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Guest Post: It Only Took A Global Depression To Reduce Gas Prices By 40 Cents

Tyler Durden's picture


Submitted by Jim Quinn of The Burning Platform blog,

You can’t watch the mainstream media propaganda channels for more than ten minutes without a talking head breathlessly announcing that gas prices have dropped for the 24th day in a row and are now back to $3.55 a gallon. Wall Street oil analysts, who are paid hundreds of thousands of dollars per year to tell us why prices rose or fell after the fact, are paraded on CNBC to proclaim the huge consumer windfall from the drop in price. This is just another episode of a never ending reality show, designed to keep the average American sedated so they’ll continue to spend money they don’t have buying crap they don’t need. The brainless twits that pass for journalists in the corporate mainstream media never give the viewer or reader any historical context to judge the true impact of the price increase or decrease. The government agencies promoting the storyline of those in power extrapolate the current trend and ignore the basic facts of supply, demand, price and peak oil. The EIA is now predicting further drops in prices. Two months ago they predicted steadily rising prices through the summer. What would we do without these government drones guiding us?

As you can see from the chart, gas prices tend to be volatile and unpredictable in the short term. You can also see that since 1998 the trend has been relentlessly higher. The average inflation adjusted price of gasoline in 1998 was $1.41 per gallon, versus $3.55 today, a 152% increase in fourteen years. Over this same time frame the BLS manipulated CPI was up only 44%. If we are swimming in oil, as the MSM pundits claim, why the tremendous surge in price? It must be those evil oil companies. It couldn’t possibly be the impact of peak oil. To acknowledge the fact that worldwide oil production has reached its peak would be to concede that our suburban sprawl, just in time world is drawing to an excruciating end. So the politicians spout their assigned storylines, supported by their paid off “experts” (aka Daniel Yergin), and unquestioningly reported as fact by their designated corporate media outlet. Those of a liberal bent assail oil companies and speculators; refuse to acknowledge the law of supply and demand, while touting green energy as the solution to all our energy needs. Those of a conservative bent believe in attacking foreign countries to secure “our” oil, refuse to acknowledge the law of supply and demand, and spout “drill, drill, drill” slogans because dealing with facts is inconvenient. The willfully ignorant public believes whichever storyline matches their preconceived beliefs. All is well – no one is required to think critically. Thinking is hard.

There are numerous factors that affect the price of oil on a daily basis, but at the end of the day supply and demand determine price. The chart below documents the key external events that have had a major impact on oil prices since 1970. The vital fact that you won’t hear on CNBC is that every recession since 1970 has been immediately preceded by an oil price spike. Anyone living in the real world (this excludes Cramer, Liesman, Bartiromo, & Kudlow) knows we have entered part two of the Greater Depression. The surge in oil prices in the last two years has precipitated this renewed downturn.

The MSM blathering baboons of bullshit dutifully report the price of gas on a given day. People who live in the real world fill up their gas tanks every week, so the average price over a period of time is what matters. The average price of a gallon of gasoline in 2008 was $3.39. The average price in 2011 was $3.48. The average price in 2012 has been $3.62 thus far. This data paints an entirely different picture than the one painted by the politicians, experts and the clueless captured media. Gas prices are higher than they were prior to the last economic implosion. Cause and effect is a concept beyond the intellectual capabilities of MSM journalists and the millions of government educated zombies they mesmerize with misinformation. The lack of intellectual curiosity and critical thinking skills plays directly into the hands of those with a storyline to sell or truth to obscure.

Swimming in Oil

The recent storyline proliferated by the MSM at the behest of Washington DC politicians and the corporate interests that control them, is that the U.S. is on the verge of energy independence, with hundreds of years of plentiful oil right under our feet. The chart below made the rounds last week on Bloomberg, defender and mouthpiece of billionaires everywhere. This chart surely proves that peak oil is bullshit. Right?

