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Something Very Strange Is Taking Place Off The Coast Of Galveston, TX
Having exposed the world yesterday to the 2-mile long line of tankers-full'o'crude heading from Iraq to the US, several weeks after reporting that China has run out of oil storage space we can now confirm that the global crude "in transit" glut is becoming gargantuan and is starting to have adverse consequences on the price of oil.
While the crude oil tanker backlog in Houston reaches an almost unprecedented 39 (with combined capacity of 28.4 million barrels), as The FT reports that from China to the Gulf of Mexico, the growing flotilla of stationary supertankers is evidence that the oil price crash may still have further to run, as more than 100m barrels of crude oil and heavy fuels are being held on ships at sea (as the year-long supply glut fills up available storage on land). The storage problems are so severe in fact, that traders asking ships to go slow, and that is where we see something very strange occurring off the coast near Galveston, TX.
FT reports that "the amount of oil at sea is at least double the levels of earlier this year and is equivalent to more than a day of global oil supply. The numbers of vessels has been compiled by the Financial Times from satellite tracking data and industry sources."
The storage glut is unprecedented:
Off Indonesia, Malaysia and Singapore, Asia’s main oil hub, around 35m barrels of crude and shipping fuel are being stored on 14 VLCCs.“A lot of the storage off Singapore is fuel oil as the contango is stronger,” said Petromatrix analyst Olivier Jakob. Fuel oil is mainly used in shipping and power generation.Off China, which is on course to overtake the US as the world’s largest crude importer, five heavily laden VLCCs — each capable of carrying more than 2m barrels of oil — are parked near the ports of Qingdao, Dalian and Tianjin.In Europe, a number of smaller tankers are facing short-term delays at Rotterdam and in the North Sea, where output is near a two-year high. In the Mediterranean a VLCC has been parked off Malta since September.On the US Gulf Coast, tankers carrying around 20m barrels of oil are waiting to unload, Reuters reported. Crude inventories on the US Gulf Coast are at record levels.A further 8m barrels of oil are being held off the UAE, while Iran — awaiting the end of sanctions to ramp up exports — has almost 40m barrels of fuel on its fleet of supertankers near the Strait of Hormuz. Much of this is believed to be condensate, a type of ultralight oil.
And unlike the last oil price collapse during the financial crisis only half of the oil held on the water has been put there specifically by traders looking to cash in by storing the fuel until prices recover. Instead, sky-high supertanker rates have prevented them from putting more oil into so-called floating storage, shutting off one of the safety valves that could prevent oil prices from falling further.
A widening oil market structure known as contango — where future prices are higher than spot prices — could make floating storage possible.The difference between Brent for delivery in six months’ time and now rose to $4.50 last week, up from $1.50 in May. Traders estimate it may need to reach $6 to make sea storage viable.
JBC Energy, a consultancy, said in many regions onshore oil storage is approaching capacity, arguing oil prices may have to fall to allow more to be stored profitably at sea.
“Onshore storage is not quite full but it is at historically high levels globally,” said David Wech, managing director of JBC Energy.“As we move closer to capacity that is creating more infrastructure hiccups and delays in the oil market, leading to more oil being backed out on to the water.”Patrick Rodgers, the chief executive of Euronav, one of the world’s biggest listed tanker companies, said oil glut was so severe traders were asking ships to go slow to help them manage storage levels.“We are being kept at relatively low speeds. The owners of the oil are not in a hurry to get their cargoes. They are managing their storage capacity by keeping ships at a certain speed.”
As a result of all this, something very unusual going on off the coast of Galveston, where more than 39 crude tankers w/ combined cargo capacity of 28.4 million bbls wait near Galveston (Galveston is area where tankers can anchor before taking cargoes to refineries at Houston and other nearby plants), vessel tracking data compiled by Bloomberg show, which compares w/ 30 vessels, 21 million bbls of capacity in May. Vessels wait avg of 5 days, compared w/ 3 days May.
As AP puts it, "a traffic jam of oil tankers is the latest sign of an unyielding global supply glut."
More than 50 commercial vessels were anchored outside ports in the Houston area at the end of last week, of which 41 were tankers, according to Houston Pilots, an organization that assists in navigation of larger vessels. Normally, there are 30 to 40 vessels, of which two-thirds are tankers, according to the group.Although the channel has been shut intermittently in recent weeks because of fog or flooding, oil traders pointed to everything from capacity constraints to a lack of buyers.“It appears that the glut of supply in the global market is only getting worse,” said Matt Smith, director of commodity research at ClipperData. Several traders said some ships might have arrived without a buyer, which can be hard to find as ample supply and end-of-year taxes push refiners to draw down inventories.
