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Based On This Chart, Can Saudi Arabia Bail Out The US Motorist From $5 Gas?

Tyler Durden's picture


No conclusions here, just a simple chart showing monthly Saudi Arabia crude oil production based on OPEC data, which has been rangebound in a tight 8,000 - 9750 tb/d range, superimposed with Brent prices over the past decade. The last time Brent soared to record highs back in the summer of 2008, Saudi production peaked at 9,522 tb/d (despite similar promises for spikes in crude production and exports). During last spring's spike, Saudi produced around 9,000 tb/d. In the past two months, production has been at record highs, even as oil keeps setting new highs, entirely due to liquidity, but not because speculators are evil incarnate as Nancy Pelosi will want her brainwashed fans to believe, but simply because for the most part they are Primary Dealers, and other entities attached at the hip to the Fed, who serve as Ben Bernanke's transmission mechanism of record liquidity being dumped into the system. Our advice: if anyone is hoping that Saudi Arabia can pump the 12,500 tb/d needed if Iran truly goes offline, buy a bike, as failure from Saudi to satisfy lofty demands will promptly send unleaded to new all time highs. Couple that with the Treasury debt ceiling fiasco in 5-6 months, and those Obama InTrade reelection contracts may seem a tad rich.


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Mon, 03/19/2012 - 15:15 | 2270564 markmotive
markmotive's picture

When the world finally wakes up and realizes the Saudis are full of hot air, everything will come crashing down.

Peak oil, the new boom bust cycle and gold.

Mon, 03/19/2012 - 15:19 | 2270604 sitenine
Mon, 03/19/2012 - 15:35 | 2270678 That Peak Oil Guy
That Peak Oil Guy's picture

This is not even the full story.  Domestic use of oil in SA has also gone up, so "they" are using more of "our" oil, which means they actually export less even as production goes up!

Choose Saudi Arabia in the country list on this site:

Mon, 03/19/2012 - 15:37 | 2270686 schismjism
schismjism's picture

Can't wait for all ideological flip required by all the free-marketeers when the arse falls out of this economy....

Mon, 03/19/2012 - 15:40 | 2270696 markmotive
markmotive's picture

And what will happen when they decide they need it more than us? It's over. Yeah, we'll send a bunch of tanks over there but conflict in Saudi Arabia won't do anything to ease the price of oil.

Mon, 03/19/2012 - 16:33 | 2270890 Poofter Priest
Poofter Priest's picture

Especially since tanks get like 1/2 mile to the gallon.

Mon, 03/19/2012 - 16:44 | 2270927 quasimodo
quasimodo's picture

Bullshit, they have a platform in the works based off of the Chevy Volt...I hear there are some serious grants involved.

 They claim .65 mpg in this new breakthrough round of recent tests.

Mon, 03/19/2012 - 17:00 | 2270951 THE DORK OF CORK
THE DORK OF CORK's picture

Chevy Volt me hole - nothing beats the Skoda Fabia Greenline........... and its cheap to buy also

Mon, 03/19/2012 - 17:45 | 2271052 Freddie
Freddie's picture

I checked and they claim 83.1 mpg.  Some Austrian guy did a test and was able to drive from Austria to Denmark and back on one tank for 127.8 mpg,  Some serious s**t because Austria to Denmark has some major elevation changes.  Skoda is VW or VAG (VW Audi Group).  1.2 TDi and no hybrid or electric bulls*it. 

The Czechs are about the only people who made decent quality stuff under communism which is really a lite version of Hope & Change marxism.   The Czech's did not have SkyNet or drones flying around killing them or QE infinity.  The Czech's also do not use UAW subhuman union goons to build their stuff.

Oh and the Skoda works in the snow unlike the Volt (less) and it is cheap.


Mon, 03/19/2012 - 18:30 | 2271129 THE DORK OF CORK
THE DORK OF CORK's picture

Yeah if you look at the Fiat 500 twin air it appears the Italians have cheated on the figures and never makes it in real world conditions , indeed it does not get even close.

However the Skoda beats its offical figures by 10MPG+ with conservative driving.

The Skoda has a diesel engine with very high gear ratios which makes it very sluggish below 30MPH so James Dean like characters won't like it but after 30MPH it works just fine.

It also has narrow wheels , streamlined underprofile , puncture repair kit instead of a spare tyre......

Mon, 03/19/2012 - 23:10 | 2271960 MeelionDollerBogus
Tue, 03/20/2012 - 00:43 | 2272246 rocker
rocker's picture

It has to be Great to be American. Where else do we socialize banking cartels who have the FED as their master.

As we give them billions to garnish their families with subsidized captitalism.

The same banksters leverage themselves to a self inflicted destruction to do one thing. Rinse and Repeat.

So now we got the bailouts from the government.  What now to do ???  All that bailout money with noting to do.  What now ??? 

Make more billions by buying cheap oil and fill super tankers with that oil the government took from reserves for it's average people.

The people never see the oil. What to do now ???  Wait a year or so.  As we got all our rich buddies to the same as planned.

Think Koch Brothers buy a tanker too. Not to be left out, eh.  What to do now ???

Wait. Til "the powers to be" create enough disruption to societies and show the war mongering corruption through main street media.

After the media has been manipulated to scare the hell out of the people. Pumping Oil up, up, and away over war threats. 

Even ZH took this bait. Create the perfect moment to sell your tankers.  Time it with Driving Season.  What to do now ???

Buy a new yacht and fill it up all on the backs of the stupid sheeple.    Wow, what a dream.  Oh Shit. I have to wake up tommow.

Mon, 03/19/2012 - 20:30 | 2271468 sun tzu
sun tzu's picture

You're right. We should have greek style socialism. Their economy is booming. More bailouts and welfare will save our economy

Mon, 03/19/2012 - 16:18 | 2270844 malikai
malikai's picture

A good war in SA and Iran should curtail domestic consumption in said countries quite well.

Mon, 03/19/2012 - 16:22 | 2270866 That Peak Oil Guy
That Peak Oil Guy's picture

But on the other hand could mean the destruction of production facilities that could take years to get back on-line.

Mon, 03/19/2012 - 16:25 | 2270870 EscapeKey
EscapeKey's picture

Which is why the export land model really i the most appropriate when discussing oil.

