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THE Price Of Crude Pt. 15

General discussions of the systemic, societal and civilisational effects of depletion.
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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Sat 05 Feb 2022, 02:38:08

Consider this:
Putin does not need to invade Ukraine to score a big win as he already has. His buildup of tensions has raised the price and oil by about $20/b and dry gas an even larger amount based on BTU equivalents.

As Russia exports some 14 million barrels per day of oil, oil products, and gas that $20 increase (an approximate figure) is bringing in some eight or nine Billion a month in extra cash flow.
He can certainly keep those troops fed and supplied out of that and pocket the balance. He might just let them sit there for a couple of years rather then invade and bring on harsher sanctions or even a real war he can't win which would eat into his profits.
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Re: THE Price Of Crude Pt. 15

Unread postby Pops » Sat 05 Feb 2022, 09:52:36

I'm sure traders see global war threats as a good buy signal but US oil and product stocks are below the 5 year average, an average that includes a bad couple of years. At the same time drillers haven't been spending as much on drilling — although it is slowly returning. Yet EIA predicts records will be broken and oil prices will fall any day now.
https://www.eia.gov/petroleum/weekly/?src=email

The only thing increasing is the Permian which is on a roll, shooting DUCs in a barrel. But everything else is just hobbling along relatively flat, 1Mb/d below 2019—which is to be expected, my doodle from 10 years ago was all about conventional continuing decline as we were lulled to sleep at the wheel by LTO.

Doesn't seem like it will be long now before the US peaks again. It's all about the Permian. A couple of years maybe, 5? I really thought it would be longer. OPEC isn't doing much better, missing their target for months now.
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Re: THE Price Of Crude Pt. 15

Unread postby Tuike » Sat 05 Feb 2022, 10:19:19

$this->bbcode_second_pass_quote('dissident', 'h')ttps://www.youtube.com/watch?v=HB1eGDpEeQY

Long video but worth listening to Art Berman explain the global energy price crisis.


Art said the world isn't running out of energy resources anytime soon. The problems are that Europe is moving too fast in green energy transition. Wind power propellers aren't moving in lull winds. The distribution of stuff is troubled as stuff is in wrong place at wrong time. High energy price is going to cause interest rates to rise, which is happening right now. The video is dated in last October.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Sat 05 Feb 2022, 11:15:13

$this->bbcode_second_pass_quote('Tuike', '')$this->bbcode_second_pass_quote('dissident', 'h')ttps://www.youtube.com/watch?v=HB1eGDpEeQY

Long video but worth listening to Art Berman explain the global energy price crisis.


Art said the world isn't running out of energy resources anytime soon.


Art has never been a run of the mill Happy McPeakster, like ASPO proper or TOD or Colin Campbell and Co., or even the folks originally populating this site. He has always been more of an industry naysayer, who consistently demonstrates that his unfamiliarity with the topic he pontificates on is minimal at best. Him just saying the world isn't running out of energy resources makes me doubt 15 years of scientific and practical application research on the topic trying to pin down what in the hell "anytime soon" is defined as, in years. Thought I had it figured out a few years ago, but Art is like the perfect counterintuitive indicator, if he says the world isn't running out, my work must be wrong.
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Re: THE Price Of Crude Pt. 15

Unread postby Outcast_Searcher » Sat 05 Feb 2022, 12:58:04

So WTI now at about $92 a barrel with the trend clearly up recently, and no sign of crude consumption even slowing down. So much for the theories of the next spike in crude oil causing economic doom, etc. So much for the claims that WTI must go to zero real soon now as the global economy couldn't "afford" to produce it.

The good news is that if the price of WTI crude get to $100 or above on a sustained basis, that implies US gasoline prices (where it's cheap) at something like $3.50 or above (based on it already being $3.20ish around here recently with WTI crude averaging over $80 in recent weeks, per the chart on the March '22 contract). That should help nudge people toward HEV's, if not PHEV's and BEV's, as gas fill-ups get annoyingly expensive once again, over and over. (Whether you're driving a 10ish mpg large vehicle, or a highly efficient HEV).

https://www.cnbc.com/quotes/@CL.1

For me, driving ordinary ICE sedans and filling up at about a quarter of a tank, that gets to be about $40 -- which is my psychological point of it getting really annoying, re the price. This will differ for folks based on finances and attitude about wasting money, frivolous spending to have fun, etc, obviously.