And here, courtesy of MarineTraffic is the interactive snapshot (readers can recreate it here):
All of which explains why this is happening:
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How in the name of Christ do you get "higher energy costs" when oil prices are the lowest they've been since 2001? the only energy price I've seen go up is electricity, and that's because of idiotic, non-scientific politicians jumping on the solar/wind bandwagon, and forcing us to pay ridiculously high prices for it whether it's produced or used.
"How in the name of Christ do you get "higher energy costs" when oil prices are the lowest they've been since 2001?"
What you have to understand is that there are delayed effects in the economy. High oil prices were a key factor in the economic crash of 2007/2008. They have been a key factor in the continuing Greater Depression ever since then. Only within the past year have we seen low oil prices again, and both times (late 2014 and now) were because of the Saudis being persuaded to pump like crazy to send the price through the floor. This will not be sustained forever. Just because the price is suddenly and temporarily lowered doesn't mean the economy is all of a sudden going to snap back to 2007 labels. A lot of damage has been done. People are broke. Having cheap gas is only a temporary relief that hardly offsets all the wealth they've been stripped of and the suffering they've been through over the past 8 years.
I live in Galveston, and it looks like a used car parking lot out there. Pretty at night llthose lights out there.
We passed peak oil, at least for the conventional oil, but the investment in oil that spurred, the shale oil turning profitable for lower than expected, and the economic crash from hitting 147 dollars a barrel oil have combined to really screw things up.
The US oil patch, where most of the additional barrels in the past few years came from, has slashed rig counts in half, but everyone else is pumping away furiously to just try and stay solvent. The US output will fall first as those new fields only have a life of ~1 year, then we'll see slowly falling supplies elsewhere. I don't expect another 147 dollar spike though because demand is just too soft, no one is making good profits, demand will disappear before the price gets above 100 dollars a barrel, at least until supply constraints start hitting things that matter.
Geezus H. F'ing. DOES NO ONE HERE UNDERSTAND BASIC ECONOMICS?!
Oil is one - just one - source of energy. It is particularly good for a transportation fuel because it has extremely high energy density, relative to other fuels. However, basic eco 101 tells us when the price of a good gets too high, two things happen: demand falls, and substitutes appear. And this is exactly what we saw.
When oil hit $120-140/bbl, and gas hit $4/gal, people stopped driving (demand falls). People also got rid of their old gas-guzzling cars and replaced them with more fuel-efficient vehicles (demand falls). People also started buying more hybrids and electric vehicles (substitution). People started using ethanol (stupid, I know, but still: substitution). Finally, the high price made investment in other types of oil (shale, oil sand) profitable (substitution).
As eco 101 predicts, the Saudis, who had the lowest marginal cost of production, extracted huge rents from the high prices, but as the effects noted above began to take hold, they cut prices to drive out those who depended on high prices (shale/oil sand/ethanol), to boost demand (miles driven has started rising again), and to make electric cars seem not worth the drawbacks and higher price. They've been reasonably successful at this game, at least as far as market share and extracting rents goes. Whether they making enough money to keep their under-employed people happy is another issue, which I'm not qualified to comment on.
If in fact the Saudis are running out of oil and they cease to be price-setters, then the shale and oil sands and bio fuels start up all over again. The problems with electrics and hybrids are being overcome, and that will permanently cut into demand. The point is, again as eco 101 teaches, at some point, the price will clear the market, and supply and demand will be back in balance.
I'm an engineer, and with the advances being made in materials and energy storage, I'm quite confident that electric cars will eventually become the standard. People will have small solar arrays and windmills to generate power for their cars, as the price and efficiency of both technologies has been improving. The 150 years from 1890 to 2040 will be known in the future as the "Oil Age", because I'm sure in another 25 years we'll be way past it.
"However, basic eco 101 tells us when the price of a good gets too high, two things happen: demand falls, and substitutes appear."
Please explain to us your ready substitute for oil. Unicorn farts? Nuclear powered automobiles? Coal power plants? What do we make plastic from? Do we suddenly sprout acres of soybeans to extract lubricating oil from, and if so, where does the supply of fuel oil and lubricating oil come from to run the tractors? I don't think you fully understand the dire situation we are in with regards to our chemical dependency on oil.
"When oil hit $120-140/bbl, and gas hit $4/gal, people stopped driving (demand falls)."
And when a dozen eggs hits $20, people stop eating eggs. But they don't go on living happily ever in eternal bliss with no eggs for the rest of their lives.
"People also got rid of their old gas-guzzling cars and replaced them with more fuel-efficient vehicles (demand falls)."
Did they? Just like that?
"People also started buying more hybrids and electric vehicles (substitution)."
