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Larger Than Expected BOE Drawdown Sends Crude Off To The $100/Barrel Races
After WTI passed the $90 barrier with firm determination, as we highlighted earlier, the most recent DOE Crude Oil Inventories number confirms that the far larger than expected draw down is accelerating. As readers will recall, after last week's massive drawdown of 9.854 million barrels which was the largest in 9 years, today's number was another stunner, coming in at 5.333 MM on expectations of 3.4 MM. The result: WTI spikes and is last seen at $90.64. And as a reminder every $1 rise in oil decreases U.S. GDP by $100 billion per year and every 1 cent increase in gasoline decreases U.S. consumer disposable income by about $600 million per year. The move in oil in the past week alone has almost entirely wiped out the most recent stimulus. Furthermore, as we suggest earlier, now that $90 is in the history books, $100 is coming, and may be here within a few weeks. At that point Bernanke may have some problems explaining how he is "100% confident" that the surge in gasoline prices is completely and totally not as a result of his deranged genocidal tendencies.Don't worry though, hedge fund managers around the world will be more than happy to afford the surging prices. Remember: wealth effect!
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As predicted last night, JPM or GS will end up cornering the gasoline market.
There is no end to the fantastic profiteering and market cornering enjoyed by the PigMen wire houses.
JPM on the verge of breakout out of a huge base....
How about a chart of LA gas prices? I want to see where you are luxuriating in $4 gas, or on the LA city bus. lulz.
Tough guy, you are hitting him hard today!
The LA average is now 3.25.
http://www.losangelesgasprices.com/
Gas prices will not affect consumer behaviour until they hit $5.50 or above, as most studies show.
Wow, Harry, you must be too young to remember 2008.
What the fuck is wrong with you?
Back in 2008 I had friends who lived in exburbia who calculated the cost of gas into everything they did...and they drive a KIA and live in a low gas tax state. There were lots of roads not taken--out to dinner, to the mall, meetings etc..
Yeah - dead wrong. Gas over $3/gal. starts eating into disposable income, $4 is death. $5.50 will result in some very angry people, the kind that will enjoy stringing up people who say that $5 is a very manageable price for gasoline.
Stop picking on the Kool-aid addicted troll! He is suffering from vegan induced malnourishment which led to dementia.
Nah, a 33% increase from $3 to $4 shouldn't have any effect on anyone.
Fail.
Your 33% increase, while correct in its math, is applied illogically to this situation. Gas is a very small slice of personal spending. If people spend 3% of their income on gas, a 33% increase is not going to have any affect whatsoever. However, once you get into near $6.00 gas, you will see some problems. But I can't foresee that any time soon.
The entire economic engine runs on oil. Higher prices will cause it to stall.
Name a product and I can tell you how oil is involved in its production.
Petrodollarz, bitchez!!!
Your response is incredibly short-sighted Wanger. I consider myself a light driver and spend $120 a month on gas. If gas prices averaged $4 instead of $3 I would be paying $160. That is $40 less per month that I have to spend on other crap, or save. For a lot of people, this is a couple less meals eating out, one less movie, etc. Enough to drive a stake through the heart of our perilous service-based economy.
Aside from the obvious, it takes gas to ship your iPad from China, to get Florida oranges to New York, for Southwest Airlines to fly their planes, for UPS to ship anything. Essentially anything that moves is based on fuel prices, and increases are ALWAYS passed along to the consumer, leaving them with less money to spend elsewhere (or save, but that's out of style anyway).
Harry - can you define what you mean by "affect". Without defining that word, everyone might be arguing past each other.
Purchases of gas, beyond what is needed for work and a few basic other things, is discretionary. I have changed my driving habits, and I know others who have also, just because gas is at $3.00 a gallon. So price has already affected my expenditures on fuel. I'm guessing that truth is fairly widespread. I'm guessing that as gas prices continue to rise, discretionary driving will continue to decrease.
Increases in the price of gas have affected my expenditures on gas. But you are correct: as a percentage, that change is peanuts next to what I spend on my mortgage. But the percentage change in the amount of gas I buy is not peanuts when compared to the amount of gas I used to buy.
I agree with you. Higher gas prices led to less usage, as you pointed out. That is why the economy, other than gas stations, will not suffer unless prices really get out of control. Until then, people will adjust their usage and continue spending on other discretionary items.
I agree with you. Higher gas prices led to less usage, as you pointed out. That is why the economy, other than gas stations, will not suffer unless prices really get out of control. Until then, people will adjust their usage and continue spending on other discretionary items.
lol, this is not just about personal spend, apart from those driving unsustainable distances in guzzlers to do minimum pay jobs, because they think it is their US citizen's right to be subsidized by cheap oil.. the rise in oil price feeds into transport costs which feed into EVERYTHING you buy.
peak cheap oil, coming your way soon ;)
I'm blessed. Harry has agreed with me twice now.