(Again, you can hedge by being long oil stocks or funds (VDE, BP, CVX, OXY, et al) and collecting the dividends, etc, but it's still annoying to see that money flow out of your wallet again and again at the pump, IMO -- at least for people with any sense of frugality at all (who want to retire, go on vacation, take care of their family, etc. with their money).
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Sat 05 Feb 2022, 13:31:09

$this->bbcode_second_pass_quote('Outcast_Searcher', '
')For me, driving ordinary ICE sedans and filling up at about a quarter of a tank, that gets to be about $40 -- which is my psychological point of it getting really annoying, re the price. This will differ for folks based on finances and attitude about wasting money, frivolous spending to have fun, etc, obviously.


I filled up my ICE powered machine yesterday. And was flipping steamed. This is the old college kid's car, both of them used it, and when they were done, I slapped studded snows on it, and it became the family winter snowmobile, better than any of my old AWDs in terms of stopping, going, you just can't beat old school even in a foot of snow with mixed ice.

Anyway, it hadn't had fuel put into it in 7 months, and the kids had been doing that previously. We ran the tank down during the most recent foot of snowfall, I stopped to fill it up, and almost considered going over to reach through the little money slot to try and get my hands on the poor clerk in his bulletproof glass enclosure. $40!!!! WHAT!!! I didn't even realize crude was climbing back to where it should be for the health of the world (if not double again even) and the sheer magnitude of how much I've been spoiled by EVing everywhere for a year was a shock!

Okay fine, sure, I can afford to fill up the car/snowmobile a couple times a winter, but I DON'T LIKE IT. I'm thinking maybe studded snows on the Leaf next year.......
Last edited by AdamB on Sat 05 Feb 2022, 14:17:17, edited 1 time in total.
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Re: THE Price Of Crude Pt. 15

Unread postby Outcast_Searcher » Sat 05 Feb 2022, 13:55:22

$this->bbcode_second_pass_quote('AdamB', '4')0!!!! WHAT!!! I didn't even realize crude was climbing back to where it should be for the health of the world (if not double again even) and the sheer magnitude of how much I've been spoiled by EVing everywhere for a year was a shock!

Okay fine, sure, I can afford to fill up the car/snowmobile a couple times a winter, but I DON'T LIKE IT. I'm thinking maybe studded snows on the Leaf next year.......

I sure won't be buying any more pure ICE's, even though I don't drive much (even when Covid goes to an endemic state). I think FINALLY, EV's are getting to the point that there will be a lot of them and lots of places to charge them. And with the Toyota HEV system, with the 150K mile / 10 year warranty on that, the small premium for an HEV will easily pay for itself in terms of gas savings. And if WTI averages over $100 a BBL over time, it will pay for itself several times in the 200,000ish miles or more a quality modern HEV should provide.

For a PHEV or BEV, it will depend on economics at the time. Hopefully batteries, like the Tesla LFP (Lithium Iron Phosphate) chemistry, being safer, cheaper, and longer lasting, will make the economics compelling for BEV's, making them super common by the time I'd prefer another car as I age.

Hopefully by then, I can also (confidently and easily, re that being common) use it as a reliable power source for the house in a power outage (we just had an ugly ice storm, and it got to be a near thing re lots of people losing power -- I have a whole house generator, but if that doesn't start some time, that's ugly, so I'd like to have two backup systems). Given the cost of batteries like Tesla Power Walls, I'd rather have an inverter setup, keep the BEV charged at 80%+ when bad weather threatens, and save $20K or more on dedicated power backup batteries.
Last edited by Outcast_Searcher on Sat 05 Feb 2022, 14:05:52, edited 1 time in total.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Price Of Crude Pt. 15

Unread postby Outcast_Searcher » Sat 05 Feb 2022, 14:04:10

$this->bbcode_second_pass_quote('AdamB', '
')Okay fine, sure, I can afford to fill up the car/snowmobile a couple times a winter, but I DON'T LIKE IT. I'm thinking maybe studded snows on the Leaf next year.......

You might like to do some reading on how well studded snows work on the Leaf before proceeding. I recently saw a Tesla FSD beta video of a tester sliding all over the place after a deep snow in Detroit, even with supposedly high quality snow tires on his Model S, and the car did OK, but certainly not great.

And are studded snows allowed on the local roads when there is no snow or ice? (I don't know, just another data point to consider).

I'm really glad to live where really bad weather re winter storms is rare enough that one can just hole up and stay home for a day or a week if need be (I'm retired), with just a little planning, once a backup power source has been dealt with.