Neither one of which is a solution to anything. Hybrids burn gasoline and diesel. Electric vehicles are manufactured using oil, and burn electricity that was predominately generated using oil.
"People started using ethanol (stupid, I know, but still: substitution)"
Stupid and irrelevant. Ethanol is not a replacement for oil. Can you make lubricating oil from ethanol? Can you make waxes and plastics from ethanol?
"Finally, the high price made investment in other types of oil (shale, oil sand) profitable (substitution). "
And we ride off into the sunset living happily ever after with our $3.00+/gallon oil shale gasoline? And we keep burning massive amounts of shale oil to run our ever increasing massive oil burning civilization, forever and ever? Or does that oil run out too eventually?
"If in fact the Saudis are running out of oil and they cease to be price-setters, then the shale and oil sands and bio fuels start up all over again."
And not one problem was solved.
"The problems with electrics and hybrids are being overcome"
How long until you realize that the fuel you put in your automobile is only one tiny fraction of the various uses for oil that our society depends on always having available at a cheap price?
"The point is, again as eco 101 teaches,"
The same Econ 101 that has led us into the Greater Depression, as we stand on the verge of total economic collapse? Methinks you don't understand as much as you think you do.
"I'm an engineer, and with the advances being made in materials and energy storage, I'm quite confident that electric cars will eventually become the standard."
How long do you suppose we have before the wheels come off this train; is it "eventually", or "really soon"?
So we all stand around for the next 10 years praying to Jesus that the miracles of science eventually save us?
"People will have small solar arrays and windmills to generate power for their cars"
Tomorrow?
"The 150 years from 1890 to 2040 will be known in the future as the "Oil Age", because I'm sure in another 25 years we'll be way past it. "
After a few billion people have died in the biggest and most destructive war yet in the history of the planet Earth, sure.
Here is a thought. Is it possible that $147 a barrel ended growth? Then the easy money guys dumped truckloads of money in shale oil and tar sands stimulating production of marginal oil. On the one hand industrial production and overall demand began to trend downward while production soared. The result is the current oil glut.
A momentary surplus resulting from a fractured market should not be confused with an overall decline in production. Pick any oil field on the planet and chart its production. The same pattern reveals itself time and again.
" Pick any oil field on the planet and chart its production. The same pattern reveals itself time and again."
Wow.. what a freakin' deep thought. Let's try a few variations:
"Pick any cereal box from your cupboard, and chart its weight. The same pattern reveals itself time and again."
" Pick any gold mine on the planet and chart its production. The same pattern reveals itself time and again."
Thanks a lot, Cap'n Obvious. Now you can go back to hotels.com
That and Global Warming... just part of the overall conspiracy. Right?
"equivalent to more than a day of global oil supply"
Ummmmm....peak oil is nowhere near being debunked here. There is a a little over a day only. Let me see here......365-1=............364!!!. Wow that's quite a shock in oversupply there.
"equivalent to more than a day of global oil supply"
Thats just a few observed spots. There are a lot of other ports not listed. This doesn't include barges, onshore tanks, SPR
the point of the article is that there is enough stored oil out there to screw the price.
Sorry about your difficulties comprehending how the physical world works. Let me draw you an analogy. You have a sponge with a limited amount of water. You squeeze the sponge harder for a few seconds and the water comes out a little more quickly. Squeezing the sponge does NOT, however, create more water.
Peak oil is happening right on schedule. We have 47 years of conventional oil left at ever increasing prices. We have enough frackable oil to extend that from between 11.2 to 20 years or so, again at ever increasing prices.
Coal and natural gas gives us a little more time. Some of that is converted to oil, at reduced energy efficiency, of course. How much time is difficult to predict. An optimist might say 40 years. Someone a little more price conscious might estimate considerably less time.
In no scenario does significant hydrocarbon fuel use extend beyond 2100 or so. Interdependent just-in-time suppy chains decay unpredictably long before then due to price increases.
The glut is temporary while the sponge is being squeezed harder by the Saudis and others. It doesn't change anything at all, except prices, temporarily.
"In no scenario does significant hydrocarbon fuel use extend beyond 2100 or so."
Hydrocarbon fuels will continue to be used for a long time. It just won't be fossil fuel.
This isn't a supply glut in any meaningful way. It is a lack of demand and that lack isn't due to innovation. It is due to demand destruction caused by high oil prices.
The bumpy plateau.
That term has been in the vocabulary of every peak oil proponent for the last decade.
That's what we're seeing now.
Are those tankers full of Oil, or refugees.
Oily refugees.
Soylent Green. It's made from people. And crude oil.
Peak puke
Neither
So you're saying that the real world glut of oil is affecting it's paper price?
