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Daily Oil Market Summary: July 16
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Oil is a big yawner. The price was fixed at $75 in July '09 (after enduring wild volatility) when the sauds said they thought that was a fair price.
http://www.telegraph.co.uk/finance/financetopics/oilprices/5395140/Saudi-Arabia-says-75-a-barrel-is-a-fair-price-for-oil.html
no bank failure friday today? How dissapointing :-(
No fail? I count 6 epic fails as of 8:30 Friday central time.
The biggest factor at the end of the week was the economy and its leading barometer, the stock market.
The map (market) is not the territory. Even the map is not the map, with all the intervention
The biggest factor at the end of the week was the economy and its leading barometer, the stock market.
The map (market) is not the territory. Even the map is not the map, with all the intervention
seems like it was so apt, it beared iteration.
Not my choice, but some other.
funny how in "hyper deflation" the price of food and energy keeps rising. "Don't worry, keep moving. Nothing to see here either. Just rich America starving to death with a good old fashioned 10th Avenue Freeze Out on the way."
because a paper unwind/price discovery event is happening, the prices of these commodities is skyrocketing in real terms as people head for the exits at once(it's still only a mere trickle at this point, just wait until j6p comes back to reality)...something like a camel going thru the eye of the needle.
Good luck with that one.
It's not about energy. It's about oil.
The planet's food supply derives no longer from family farms. It comes from agriculture conducted on farms of 10s of thousands of acres, and those have become the norm in Brazil.
These are now and NEVER WILL be cultivated by electric tractors and combines. Those are machines whose engines are 500+ horsepower. You can go youtube electric tractor and find some items that are essentially toys, and if you watch them long enough you'll discover they hold a 15 minute charge and require about 12 hours to recharge. This is not a battery or technology problem. It is a laws of physics problem.
The depletion of oil will cut the planet's population by 6/7ths . The only question about this how fast.
I would like to think I intimately know what you're saying here.
It's just that I can't really comprehend it until I hear someone else mention it. And that rarely happens even at a place like ZH. And it's fucking scary.
I see it playing out as this; the illusion will take hold that we are swimming in energy due to demand destruction. This will cause prices to continue falling in nominal terms, however in real terms prices will be going up as purchasing power is continually destroyed. This will precipitate destruction of supply causing prices to finally shoot up in nominal terms, however in real terms a barrel would be something like 500 or 1000 2010 dollars... Oil at $20 is scarier to me than oil at $87 or $147, God forbid we ever see $10 or less.
You can't drill down 5000 feet at $20/barrel. Supply would disappear overnight.
The crusher is older fields in Russia and Saudi Arabia are losing production at 5+%/yr because . . . they are old. New fields will not undo that. And at $50/barrel, there will be no new fields.
But this is not about money or price of oil. This is about growing and transporting food. Death is ahead. Widespread death, and there is absolutely nothing that can be done about it.
this is about mispriced inputs which is absolutely systemic risk and nothing except systemic risk.
80% of oil in US goes to transportation-71% fuel, 9% roads. 10 calories is burned to transport 1 calorie of food. Food travels an average of 12-1500 miles before it ends up on your plate. Blah blah blah.
I can talk numbers all day but we are in agreement. There will be no more fields coming online as prices continue to drop. And they will, because nobody can afford oil anymore and pretty much all oil consumption is wasteful and counterproductive anyways. For instance most of the oil here is simply burned for leisure activities, unproductive service/government jobs and other totally unsustainable practices.
Prices continue to fall in nominal terms but quite the opposite in real. The wells already in production will of course continue producing, granted at a declining rate, as demand drops like a rock until it would appear we are swimming in energy (total illusion for the reasons i've named). Eventually the realization will set in that there is no more oil to be had at an economically friendly price and prices will probably hit the roof in nominal terms but continue through the roof and to the moon in real terms.
The kicker is that dollar availability is solely dependant on the Saudi's benevolence and the ever rapidly declining supply of economically feasible, extractable oil.
The food production you mention (or lack thereof) will starve billions for sure.
Updated DOW chart:
http://stockmarket618.wordpress.com