[drbobguy]

$this->bbcode_second_pass_quote('Voice_du_More', '
')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.

[shortonsense]

$this->bbcode_second_pass_quote('drbobguy', '.') If you want a good lesson on how to do this properly, check out Edward Tufte's The Visual Display of Quantitative Information.

[Voice_du_More]

$this->bbcode_second_pass_quote('drbobguy', 'A')nyways, I just wanted to point this out because redefining the baseline is the most common way to skew data to make a false point. It's one of the first things you learn in any class on data presentation, and afterwards it really stands out as a cheap trick.

[Voice_du_More]

$this->bbcode_second_pass_quote('shortonsense', '')$this->bbcode_second_pass_quote('drbobguy', '.') If you want a good lesson on how to do this properly, check out Edward Tufte's The Visual Display of Quantitative Information.

[rangerone314]

Its tricky to show the relationship ANYWAY, whether or not an appropriate baseline is chosen, simply because there is not a linear relationship between price and supply.

During the artificial supply crisis of the 1970s, a minor reduction in supply caused many magnitudes larger increase in price.

I would suspect dropping the supply now by 3% might cause as much as a 30% increase in price per bbl. I am probably being conservative.

[copious.abundance]

I did the graph the way I did to make both charts fit on a nice-n-tidy sized graph.

Having the same magnitude scale for both charts is not neccesary because prices and production (or sales, etc.) of most economic goods almost never correspond with each other at a 1:1 scale. For example, even though the price of oil has crashed by 2/3 since last summer, production has not crashed by 2/3 - it just goes down on the margin. Similarly, If Coach, for example, decided to slash the prices of all of its handbags by 50%, that does not mean sales would go up by 50% - they might go up by 5% or something like that.

[copious.abundance]

EDIT: Nevermind, see 2 posts below

[copious.abundance]

$this->bbcode_second_pass_quote('pstarr', 'T')hanks drbobguy. That is what I meant by data manipulation.

And yes, it is very intentional.

$this->bbcode_second_pass_quote('drbobguy', '')$this->bbcode_second_pass_quote('Voice_du_More', '
')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.

[copious.abundance]

Here's a perfect example of what I'm talking about - housing starts ("production") and median housing prices.

Here is a chart showing median housing values for certain localities in California, as well as the US. The line representing the US is at the bottom.



Notice the price went from somewhere around $20,000 in 1968 to about $250,000 in 2006.

Next, here is a chart showing US housing starts, also from 1968 to 2006. The chart is perishable so I'll give the link also:


LINK

During the time housing prices rose roughly 12-fold, housing starts "plateaued" between about 750,000 and 2.5 million.

Even if we look at the same housing price chart, but this time adjusted for inflation, we still see a rise from about $25,000 in 1968 to about $42,000 in 2006. But did housing starts double over this time period? No.

[drbobguy]

OilFinder2, you're right I mistakenly used all liquids, just because that was the first graph on the page you linked. But it doesn't really matter.

All I'm trying to show is that your argument was "economics works, price goes up, so supply does too."

Of course there is some correlation, no one here is arguing that. But your graph hides the fact that that correlation is HIGHLY inelastic, that a huge surge in price (300% or more) caused only a few percentage points increase in production (maybe 5-10%). So sure, supply-demand works, but what happens if demand increases 50%? Prices rise to hundreds of times what they are now?

I mean who knows. At some point the whole model breaks down.

I'm not at all convinced there will even be a single oil production "peak," but what I do think is obvious is that extraction is getting harder and prices are going which will slow global economic growth.

[copious.abundance]

If the correlation between oil price and production is HIGHLY inelastic, then so is the same for housing. And most everything else, for that matter. For this reason, your objection is moot. In this regard, oil is little or no different than anything else.

[yesplease]

$this->bbcode_second_pass_quote('drbobguy', 'O')f course there is some correlation, no one here is arguing that. But your graph hides the fact that that correlation is HIGHLY inelastic, that a huge surge in price (300% or more) caused only a few percentage points increase in production (maybe 5-10%). So sure, supply-demand works, but what happens if demand increases 50%? Prices rise to hundreds of times what they are now?

[Southpaw]

Oilfinder2 what are you trying to achieve? you skewed the data it's as simple as that. 0 baseline is the most logical thing to do. so your points on this topic are meaningless.

What you aren't saying is that suadi arabia and all other opec nations were pumping everything they got in 2008. that's why you saw a 3 or 2 million barrel increase in the summer of 2008.

You are not trying to proof a fact but you are trying to get people here to say omg you are right Oilfinder2. YES WE CAN buy all the hummers in the world and hydrogen and natural gas will safe our society.

Yes maybe for China but your country is as good broke. but you are in denial about that too. I don't mind that some people are overly optimistic about the future at least they understand that peakoil is a problem.

but you are so optimistic that's it's annoying.
You are like those jews when they had to go inside the showers in WW2. you probably are one of those jews that tought there whas really water instead of gas. while the most clever jews knew what came out of it.



You lost all your credibility for me nothing what you will say to try to make a point now is either manipulated or just plain wrong.

[shortonsense]

$this->bbcode_second_pass_quote('Southpaw', 'O')ilfinder2 what are you trying to achieve? you skewed the data it's as simple as that. 0 baseline is the most logical thing to do. so your points on this topic are meaningless.

$this->bbcode_second_pass_quote('Southpaw', 'O')ilfinder2 what are you trying to achieve? you skewed the data it's as simple as that. 0 baseline is the most logical thing to do. so your points on this topic are meaningless.

[copious.abundance]

$this->bbcode_second_pass_quote('pstarr', 'O')ily, what are you up to? Housing prices?

If you are prepared to show how record petroleum-price increases cut into household incomes and expenditures, destroyed the real estate market, and resulted in a cascading financial crisis---then those charts might be interesting.