Tue, 03/20/2012 - 12:49 | 2273718 SelfGov
SelfGov's picture

And exports already peaked...

Mon, 03/19/2012 - 17:11 | 2270991 gookempucky
gookempucky's picture

Last check saudi is using 2.5-3 million of those barrels within country--- as are all producing countries---

Mon, 03/19/2012 - 15:42 | 2270701 Gully Foyle
Gully Foyle's picture

Russian Anti-Terror Troops Arrive in Syria

Now the Russian Black Sea fleet's Iman tanker has arrived in the Syrian port of Tartus on the Mediterranean Sea with an anti-terror squad from the Russian Marines aboard according to the Interfax news agency. The Assad government has insisted it is fighting a terrorist insurgency.

Mon, 03/19/2012 - 15:10 | 2270567 battle axe
battle axe's picture

So the Saudi's lied, what else is new....

Mon, 03/19/2012 - 15:52 | 2270750 Flakmeister
Flakmeister's picture

They always talk about "production capacity"....

Having old infrastructure good for 1,000,000 bpd on a field that can only provide 600,000 bpd is still counted as 1,000,000 of production capacity....

In the past, they have also been able to spike production by judicious drawdown of their tankfarms leased around the world....

Mon, 03/19/2012 - 17:22 | 2271008 CrashisOptimistic
CrashisOptimistic's picture

Good call Flakguy.

The overarching reality of all this stuff is that EIA, IEA, JODI and OPEC all report numbers GIVEN to them by governments.  They do not audit and cross check against shipments because, of course, shipments can't be definitive if you consume domestically.

There were rumors a month or so ago that Lukoil reported corporate oil production to the Russian government, who summed it with Rosneft and others and quoted it as Russian production.  But, of course, Lukoil has leases in Nigeria.

Think about that real carefully, sportsfans.  We Have No Idea What Global Oil Production Is.

Mon, 03/19/2012 - 18:08 | 2271089 tonyw
tonyw's picture

We Have No Idea What Global Oil Production Is - but what we know is that it is getting harder and harder to get the stuff otherwise we wouldn't be drilling in deep water, Arctic.... which actually tells us quite a lot.


Mon, 03/19/2012 - 18:47 | 2271179 CrashisOptimistic
CrashisOptimistic's picture


If it was infinite and fields refilled themselves, no one would pump anywhere but Oklahoma.

Mon, 03/19/2012 - 15:10 | 2270569 LawsofPhysics
LawsofPhysics's picture

Who runs bartertown?

Mon, 03/19/2012 - 15:11 | 2270574 merizobeach
merizobeach's picture


Mon, 03/19/2012 - 15:27 | 2270640 redpill
redpill's picture

well...ain't we a pair...raggedy man

Mon, 03/19/2012 - 15:12 | 2270572 GeneMarchbanks
GeneMarchbanks's picture

HoS has been stealthy in buying the absolute shit out of uST's if I'm not mistaken.

That is about all they can do for their masters. Oh, and supply arms to Syrian 'rebels'.


Mon, 03/19/2012 - 15:14 | 2270586 Tyler Durden
Tyler Durden's picture

Nope - TIC

Mon, 03/19/2012 - 15:33 | 2270670 Paul Atreides
Paul Atreides's picture

I looked at UK, thought of the city of London and laughed. Then I looked at Canada, I felt a little worried and the word 'proxy' popped into my head.

Mon, 03/19/2012 - 16:18 | 2270845 Shitters_Full
Shitters_Full's picture

Why the serious ramp up in purchases from Luxembourg and Belgium over the last year?

Mon, 03/19/2012 - 16:38 | 2270904 Robot Traders Mom
Robot Traders Mom's picture

Oil exporters have increased Tsy holdings almost 20% YOY, according to the official statement linked.

Mon, 03/19/2012 - 19:55 | 2271371 BigJim
BigJim's picture

Thanks, useful chart.

Anyone know where can we find the equivalent for ALL issuance, including Fed purchases?

Mon, 03/19/2012 - 15:12 | 2270577 Motorhead
Motorhead's picture

Charts, bitchez!

Mon, 03/19/2012 - 15:13 | 2270581 steve from virginia
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The last time Brent soared to record heights was last April, the Brent price was actually higher.

- QE 2, remember?

- Attacks all over Libya and the 'war' vs. Qaddafi.

- The 'Arab Spring' threatening Bahrain and eastern Saudi Arabia.

Simmons used to say that when Saudi Arabia's production started to reflect (terminal) depletion, it is 'Game Over'.

Mon, 03/19/2012 - 15:19 | 2270603 markmotive
markmotive's picture

RIP Simmons. He was one of the good guys. Less of a nut job than some of the other peak oilers.

Mon, 03/19/2012 - 23:15 | 2271979 MeelionDollerBogus
MeelionDollerBogus's picture

NONE of the peal-oilers are nut-jobs. That's the science, that's the evidence.

Mon, 03/19/2012 - 15:14 | 2270584 Sudden Debt
Sudden Debt's picture

And at 5$, no American will opose the carpet bombing of Iran.

Mon, 03/19/2012 - 15:26 | 2270633 surf0766
surf0766's picture

That would mean $1.19 increase around me.  No way we can run another buck without everything hitting the shitter.

Mon, 03/19/2012 - 15:31 | 2270658 Sudden Debt
Sudden Debt's picture

I payed 2.03 euro per liter today... About 10,5$ per gallon...

Mon, 03/19/2012 - 15:38 | 2270687 aerojet
aerojet's picture

Sure, but you have less far to drive, right?  Americans are all spread out and budgets are also spread pretty thin already.  $6-10/gal, game over as far as consumerism goes.  Many people who just stop going to work.  Either that, or they have to get very creative with carpools and mopeds.

Mon, 03/19/2012 - 15:48 | 2270724 surf0766
surf0766's picture

There are 3 refineries closing here within a few months. We expect gas lines to be right around the corner.

Mon, 03/19/2012 - 16:22 | 2270840 Sudden Debt
Sudden Debt's picture

Drive to work: 1 hour 45 minutes at best
Drive home: 1 hour 30 minutes to 2 hours if i'm lucky

One way trip is 50 miles but traffic over here is a real bitch.
I drive the kind of car that when i pass a treehugger, they scream like in that movie screamers and run after me like crazy.
As of now, i spend 20% of my paycheck to DRIVE TO WORK!!!!