Besides the false representation of oil production and the misleading conclusion that we have more oil than we need, the chart and Bloomberg screed does not provide the true context of why worldwide demand is tumbling. The chart is NOT showing global crude oil production. It is showing global oil and other liquids supply, which includes crude and condensate, natural gas plant liquids, other liquids (mostly ethanol), and processing gains (increase in volume from refining heavy oil). The MSM would rather mislead the public than provide the true picture of the supposed oil production boom. The question is whether the MSM is misleading the public due to their own journalistic incompetence or are they carrying out their assigned mission on behalf of the corporate oligarchs running the kingdom.

The chart below reveals a truer picture of the worldwide energy situation. Conventional oil production hit its peak/plateau around 74 million barrels per day at the end of 2004, and has barely budged from that level over the last eight years. Despite all the rhetoric about the North American oil boom, conventional oil production is at virtually the same level today as it was in 2004. The U.S.(shale oil) and Canadian (tar sands) gains in production have been matched by the collapse in Mexican production. The Middle East countries produced 23.3 million barrels in September 2004. The average price of a barrel of oil in 2004 was $38. They are now only producing 23.9 million barrels when prices are 120% higher.

World Oil and Other Liquids Supply

Global oil demand in 2004 was around 84 million barrels per day. To increase liquid fuel supply to meet the 90 million barrels per day demand we had to turn to unconventional fuels like tar sands, tight oil, and biofuels, all of which have far higher production costs and far less energy content than sweet crude. As the easy to access, cheap to produce ($20 per barrel in Saudi Arabia), close to the surface sweet crude has been depleted, it has been replaced by heavy crude, tar sands, deep-water oil, and shale oil, with production costs in excess of $80 per barrel. Anyone anticipating a long-term decline in fuel prices must be smoking tar sands in their bong. The liquids that have “replaced” conventional crude have a few slight drawbacks. Natural gas liquids provide about 70% as much energy per barrel as crude oil, so a barrel of NGL is not equivalent to a barrel of crude. Have you filled up your SUV lately with some NGL? Ethanol provides only 60% as much energy per barrel as crude oil and its EROEI is pitifully low. The energy returned on energy invested for these non-conventional sources of energy approaches the minimum limits unless prices rise dramatically. The Obama green army does not want this chart making its way into the public discourse. Their fantasyland of renewable energy solutions is proven to be a fool’s errand.

Catch-22 Energy Edition

The price of a barrel of West Texas crude is currently $86 per barrel, down from $109 per barrel in February. Obama supporters will proclaim that his threat to crack down on speculators had the desired effect. He must have scared those nasty speculators with his gravitas. The price rise surely didn’t have anything to do with the U.S. led attack on Libya, the act of war economic sanctions on Iran, the beating of Israel/U.S. war drums, Japan demand due to the shutdown of their nuclear power industry, or the relentlessly higher demand from China and India. And now the MSM is trying to spin a yarn that prices have dropped by 21% because worldwide supply is surging. That is so much more palatable than telling the truth and admitting that we’ve entered the 2nd phase of the Greater Depression.

It took $140 a barrel in oil in 2008 to tip the world into recession. Worldwide economies were much stronger then. The U.S. National Debt has risen by $6.5 trillion, or 70% since 2008. Real GDP has risen by $200 billion since 2008, or a 1.5% increase. Debt to GDP has risen from 64% to 102%. Consumer debt at $2.55 trillion is exactly the same as the 2008 level even after Wall Street banks have written off over $1 trillion, subsidized by the American taxpayer. The consumer deleveraging storyline is completely false. In 2008 there were 234 million working age Americans and 145 million of them were employed. Today there are 243 million working age Americans and 142 million of them are employed. In 2008 there were 28 million Americans in the food stamp program. Today there are 46 million Americans collecting food stamps. The economic situation in Europe has deteriorated at a far greater rate. Therefore, it is not surprising that it only took $109 a barrel oil to push the world back into recession.

The main reason prices are dropping is the collapse in demand from Europe and the United States. The bumpy plateau of peak oil is in full force. Prices rise to the point where they push economies into recession, demand crashes due to the recession, and prices decline. The double whammy of oil prices reaching $111 a barrel in 2011 and $109 a barrel in 2012 have sapped the life out of the American consumer. This is reflected in the plunge in gasoline and petroleum usage since 2008, with a temporary leveling off in 2010, followed by a further nosedive since 2011. As this recession deepens over the next six months, prices will likely fall further. But this is where the Catch-22 kicks in.