And I'm not above having some food delivered on occasion by people with AWD cars and good ground clearance, given how rare that is needed around here (once or maybe twice every several years or so).
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Sat 05 Feb 2022, 14:29:46

$this->bbcode_second_pass_quote('Outcast_Searcher', '')$this->bbcode_second_pass_quote('AdamB', '
')Okay fine, sure, I can afford to fill up the car/snowmobile a couple times a winter, but I DON'T LIKE IT. I'm thinking maybe studded snows on the Leaf next year.......

You might like to do some reading on how well studded snows work on the Leaf before proceeding. I recently saw a Tesla FSD beta video of a tester sliding all over the place after a deep snow in Detroit, even with supposedly high quality snow tires on his Model S, and the car did OK, but certainly not great.


They make the kid's 5 speed stick no ABS no traction control bare bones FWD...all old school....an unstoppable beast in the snow, the only thing I can think of that would handicap the Leaf are those damnable electronic controls on things like wheel spin, and the anti-locks. The anti-locks are the bug-a-boo on my selectable electronically controlled torque splitting AWD turbo, it goes fine, but I've slid through red lights before because without matching tires, it doesn't stop any better than anyone else on low friction surfaces. The FWD kid car just doesn't care. It stops on ice and snow, it slides evenly at both ends, it accelerates uphill in 10" deep snow without a seconds thought. The AWD has more ground clearance though, and I've blasted through 18 inches of snow with it, being an SUV rather than a FWD 4 door normal people car.

$this->bbcode_second_pass_quote('Outcast_Searcher', '
')And are studded snows allowed on the local roads when there is no snow or ice? (I don't know, just another data point to consider).


Studded snows are good to go locally where I am. I put them on late September, take them off end of March. The mountain folk put them on Subarus, I've never felt the need for going that all in. If my FWD with studded snows is a tank in the snow, I can't imagine how much better a AWD Subaru is equipped the same.
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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Sat 05 Feb 2022, 15:55:48

outcast_searcher wrote:
$this->bbcode_second_pass_quote('', 'T')he good news is that if the price of WTI crude get to $100 or above on a sustained basis, that implies US gasoline prices (where it's cheap) at something like $3.50 or above (based on it already being $3.20ish around here recently with WTI crude averaging over $80 in recent weeks, per the chart on the March '22 contract).


I think you are a bit off in your math there. The $3.40 national average gas we are buying today was refined from oil costing about $70 per barrel as there is a lead time between entry to the refinery and delivery at your local gas pump.
Let WTI get to $100+ per barrel and gas will within a few weeks cost $4.50 or better per gallon.
On the old school drive systems in snow or on ice I have to differ having driven most options in mountain conditions over the years. Unless you old school vehicle was 4X4 with a differential lock and armed with good aggressive snow tires (studs where legal) the new AWD drive systems on SUVs like my Subaru or our last Toyota rav4 are far superior. For one thing they are always on so your wife or daughter does not need to explain why she did not pull the 4x4 lever. They work seamlessly and very effectively.
There are switches to turn off "traction control" etc.where they would not be helpful so that is a non argument. I have progressed from rear wheel, one wheel drive to front wheel drive to 4x4 locking hubs, to automatic hubs, to all wheel drive. The latest version in my Subaru Forester armed with studded Hakkapelitta tires is a snow machine which we let our youngest drive through a foot of unplowed snow to work yesterday as it let us not worry abut her getting there.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Sat 05 Feb 2022, 20:58:57

$this->bbcode_second_pass_quote('vtsnowedin', ' ')
On the old school drive systems in snow or on ice I have to differ having driven most options in mountain conditions over the years. Unless you old school vehicle was 4X4 with a differential lock and armed with good aggressive snow tires (studs where legal) the new AWD drive systems on SUVs like my Subaru or our last Toyota rav4 are far superior.


I have a quite nice AWD system on the Nissan, and sure, if I put at the least snow tires on it, it would be fine, and is fine even without them....when just normal running through snow is required. What happens to ABS systems, even with snow tires, when trying to stop downhill on ice, or maybe some other similar non-traction surface comprised of packed and then frozen snow?

The system cycles, and the cars slow down...but depending on the speed of the cycling, there is ZERO requirement that you slow down in the space you've got.

So yes, I'd take normal snows on my AWD over needing anything bizarre...except when running into those conditions where studs make quite a bit of difference. Here is quite a practical example you might not find out in just plowing through snow to get home, but in suburbia where I live, you have cars behind you. As I live on top of the city in the US with the most SUVs ( for obvious reasons when you see where it resides), there are always following you. And guess what happens when I hit the brakes with them behind me? I stop...they don't..and I've got to release to give them room to get the ABS and traction control and inability to stop in the space I can under control.

Not a requirement in a more rural area I'm betting.