Ha! Une vrai bon mot...
Bullshit.
Most folks I know have NO disposible money at the end of every month. Granted my survey is less than scientific, but it includes folks who are technically "working poor" to folks well into the 6 figures.
They are all essentially directing thier scare resources toward whatever end they think will give them the best return. Fuel is not a negotiable part of this equation for anyone as they have already reduced needless driving - even the folks who chose to ride the bus face increased fares because costs are passed along. Ever penny that fuel rises is a penny that won't go toward iCrap, etc. etc. Not to mention that increased fuel prices are also seen as increased food and heating oil prices.
Based on what happened in 2008 and my own situation, I would tend to disagree. Can you cite one of the studies you mentioned?
Harry, If gas hits $4 / gallon like it did in 2008, it will cause another serious shitstorm in the economy. Dude, even though I disagree with almost everything you write on these forums, I never junk you because I appreciate all different viewpoints, even utter nonsense. However, regarding your study re; $5 / gallon gas, you are out of your freakin mind. At the end of an average Americans work week, if they are spending an extra $ 20 - 30 on gas, then they are screwed. Period, end of story.
I've heard rumors that the banks have been building huge long positions in oil (OTC contracts, so you won't find it anywhere) in the crude market. The government throws a bone of lower taxes (which the tax payer must pay for eventually) and it just goes into the pockets of a few select players who control supply of the products we have no choice but to buy. I don't see how this results in a recovery for anyone except those with access to zero cost credit...
Its all about the central banksters now, everyone else has been written off. The only reason they havent Kissinger lifekilled everyone yet is they want the last of the money from the 'consumer' first. Actually they call all of us 'useless eaters', consumer is just their public-speak term.
They are most sociopaths than psychotic. They see it as a game - how do they get us much of your money into their pot as possible. The problem is Bernanke is no Volker and thinks that asking the bankers how to fix the economy is a good idea. To my mind, it's like asking my dog where I should keep the sausages.
English next time? I can barely follow what you're saying.
Thar she blows, Robo! Get on that bus!
LOL sure Robo, there will be 'great profiteering' this time when gas shoots up to $4 and beyond...more like total economic shut down. You know the truckers are ALREADY talking about cutting their routes way down? Diesel $3.30 avg nation wide.
Yea Robo lets see the food shortages bring it on. This time isnt like last a couple years ago where gas shot up BRIEFLY and people could better absorb it, not this time that kind of rise in energy will turn the lights out on USSA.
Yep. Won't be like 2008. Most still had jobs back then...and that's the difference.
Lindsey Williams is right!!!! (so far)
Yea thats a fact.
I thought I heard Lindsey over a $100 by X-Mas, not sayin he's wrong just a little late. Who knows we still have a few days...
I'm not printing money. I can keep inflation under control.
Fairy tales by the benake
100% certain he can hit the 'contain inflation button' within 15 minutes...hey does that button connect to any ICBM's ya think?
It's like the "close door" button on an elevator. Its not connected to anything, just there to make you psychologically feel better.
Why are stocks going down? Is production down, or is demand up? Or is someone just filling up newly cheap tankers with oil and parking them off the coast again?
Production of stocks, or oil?
Stock of oil, as in supply, not equities.
I know, my <sarc> button didnt work.
Good thing. There are certainly plenty of stock certificates being issued.
Do we still have as many ships at anchor outside harbour loaded with oil as in summer 2008?
that was some crazy schitt!
imports of the black shit have held under 9 MB/day for the last 3 months....
refiners dont want to take delivery because they pay taxes on oil in storage as of Dec 31. i'm sure they dont want it at $90 either as demand falls off a cliff thanks to surging prices.
The heat is on! As predicted by the biflationary theorem, inputs: UP!, while assets: Down :(
Variety is the spice of life, so a little biflationary tickle this morning is just what the country needed. A little oil spike here but ain't just oil, a little food inflation there, minerals up across the board and now you have the entire cost structure of the productive economy reset at a new higher level. What a stimulus to the barrier for entry! We're supposed to be in a favorable environment for new startups coming out of a recession.......but NO!
Meanwhile back in asset land (housing, incomes, retirement funds) we're still waiting to get trickled down from all the largess that set commodities on fire.....Trickle me!
The irony, of course, is that the stimulus is helping to increase those oil prices (a) by propping up consumer ability to pay for gasoline (to some extent) and (b) more importantly by showing how fully guaranteed the devaluation of the dollar is.