And remember, food costs about tripple over here

Mon, 03/19/2012 - 16:40 | 2270912 EscapeKey
EscapeKey's picture

And remember, food costs about tripple over here

Hmm, got to say on my last trip to SF a few months back, I didn't really see any difference in the price of food relative to the UK. The US is rapidly catching up, it would appear.

Mon, 03/19/2012 - 18:11 | 2271092 tonyw
tonyw's picture

Have you given any serious thought to moving closer to work and buying a fuel efficient car?

Disclaimer, I'm an annual train ticket holder - but i've also got five cars just for fun not commuting:-)


Mon, 03/19/2012 - 18:51 | 2271187 CrashisOptimistic
CrashisOptimistic's picture

Rule of Physics:

Fuel efficient = Not Crash Survivable  

The lighter the car, the less mass there is surrounding you to absorb impact.

Mon, 03/19/2012 - 19:15 | 2271265 Sudden Debt
Sudden Debt's picture

At least you make sense.

Mon, 03/19/2012 - 20:26 | 2271460 smiler03
smiler03's picture

@ CrashisOptimistic

Actually you are completely wrong...

The most dangerous SUV: The Hummer has the highest rate of drivers killed and the highest rollover rate.

"According to a study by the National Highway Safety Traffic Administration (USA), if you are in an accident with an SUV, you are 3.4 times more likely to be killed than if you had been hit by another car. Simply put, on the road, mass wins. Tough luck for the other guy (or woman or child), you might say, but at least I’ll be protected, right? Wrong! SUVs are not safe for their own drivers, either. The higher mass of SUVs make them more difficult to stop. This lack of maneuverability INCREASES the numbers of fatal accidents."

Mon, 03/19/2012 - 20:35 | 2271486 sun tzu
sun tzu's picture

So you think in a crash between a fiat and a hummer you would be safer in a fiat? bwahahahaha

I'd never buy a hummer, but I would never buy a tiny car either. I go with mid-sized for safety. I don't care what some website claims, the insurance actuaries knows that larger cars are safer. They do more tests and collect more data on crashes than the government.

Tue, 03/20/2012 - 20:41 | 2275367 smiler03
smiler03's picture

Well I certainly can't blame you for distrusting a US Government Agency so let's look at the safety ratings data from the IIHS ( Insurance Institute for Highway Safety).

G (good) is the highest result, A (acceptable) is the next one down.

Hummer H3

Frontal Offset Test Results: A (acceptable)

Side Impact Test Results (with standard side airbags) - A (acceptable) 

Side Impact Test Results (with optional side airbags) - A (acceptable) 

Roof Strength: no tests conducted

Fiat 500

Frontal Offset Test Results: G (good)

Side Impact Test Results (with standard side airbags): G (good)

Roof Strength Test Results: G (good) 

So the tiny Fiat 500 is safer than the monstrous Hummer. You can think what you want of the facts but size and mass don't necessarily go hand in hand with being robust. Imagine a lightweight car with a giant rubber bubble around it. It would bounce off anything!  Just sayin ;O)


Mon, 03/19/2012 - 23:31 | 2272046 Seer
Seer's picture

The interpretation is wrong.

If the Hummer (or other SUV) was parked then it's pretty much perfectly safe.  Yes, I'm serious.  I'm making a case here...

The question is: At what point does that Hummer become "unsafe?"

"The higher mass of SUVs make them more difficult to stop. This lack of maneuverability INCREASES the numbers of fatal accidents."

So, how does this translate to the trucking industry?

Sorry, but it's got everything to do with proper operation, and little to do with mass.  I have always held that it takes TWO to create an accident.  An attentive driver is able to prevent just about any possible accident: only in cases where someone is at a complete stop (well, I'll have to say that I actually saw someone avoid being rear-ended while being at a complete stop- they had no one in front so they gassed it; incredible reaction, and that's my point- it's the driver more than the vehicle), something falls out of the sky, or someone's vehicle blows up (or basically disintegrates, due to major equipment failure) next to you.

Disclaimer: I'm NOT defending Hummers, I think that they're the ultimate statement of unsustainability and excess; however, a fully loaded Hummer is more efficient than a single occupant Prius when it comes to the REAL measure- People Miles Per Gallon.

Tue, 03/20/2012 - 00:40 | 2272242 DarkWanderer01
DarkWanderer01's picture

"however, a fully loaded Hummer is more efficient than a single occupant Prius when it comes to the REAL measure- People Miles Per Gallon."

If you want an apple to apples comparison you need to compare a fully loaded Hummer with a fully loaded Prius.


Mon, 03/19/2012 - 16:38 | 2270906 EscapeKey
EscapeKey's picture

Well, you say that, but I woke up this morning to see the UK government considering leasing out the motorways!

First, we get struck really hard with hefty oil taxes, and then we need to pay roadtax to use the roads our taxes paid for!

Fucking hell, why don't they just declare being middle class illegal and get it over with? Soon there will be fuck all reason to drive to work.

Mon, 03/19/2012 - 19:47 | 2271349 Calmyourself
Calmyourself's picture

I just read the UK Gov is using cameras linked to the motor vehicle database to stop the fuel pump at gasoline stations if your plate comes up as owing road tax or insurance.  If the limeys do not riot why the hell would the Greeks?  Both fascist but one has good weather and better food...

Mon, 03/19/2012 - 19:57 | 2271376 BigJim
BigJim's picture

Bullish for petrol jerricans

Mon, 03/19/2012 - 20:39 | 2271493 smiler03
smiler03's picture

Too damn right. If the bastard hasn't insured their car they are statistically more likely to have an accident. If with other drivers then the other party loses out because they can't claim against them. All UK car drivers pay at LEAST an extra £30 per year to pay for these criminals.

There is also evidence that uninsured drivers are more likely to commit driving offences and to be involved in criminal activity. Like using untaxed fuel (which legit motorists have to pay).

As for road tax, exactly the same. They are tax evaders. Legit motorists have to pay more because these twats don't pay a thing.

There is another thing too, if they have no insurance and/or no tax then their vehicle is likely to not have a current MOT (annual compulsory safety check). That will make their vehicles less safe on the road.