$this->bbcode_second_pass_quote('vtsnowedin', '
') For one thing they are always on so your wife or daughter does not need to explain why she did not pull the 4x4 lever. They work seamlessly and very effectively.


Because we all drive the FWD with studded snows instead, when the weather turns sour. When I say FWD, I mean, front wheel drive. A 20 year old PT Cruiser to be exact.

$this->bbcode_second_pass_quote('vtsnowedin', ' ')There are switches to turn off "traction control" etc.where they would not be helpful so that is a non argument.


True. And on 3 of my cars that have it, it reactivates at a given, and slow, speed. So presto...now we are sliding into the car in front of us and we can't turn off the ABS (it doesn't in any of my 4 other cars that have it), and stabbing for a switch to turn off traction control isn't what you need to be doing while rotating sideways in the middle of a 3 lane secondary road in town.

$this->bbcode_second_pass_quote('vtsnowedin', '
') I have progressed from rear wheel, one wheel drive to front wheel drive to 4x4 locking hubs, to automatic hubs, to all wheel drive. The latest version in my Subaru Forester armed with studded Hakkapelitta tires is a snow machine which we let our youngest drive through a foot of unplowed snow to work yesterday as it let us not worry abut her getting there.


I've done all those as well. And unplowed snow is GREAT stuff, a traction surface unto itself. I've done that before in NE New Mexico at 2AM with a Ford Fiesta front wheel drive and normal M&Snows and 5 speed because the snow itself is a great traction surface. No big deal.

But if we want to tell stories, how about above timberline in the Canadian Rockies, open differential Toyota 4WD, turns out the six inches of snow I was plowing through sat on 1 foot thick unmelted ice sheet, and I only figured it out after the truck slid into the slight ditch on the left side of the road. If it hadn't caught me, it was a 50' slide to the next bench down the hillside. Years running field operations where I had a D5 around at all time to unstick me was a great way to learn what a 4WD can, and can't do, year round.

Went and got myself 2 sets of CANADIAN snow chains in Edmonton after I got out of that mess. I'm sure you've got more than a few, I've got some great fallen trees one, in a ditch without the ability to back up (and those damnable open diffs), and I built a ramp out the limbs from the blowdown blocking the road with an axe. I was once far more adventurous than I am now. And younger. Now all I can do is tell sliding on ice stories...in a clunker PT Cruiser..... :cry: :cry:
Last edited by AdamB on Sat 05 Feb 2022, 21:07:11, edited 1 time in total.
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Re: THE Price Of Crude Pt. 15

Unread postby theluckycountry » Sat 05 Feb 2022, 20:59:23

$this->bbcode_second_pass_quote('Outcast_Searcher', '
')
For me, driving ordinary ICE sedans and filling up at about a quarter of a tank, that gets to be about $40 ... it's still annoying to see that money flow out of your wallet again and again.


There are more economical options

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We're 17 years past the peak now and the 3rd World is going hungry and dark. We'll be next, we're well on the way in fact.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Sat 05 Feb 2022, 22:06:17

$this->bbcode_second_pass_quote('theluckycountry', '')$this->bbcode_second_pass_quote('Outcast_Searcher', '
')
For me, driving ordinary ICE sedans and filling up at about a quarter of a tank, that gets to be about $40 ... it's still annoying to see that money flow out of your wallet again and again.


There are more economical options

Image


Maybe that is what the homeless in Australia might buy to live in or something, but rich banana benders like you with high powered exotic two wheelers would never be caught dead with that.
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Re: THE Price Of Crude Pt. 15

Unread postby Armageddon » Sat 05 Feb 2022, 22:31:48

Are we coming to the conclusion yet that we are at the top of the production peak?
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Sun 06 Feb 2022, 00:06:26

$this->bbcode_second_pass_quote('Armageddon', 'A')re we coming to the conclusion yet that we are at the top of the production peak?


<yawn> Fortune cookie say...

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Re: THE Price Of Crude Pt. 15

Unread postby Outcast_Searcher » Sun 06 Feb 2022, 01:18:32

$this->bbcode_second_pass_quote('vtsnowedin', 'o')utcast_searcher wrote:
$this->bbcode_second_pass_quote('', 'T')he good news is that if the price of WTI crude get to $100 or above on a sustained basis, that implies US gasoline prices (where it's cheap) at something like $3.50 or above (based on it already being $3.20ish around here recently with WTI crude averaging over $80 in recent weeks, per the chart on the March '22 contract).