Well, there's a first time for everything, I suppose.
Paper oil is so less messy though.
"paper" has been digitized. Pretty cheap to store "paper" oil
If OPEC acts, you will be limited on what you can sell, so dump everything you can on the market now.
If OPEC does not act, the price will fall further, so dump everything you can on the market now.
$15 a barrall is price parity with Nat Gas ..BTU wise.
Wait, are you saying there are complimentary energy sources that have smashed the oil cartel and are driving oil down to its economic price?.
Nonsense.
If everyone in America flicked their Bics at the same time, all that natural gas would be gone.
And you can't power your car with shale oil. Shale oil is like salad oil; good on greens, maybe.
Only a hippie driving a biodiesel would use shale oil. And it stinks.
You mean like banks do with fraudclosure ?
And the bankruptcy attorneys are licking their lips.
And maritime insurance underwriters are getting nervous.
Good thing Hurrican season ends soon!
No problem. Importing some Somali pirates can also provide some fun.
the pirate's overhead is too high. at $40/bbl they can't make a profit.
We'll treat them as Oblama immigrants and give them all kinds of $ swag. Overhead solved.
Plus there are so many of them, it's hard out there for a Pirate...
I think we have passed Peak Pirate.
Still plenty of road pirates out there.
<-- Hurricane
<-- Typhoon
<------- War
<------- Somebody who doesn't suck MIC or banker cock becomes president.
Somebody like that would have to run before they could become president. Right now I think they're all in the tank (pun intended).
If we started a campaign to get everybody to write "Dr. Engali" on their ballots, and it was successful enough to get you elected, would you take the job? I sure as fuck know I wouldn't.
Depends, do I get to keep all the White House furniture?
No furniture for you ^_^
Sure if you like past and present cum stains.
I take back what I posted above. Doc can keep the PILLOWS!
How would you get the stink out?
No, you get an unlimited budget to redo all the rooms & furniture to your taste. The taxpayers credit card has no limit!
And why should it? We have a printer AND a rock solid Ponzi scam going.
<-- 'Nukular' War, in ME.
<-- Conventional War on Iran and front-running os the Straits of Hormuz closing.
Was hoping for some naked, partying coeds, but then again, that's not really "strange" around Galveston
But the Chinese are using more oil and there just isn't enough left to pump under $100! Waaaaaaassaaaaaa! Poor oil people. They thought the scam would last forever.
GOOD DAY SIR!
So that's, what, an 40% increase in wait time, half again as many tankers, and capacity is nearly maxed...
I can hardly wait for a hurricane to head towards Texas.../sarc
I bet the prices paid are much less than the spot price...
you're damn straight they are
If we were smart, we would make a mobile gaming and hooker ship to facilitate the crews of those ships. Im sure we could find some refugees that need some work.
I wonder what Jack Abramoff is up to these days?
have to hit them in volume...
deckhands make about 1200 per MONTH
still, with about 30 people on each ship....could scratch out a few bucks
might not get the captain though....some of them have their wives on board
Final war preps.
Nah, this is initial war preps. Balkans are putting up razor wire fences, that's next level shit. Final war preps will be training camps for millenials pre-draft.
Peak preps
get stacking Phyzical Bitchez... BTFD
Maybe we could build a pipeline across the US to store oil in?
Lake mead is running dry and nobody cares about that so why not drain it completly and fill it up with nice sticky oil?
And I guess it will be a nice tourist attraction also! Look kids!! That's the stuff we nearly got for free, while less then 5 years ago millions of people had to die for "cheap oil below 150 dollars!!"
Those peopel surely didn't die to profit the bankers who run the ICE!
And it's just weird that the ICE is never mentioned in any of this... it's THE COMEX OF OIL! RUN BY THE SAME KIND OF PEOPLE!!
OMG!!!!!!! Its a Chinese amphibious invasion fleet!!
Call out the guards! Call out the guards!
Wait until all that Iranian oil hits the market soon.
Hello oil / $20s a barrel !!
Easiest short of the century!!
Let's add the next big Yuan deval to the mix here. Been saying the Banksters are literally all hands on deck trying to prop up that pile of horse shit crude . . . . . . . might be one the last few levers holding together an attempt to prevent the ponzi from imploding.
That is not a picture of the Lightering, that is the Anchorage. Smaller vessels that draft less water use the Anchorage - cargo ships, small tankers.
The VLCC's are 80 - 100 Miles off the coast.
It's normal for the Galveston Anchorage to wad up, depending on port traffic.
Another false pretense in creating oil supply chain influx. Look at Baltic Index charts index under Crude Oil. As the supply raises, price drops. We better create another Delta Niger event.
At 1.40. They covered the brand name of twin outboard boat engines.
