in definitions of Conventional Peak, or all liquids Peak, or my old favourite Net Energy Peak. I wonder if the important one in many ways might have been the Oil industy (or extractive industries) Maximum Profitability Peak. An inflection point where the aggregate business of providing the resources needed by Industrial Civilisation stopped being self-supporting in its own growth, and started acting as an economic sink accumulating debt. Unlike the maximum volume ever produced, it's not an event where you can look back say “There's the maximum, at the peak of that curve.”, but instead individual producers having problems becomes a trend, then the norm.

[onlooker]

I think I totally understand and agree with what Rockman is stating. What matters is not a particular oil price at a particular date but the whole ongoing dynamic of oil and the economy. We saw this vividly with what happened in 2008 and the shock to the world's economies of oil at that price and subsequent easing of prices due to much of the LTO oil coming online. All of this not in a vacuum but within the larger context of the world economy and other pressing factors on it. These factors among others being debt levels as well as macro trends in employment and outsourcing. Consumers purchasing power as slowly but surely been transferring to the East and their consumers cannot afford higher priced oil and western consumers sagging economic fortunes also mean they cannot afford higher priced oil. So given the new oil online and the decreased purchasing power of consumers worldwide, it was natural for oil prices to manifest this downward trend. As was stated affordability is the key to oil purchases and use. The wider economy dictates to the energy sector and vice-versa. All this part of the Peak Oil dynamic. Here is a chart of oil prices from 1980 to 2016.

150117-2.png

[ennui2]

$this->bbcode_second_pass_quote('onlooker', '
')...western consumers sagging economic fortunes also mean they cannot afford higher priced oil.

[sjn]

ennui2, the point is we use these mechanisms we call “markets” to match buyers and sellers at a price where they both perceive value. Markets can fail when there is an expectation they do anything else, but a glut is not possible where buyers and sellers are able to reach an agreed price, that is to say, the market is functioning. Sellers may find their perceived value of their own products are below their cost of production, this is a problem for them, perhaps even an existential crisis, but it's not a glut.

In a Demand Economy or during a market failure, a glut is possible where supply side products for sale pile up unable to find matching demand, or else a shortage may develop where demand outstrips supply. We don't have a Demand [Global] Economy, and as far as I know, every barrel of oil is finding a buyer.

[peripato]

$this->bbcode_second_pass_quote('sjn', '.').. and as far as I know, every barrel of oil is finding a buyer.

[EdwinSm]

$this->bbcode_second_pass_quote('sjn', 'a')s far as I know, every barrel of oil is finding a buyer.

[sjn]

ROCKMAN is right. Every barrel of oil in storage is bought and paid for. Those who bought it perceived they received value at the price they paid.

[ennui2]

$this->bbcode_second_pass_quote('sjn', 'a') glut is not possible where buyers and sellers are able to reach an agreed price, that is to say, the market is functioning.

[AdamB]

$this->bbcode_second_pass_quote('pstarr', '
')I've shown that every previous recession (save the one in the late 1990') was preceded by a significant petroleum shortage. Not wheat. Not gold or tungsten but oil.

[AdamB]

$this->bbcode_second_pass_quote('Shaved Monkey', 'S')urely we are in the delusional stage.
No need to panic/plan buy a new SUV, PO isnt going to happen