This technology will also be useful for catching more stolen vehicles and for catching drivers who drive away without paying for their fuel.

Win win win win.


Mon, 03/19/2012 - 23:55 | 2272137 FrankDrakman
FrankDrakman's picture

And if they implant mini-cams in everyone's heads, they can cut out rape and murder and robbery and adultery and public urination and voting against the government and reading banned books and thoughtcrime and.. and.. and..


And today, the oil ration was increased to 7l per week!

Tue, 03/20/2012 - 20:54 | 2275427 smiler03
smiler03's picture

I wouldn't expect anything else from an American.

You're the first lot to complain about the criminal elements around you and imprison them in HUGE numbers but mention the word camera and you all cry about personal liberty violations. The country that will force the FAA to allow 30,000 drones in the American skies and build the planets biggest eavesdropping database ever conceived.

I'd rather just catch insurance thieves before they fuck up an innocent persons life. All they get is a fine and have their vehicles taken off the road until they DO insure them. 

Mon, 03/19/2012 - 23:54 | 2272133 Seer
Seer's picture

Unsustainable living IS expensive.

We'll be returning to two-class societies.  This could be avoided if people would finally get it that we do NOT need "leaders," that empowering others is how you become kicked down (to that lower class).

Mon, 03/19/2012 - 17:16 | 2271000 Freddie
Freddie's picture

I think a lot of people are not getting it because they are talking about high prices due to supply etc.  I doubt the Saudis can do much.  One of the biggest factors is dollar devaluation.  The dollar keeps sinking.  The Saudis cannot pump more and I doubt it would matter.  This some and mirrors theater is designed to make the Saudis look like good guys,  Total BS.

I am seeing people I never dreamed of having any financial problems hanging on by their finger nails.  They are trying to hang on for the election and 2013.  Many will not make it.

Tue, 03/20/2012 - 00:04 | 2272156 Seer
Seer's picture

"They are trying to hang on for the election and 2013."

What the fuck for?  Like an election is going to make any difference?  Do YOU think so?  Oh, yeah, that's right, you're the one who ALWAYS posts something that contains a derogatory dig at Obama.  You're a party-pussy, come clean.  Your party, whatever the fuck it may be, would also be shit: and I'd love to see all those who think that voting in YOUR party will solve their problems, see them find out otherwise and then see them ride asses like you the hell out of here...

Tue, 03/20/2012 - 09:09 | 2272792 jwoop66
jwoop66's picture

If McCain won in '08 the govt would not have taken over the health care industry.   We would still have ten wars raging, but no obamacare.  One party is all statist. The other is half statist; they are the only hope right now.  There is a difference; small sometimes, but a difference.

Tue, 03/20/2012 - 09:40 | 2272837 Flakmeister
Flakmeister's picture

Umm.... wow, I did not know the government tendered an offer to purchase Health Ins. cos. When did this happen?

Quit with the bullshit and people may take you seriously...

Oh, and Obamacare is a shitshow... nothing but more corporate welfare...

Tue, 03/20/2012 - 09:31 | 2272876 Chump
Chump's picture

Sorry, not true.  There is no such thing as "half-statist."  It's a meaningless term because it still rests on the belief that state power can be exerted at any time over any thing.

Look at it this way: we're headed towards a reinforced concrete wall right now.  Democrats want the pedal on the floor, zipping along at around 95MPH.  Republicans are indignant, because they'd much rather we go the posted 65MPH, maybe 70MPH tops.

That's the difference, if you can even call it that.

Mon, 03/19/2012 - 15:28 | 2270649 tickhound
tickhound's picture

"Bullish for stocks, Iran's fault, OPEC, Obama, EXXON, evil speculators, but the consumer is resilient, economy can handle higher gas prices" Round #179

Mon, 03/19/2012 - 15:32 | 2270665 Vince Clortho
Vince Clortho's picture

Do you really think public support for war will be a factor in the decision .... Its not like the CBs bring this up at their "Who-Do-We-Smite-This-Time?" meetings.

 They are not particularly sensitive to the views of the common pond scum.

Mon, 03/19/2012 - 15:40 | 2270698 dontgoforit
dontgoforit's picture

Amen, brother!  'Cept Obama - he's got this thing about algae.

Mon, 03/19/2012 - 15:45 | 2270715 Timmay
Timmay's picture

I will.

Mon, 03/19/2012 - 15:15 | 2270589 bobola
bobola's picture

I recall a 60 minutes segmant a few years ago that talked about new oilfield production deep in a harsh  & remote area in Saudi Arabia.

The Saudi being interview (probably an oil minster of some kind) said the price of a barrel had to stay at or above $100 in order to keep that oil flowing, based on production costs.

Certainly the Saudis can keep oil flowing, but it will never come cheap.

Mon, 03/19/2012 - 15:17 | 2270595 markmotive
markmotive's picture

It's the cheap oil that matters.


Mon, 03/19/2012 - 15:49 | 2270727 roadhazard
roadhazard's picture

in 2008 the Saudis needed $75 a barrel to cover their nut.   I laffed. 

Mon, 03/19/2012 - 18:54 | 2271196 CrashisOptimistic
CrashisOptimistic's picture

The newest Saudi field is Manifa.  It's offshore.  I could just stop there and say "think about that", but let's go farther.

It's heavy oil.  Not light, sweet Ghawar type.  Harder to refine (meaning fewer refineries can refine it, which means fewer customers for it).

And lastly, it's laden with Vanadium.  Vanadium destroys refineries.  Almost none can handle it.  In fact, it's so bad the Saudis may build their own refinery and use the oil domestically.

Does all this suggest rich, vibrant abundance in KSA?

Tue, 03/20/2012 - 00:08 | 2272165 Seer
Seer's picture

the price of a barrel had to stay at or above $100 in order to keep that oil flowing, based on production costs.

Certainly the Saudis can keep oil flowing, but it will never come cheap.

Sorry, but that's shit for logic.

If people cannot afford higher-priced oil then the Saudis wouldn't likely be keeping the oil flowing, flowing for WHAT? when there's no buyers?

Economies of scale in reverse. Even what we think of as "cheap oil" will become more expensive due to declines in volume (again, with less demand you have to cut back production).