'Oil War' Rages in Niger Delta - YouTube
We need the Laurentian National Oil Storage Facility!
http://www.zerohedge.com/news/2015-04-01/americas-new-crisis-peak-oil-st...
USD 120 on the DXY coming our way!
We are waiting for the Lehman-equivalent failure to formally begin the World Wide Greater Depression.
How to look at shorts for major financial firms?
https://thinkpatriot.wordpress.com/2015/11/10/a-measure-of-propagandas-p...
https://thinkpatriot.wordpress.com/2015/11/11/dynamics-of-national-colla...
I will personally be so relieved when that finally happens, my wife doesn't believe my predictions of financial collapse because they have not affected any one. Housing in our area is still hot, car sales were also, don't know about now.
"I told you so" is so satisfying in these situations. Better learn to be a stoic, take what satisfaction you can get from life, this isn't going to be fun for many people.
A point history classes do not make is that nation's troubles are almost always self-inflicted, the result of leader's hubris of some kind. America has had leaders with Harvard degrees, so hubris to the power of Dunning-Kruger.
Propaganda at its finest.
Smells like a disaster waiting to happen. Ships colliding, something stupid.
wait till terrorists start sinking them
All I know is the DOW will be green before the day is over. 100 points straight up in the last 45 minutes....
BULLSHIT!!
When the internal combustion engine fueled by oil products is finally consigned to the dustbin of history as the horse and buggy was, to be replaced by electric and new battery technology for the 21st century then 70% of the market for oil, which is what transportation is, will severely shrink, with oil used mainly for lubrication and sundry purposes.
Yes, because lithium mining is very friendly to the planet.
And plentiful!
And we power those batteries for free - no fossil fuels at all. Just comes straight out of the wall, like magic.
Fusion looks to be coming down the pike, and thorium fission is also in progress.
Yes ...why yes it does.
Thorium and molten salt reactors are shelved because they dont have anciliary revenue streams provided by the weapons on the backside of production.
Nubian....how do they make energy again?
RIPS
Pipe dream.
The down votes are all wrong. While there is still a lot of engine tech that is oil dependant (military), and, well, it might take a while, but what you are mentioning is very significant. Who thinks that oil, someday, as a primary energy source, will become obsolete? What happens if a new technilogy shows up to replace it? Battery technology is an area to look at, storing wind power, etc, some sort of solar development, hard to say. Near term (5 yrs) not likely, 20-50 yrs out, not impossible.
Pipe dream. EROEI sucks on solar and wind and you're never going to get the energy density in batteries high enough to run a modern industrial economy.
You are out of date on the solar and wind efficiencies. Solar can pay back the entire system cost within about four or five years at the residential scale without subsidies. Wind is similar, but only at the largest scales. And metal air batteries have energy densities similar to gasoline.
EROEI, not efficiency. EROEI on solar sucks. Plus, you're talking theoretical limits to battery energy density. Knock that down by a factor of three to get practical energy densities.
Yea but you're talking today. I tell people this
"right now, there are tens of thousands of the smartest people you've never met working 24/7/365 to develop next generation battery/energy technology -- and the'yre armed with $BILLIONS in R&D -- and they're motivated to crack the ~$2 TRILLION annual energy market"
The bottom line with this stuff is that it sits in the semiconductor space. Think you're home computer being outdated before you get it out of the box and the staggering drop in the price of solar.
This thing is unstoppable. Now, the move away from petroleum is going to be the largest global destabilzation problem the world has ever seen. What happens when Saudi Arabia, Iran and of course Russias tills run dry because we just aren't buying much oil anymore? We are currently seeing a global preview of that.
My neighbor runs his house and his electric car using solar panels exclusively. This is in New England, not Arizona.
I told him that the EROEI sucked, and his battery needs to have greater energy density, but he's a hippie.
I hate hippies.
He sells his excess electricity back to the grid.
So in addition to being a hippie, he is a communist.
"EROEI, not efficiency."
I didn't say anything about efficiency. Unless they are summoning energy from the aether at some point in their production process, then they have to pay for the electricity used to produce the panels, as well as all the fuel that goes into mining the raw materials, and all the other costs between the dirt and the final product. The neat thing about price is that it accounts for all of the inputs. And the electricity produced pays back not just the cells, but the inverters, wiring, brackets, etc within five years. Where the panels have expected lifespans of 25-30 years at least.
" Knock that down by a factor of three"
From wiki: Nonetheless, the way that it becomes actually interesting for vehicles is combined with electric motor's high efficiency (95% compared to 35% for thermal engine). Then the energy storage is instantaneously reduced by factor 3.
Sorry to kill your doomboner :(
From wiki:
And your done. You just showed the world your ignorance.
