[mos6507]

You know the fool me once, fool me twice axiom.

The lesson of the credit crisis is that peak oil is more than just watching the production charts. There are too many factors contributing to oil prices.

1) Voluntary production cuts due to depressed demand
2) Speculators helped push oil to $147. They can and will do so again if they think they can make a buck. They can artifically push it up and then back down when they cash out en masse just like the stock market.
3) Potential dollar instability artifically inflating the price
4) Seasonal demand spikes (summer driving season) which are likely to subside in the fall.

So yes, oil depletion continues and we know where this is going to lead but pearkers who are so eager to get back on the peak oil doomer train should know better than to stick their necks out again with flawed predictions.

[TheDude]

$this->bbcode_second_pass_quote('', 'S')peculators helped push oil to $147.

[mos6507]

$this->bbcode_second_pass_quote('TheDude', '')$this->bbcode_second_pass_quote('', 'S')peculators helped push oil to $147.

[AAA]

$this->bbcode_second_pass_quote('DoomWarrior', '')$this->bbcode_second_pass_quote('Voice_du_More', '
')Other than OilFinder, how are you all seeing this new data?

[copious.abundance]

$this->bbcode_second_pass_quote('Voice_du_More', 'H')ave you ever considered that the economic crash has been at least partly caused by the run up in oil prices and that the recession is actually coming at just about the right time to hide peak oil? Have you ever looke closely at the predicted output form Iraq past 2012 and thought that it was quite odd that Iraq somehow factored into PNAC back in 1999. Imagine if we were here today and Saddam were still in control of Iraq, I'll bet Paul and Don imagined that very thing in 1998.

We have really entered into a bad place have'nt we guys. I've had it in the back of my mind and it has deeply effected me but I am having to come to terms with two things, 1) that I know there are very deep connections between the major events of the last decade 2) that I have to sit down and try to understand what I should do with that knowledge.

[AirlinePilot]

The ridiculous run up in prices spurred what anyone would consider a meager production increase. As others and myself have already pointed out the increase was not enough to take us statistically off the plateau. If you believe that it did, than your more steeped in cornucopia than even i thought. Production will never follow some smooth curve perfectly correlated to price. It didnt then and it isnt doing it now.

The market is pricing in what it sees. Green shoots. Demand is not down as significantly as folks think, the dollar is in real trouble, and everyone who can is going to start buying lots of oil while it still may be pretty cheap (China). Also the refiners are making a statement by refusing to accept crappy margins. Plenty of folks are screaming bloody murder about industry capitalization and the future resulting from not enough of that.

[copious.abundance]

I would not call a 3+ milion bpd increase - TWICE - in the span of 5 years to be a "meager" output increase.



From spring '04 to spring '05 crude production went from about 71.4 million bpd to about 74.3 million bpd.

Then from summer '07 to summer '08 it went from about 72.2 million bpd to about 75.2 million bpd.

[copious.abundance]

Here is a chart demonstrating that the free market, does, in fact, work.

I superimposed a chart of Jan 04 - July 08 oil price onto a chart of crude oil production from the same time period.

Oil price chart I got here.
Oil production chart I got here.
Both are monthly averages.



Notice that, as the price went up from 2004 to mid-2006, production also did. In the 2nd half of 2006 the price declined, and - surprise! - so did production. In early 2007 the price started going up again, and, with a bit of a lag, so did production, setting a new production record to go along with a new price record.

Amazing! Economics works!

[copious.abundance]

$this->bbcode_second_pass_quote('pstarr', 'D')on't you ever get tired of obvious data manipulation?

[TheAntiDoomer]

$this->bbcode_second_pass_quote('pstarr', 'D')on't you ever get tired of obvious data manipulation?

[AirlinePilot]

The simple fact remains that statistically we are on a plateau. Lately we are actually falling off of it!!! Yes there is a possibility that oil production may go above the last peak in the future. But you have to ask yourself what is the probability of that. Then ask can we sustain growth above that increase?

If your being objective and consider the dynamics of what is presently going on in the world, it does not appear to be a very high probability. Non OPEC oil is declining. Soon that decline will increase in it's rate. At that point there is little probability given what we know about discoveries and Saudi claimed reserves, that growing much above where we are is possible over the longer term. Even with spare capacity, growing above a 6% or even a 3-4% global decline will make that basically impossible with current trends in discovery.

I try to find positive news, but despite OF's blind optimism he hasn't found enough new oil to make these dynamics change appreciably. We might stay on a plateau for just a bit longer, but inevitably we are going to enter decline. My personal belief is that around 90mbpd (total liquids) will be all she wrote. After that there will be no more. I believe that oil has seen near its top forever and only through the magic of adding ever ridiculous sources to the "total liquids" number can we possibly hold off the forever decline.