Once prices drop below $80 a barrel it sets in motion a reduction in capital investment, as new production projects are not economically feasible below $80 per barrel. Oil analyst Chris Nedler explains the Catch-22 aspect of oil prices in a recent article:

Research by veteran petroleum economist Chris Skrebowski, along with analysts Steven Kopits and Robert Hirsch, details the new costs: $40 – $80 a barrel for a new barrel of production capacity in some OPEC countries; $70 – $90 a barrel for the Canadian tar sands and heavy oil from Venezuela’s Orinoco belt; and $70 – $80 a barrel for deep-water oil. Various sources suggest that a price of at least $80 is needed to sustain U.S. tight oil production.

Those are just the production costs, however. In order to pacify its population during the Arab Spring and pay for significant new infrastructure projects, Saudi Arabia has made enormous financial commitments in the past several years. The kingdom really needs $90 – $100 a barrel now to balance its budget. Other major exporters like Venezuela and Russia have similar budget-driven incentives to keep prices high.

Globally, Skrebowski estimates that it costs $80 – $110 to bring a new barrel of production capacity online. Research from IEA and others shows that the more marginal liquids like Arctic oil, gas-to-liquids, coal-to-liquids, and biofuels are toward the top end of that range.

My own research suggests that $85 is really the comfortable global minimum. That’s the price now needed to break even in the Canadian tar sands, and it also seems to be roughly the level at which banks and major exploration companies are willing to commit the billions of dollars it takes to develop new projects.

Oil prices may temporarily drop below $80, but prices below that level for a prolonged period will lead to supply being constricted, which will ultimately lead to higher prices. The storyline of hundreds of years of Bakken shale oil that will make the U.S. energy independent is the latest fiction to be peddled by the oligarchs as a way to sedate and confuse the masses.

What the Frack

U.S. oil production in 2007 averaged 8.5 million barrels per day. Today, the U.S. is producing 10.7 million barrels per day. We must have hit the jackpot. Not quite. Actual crude oil production has increased by 1 million barrels per day, a 20% increase. The other 1.2 million barrels have been from liquefied natural gas (up 34%) and government subsidized ethanol (up 100%).

The U.S. crude oil production is at the same level it was in 1998, but somehow we are on the verge of becoming energy independent. The recent increase is solely due to the horizontal drilling and hydraulic fracturing of shale deposits in Texas and North Dakota. You don’t hear much about Alaskan production declining for the ninth year in a row and California production declining to the lowest level in three decades. The paid shills predicting Bakken production of 3 million barrels per day are purposely lying or just plain delusional.

North Dakota oil production has reached 550,000 barrels per day versus 187,000 barrels per day in 2009. Simpletons in the MSM will just extrapolate this growth to 3 million barrels by 2020. No need to examine the facts. Oil market expert Tom Whipple reveals the dirty secrets behind the Bakken shale oil miracle:

It took the production from 6,617 wells to produce North Dakota’s 546,000 b/d in January. Divide the daily production by the number of wells and you get an astoundingly low 82 b/d from each well. I say “astounding” because a good new offshore well can do 50,000 b/d. BP’s Macondo well which exploded in the Gulf a couple of years ago was pumping out an estimated 53,000 b/d before it was capped.

Now a North Dakota shale oil well is not in the cost class of a deep-water offshore platform which can run into the billions, but they do cost about three times as much as a classic onshore oil well as they first must be drilled down 11,000 feet and then 10,000 horizontally through the oil bearing layer before the fracturing of the rock can take place. The “fracking” involves at least 15 massive pumps that inject water and other chemicals into the well. Take a Google Earth flight over northwestern North Dakota. The fracked wells are hard to miss as there are now about 9,000 of them and they are each the size of a football field.