You are a complete moron, like all peak theorists.
Solar and wind are already crushing the economics of utilities. You don't need to run the economy 100% off of storage/renewables but the change of getting there will savage the incumbents. It already is. They're scared shitless and making all kind of crazy knee jerk reactions.
That still does not take the EROEI issue into account. Nor does it take government mandates and subsidies into account. How much energy was used to produce the solar panels you are talking about? What kinds of a tax break can you get for putting solar on your house? Who sets the price that the power company must pay you for any excess electricity generation?
Spot on EV. And throw in the REPLACEMENT of those same batts every three to five years and forgetaboutit...
I love how you keep spouting "EROEI" without actually looking at the figures. Fact is that energy invested in producing solar panels is much much less than energy produced by solar panels, and even moreso for wind turbines. NOT talking about tax incentives or any other crap. Just joules. Or dollars, if you prefer.
Okay, so what figures are you looking at? Better yet, do they include the overhead of the world being run by the mafia?
After all, if they can't control it, they will break it.
sunelec.com
What, "they" are going to come onto my property and smash up my solar panels?
Sounds likely. In the mind of a crazy person.
I betcha those electric jet airliners won't leave no chemtrails, eh?
You cannot store sunlight or wind, but you can store oil, coal or gas.
That's a big problem with the renewables, so even if they managed to make them give as good a return on energy investment as oil (not there yet, but oil is slowly getting worse so one day they will get there), they still would not be as convenient for us, since we need to spend a heck of a lot to store the energy they produce.
Germany uses excess wind production to pump water into Scandinavian fjords, and then uses hydroelectric for base load. Pretty efficient, actually.
I still prefer nuclear, but you peak oilers need to be put in your place when it comes to your death-worshipping nonsense.
What did the article say, all this oil on the seas represents ONE DAY of useage!?
And these idiots think oil will last forever. Just because there is a glut of production does not mean we will not run out.
Much of America is fascist, left or right, they only believe what they are told and ignore any information that runs contrary to their politic or ideological beliefs.
Its not religion, politics, or government that is broken, its human nature. Human nature worked great when there were few of us, but as the numbers grow, we show absolutely no ability to limit our reproduction or our use of rescourses. There are almost 3X more people added to the world population each year than are dying, how long do you think that can be sustained.
http://www.ecology.com/population-estimates-year-2050/
I'm afraid you are the idiot. Look up abiotic oil. ANYONE who thinks that 90 MILLION barrels of oil PER DAY are from decomposed dino shit is a FUCKING IDIOT....
Peak oil motherfuckers had me believing in 200 dollar oil and a $1.20 CDN dollar. I waas going to be rich!
Just had a inquiry from Canada on one of our properties. He said, United States are bleeding the currency conversion costs. I asked him, how is the Clinton NFTA Trade deal work out for them.
He laughed. Stated the TPP will be far worse.
I concluded, welcome to the central policymakers that cannot find their way out of a wet paperbag.
We laughed again. We both agreed that the European Union is done. He plans on staying in our villa.
Meanwhile, ICE cannot intercept the flooding of illegal aliens hitting US territory.
Thank you ZH for reporting information that is ignored by all other news outlets.
The POO continues to drop while they wait off shore.
Fundermentals apply to crude oil?
Naaah, that's just crazy talk.
these ppl storing oil to cash in on the cheap prices sure are stubborn. I would have thought they had stopped doing that by now. They all think this is 2009 all over again. no market reverses unless there are big losses eaten at the lows. oil traders (specs) will just keep the pressure on until the big dump. and you'd think the producers would turn off the valve, but i guess the profit margins are still pretty wide (?). I think in terms of fundamentals we definitely are looking at alcohol and barbiturates - weak demand + over supply. Plus rate hike pricing in ... I expect supply to break, and a massive post rate hike rally in oil, probably back to $60. In the mean time its build that long position and sit. This is a game of last man standing. Oil buy and store it players (I think) will be forced to dump long before I am forced to do anything at all.
This is a case of producers trying to make up the losses by volume.
Bingo. Utilizing the retail model to sell high volume to offset losses. One problem, Petrodollar oil purchasing agreement by Henry Kissenger.
Quiz: What four countries did we take out under false terrorist claims to avert the selling of oil outside petrodollar agreement?
Recycling Petrodollars - Federal Reserve Bank of New York
Thats the point. The producers cant "turn off the valve".
Every gulf country fueled by oil, the tin pot latin countries and of course Russia MUST keep the valves open at any price because those idiots built a single dimnension economy off of oil sales. Worse yet, most of them will not survive politically (or with their heads) if they quit selling oil at any price.