Good move con-gress and Bennie. Hyperinflationary death spiral here we come...
everyone under 75K loses the $800 making work pay credit.
the gov't is giving everyone a 2% reduction in pr tax.
those making under 40K (2% of 40K) break even tax-wise next year and then get pummeled by surging food and energy.
as the saying goes: The poor get poorer and the rich get richer.
genius
CNBC whores all giggly at oil topping $90 and almost creamed their seats at the thought of $100 oil. All just numbers on a screen and not given any more thought than that. As long as the stock pimps they service make money who gives a fuck?
Every tick of the price of oil on their charts should include a counter graph of the money sucked out of the economy and projected impact on GDP. Or at least a frowny face to remind us that it is bad.
Stop watching cnbs. Its that simple. The amount of folks watching that channel has plummeted dramatically. If enough folks continue this trend, cnbs will eventually go the way of the dodo bird. ;-)
Lol, wish I could. Office tv has basic cable and no Bloomberg available. Normally CNBS on just for the scroll (I'm a junky for the scroll) and business headlines but had volume on this morning to my remorse. Only time I typically turn volume up is when Rick S is on.
Ditto
Does anyone have any interesting perspective on why nat gas refuses to follow? I know there are plenty of storylines around it, but even the contango is gas flattened from a few months ago.
You can't export it. Any natural gas market is going to be a local one. In that, it is more like real estate than easily transportable crude.
Natural gas will rise or fall to reflect the demand only in the US/Canada/Mexico (places reachable by pipeline).
Only thing I can come up with is nat gas isnt as much a fuel for transportation on a large scale? Its used for heating in some places and bbq grills. Only thing I can come up with right now as to why the 2 dont follow each other closely.
Also lots of supply is coming on.
Every correlation has been broken in this ponzi market. Used to be when USD is up, oil plunges and vise versa but the past couple if days its been broken. Same thing with equities. NATgas /OIL prices used to have a ratio of 1 to 11 and they would move together but OIL is more of a trading vehicle and easy to manipulate with POMOs and other hot money, just like stocks. In the past we used to see NATgas go up when oil is up because many power plants operate on dual-fuel and they would switch to NATgas when oil gets too expensive so if oil continues to go up I would expect NATgas to start to go up specially if the Midwest gets his with bad weather.
Nat gas is a better gauge of domestic energy usage as it is not as easy to ship as oil.
Currency and inflation and manipulation have more to do with oil rise recently.
But as the article states clear, it draws out consumer money and people complain and clamp down especially when prices reach a psychological level like $3 a gal. Which is now the average.
Ive never heard nat gas is difficult to ship, I know you can liquefy it, what makes it difficult to ship?
LNG carriers are fuel air bombs on steroids.
Sweet!!
The infrastructure costs are enormous with a long lead in time. Nat Gas is also not as fungible as you would think at first blush.
http://www.youtube.com/watch?v=HZkotKZfg6w
This is a propane tank getting popped with a rifle...note that the first shot does nearly all the damage. Now, imagine a really really big natty tank, in a crowded harbor, plus an idiot with a rifle.
"Blew 'em up real good."
There's an 800lb gorilla in the room....make that a 900lb Bear (hint it rhymes with Mussia)
http://intelligencepress.com/
This is a good source for NG info. Basically there is a supply glut and more coming due to new drilling.
Part of the issue is that, as NG is a byproduct of oil drilling, there has been an uptick in NGL production as some oil production has increased. To some extent, the supply-limitation mechanism normally linked to a low price has been damaged by a surging oil price. Over the short-term, it might even be a situation where NG prices collapse if CL prices continue to surge.
Wrong All around Ft.Worth they drilled 1000's of ng well's, google barnett shale..
Thanks.
I know I'm not saying anything profound here, but there really could be a revolution in NG production.
Does anyone know if once you complete a NG well, is there ever a reason to stop it? For instance, you complete a horizontal well, would you ever send someone out there to shut it off for anything other than safety?
NG wells are low maintenance but do occasionally get restricted by gunk coming out of the formation and depositing in the well tubing. A short term shut down for cleaning is required but normally this is a brief interuption.
I think you will see NG prices stay low for a while longer, at least until all the squabbling is concluded over contracts and pipelines in the Caspian Sea area. As soon as that is finished we will see a few major lawsuits about water pollution and a buch of gas sites will go down and supply will drop hence price will rise.
Prius and Vespa's Bitches!
LiteSpeed mountain bike FTW!
This is a travesty. Bernanke is the ultimate middle man driving up the price of everything. Look at every service or product over the past decade where prices have exploded and you will find the government, a bank or usually both as a middle man "making it more affordable".
I wonder what Exxon sends Bernanke in his Christmas card?
coal
Is that a trick question? The Bernak is jewish so he doesn't get an xmas card. he has 8 nights of getting crappy little trinkets.
