[Armageddon]

can demand outstrip production/supply before PO happens ? it seems like it can to me. if it can, wont the prices skyrocket ? and wont skyrocketing prices kill demand ? and wont demand destruction kill the economy ? now my head hurts

[TT]

$this->bbcode_second_pass_quote('armegeddon', 'c')an demand outstrip production/supply before PO happens ? it seems like it can to me. if it can, wont the prices skyrocket ? and wont skyrocketing prices kill demand ? and wont demand destruction kill the economy ? now my head hurts

[backstop]

armegeddon -

mine too -

yes - all the sequence you sketch can happen and maybe is now under way.

Given that I saw the Iraqi Oil minister interviewed last night on BBC, saying that due to US Army negligence Iraq exports 1.4 Mbpd now compared with 2.6Mbpd pre-invasion, it is possible that the "demand destruction" you describe is being generated on purpose to avoid a cliff event in future, &/or to break the communist Chinese govt.

Some would call that conspiracy. I'd call it a possible imperial strategy . . .

regards,

Backstop

[Armageddon]

i have a feeling that is exactly how it will play out. economies will collapse before po sets in. we may be at peak right now at 84 mbpd, and with the refinery situation, these high prices are here to stay. and when they reach simmons' estimation, it wil be all she wrote for the u.s. economy. the huge debt and realstate bubble is about to pop, and its going to be ugly. they are printing money so fast just to keep the ship afloat, because they know whats ahead .

[rogerhb]

Mais oui, mon ami.

[elroy]

$this->bbcode_second_pass_quote('', 'd')emand outstrip production/supply

[Barbara]

Not quite exactly. But it's very useful to make friends/relatives grasp the topic. Since I use the demand/supply example, everybody believes me.

[Armageddon]

nope, po isnt all about demand outstripping production, po is when the earth is at the halfway point of extracting oil, and no matter how hard you try, you cant produce anymore oil than you are currently producing. then decline starts to happen. the current 84 mbpd may be the peak. we wont know for a few after the peak , when the peak actually occured. if the current oil fields decline faster than the new fields come on line, then we have definately peaked, which i think will happen.

[Doly]

$this->bbcode_second_pass_quote('armegeddon', 'n')ope, po isnt all about demand outstripping production, po is when the earth is at the halfway point of extracting oil, and no matter how hard you try, you cant produce anymore oil than you are currently producing.

[Permanently_Baffled]

Demand cannot outstrip production.

If demand > available supply = prices rises until Demand = supply.

So if this winter we are shy 1 mpd at $66 a barrel, the price will keep going up until 1 mpd of demand is removed from the market.

What price will do that ? I dunno , but I suspect its in three figures !

PB

[aahala]

$this->bbcode_second_pass_quote('armegeddon', 'c')an demand outstrip production/supply before PO happens ? it seems like it can to me. if it can, wont the prices skyrocket ? and wont skyrocketing prices kill demand ? and wont demand destruction kill the economy ? now my head hurts

[RonMN]

pretty much everybody was expecting demand to exceed supply in the 4th quarter of 2005...that was BEFORE the hurricanes

[Armageddon]

are there any indicators that demand is slowing in the u.s ? and what about the rest of the world ? im not sure you can slow china and india very much right now. but i guess if the price gets high enough it could.

[Armageddon]

so i guess basic economics 101 is when production cant meet supply, you raise the price to slow the demand so it can meet production/supply.

[Marklar]

how do you price oil when there is just one barrel left ? (theoretically)

I know there'll never just be one barrel left.... I'm just putting it simply.

That answer to that is pretty self evident and explains what would happen as demand attempts to outpace supply.

[Keith_McClary]

$this->bbcode_second_pass_quote('Marklar', 'h')ow do you price oil when there is just one barrel left ? (theoretically)

I know there'll never just be one barrel left.... I'm just putting it simply.

That answer to that is pretty self evident and explains what would happen as demand attempts to outpace supply.

[elroy]

$this->bbcode_second_pass_quote('', 's')o i guess basic economics 101 is when production cant meet supply, you raise the price to slow the demand so it can meet production/supply.