This is EXACTLY why Putin "the chess player" has no moves on the board. Russia will collapse if they even hint of pulling back oil sales. And that is EXACTLY why the world is afraid of Putin right now. It looks like he is trying to create his version of WW3 that distorts oil to the upside so that he can literally keep his head.
Absolute fucking rubbish...
What's Russia's debt to GDP again?
Russian Economy Continues To Contract, Remains In Trouble
November 12, 2015
Official government statistics released in Moscow on November 12 show that Russia’s economy shrank by 4.1 percent during the third quarter of 2015 as a recession caused by low oil prices and Western sanctions over Russia’s role in Ukraine’s civil war continued to take its toll.
The preliminary figures released by the state statistical agency, Rosstat, represent a slight improvement of government forecasts of a 4.3 percent fall compared to the third quarter of 2014.
But they show that Russia’s economy remains in deep trouble.
According to the government’s latest estimates, the economy will shrink by about 3.9 percent in 2015.
The World Bank in September predicted the Russian economy would shrink by 3.8 percent in 2015, a much steeper decline than its earlier forecast of a 2.7 percent fall.
The World Bank has said the downturn in 2015 could be as much as 4.3 percent if oil prices continue to fall and average about $50 per barrel for the year.
"Rate hike"..... Haha, the one they have been threatening for 8 years?
Here's an idea, governments should threaten to confiscate the tankers and their oil and put them in permanent storage if OPEC and other oil exporters with 3rd world parasitic economies refuse to act responsibly.
During the OPEC crisis in the 1970s, the Nixon/Ford administration threatened to BOMB Saudi Arabia if they didn't start cooperating. Maybe it's time to start rattling that sword again, especially since we are so close to being energy independent.
But having to witness this constant cheering of the destruction of America by Zero Hedge every single day, I am left to wonder what your libertarian vision is about. As a practioner of the Austrian school of economics myself, I see a major disconnect between that and what goes for libertarianism in the US. What is it that you guys want anyway?
Protecting our domestic economy from such economic attacks due to trade is one of the three enumerated powers of Congress. Is that consistent to the principles of what passes for libertarianism on this site?
Welcome to the new centrally-planned global economy under one government. A world without borders and without national interests. Enjoy.
Wha?
What 3rd world parasitic nation are you referring, this should be interesting. What Middle East nation has fed of the US, versus the other way around, unless you are talking about Israel, which I highly doubt.
The Middle East, does not need us, we, thanks to our zionist master have spent the last 50 years destabilizing the region, and installing puppet rulers.
If the Joos rule the world, why is it so FUBAR? Ideally we'd all be their slaves and Israel would be the land of vodka, free hookers, milk and honey. Instead fat Arab bitches are stabbing them with 8 inch knives. If Israel is a fake state how about every "copuntry" created by Sykes and Picot after the 500 year Caliphate? See a straight line in the Arab world? It's a fake country. Iraq? ha. Lebanon? Kuwait? Jordan? Best of all why did God put them in the only place with no oil? You are our puppet, go get your fat ugly wife for us to lend to isis and we'll take all ur money. Be there in the morning. No checks.
If the Joos rule the world, why is it so FUBAR? Ideally we'd all be their slaves and Israel would be the land of vodka, free hookers, milk and honey. Instead fat Arab bitches are stabbing them with 8 inch knives. If Israel is a fake state how about every "country" created by Sykes and Picot after the 500 year Caliphate? See a straight line in the Arab world? It's a fake country. Iraq? ha. Lebanon? Kuwait? Jordan? Best of all why did God put them in the only place with no oil? You are our puppet, go get your fat ugly wife for us to lend to isis and we'll take all ur money. Be there in the morning. No checks.
If the Joos rule the world, why is it so FUBAR? Ideally we'd all be their slaves and Israel would be the land of vodka, free hookers, milk and honey. Instead fat Arab bitches are stabbing them with 8 inch knives. If Israel is a fake state how about every "country" created by Sykes and Picot after the 500 year Caliphate? See a straight line in the Arab world? It's a fake country. Iraq? ha. Lebanon? Kuwait? Jordan? Best of all why did God put them in the only place with no oil? You are our puppet, go get your fat ugly wife for us to lend to isis and we'll take all ur money. Be there in the morning. No checks.
anyone want to watch the disaster unfold http://www.marinetraffic.com/en/ais/home/centerx:-94/centery:29/zoom:10
Wonder if someone out there is thinking, "target rich environment"?
LMFAO!!!!
OMG, we're running out of oil. LMFAO!!! FUCKING GUMMAMINT COCKSUCKER LIARS!!!!