Yeah, I know. But what can you do with a budget of just $8 billion per day?
these Central *ankers should go and see what it like to live off minimum wages and see how inflation... including non core items like food and energy ... is really... an easy cake eating process
We should really let central banksters know what it feels like to get a rope around their neck and hauled up on a street light pole!
Banks, concerned about the creditworthiness of some of their counterparts, yesterday lodged 61.2 billion euros in the ECB’s deposit facility, the central bank said in a separate statement today. That’s up from 28.5 billion euros on Dec. 16.
Does anyone not see what it means that we're at boom time levels far as cost inputs, but recession levels of business activity?
It's not just that margins of existing businesses are getting squeezed big time....and that's bad enough.
But the barrier to entry for NEW business trying to compete is now as prohibitive as it gets at eh END of a business cycle, and yet we're supposed to be at the beginning, when it's most favorable for new startups. Could be one contributing factor to the dearth of US IPOs lately (while China's are booming)
Yea, EXACTLY! All is well, as long as youre a crook banker and have a fully turned on free money spiggot. For everyone else, well it pretty much sucks to be you!
Exactly. Someone took the decision sometime in 2009 that the Financial services sector was the only thing worth salvaging in America. And as usual, they fed themselves the BS that some money would "trickle" to everyone else in the lower regions.....the trickle me! economy.
Not to mention the regulatory env created by big corp lobbies. It makes it almost impossible to build a competitive business from scratch. Most laws favor the big incumbent and make the startup burn precious capitol jumping through legal hurdles. Most startup activity is in the tech sector because it was largely unregulated and a somewhat even playing field. Well, until yesterday it was.
In the same report, DOE stated that the average total products supplied to the market was 19.7 million barrels/day. If my memory serves me correctly, this is an all-time high for this country.
In brief, all these people who are losing their jobs, are getting into their cars and driving around all day.
all these people who are losing their houses are doing the same.
Peak oil is now a fact, its in the rear-view mirror.
As for natty, what has happened is that fraccing and coal-bed methane discoveries have opened up huge new avenues of supply, far greater than anticipated. For the most part, NG is not fingible with oil ... people cannot (yet) put NG in their gas tanks, even though the cost, BTU for BTU, is about 1/3.
The cost of converting a car to NG is about $6000 (check out WPRT).
Cummins makes new engines which run on NG, their stock has been rising faster than Apple.
But you have to hit the average american with a sledge hammer, repeatedly, to get his attention away from the boob tube ....
Peak oil is NOT in the rear view mirror, for fucks sake. World oil production is within 1% of it's highest value, well within the noise. If production falls for a few years, or falls precipitously in one year, THEN you can say it's in the rear view mirror.
I am of the opinion that we aren't even close. More likely, we are running down the supplies in SA and some other Arab nations where their oil production has been subsidized by under the table gold payments since the 70's. Once that deal is over, oil prices will rise, and production around the world will resume an upward trend (we'll probably see an overall plateau, or even a temporary fall, at least until this depression is done).
We are on the plateau, there has been no signicant increase in supply for going on 5 years. Here is one for you
http://www.glgroup.com/News/What-statistics-can-tell-us-about-future-world-crude-oil-production-rates-51871.html Here is the synopsis:Exactly what I was looking for, thank you.
Realize that we are also in a global depression. There are two ways for the tap to run dry--either the water pressure falls (peak oil), or the faucet is shut off (economic slowdown/collapse). Both might hit at the same time, but that is pretty unlikely. The former would cause the latter, but that would mean an economic slowdown preceded by a huge increase in the price of oil, with sustainably high prices throughout, which we didn't really have. The oil price profile we have seen says "monetary shenanigans" much more than it says "supply problem" to me.
except that we're not really in a global depression.
Inventories drawdowns are a sign, if continuous, of consumption exceeding supply. Simple as that.
water pressure falloff? Dude, they go 2ndary extraction in the primary phase now, which is why production curves look like trapezoids since the 70s.
Look at shadowstats' alternate data and come back and tell me we aren't in a depression.
NOT as simple as that. Remember the oil speculators filling tankers with crude and parking them off the coast back in 2008? The oil there was not reported to anyone until it was put up for sale, crashing the oil price. I'm not saying that that is what is going on, but there are things that can happen behind the scenes to affect those numbers.
So? They also won't allow new wells to be drilled where all the oil is (under 500 feet of water off the coast) because of NIMBY. The Feds dictate where the wells go now. Of course production is falling off, the Feds are in charge!
Have you ever looked at a plot of US oil production? Jeezus H. Christ, no one is saying that there is no oil offshore, just that it cannot replace what has already declined.
At the peak of the off-shore tanker storage, the amount stored was 17 hrs of world demand, about 60 million barrels.