Mon, 03/19/2012 - 15:18 | 2270596 HungrySeagull
HungrySeagull's picture

If Iran goes off line?


Consider this.

Iran just might take shots at Saudi. THEY might go off line then too.

We will learn horseback, scooter and children as messengers again.

I totally ignore that number under the Desiel and Gasoline now. I only think in terms of how much cash for a fillup versus vehicle performance in total mileage..

So far so good.

Mon, 03/19/2012 - 15:19 | 2270606 FXPortent
FXPortent's picture

GMail Express is much better than Pony Express!



Mon, 03/19/2012 - 17:28 | 2270650 hedgeless_horseman
hedgeless_horseman's picture



Unlike my ponies, Gmail Express doesn't produce manure for my garden, but it does produce a massive pile of shit for the NSA.


Tue, 03/20/2012 - 09:12 | 2272812 jwoop66
jwoop66's picture

I have a vision of a dark room, a jackbooted goon and all my ZH posts layed out on the table.

Mon, 03/19/2012 - 15:27 | 2270643 hack3434
hack3434's picture

Iran just might take shots at Saudi


Exactly! The chessmasters could go sucidal and take down a few Saudi oil fields. 

Mon, 03/19/2012 - 18:56 | 2271202 TheFourthStooge-ing
TheFourthStooge-ing's picture

hack3434 said:

The chessmasters could go sucidal and take down a few Saudi oil fields.

Iran isn't suicidal. They've shown more restraint in this whole fiasco than anyone, despite the ham-fisted efforts of Israel and the US to provoke them into a war.

Suicidal would be if the US attacks or allows Israel to attack. Take a good look at the crude oil storage and tanker loading facilities in and around Ras Tanura. If Iran is attacked, you can expect these to go up in flames. After all, the Saudis have been pushing for an attack and have even given Israel a green light to use their airspace.

With the Saudis' crude oil storage and transport infrastructure roasted to a crisp, an open Strait of Hormuz will be a moot point.

Mon, 03/19/2012 - 20:39 | 2271500 sun tzu
sun tzu's picture

Let's just say neither side are angels. Iran is only digging their own grave when they threaten to wipe Israel off the map. Not too smart. 

Mon, 03/19/2012 - 22:15 | 2271811 TheFourthStooge-ing
TheFourthStooge-ing's picture

sun tzu said:

Iran is only digging their own grave when they threaten to wipe Israel off the map. Not too smart.

Yes, it would not be very constructive if they were to do that. I'm glad that they haven't.


Mon, 03/19/2012 - 23:20 | 2272005 MeelionDollerBogus
MeelionDollerBogus's picture

that same tired misquote again? "Zionist regime IN Israel" not "Israel"

regime change.

"removed from the pages of history"

not "the map"

Mon, 03/19/2012 - 15:28 | 2270647 Gully Foyle
Gully Foyle's picture


"children as messengers"

Fucking eh a stable of streetrunning urchins glad for a crust of bread and performing like Chinese acrobats in a vintage Jackie Chan film.

Probably have to keep them away from the Catholic churches, but still lots of other business.

Mon, 03/19/2012 - 15:56 | 2270765 Poofter Priest
Poofter Priest's picture

Hey! I resemble that last remark.

Tue, 03/20/2012 - 00:15 | 2272187 Seer
Seer's picture

This is more of a reality than most would want to admit.  I've been to Manila; children running around everywhere, peddling and whatnot.

Sigh, in cities children will be covered in garbage (mingling with rats), in the countryside they'll be covered in manure.

I have no "wish" for any of this.  I'm just a realist.

Mon, 03/19/2012 - 15:30 | 2270656 Race Car Driver
Race Car Driver's picture

> ... children as messengers again.


Lol... fat, rolly-polly, hormonally and chemically fattened children. Waddling to a mailbox near you!

What an image.

Mon, 03/19/2012 - 15:34 | 2270672 HungrySeagull
HungrySeagull's picture


They will be thin again fast enough.

Have you ever seen a fat UPS driver? The stress alone is good for 50 pounds.

Tue, 03/20/2012 - 08:14 | 2272651 Maghreb
Maghreb's picture

They might but it would be the opening shot to the biggest secretarian conflict in the history of mankind. Sunni Vs Shiite massacres all over, check the wave of bombings in Iraq today. Check the Syrian Alawite majority vs Sunni insurgency. It's getting real close to the point where oil prices spike and the middle east ignites along with most the worlds oil supply.

Mon, 03/19/2012 - 15:18 | 2270599 FXPortent
FXPortent's picture

Except when they slowly realize that flattening Iran knocks out a significant portion of the world's oil production.

Supply and Demand bitchez


Central Banks Around the World Unite for massive monetary injections bitchez!


Bullish Oil for the mean time

Mon, 03/19/2012 - 15:32 | 2270664 Gully Foyle
Gully Foyle's picture


"flattening Iran knocks out a significant portion of the world's oil production"

Unless your intent is to stop the world then restart it at a single level with a single bank and a single government.

Blah, blah, nlah ...Never again will mankind be a slave to individual despots and rogue states. Never again will mankind be held hostage to those who through luck of geography controlled rescources all mankind needs.

Never again so say we all.......

Mon, 03/19/2012 - 15:18 | 2270600 kaiten
kaiten's picture


Mon, 03/19/2012 - 15:20 | 2270610 FXPortent
FXPortent's picture

Imagine if you literally had to fill up the iPad with gasoline?



Mon, 03/19/2012 - 15:22 | 2270607 Dr. Engali
Dr. Engali's picture

Once the house of Saud decides that the oil they have left isn't worth the paper we are buying it with the petro dollar is doomed. My guess is they will be making nice with their neighbors soon.

Mon, 03/19/2012 - 16:42 | 2270919 EscapeKey
EscapeKey's picture

The US army protects the Royal Family.

Once they cut this support, there will be a revolution in SA (and many heads will roll).

Mon, 03/19/2012 - 20:04 | 2271392 BigJim
BigJim's picture

Exactly. The Oil despots won't be taking anything other than USD for a while yet. The US would arrange a local 'Arab Spring' to get a new set of bosses in if anybody tries that.

Ironically... it's the fact that the Iranian leaders have more popular domestic than our OPEC 'allies' that allows them to pull the US tiger's tail.