Back when I was an engineering student, one of the classes was compuer simulations using mini-VAX computers. For you younguns, a mini-VAX was the size of a washing machine, but that was mini compared to the computers that took up half a room. Anyway one of the assigments was modeling the arrival of tankers arriving to ports and being unloaded. We used to vary the simulation based on weather activity, tug availablility, and pumping equipment failures. We never ever modeled the "what if" for having full storage tanks in a port. I guess they will be doing that now.
Cue Exxon-Mobile Valdez-type accident in 3...2...
What part of this story is not already priced into the market?
"Market" he says.
Good one!
There's chicken pox in the water?
"is equivalent to more than a day of global oil supply"
That statement alone tells you that oil prices are artificially depressed and that todays glut is an illusion that will correct in time. The only thing that will depress prices longer term would be a global depression. That is not out of the question, but if not, then prices will rise. Usage of oil is the one thing that maintains the modern world economy and agriculture. Oil runs it all, it will be vauled higher in a reasonable time.
'...more than a day...' is way beyond the horizon of many 'investors' today.
I agree with you that this can go screaming back in the other direction.
No to the Keystone pipeline which would have seen TransCanada Pipelines bring oil down from friendly Canada but yes to bringing oil in from Iraq and the MiddleEast.Obama's buddies need money over there for whatever reason.Maybe it's to bring in more oil in from southern Iraq before Iran comes onstream shortly?
So you are saying Iraq is "unfreindly to US, and what did they ever do to make you think that. Did they bomb our nation ino the stone ages. I swear to God, some of you are totally devoid of reason and compasion. WE BOMBED THEM, not the other way around.
I take it you aren't aware that Canadian oil was purely for export only? The US does not have refineries to process this sludge. They were going to mix it with the light stuff obtained by fracking and ship it out to somewhere else.
Currently, neither of these sources are economical at today's prices.
But yeah, that pipeline would been the greatest thing ever, huh?
Plenty of refineries in Houston can handle Canadian crude. In fact it is what they are set up to refine.
I know a bunch of people that work refinery jobs - they pay pretty good, opertors make $100K+ with what is a 2 year degree. I guess you hate high paying US manufacturing jobs.
If they were really just shipping the crude to BFE why send it all the way through the USA first?
This - it is just going to be exported - got started from enviormental cunts that hate fossil fuels - but still drive a car everyday.
Fuck them.
The value added by the refinery would help our trade balance - which is $40 billion or so a month last time I looked.
Maybe oil is so cheap because of all the peace and stability of oil producing regions
Not much oil required for the printing of money. Is the US still going to sell off the oil reserves as planned? This is really getting crazy.
bullish for refiner cartels and korean ship builders and 500 horsepower Cadillac SUVs for Latina moms on welfare
kinda bearish fro solar huh?
Peak oil occuring at the same time that global wealth inequality destroys the middle class confuses people.
Deflation is the result of a shrinking middle class. I do not need to prove this to you. You can either do the research and see for yourself or you can demonize the poor.
Soon we will witness a Stagflation economy as faith is lost in fiat currencies. All goverments will resort to QE+Infnity as that is all they will be able to do. Troops will be deployed to the streets. Riots will ensue. Food shortages, energy shortages, all will unfold. There will be blood.
All while a select one tenth of one percent hide away and wait out what they have caused in their luxury bunkers.
Humanity, you don't give me much hope...
That 1/10 is not secure nor immune to the effects of chaos.
After all, "Fixed forifications are monuments to the stupidity of man". I think Patton may have said it.
So there is a little over a month worth of oil in SPR and its almost at capacity. Where is the demand? How much oil do you need to fire up the economy for WW3?
Galveston Texas?...
If you were the Russian Navy!
Does anyone remember the real reason for this global overproduction?
to get out of this mess, exxon will have to give gas away at the pump.
ha ha
exxon will have to give gas away at the pump.
ha ha
Don't laught too hard. In western Canada this summer, propane from producers had a negative price for a short time. Yup, the producers were paying to have it hauled away.
Our author mentions the word, "glut", in each of the first three paragraphs.
And near the end quotes AP
But at the end of that AP quote, finally a glimpse of reality
Semantics. You interpret it to fit your narrative. Gotta keep the narratives straight.
The true narrative is, as I've said before, this is the Sorcerer's Apprentice, the buckets of water are barrels of oil, and Barack Obama is Mickey Mouse.
Right - and with the bonus side effect of destroying venezuela who refuses to do as it is told,
Whos "Venezuela"? Got her phone number? What did "Venezuela" say this time?
Yes. For Russia, oil is important, but not the only thing they export. They will survive. The west, probably not.
So thats why Russia's GDP is shrinking. Oil price is a big deal for the Russian economy. Not sure what you mean about West survival.