You remind of what kind of person was the one who cut down the last tree on Easter Island.
You don't think very hard then. The person who cut down the last tree on Easter Island was a government worker, building a monument to his boss.
If I lived on Easter Island, I would have opened a tree farm, or opened a stone moving business that used sustainable methods. I would have called for private property rights, and absolute ownership of discrete areas by individuals. I would have called for the assassination of tribal leaders that were destroying the island's capital via government spending on monuments.
In any event, if we had hit peak oil, one would expect that oil would buy a lot more of any of these things than it does: http://oilinsights.net/index.php/2010/05/01/crude-oil-price-outlook-what...
The only point peak oilers have to make is to conserve oil via more government regulation and/or population reduction. Well, guess what? There have been lots and lots of arguments like that over the years. I have posted some that now seem quite absurd (like the 1910 paper calling for oil reserves to run out by 1930, and the 1912 paper calling for a food crisis by 1950). None of them ever come true, because humans are in charge, not your false god. If you want to give up, I would be happy to loan you a gun and supply you with a bullet.
Hmm. Not sure where you got that from. I have no interest in "conserving" oil. In fact, I'm really looking forward to it being used up so that we can get on with what's next. It's really got nothing to do with conservation.
In any event, I expect riots to start when gasoline gets to 5 bucks a gallon, so there won't be any conservation, just like there wasn't any on Easter Island.
What's the point of conserving anyway? So people in 20 years can burn the oil? No point to that - it's going to get burned either way.
So what do you think my motivation is now, given that it's not to force anybody to conserve anything?
I'm glad you don't have such a motivation, but many others do, and you are feeding them.
The fact is, this is a molehill made into a mountain.
I'm not sure what you mean when you say "just like there wasn't any on Easter Island." They didn't have a free market. They didn't have property rights. They were basically a society in the grips of a government or governments focused on self aggrandizement. Just like government officials wearing $10000 suits in the middle of a depression, their government didn't care about markets or scarcity. They were focused on taking what wasn't theirs, and not on their long term rational self interest.
If that is allowed to happen here, we may well be fully screwed. The point is that blathering on about the end of oil does literally nothing except hand the statists another sword to stab us with. It is far better to focus on the real threat, which is government regulation, taxation, and spending.
Nice to hear that you wouldnt have chopped it down, there's hope.
The true price of oil is not fully realized, in that I agree with you completely. As far as the gubmint goes, think of it this way: maybe, just maybe, the gubmint is doing everything they can to keep the price of oil down with tremendous hidden costs that are being amortized.
Peak calls in 1912 dont mean diddly. Please refute the peak in oil discoveries that was 45 years ago.
That was about the same time that the US started subsidizing SA oil sales with gold. This suppressed the price of oil. Further, burdensome regulations which were instituted in the US around that time reduced interest in exploration at home, with geologists instead focusing abroad.
I can't say for certain whether there is really and truly any more oil in the US, but I can say that burdensome regulations CAN and DO stop exploration, just as they stopped my research group from pursuing extremely promising drug development work for more than a decade.
Peak calls from the 1910's speak to the human condition. Alarmism. Chicken Little, etc. Remember what happened at the end of that story? All the little creatures took shelter from the falling sky in the den of the predator and were eaten. Same thing will happen here.
And as for false gods and other nonsense, I suggest you review "Limits to Growth" and compare their model with the presently observed data. You are the one worshipping the false god.
Did you miss the fact that we are indeed "Drilling, Baby, Drill" like never before. More wells, less oil, lower API, higher sulfer content (check out the DOE data). Diesel at a premium, Brent at a premium despite being a lower quality benchmark.
I guess that you will see what you want to see.
TMosley wrote: "Peak oil is NOT in the rear view mirror, for fucks sake. World oil production is within 1% of it's highest value, well within the noise. If production falls for a few years, or falls precipitously in one year, THEN you can say it's in the rear view mirror."
So have you done a lot of research? Or is this your opinion like my dear Aunt Sally has an opinion on whether Dancing With the Tards is a good show?
How do you explain production being flat for 6 years despite price going up 4 fold? How do you explain SA production flat during the rise from 20 dollar oil to 145?
How do you explain 90 dollar oil and 3 dollar gas?
Answer - you don't.
For a "peak" to have come and gone, there needs to have been a "peak". You do know what a "peak" is, don't you?
I don't need to explain shit. I just need to show that there has been no peak, and there hasn't.
But hey, let's explain anyways--production isn't rising because the rise in price has been an illusion. Oil isn't getting more valuable, the dollar is collapsing. Look at oil priced in gold, and you will see oil is cheaper today than it has been at any time since 1979. http://www.incrediblecharts.com/economy/gold_oil_ratio.php
Depends on what you call a peak... seriously. The doomers all foresaw a sharp peak, they were wrong. A lot of them have egg on their face. Hirsch was also guilty of that error. A plateau that turns over slowly, i.e. 5-10 years will only look like a "peak" after 20 years, rhen what?