Tue, 03/20/2012 - 03:04 | 2272408 Seer
Seer's picture

There's also an issue of transitioning power within the Royal Family.  Things are far more shaky then most realize.  I figure that this was the REAL underlying reason for the invasion of Iraq: hedge against collapse of the Royal Family.

Mon, 03/19/2012 - 20:41 | 2271504 sun tzu
sun tzu's picture

The Saudis have no choice but to sell their oil. They produce nothing else of value and would quickly starve to death. They aren't exactly the breadbasket of the world.

Mon, 03/19/2012 - 15:22 | 2270616 prains
prains's picture

Hummer for sale, will trade for sack of potatoes, vodka grade

Mon, 03/19/2012 - 15:34 | 2270671 Gully Foyle
Gully Foyle's picture


Depends on how old the Hummer is and if the drapes match the carpet.

Mans gotta turn his bitches out if he wants to keep eatin.

Mon, 03/19/2012 - 15:50 | 2270731 blunderdog
blunderdog's picture

*Everything* is "vodka-grade"--you don't need potatoes.  Just do some vacuum distillation and you're set, even if you started with neighborhood garbage.  (If you believe that Jameson guy, triple-distillation is good, but hard to say what might linger.)

Split your organic waste into two piles--one compost for the garden, the other for the vat of wort.

Tue, 03/20/2012 - 03:07 | 2272412 Seer
Seer's picture

Clearly one of the most worthless pieces of...  At least with a pickup truck you can use it as a planter.  I suppose that the Hummer could be used as dehydrator.

Mon, 03/19/2012 - 15:23 | 2270617 bob_dabolina
bob_dabolina's picture

If Saudi Arabia can't do it, the SPR will save us. Obama and democrats said so and I believe them.

Obama also said algae will do the trick and keeping our tires inflated.

I have faith in them. Maybe if we give people gas stamps that will lower demand and bring prices down.

Mon, 03/19/2012 - 16:43 | 2270922 EscapeKey
EscapeKey's picture

It's a little known fact that abiotic oil filled the SPR. (In the voice of Cliff Clavin)

Mon, 03/19/2012 - 18:59 | 2271214 TheFourthStooge-ing
TheFourthStooge-ing's picture

The audacity of dope.


Mon, 03/19/2012 - 19:47 | 2271347 Slewburger
Slewburger's picture

Don't think for a second this price shock isn't planned. Energy is a tool for production.

Peak oilers crack me up.... they just add fuel to the proverbial fire. There's plenty of oil, maybe not at 1 $/gal but there is oil to be had.

Yes domestic production has peaked, but there is still oil in the ground. That means a good formation removal rate in the 80's was 20%. Leaving 80% downhole after production and well abandonment.

Well stimulation on secondary and tertiary recoveries is hovering in the 30's. Downhole completion tools are just now really starting to have some capital investment for new development. Costs per foot have also been dropping for "expensive" wells. Imagine 60% rates, more efficient tools.

Yes , there are stimulation wells that need to be drilled, and yes there are energy inputs, but for fucks sake. Not to mention logging while drilling, directional drilling, and acoustic azimuth controls.

The sky can fall all you guys want, I'll just buy some SLB, WFT and HAL.

Junk away.


Mon, 03/19/2012 - 20:15 | 2271421 Flakmeister
Flakmeister's picture

No one is claiming that there is not a lot of oil... you just cannot get it out of the ground as fast as you like...

You should look up the terms fractional flow and equation of state vis a vis an oil reservoir...

Think of having a $1,000,000 trust fund with a monthly withdrawal limit of $1500.... Are you rich?

Mon, 03/19/2012 - 20:51 | 2271544 smiler03
smiler03's picture


You've just ruined my day.

The FBI and the World Bank and the Bank of Nigeria have just released my compensation $10,000,000 inheritance fund. They are sending me an ATM card which I can take out $1000 a day. 

Hmmm, I'm not going to be rich after all.

Tue, 03/20/2012 - 01:00 | 2272139 Slewburger
Slewburger's picture

Ok, Flak I'll bite.

You think too linearly. The argument is weak, if I only have one access point and the flow is restricted or the formation will collapse, no I'm not rich. The solution is more hydraulic HP, bores and formation contact. Get creative.

As far as rate that the well returns, depends on a myriad of factors. Well configuration, initial pressure, compressibility, permeability, formation phase/composition, mud weight and quality of drilling data.

PS. Nice Straw man.

Tue, 03/20/2012 - 08:36 | 2272678 Flakmeister
Flakmeister's picture

In a oil resevoir there is water and oil occupying the "pores" in the rock, hence the term porosity. There is also permeability, this determines the flow rate.  Every reservoir is different, but the general principles apply to all of them. Here is an excellent introduction:

Oil and water will flow at different rates in the resevoir, the flow rate of each depends on the relative saturations and the geology, hence the term fractional flow....Basically depending on the water saturation of the pores, you get to the point where the oil is trapped and will not flow... This occurs at water saturations of ~70% or so.. (i.e. 70/30 water oil)....So you will get your oil with a water cut of 99%, which is basically the case in the Permian Basin or a generic stripper well....

The Bakken is a case of good porosity and crappy permeability, for example the Bakken shale has permeabilities of a few milliDarcies whereas the Ghawar Super-K zone have them in kilo-Darcies...

So unless you know of way to supercede the physics of fluid dynamics, there will be a lot of oil trapped and in an older field and the rate of oil extraction is limited... Even with tertiary recovery techniques... 

Tue, 03/20/2012 - 19:10 | 2275172 Slewburger
Slewburger's picture


That link wasn't terrible but I stopped reading at "Let us assume that the fluid compressibility may be neglected".

Oil and water can't mix. OMG it can't be done... evar.... Why do you have to break "physics of fluid dynamics"?  If you have oil stuck behind water its time to fire the sand (proppant) control.

I'd ask a much simpler question.

Why pump it to begin with?



Tue, 03/20/2012 - 19:43 | 2275269 Flakmeister
Flakmeister's picture

That link is on the well flow not in the source rock....

It is the flow through the rock matrix that matters, the flow rate for oil and water is different depending on the saturation....Check the figures at the end of the link...