I think you are a bit off in your math there. The $3.40 national average gas we are buying today was refined from oil costing about $70 per barrel as there is a lead time between entry to the refinery and delivery at your local gas pump.
Let WTI get to $100+ per barrel and gas will within a few weeks cost $4.50 or better per gallon.

I'm going to respectfully disagree. WTI was already $80ish a few weeks ago, per the March futures contract chart I linked to, and in my experience, the current gasoline price seems to be roughly based on the crude price from a few weeks ago or less, on average. I DID specify "where it's cheap" re gasoline, as my barometer, because it's cheap where I live, and so where I observe prices vs. WTI's price every week.

Also, in 2008 when crude oil hit records with prices hanging out in the area of $135 for a few weeks on average at the peak, oil in the cheap places in the US was at about $4.30.

I realize there might be a small tax increase or other expense increase in the past 13.5 years, but that should NOT make gasoline more expensive than July 2008 near the peak when WTI is $35 cheaper than it was then. (To me, that seems like the doomer/alarmist sort of thinking we see so much of on this site).

So, I think that, round numbers, something in the ballpark of expecting about $3.50 in the cheap places with WTI at about $100 is reasonable, since in the cheap places (like where I live in central KY), it's a bit below $3.20 now.

I realize the $3.20 is less than the national average, since expensive places like CA drive the average price up. But interpolating $3.20 gasoline for $85ish crude oil and $4.30 gasoline for $135ish crude oil makes my $3.50ish prediction at $100 crude a fairly reasonable back of the envelope guess, where US gasoline is cheap.

And if I end up being wrong by a significant margin, I'll admit it. But I do keep a weekly eye on crude oil prices and gas prices around here (a decent proxy for cheap gas in the US), as an investor in various oil companies / funds for decades.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Sun 06 Feb 2022, 05:05:12

Well only time will tell.
At $3.20 you are only under the National average by $0.20 and I am paying that $3.40 average or at least I was last week. Crude (WTI) went from $65.15 to $76.99 during December and six weeks ago it was at $75.57 so that is my estimated input price.
The actual lead time between a refinery purchasing crude and delivering the finished products for retail sale probably varies from refinery to refinery and region to region. A lot of fuel here in Vermont comes down from refineries near Montreal Canada as a gas station chain owns a interest in one of them.
Also I do not think 2008 is a barometer we can go by as inflation has hit all cost points in the industry from electricity costs to employee pay.
But I have enjoyed watching my Exxon stock rise $35/ share from where I bought it 14 months ago. :)
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Re: THE Price Of Crude Pt. 15

Unread postby Pops » Sun 06 Feb 2022, 08:46:54

$this->bbcode_second_pass_quote('vtsnowedin', 'T')he $3.40 national average gas we are buying today was refined from oil costing about $70 per barrel as there is a lead time between entry to the refinery and delivery at your local gas pump.

Pump price has nothing to do with when oil was refined or even what the distributor charges—except that retail is always more. It's all about local competition and what the guy on the next corner charges.

Retail price goes up on futures prices and down... when it must: rockets and feathers.
If you and I can see futures prices why wouldn't retailers who make a living on the margin?

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Re: THE Price Of Crude Pt. 15

Unread postby Pops » Sun 06 Feb 2022, 09:30:15

$this->bbcode_second_pass_quote('Armageddon', 'A')re we coming to the conclusion yet that we are at the top of the production peak?


IEA OMR 1/2022
$this->bbcode_second_pass_quote('', 'A') growing discrepancy between observed and calculated stock changes suggests demand could be higher or supply lower than reported or assumed. Moreover, higher output would also result in lower OPEC+ spare capacity. By the second half of the year, effective spare capacity (excluding Iranian crude shut in by sanctions) could shrink from around 5 mb/d currently to below 3 mb/d – most of it held by Saudi Arabia and the United Arab Emirates. If demand continues to grow strongly or supply disappoints, the low level of stocks and shrinking spare capacity mean that oil markets could be in for another volatile year in 2022.


Image

The vaunted spare capacity, LOL. KSA / UAE has never done much more than 13 for any length of time, I'm not holding my breath. The Permian is climbing with a ways to run but other regions and conventional are declining or at best flat. Maybe a deal with Iran? After 10 years of goofing off I'm back to thinking about hunkering down.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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Re: THE Price Of Crude Pt. 15

Unread postby Pops » Sun 06 Feb 2022, 09:52:22

$this->bbcode_second_pass_quote('', 'W')hy is America so intent on draining itself, first, for the sake of exports... and who in the hell is in charge of this shit show?


Why doesn't anybody care?

https://www.oilystuffblog.com/single-po ... n-from-god
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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