We can argue about semantics, but you cannot dispute that oil discoveries peaked in the 1960's. Based on the USGS estimates made in 2000, we are finding nowhere near the new oil that we were "supposed" to. This includes Tupi and other deep-water finds. Hell, it is now accepted that the existing fields are declining at an annual rate of 4.5%. Extrapolate that over 5 years, that is about one Saudi Arabia.
And yes, oil is cheap relative to gold. Or is gold is expensive relative to oil? Historically the average is about 16 to 1 but with wide bands. Thats why I own both.
Best way for the average person to play oil is PBT. Own the underlying and recieve the monthly cash flow.
How or why would you go all "peak oil" and then use some historic comparison between oil and gold?
Curious.
Was only commenting on the above statement. Au and Oil production have both for all intents and purposes peaked.
duplicate
Sigh...what is it with you idiots and your infatuation with comparing irrelevant variables?
Gold SHOULD be more expensive wrt oil than previously because gold production hit a material peak in 2001, whereas "oil" as rubes know it hit one in 2006.
For you to show there has been no peak, you have to demonstrate a production figure EXCEEDING all other production figures, a new high. For C&C, IEA says 2006, the data I have shows late 2005, close enough, and we haven't approached that since.
This is the oil that pumps itself, as opposed to the kind we have to dig up, wash, and process.
No, it shouldn't have, because *GASP* oil is used up, but gold remains forever. Even if gold production completely stopped tomorrow, the price of oil in terms of gold would not go up, it would just stop declining.
Look, there has been no clear peak. Period. Fuck off if you think there has, because you're an idiot. Don't show me noise and call it signal. I can tell the fucking difference between rain and someone pissing on my head.
oil production stopped GROWING in 2004 dipshit.
That ALONE should set off alarm bells in your head, but it can't because your head is full of rocks.
SHOW ME THE FUCKING DECLINE, or call it "plateau oil". I'll say it again, don't piss on my head and tell me it's raining.
I can't hear any peak oil alarms over the cacophony coming from the Fed and US government. The problems there far overwhelm any coming from the oil markets.
No need to be nasty. I accept that you have a different opinion on this. I was of your opinion for quite a bit after first hearing about Peak Oil. It took a lot of time and a lot of reading for me to change my mind, and my paradigm.
I didn't write "rear view," BTW, that was another poster. It doesn't matter. Peak in 05, peak in 2012. Bottom line is production has been flat for 5 years, and that's a huge warning no matter when the actual peak is.
Regarding your thought that oil price reflects dollar decline, well sure that's true, in part. But oil was 20 in 2001, and it's 90 now, which is 4.5 times greater. The dollar hasn't lost anywhere near enough value to cause that.
In any case, inflation adjusted gasoline prices have been on a steady uptrend since about 2001.
How do you explain the steady increase in the price of oil and gasoline? Oil company conspiracy?
At what price of gasoline will you concede that oil production is declining?
I get really nasty when people yammer on about the end of the world based on a leveling off of production in the middle of a damned depression, and when they just say "Peak Oil says you are gong to die next Thursday". They don't bother to think of a way forward, but instead simply scream "death!" at the top of their lungs. It's disgusting. I have posted in many threads just like this one about new technologies that will make oil obsolete as an energy source. By this, I mean a method for producing perfect graphene sheets on an industrial scale with very little energy input in a manner that they can be easily doped, which makes them ideal for solar applications. Think about solar panels that are as cheap as newspaper.
Oil went from 20 to 90, gold went from 250 to 1400. Oil is cheaper now than it was in 2000. Sorry, that's the way it is. You can't measure anything in terms of dollars, just like you can't build a skyscraper on loose sand.
I will concede that oil production has become a problem when the price of oil in gold goes up and does not come back down. We are currently sitting around the average price for the last 50+ years in terms of both gold and silver, as well as many commodities. The fundamentals for gold and silver are also pointing strongly northward, and there are very credible accounts of price suppression regimes in both metals, which means that oil is in reality even cheaper.
Further, the "golden age" of American manufacturing occurred during a time when oil priced in gold was a couple of standard deviations higher than it is now. From all these data points, it is easy to draw the conclusion that this depression has been caused by the Fed and the US government, NOT by oil.
Solar voltaic uses petrolium as a product. The input cost is there, do not deny it.
And as far as the depression, the financial House of Cards was made long ago, and the plan was to knock it down right before oil production peaked.