You could inject a miscible gas, e.g. C02 to push everything along, but that ain't cheap... and BTW, it falls under tertiary recovery.... file it under "the spice must flow" category...

PS Compressibilty is a small effect and has the feature of making the equations non-analytic....

These fields are not like Ghawar undergoing injection as a water drive, that is different dyanmic... in the Permian there is no well defined water-oil contact surface...

Wed, 03/21/2012 - 19:17 | 2278190 Slewburger
Slewburger's picture


Nonlinear is the bane of engineering existance. Water is 9% compressible by volume at 40kpsi, believe it or not.

You've gone extreme on me again. Nat gas reinjection is the way to go, unless you are getting N on the cheap by membrane seperation. Yes the Nat gas could go back into concentration at high pressures but the idea is its already there.

I guess bulk CO2 is cheaper if you dont have generation equip?

Mon, 03/19/2012 - 23:24 | 2272020 MeelionDollerBogus
MeelionDollerBogus's picture

dude. When it takes 1 barrel of oil's energy to remove 1 new barrel of oil from the ground, it's game over.

Tue, 03/20/2012 - 01:02 | 2272248 Slewburger
Slewburger's picture

An onshore multilateral well will cost in the neighborhood of $12m with power inputs and water treatment (to completion). Those are just over 25% of intangible costs (~3% is fuel). What I'm getting at is power inputs are not much of a restriction on return. From both a $ and net energy perspective.


Tue, 03/20/2012 - 03:24 | 2272421 Seer
Seer's picture


More than a quarter of all the known oil deposits in the U.S. are in Texas


The average daily production per Texas oil well is fewer than nine barrels. By contrast, the average oil well in Saudi Arabia produces about 6,000 barrels per day.


So, how long does it take to recoup a $12 million investment at 9bbl/day? (yes, you say "multilateral," but there's no measure of how many actual holes this $12 million buys you, and, at 9bbl/day average, well...)

Tue, 03/20/2012 - 06:47 | 2272541 TheFourthStooge-ing
TheFourthStooge-ing's picture

Seer asked:

So, how long does it take to recoup a $12 million investment at 9bbl/day?

Also, if you're talking about the older wells in east Texas, you need to take into account that, although they are still producing oil, it requires a 99 percent water cut. Those nine barrels a day of crude are coming out of the ground in the form of nine hundred barrels a day of oil-stained water. Your energy requirements include pumping around a thousand barrels of water into the ground, pumping nine hundred barrels of oily water out of the ground, and separating the oil from the water.


Tue, 03/20/2012 - 19:12 | 2275178 Slewburger
Slewburger's picture

See the link in post above. Or just google it. Expensive technology, not for east Texas.

Mon, 03/19/2012 - 15:23 | 2270620 Jason T
Jason T's picture

US Motorist??  China will buy more cars than US this year.. and make more than 2x the amount of cars.  US and Europe are beyond help.

Mon, 03/19/2012 - 20:42 | 2271508 sun tzu
sun tzu's picture

China has been subsidizing their fuel prices. How much longer can they afford it?

Mon, 03/19/2012 - 15:23 | 2270622 Bulldog1
Bulldog1's picture

Funniest thing ever!!!  Check out this video:

Tue, 03/20/2012 - 03:35 | 2272426 Seer
Seer's picture

Not the funniest EVER, but it was pretty funny!

Mon, 03/19/2012 - 15:25 | 2270631 Bartanist
Bartanist's picture

Where are the charts on inventoried supply?

Mon, 03/19/2012 - 16:40 | 2270700 Flakmeister
Flakmeister's picture

Google OECD oil stocks


Mon, 03/19/2012 - 15:26 | 2270635 THE DORK OF CORK
THE DORK OF CORK's picture

The private car is dead , long live the train

Mon, 03/19/2012 - 15:32 | 2270667 Global Hunter
Global Hunter's picture

fuck the train but the host of that show is nice!  Kidding, I use to love going on the trans Pennine Express from Madchester to Cleethorpes and that one looks even better.

Mon, 03/19/2012 - 15:36 | 2270681 HungrySeagull
HungrySeagull's picture

Trains delivered mail and whatever you cared to ship. We are a nation built on paved over rails.

I suppose in extremity we can dig the rails up again and use them. Be plenty of labor ready then.

Mon, 03/19/2012 - 16:01 | 2270775 Uber Vandal
Uber Vandal's picture

Good luck with that.

MANY rail lines and rail yards have been turned into housing developments, malls, etc. Those lines are obliterated, and unless you knew the history of the area, you would never know that a major rail yard and terminal facility actually existed there in the past.

Also, think of how many "enviromental impact studies" and other litigation from land owners who may or may not be entitled to the former right of way will be expecting a substantial pay day and will be blocking any chance of a rail line becoming reactived.

Mon, 03/19/2012 - 16:32 | 2270886 THE DORK OF CORK
THE DORK OF CORK's picture


Yes I am afraid thats true in the British isles but the French regional rail lines closed in the 60s & 70s (many 10000kms are all still intact)

These can be brought on line pretty quickly with some organisation and capital.

The 64km Nantes to Chateaubriant line is now expected to cost 200Millionish when completed in early 2013

Indeed this tram train concept is already happening in Nantes existing train lines with more stations built to integrate this line with commuter traffic all the way to Clisson

Who knows these lines could extend westwards to the coast as far as Paimboeuf which has not had a passenger train since the war although the line remains intact (the French are very conservative & protective of their lines)œuf

(go to Google earth around that region and see for yourself all the lines that have been closed or little used - the skeleton "Blue whale" DMU service to Pornic could be upgraded also for example.)

Mon, 03/19/2012 - 18:35 | 2271106 falak pema
falak pema's picture



As Flakmeister implies and I agree; time's arrow in the coming age will be ENERGY and its price NOT international labour arbitrage. So economies will have to reconvert to keep the energy component of IMPORTED product down, as structural imbalances mean, for monetary reasons, we balance trade flows. In this context of rising energy prices in the NET Export land model, where marginal price of hi-density energy can only rise, given the population explosion conundrum, chindia demand etc.,  two factors are important for nations to achieve sustainable equilibrium :

1° Have a positive food balance locally. Home grown agriproducts is VITAL. The population increase makes this vital issue, and money earner for exports. Big time. 