There is still more — fracked wells don’t keep producing very long. Although a few newly fracked wells may start out producing in the vicinity of 1,000 barrels a day, this rate usually falls by 65 percent the first year; 35 percent the second; and another 15 percent the third. Within a few years most wells are producing in the vicinity of 100 b/d or less which is why the state average for January is only 82 b/d despite the addition of 1300 new wells in 2011.

The rapid depletion of these wells, enormous expense to drill new wells, oil prices barely above cost of production, low EROEI, swiftly falling Alaskan and shallow water production, and the snail’s pace of deep water production are not a recipe for energy independence. Shale oil production will never exceed 1 million barrels per day. And if you believe Saudi Arabia’s promises to fulfill any shortfalls, I’ve got some delightful beachfront property in Afghanistan to sell you. Saudi conventional crude oil production is at the same level it was in 2005.

Saudi Arabia Oil Production

The seven year Saudi plateau is just a precursor to what is going to happen over the next decade. Saudi Arabia began pumping oil in 1945. It will all be gone by 2045. You can’t extract an infinite amount of oil from a finite world. Pretending this isn’t true won’t make it so. Oil has been the lifeblood of our nation since the late 1800s. The depletion of this essential ingredient of the modern world will not lead to a sudden death for our way of life but a slow downward spiral of waning supply, escalating prices, and economic decay.

The sustained high and rising oil prices will be economically destructive as our debt saturated, suburban sprawl, mall centric, SUV crazed, cheap oil dependent society methodically and agonizingly implodes. Chris Skrebowski describes our future succinctly:

“Unless and until adaptive responses are large and fast enough to constrain the upward trend of oil prices, the primary adaptive response will be periodic economic crashes of a magnitude that depresses oil consumption and oil prices.”

We’ve entered one of these periodic economic crashes. They are coming faster and faster. So enjoy that 40 cent drop in gas prices as you drive down to sign up for food stamps. The Saudis have a saying that acknowledges their luck in being born on top of billions of barrels of oil and the inevitability of its depletion:

“My father rode a camel, I drive a car, my son flies a jet plane, his son will ride a camel.”   

Delusional Americans believe they have a right to cheap plentiful oil forever. They refuse to acknowledge that luck has played the major part in their rise to economic power. The American saying will be:

My great grandfather rode a horse, my grandfather drove a Model T, my father drove a Buick, I leased a Cadillac Escalade, my son died in the Middle East fighting for my oil, his son will never be born. 


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Sun, 06/10/2012 - 22:29 | 2513205 HungrySeagull
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And will take a war to raise it 40 dollar.

If you can get any at all.

Sun, 06/10/2012 - 22:42 | 2513232 CrazyCooter
CrazyCooter's picture

Personally, I am waiting to see the outcome of the whole fracking industry. NG is tits up. Condensates are like a barrel of oil. I think the NG fracking industry will burn to the ground and the big boys will pick up pieces on the cheap. Nothing good for prices in that formula.

In the US, I think our energy situation is quite dire. Time will tell, and I am often wrong before I am right.



Sun, 06/10/2012 - 22:57 | 2513262 jcia
jcia's picture

Whenever I see EROI, I think of SRSrocco's work

Sun, 06/10/2012 - 23:02 | 2513270 Pinto Currency
Pinto Currency's picture


The cost of producing digital currency units is zero.

Expect much more expensive oil costs - in the middle of a depression.

Sun, 06/10/2012 - 23:08 | 2513279 CrazyCooter
CrazyCooter's picture

EROI is a concept, been around a while. You see it over at TOD (i.e. TheOilDrum) a lot. Not to diminish, but it is nothing new. As far as your source, he is pretty sharp. I tried to blog to my very small readership and cited him a while back.

My blog rant (all of 10 readers, if that - friends, family) is here (I am a barking dog):

I reached the conclusion a while back that energy is the lynch pin. So, I moved to an energy rich state, with a small population for the near term. I had no idea I would fall in love with this place. I want to put down roots here badly, but the economics are not so good ... but I digress ...



Sun, 06/10/2012 - 23:21 | 2513306 Newsboy
Newsboy's picture

Good-on-ya, Mate!