[peripato]

$this->bbcode_second_pass_quote('OilFinder2', 'H')ere is a chart demonstrating that the free market, does, in fact, work.

I superimposed a chart of Jan 04 - July 08 oil price onto a chart of crude oil production from the same time period.

Oil price chart I got here.
Oil production chart I got here.
Both are monthly averages.



Notice that, as the price went up from 2004 to mid-2006, production also did. In the 2nd half of 2006 the price declined, and - surprise! - so did production. In early 2007 the price started going up again, and, with a bit of a lag, so did production, setting a new production record to go along with a new price record.

Amazing! Economics works!

[copious.abundance]

$this->bbcode_second_pass_quote('peripato', 'Y')eah, but in this case it was not able to meet red-hot worldwide demand during this time, since at the rate of increase for CC since 1994 (~1.8%) at least an additional 5 million barrels of CC should have come on-stream during this period 2004-2008, however far less than half of this amount actually did materialise. Moreover since 2005 the supply of CC has stubbornly refused to go very much higher, despite the industry swimming in cash, although they tried their best, in which they only managed to wring out a meagre 300,000 bs p/d extra- ergo the huge and sustained run up in price during that period, as capacity was breached and breached again.

[shortonsense]

$this->bbcode_second_pass_quote('TheAntiDoomer', '')$this->bbcode_second_pass_quote('pstarr', 'D')on't you ever get tired of obvious data manipulation?

[peripato]

$this->bbcode_second_pass_quote('OilFinder2', '')$this->bbcode_second_pass_quote('peripato', 'Y')eah, but in this case it was not able to meet red-hot worldwide demand during this time, since at the rate of increase for CC since 1994 (~1.8%) at least an additional 5 million barrels of CC should have come on-stream during this period 2004-2008, however far less than half of this amount actually did materialise. Moreover since 2005 the supply of CC has stubbornly refused to go very much higher, despite the industry swimming in cash, although they tried their best, in which they only managed to wring out a meagre 300,000 bs p/d extra- ergo the huge and sustained run up in price during that period, as capacity was breached and breached again.

[drbobguy]

$this->bbcode_second_pass_quote('OilFinder2', '')$this->bbcode_second_pass_quote('pstarr', 'D')on't you ever get tired of obvious data manipulation?

[peripato]

$this->bbcode_second_pass_quote('drbobguy', 'Y')ou know I registered to this forum just to demonstrate how this "manipulation" works. You didn't manipulate the data, what you did manipulate is the presentation of the data.

[Voice_du_More]

Clearly I wonder at OF2's real motivation for spending so much time here trying to tell us all that there is no problem. I suspect that he/she and other cornucopians, or even moderates here are in denial and they keep coming back here because somewhere deep inside they smell doom in the arguments but are not ready to admit that to themselves. It does'nt realy matter, it probably is good for us to have to try to unravel some of these arguments and data that are presented.

That said, I do not think that scaling the graphs is all that necessary in a comparison, though yes I agree with the idea that graphival information is often interpreted incorrectly because things that look the same size on paper may be thought of that way. So pick a baseline that makes it look like oil production rose the same amount on paper as price did and alot of folks might consciously or otherwise feel like there is a connection being put forth.

The idea that the industry would for so long fail to invest properly in infrastructure so as to ensure the continued growth of such a vital resource speaks for itself. If the industry and the oil producing nations had real hope that there was ever going to be a 3 or 5% consistent YOY growth in supply they would be falling all over themselves to keep their infrastructure and labor pools growing as well. Actions speak loudly, I was recently told, and I believe it.

The notion that oil companies would underinvest to the point of letting the pipelines rust in place so as to gouge the public is flawed, it is not good business in the case where one expects the source of that business to keep growing. It is frugal business to try to get as much as you can for as little as possible, but short term strategies like we are seeing now do not indicate anyone in the business really has hopes of either significantly more oil being found or large amounts of existing oil being brought to market in the near future.

For me, and this is why I started this thread, all of the canaries are either dead or noticeably ill without much hope of recovery.

All the PTB can hope to do in my opinion is manage the powerdown and the media coverage so as to avoid a panic starting too soon. They definitely have to let price rise but not catastrophically, this creates the possibility of a shortage in a few years. Eventually depletion has to become so severe that our modern economies cannot bear it. All of this points to major and shocking changes in the world in the years just ahead.

The game theory constraints I am considering right now are these: Do the major players wait and see if everybody plays nice or do they start trying to out-maneuver each other for the best position well ahead of the expected timeframe of serious impacts? Some would say that the US has already positioned itself in Iraq, but since Obama seems unwilling to fully continue the policies of the neocons Iraq will probably be all for nothing as far as oil security goes.

In the end I think we are too late to do much and all games will come to an end much sooner than the world will come to understand what happened.