CURRENT photovoltaics use petroleum, and they use them as a capital investment. Solar cells return their energy input within ten years or so. The ones I am talking about can use any carbonaceous compound as an input, and can be doped with simple compounds like melamine. The only energy inputs are the production of the nitrogen gas that modulates the deposition of the graphene, and the 800 degree chamber temperature where the reaction takes place (this does not use as much energy as you would think, hell, it could be solar powered at the cost of making a big lens).
And don't put to much stock into the idea that this is how things were planned. This has been a disaster for the West. If they knew what they were doing, they would have created the Fed, but kept the (mostly) free market operating. What we have today is the result of hundreds of thousands of half assed interventions built up by politicians over the years.
FIAT and bond worthlessness could be causing the rising oil prices alone,, but I do not think it is as sinple as that. Never mind the low hanging theories, the production has platued. This in many countries before now, but now that the House of Saud has failed to maintain their production level, it is on to Canadian tar sands, and we know were it goes from there. A warning to all "Hippies", get ready to drive half as much as you did your whole lives.
Electric cars: Because oil is fucking ridiculous.
Just a quick question for the electric car brigades- What makes the electricity to charge them?
Wink wink
Maybe unicorn farts power the electric vehicles? Still researching it.
Hehe and baby kisses and puppy dog looks
I thought it was made from ground-up homeless people; or is that what our future food supply will be? I forget.
You need pounds and pounds of rare earth metals for each hybrid Prius. Thing is, China is slapping-on quotas, increasing export taxes and the rest of the world has been priced out of the market years ago.
JF: It's soilent green!
So... why do you think I have been recommending Avalon and Great Western since 2008? The rare earths needed for the permanent magnets are the "heavy" ones, not the stuff that Lynas and Molycorp have.
All joking aside GWG.TO is being run by some very sharp people, look at the history of the company over the past 3 years. They are going for full value vertical integration backed by serious plays in Canadian Shield. They already have 20% of the world market for Samarium Cobalt alloys through their acquisition of LCM, a specialist alloy producer.
I'll look into them when I take an exit from TET.TO or when it spits out enough dividends to acquire some shares of them.
BTW, anyone know a good sell point for TET? I am totally in the dark right now on this trust
Not familiar with them (TET). I did sell my PWE into some recent strength, even though I really like the company (tax management, mainly). Picked up some ERF with the proceeds....
Depends on where you are. Given EVs are not enough of a drain on the grid, I'd say nat gas. Or legitimately could be wind power if it's part of ERCOT at night imported from the west zone.
Just burn the nat gas in the fuckin cars to begin with...more efficient than
converting it to electricity, transporting it through transformers, over transmission lines, through transformers, battery chargers, and finally to the batteries themselves,where charging efficiency is 70%, on brand new batteries...
I'm not sure I want to drive around in a bomb. Just sayin'. Also, what is the efficiency of an engine powered by natural gas? I have no idea, but I would think it wouldn't be much better than an internal combustion engine. How would you fill it without blowing up?
I'm thinking something like a plug in hybrid biodiesel would be what is called for as far as personal transportation.
Whats the efficiency of a natural gas engine/generator combo?
No more energy in a tank of nat gas than petro gas and the tanks have proven perfectly safe over the past 20 years...
Much more efficient central energy production plants?
If you could convert electricity to gas, it would cost something like 17 cents per gallon.
Pure conjecture. Where do you come up with these numbers? Where does the electricity come from? It probably takes more than 17 cents per gallon to convert crude oil into gasoline and that is using the best possible precursor, crude oil, just what sort of method converts 3 kilowatt hours of electricity into 125 million joules of energy, which is the amount of energy in one gallon of gasoline.
really there are web sites where this whole matter has already been hashed out. Take a look at the oil drum - http://www.theoildrum.com/
Thems is coal fired cars SheepDog-One...
Like chevy Volta that cost 44k and still run on gas?
Buy two prius' or just one and you'll have enough money for gas for life.
hello sir,
how many electric cars that can travel at least 400 miles with one charge are there on the market or do you expect all those people to buy 2 cars ???
Btw: last week in Netherlands, EU the Shell by the highway was selling a liter of gas for 1,60 euro !!! a record
For a while now, I have been telling people to get ready for a 2 euro a liter gasoline ( the best way to collect the taxes since from that price about 1,10 is taxes to feed the eu BANKerS)
Can the average European pay 10 euro per liter in no time or will the German anti inflationist penny pincher demand back the 3rd Reich and the real judgment day for the money changers one more time
Saw a coal truck on the road the other day. Are people stockpiling coal now?
bad news wednesday this is turning out to be.
somehow all of the happenings, also and especially this sudden focus on Oil, which climbed from 25-27 to 90 without much of a hoot from the public or the markets.