2° Have a local infrastructure which is energy efficient. As you know, the USA today has the worst energy profile on point #2; it consumes 25% of world energy with 4.5% of world population. Big problem. It will have to change its model and it will mean PAIN. As it does not have energy efficient infrastructure. I hope cheap local gas will help...but it looks like a drop in the ocean.

The country with the best profile on these two fronts in Eurozone is France. It has good mass transport systems countrywide. Energy efficient. It has a base electrical production on nuclear, not gas; it has a potential to make intensive agroindustry which is second only to USA. So it has some good aces in the pack. All it needs to do is to junk its administered economy and move to a more competitve model based on exporting agro plus hi-valued quality products like LMVH and L'Oreal and Hi-tech medical and Net economy video/music areas where it has talent. Germany has the industrial edge, but France could go big in infrastructure cost effectiveness to help local industry and transport and intensive agri business. Two big plusses.

Bottom line : go local to protect local production on key local resources to help social fabric, and develop comparative advantage in chosen sectors for export.

Mon, 03/19/2012 - 18:47 | 2271174 THE DORK OF CORK
THE DORK OF CORK's picture


I know France pretty well for a dumb Irishman - they will go protectionist - thats what they will do .

Sarko has already made a campaign speech about buying Alstrom products only(they make better trains but are more expensive) - they have a better energy independence ratio then Germany at 50% vs 40% and will push that out to 60% with this regional train transport policey I guess.

Also their urban Tramway system is expanding at a high level.


Mon, 03/19/2012 - 20:59 | 2271565 smiler03
smiler03's picture

Don't forget that France currently has very small farms on average. The French agricultural industry only survives because of the Common Agricultural Policy. It would take a revolution to change that and I hope it never happens. The French countryside would be ruined forever :O(

Tue, 03/20/2012 - 15:57 | 2274540 falak pema
falak pema's picture

you are right on protectionist : its their colbertist and Jacobin strain. Can't change the leopard's spot.

Tue, 03/20/2012 - 03:47 | 2272433 Seer
Seer's picture

"It has a base electrical production on nuclear"

And the feedstock comes from where?

ANYONE using more energy than made available through solar inputs is surpassing sustainability.

Reductions in exports will result in higher costs for importing nations.  This will force importing nations to either decrease imports or increase exports (pressures will increase to keep resources within one country's borders), or both.

Tue, 03/20/2012 - 09:04 | 2272773 AnAnonymous
AnAnonymous's picture

And the feedstock comes from where?


From a rigged market. They buy at around 1/3rd less than the price market in their former colonial holdings. Which also allow them to pollute through radioactive waste the very same places.

The more stronger countries move to nuclear energy, the more those dominated territories will be challenged.

And considering the French offer, it is very easy to do better than them.

So expect more security wars, operations in Africa from US citizen french.

Tue, 03/20/2012 - 16:09 | 2274583 falak pema
falak pema's picture

we'er talking about an interim window between fossil depletion and renewable take off; the next thirty years. Renewables should fuel the future after that if our innovation curve is on schedule.

Mon, 03/19/2012 - 15:52 | 2270749 THE DORK OF CORK
THE DORK OF CORK's picture

Yeah , she does a walking series for the Beeb so I guess she must be fit............the camera man glorys up her arse a lot.

The BoE Monetory policey has very effectivally pushed people back into railways despite it being one of the most expensive in Europe..........

Check out Barnsley railway station passenger numbers in 2008/9 & 2009 /10

Numbers like this has been seen all over the UK - meanwhile countries such as Ireland & Greece cannot have a more effective transport policey because of ineffiecent resourse allocation as a result of flawed ? Euro monetory policey.



Mon, 03/19/2012 - 15:34 | 2270677 Gully Foyle
Gully Foyle's picture


Wow, so terms like Cannonball will be used in songs again.

Miss those goddamned train songs.

Mon, 03/19/2012 - 18:43 | 2271164 Diogenes
Diogenes's picture

That Golden Rocket's gonna carry my blues away.

Mon, 03/19/2012 - 19:02 | 2271227 Chump
Mon, 03/19/2012 - 20:44 | 2271514 sun tzu
sun tzu's picture

The only problem is that the train doesn't take you where you need to go. I have to drive 10 miles before getting to the nearing mass transit to get to work. 

Mon, 03/19/2012 - 23:30 | 2272048 MeelionDollerBogus
Mon, 03/19/2012 - 15:31 | 2270663 blunderdog
blunderdog's picture

It's all just a Fed/MSM conspiracy to trick us into believing gasoline price is affected by oil price.

We can just elect Newt and we'll get it for $2.50.

Mon, 03/19/2012 - 15:44 | 2270708 Flakmeister
Flakmeister's picture

Its funny...

The Newt says we gotta bomb Iran and then he says he will get gasoline down to $2.50...

Mutually exclusive goals I would think...

Unless, of course, his master plan is to collapse the economy so bad that U6 goes to 32%.....

Mon, 03/19/2012 - 17:12 | 2270994 css1971
css1971's picture

Its funny...

The Newt says we gotta bomb Iran and then he says he will get gasoline down to $2.50...

Mutually exclusive goals I would think...

Not at all. One follows the other as night follows day.

Unless, of course, his master plan is to collapse the economy so bad that U6 goes to 32%.....

Ah the gentle tones of the central banker. "We see inflation moderating in the future".

Mon, 03/19/2012 - 19:09 | 2271249 TheFourthStooge-ing
TheFourthStooge-ing's picture

Newt also said that the government should allow a few terror attacks to happen from time to time so that people are reminded how much they need the government:


Mon, 03/19/2012 - 20:45 | 2271517 sun tzu
sun tzu's picture

Gingrich is an evil one-world government bastard. 

Tue, 03/20/2012 - 06:43 | 2272538 Seer
Seer's picture

"The tree of liberty must be refreshed from time to time, with the blood of patriots and tyrants." - Thomas Jefferson

I wonder what Jefferson would have thought about Newton Gingrich?

Mon, 03/19/2012 - 15:34 | 2270673 Dr. Engali
Dr. Engali's picture



Okay raise your hand if you can remember the last time the market was down two daysin a row.

Do NOT follow this link or you will be banned from the site!