I'm preparing to move from an energy rich state, to a food rich, isolated state, with lovely weather year round and reliable sun, wind and rain, anticipating on a longer horizon...

Mon, 06/11/2012 - 00:25 | 2513388 kekekekekekeke
kekekekekekeke's picture

good for you re: your blog but weird 9/11 rhetoric in that barking dog article. TOD is my next project to learn more about.  I commented on the wolf article post. Mine's here.

Where did you move to? is OK a good state, seems energy rich (although a lot of that is natural gas) and low pop density

Mon, 06/11/2012 - 00:35 | 2513399 jeff montanye
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cooter: i like the image of energy holding things together yet strangling the economy at the same time time.

Mon, 06/11/2012 - 00:55 | 2513409 greyghost
greyghost's picture

did this clown mention "the bazhenoz field"? if not why not? the untapped fields off the coast of greece? this nonsense reminds me of the crap someone wrote about the american professor on energy at the univ. of moscow. only an ugly american would go to russia and tell them they don't what they are doing when it comes to drilling oil. repent for the world is coming to an end....repent. lol

Mon, 06/11/2012 - 01:16 | 2513421 greyghost
greyghost's picture

then this clown writes about the bakken field wells doing 82 barrels a day. then starts in on vague cost for drilling the wells. gee, with oil at $100.00 a barrel times 82 barrels a day times 365 days equals aprox. 2.9 million dollars a year. wow, i can i get one for my back yard? so does the barnett shale in texas suffer the same drastic drop off as the bakken field, yes one is oil and the other is gas but both are energy sources. after all they have been drilling the barnett shale for aprox. 15 years, have they run the field dry yet? i have heard that same story of low production in the texas shale also. my point being is that this is the exact same story i have heard since 1970, except the names have been changed to protect the guilty. should make people wonder what and who's book this author is pimping. with the price of crude collapsing we can expect more stories about how little oil is available to attempt to justify their investments.

Mon, 06/11/2012 - 01:24 | 2513432 greyghost
greyghost's picture

speaking of natural gas i am now wondering with the utter collapse in the price of natural gas, how is it that companies like so. california gas can continue to charge the rates they do each month? believe me i have let the public utilities comission in calif. know how criminal their actions are. anyone else in their neck of woods getting reamed every month, month in month out? wow, it only took a depression to screw everyone on energy.

Mon, 06/11/2012 - 02:19 | 2513483 joe6px
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Mon, 06/11/2012 - 07:47 | 2513844 Jim Quinn
Jim Quinn's picture

Price of a barrel of oil in 1970 = $3.39

Price of an inflation adjusted barrel of oil in 1970 = $19.71

Your plentiful oil story is complete bullshit. Prices reveal liars and dumbasses. Which are you?


Mon, 06/11/2012 - 10:21 | 2514333 greyghost
greyghost's picture


Mon, 06/11/2012 - 14:13 | 2515460 Jim Quinn
Jim Quinn's picture

Your ignorance is breathtaking to behold. Typing in caps gives you so much authority. Oil is discovered every day. Oil is consumed every day. You are so fucking stupid, you don't even know what Peak oil means. I'm not an investor with an agenda to push like yourself. Ideologues like yourself bore me.

Learn proper grammar you fucking dumbass. It's TOO, not TO.

Christ ZH needs to get a better commentor class. You should at least require an IQ above 50 to post.



Mon, 06/11/2012 - 06:27 | 2513737 markmotive
markmotive's picture

There's a difference between EROEI and EROI.

Sun, 06/10/2012 - 23:01 | 2513267 Pinto Currency
Pinto Currency's picture


Sun, 06/10/2012 - 22:50 | 2513247 1100-TACTICAL-12
1100-TACTICAL-12's picture

FRAC it, we can just light our faucets a'fire to stay warm.

Mon, 06/11/2012 - 03:49 | 2513631 Chuck Walla
Chuck Walla's picture

Oil is it for the foreseeable future. If we don't keep looking and finding, then death is the result as agriculture runs on oil. Deere don't make solar tractors.