Why is this upward pressure so critical? Because somewhere up along the demand/price curve, it starts to get really painful for consumers. It's the old logarithmic hockey stick walloping you/me/us in the ass.
In India, we just had a 6% hike in gasoline prices with nary a whimper from Anand six credit-card.
ORI
http://aadivaahan.wordpress.com
You're right. My guess as to why there's been so little outcry so far is this: when times were still good (as in the summer of 2008), consumers felt bolder to complain. They felt more secure in their jobs and general outlook. Now that confidence has been wiped out. So there's a reluctance to complain combined with fear and even general denial that things won't get better fast. That will last and last until denial turns to rage. That usually only starts when people have lost hope. And once it starts it's very difficult to stop. This is why governments are trying every trick to pacify people with extended unemployment (the dole) and lots of TV.
And also why the police state clamps have been coming down and the domestic terrorism rehtoric is ramping up.
I have been saying this for months now, look at the diesel - gasoline spread. Diesel at a premium in the US speaks volumes about the global demand.
Also, the WTI benchmark is obsolete. Brent reflects the price of tanker deliverable oil to anywhere in the world. Once upon a time you could deliver Brent to Cushing at a $0.40 discount to satisfy a contract. That hasn't happened for quite a while.
Just fuck'n collapse already! Long DBC
Ten years from now, the topic of conversation in financial circles will be "what ever happened to those gloom and doomers of a decade ago?".
We already had the "Collapse"! Where were you in October 2008? lol
if to you 2008 seemed like a collapse, than kissing the girls cheek is like anal for you right ?
collapse is when there are bloody freshly skinned bankers heads rolling on the street and kids playing some soccer with it, thats colllapse
alright, wake me up when that comes (It's not).
The "Double-Dip" didn't happen. Inflation is low. Market has recovered nearly all its gains since before the previous recession.
The American people don't care very much about the banks. As long as money and credit is flowing, no Great Depression 2 is possible- PEOPLE DON'T WANT TO LIVE THROUGH MADDNESS!
That's right, stay asleep. That makes it easier for the rest of us to gather resources.
Ten years from now you'll ask "what ever happened to those doomers". You'll then look up to the big house on the hill, and you will see them there, sipping mojitos while you trim the hedges.
"As long as money and credit is flowing"
http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=TOTLL&s[1][range]=5yrs
It's not. It's actually been steadily falling since October 2009.
Ha, 2008 was just a warning shot across the bow. The ship has not slowed or turned and a full asault is right around the corner.
Just keep believing oil prices are caused by supply/demand norms.
Frankie: JPM, they're takin' hostages. And Mike, they spit right in the people's face all because they're backed up by that Jew at the federal reserve.
Michael: I know. That's why I don't want 'em touched...I want you to be fair with them.
Frankie: You want me to be fair with em? How can you be fair to animals?...
Oil sucking wind looking to break 90 on the downside. Could get ugly to 88 if so.
The oil age is about over. If you're old enough to remember when Reagan was elected, then you lived through the best part of the oil age. I hope you appreciate how great it was.
Peak Oil is the unifying concept. It explains 911, Iraq, Afghan, The "War" on Terror, Expanding police state in U.S., hostility toward Iran, Venezuela, and the impossibility of economic "recovery." The U.S. economy was built on cheap oil. It will die on expensive oil.
If you believe the propaganda on TV about "more oil in Alaska, Bakken," and so on, then you are as much of a sheep as the fools who believe the economy is "recovering."
The reason that most people can't/won't get their arms around the concept that oil supply is now on a downward trend is that it will change their paradigm of living. Few people are intelligent and wise enough to reconsider their own paradigm. Asking your typical fat American energy whore to understand that his/her days of energy whoring are over is like asking a Muslim to believe that Mohammed wasn't a prophet - it's paradigm changing and so it is discarded without consideration.
Oil at 91 and rising. Gasoline over 3 and rising.
How long can you maintain the fiction that there is plenty of oil out there if price keeps rising?
We are on the cusp of a huge inflection point in U.S. [nay world] history.
I laugh outloud as I imagine Americans finding ways to rationalize how 10 dollar gasoline (coming soon to a decrepit quickie mart near you) is NOT the result of dwindling supplies.
Have fun with that. Peak Oil is here.
Frank, you ignorance is really showing or your script is a bit overstated. So are you in Utah or Virginia??
I'm in PA. What do you mean overstated?
I like that, "Unifying Theme"....
The first 1/3 of "American Theocracy" should be mandatory reading.
Yes, I picked up that book at an airport bookstore in Oct 2007. The increase in the oil price over the previous few years wasn't computing with the mainstream media. The first third of that book was a real "LIGHTBULB" moment for me, and everything thereafter seemed to "fit"