You can bitch all you want about peole who want to drill, those who don't, don't mind killing the poor or worse yet, are too stupid to apprehned that fact.

Mon, 06/11/2012 - 05:33 | 2513697 jeff montanye
jeff montanye's picture

i'm guessing the future won't be very foreseeable.  

Sun, 06/10/2012 - 22:30 | 2513208 Killtruck
Killtruck's picture

Election year, bitches.

Sun, 06/10/2012 - 22:44 | 2513238 CrazyCooter
CrazyCooter's picture

Sir, I think you win the prize. What happens in the next four years will be nothing short of historic.

Which way it goes, I can't tell you. I just know the wind is blowing against the hard working man.



Sun, 06/10/2012 - 23:37 | 2513334 NemoDeNovo
NemoDeNovo's picture

Very true, our "Future" is in our hands now, questions is what are we gonna do with it................


Mon, 06/11/2012 - 02:26 | 2513499 joe6px
joe6px's picture

A Common Goal
Our country was founded on an inspiration, on an ideal.  Over the course of the two hudred plus years of our development we have refined this ideal and then defiled it by the actions of our government and our own inaction as individuals.  I am just as guilty as anyone.  When asked by a woman:
“Well, Doctor, what have we got—a Republic or a Monarchy?”
Franklin responded:
  “A Republic, if you can keep it.”  (
As we all know a republic is very different than an democracy in that the three branches of government detailed in the constitution, which form our republic, are separate and interdependent.  The executive, the judicial, and the elected branches (congress and the senate) are meant to counter act one another so that mob rule or a specific political view can not force the country into mayhem.  The activities of the past few executive branches have been contrary to the constitution in that presidential decrees have been upheld by an elected congress, however the decrees are unconstitutional.  The most recent ruling by a federal judge states that portions of the NDAA are unconstitutional, to which the executive branch answers...enforce it.  The executive branch knows that the judicial has no means to enforce it's interpretation of the constitution, and in so stating has taken an authoritarian stance and has discounted the very constitution that is supposed to govern our daily lives.  How then as persons of this country are we supposed to react to the continued denial of our granted rights?  How is it that the cowards who would have you believe you could live forever if not for those...terrorists, extremists, or whatever word they use?  Life is full of risks.  Real freedom is difficult, simply because for every right there is an obligation to grant that right...even if you don't agree with it.  A Republic is hard to maintain.  If you are not paying attention it will be taken away from you.

To that end  join or die, or we hang together or we all hang separately.

Sun, 06/10/2012 - 22:32 | 2513213 stormsailor
stormsailor's picture

haven't seen this mentioned yet  bank holiday in italy

Sun, 06/10/2012 - 23:12 | 2513287 Tom Green Swedish
Tom Green Swedish's picture

Jean Claude Juncker told UniCredit to lie about the banks.  Don't worry the mafia will save Italy.  They have about 90 billion in cash reserves. Trust me the guys from Berlin said Silvio can call in a mafia favor whenever he wants.

Sun, 06/10/2012 - 22:35 | 2513222 Gully Foyle
Gully Foyle's picture

Thank fucking god. Now the next wave of OWS protest can involve self immolation.

Get the fire departments involved as well as the police.

Turn it into a weenie and marshmallow roast to help feed the homeless.

Damn fine tv too.

Bookies could run a whole range of bet scenarios, like will the thin Hipster burn longer than the old hippie chick.

Mon, 06/11/2012 - 00:21 | 2513387 Cosimo de Medici
Cosimo de Medici's picture

Perhaps I am misunderstanding you, but your post seems.......cynical.  But I'll play along.  Put me down for a sawbuck against the hippie chick.  Most of them have that Al Hunt-Peter Lynch thing working with their hair.  Get that stuff near an open flame and....POOF!

By the way, who ever said AdSense doesn't have a sense of humor.  I pull up this page and the sidebar ad is some "hippie chick" wearing bling and shilling gold.

Mon, 06/11/2012 - 01:39 | 2513442 prodigious_idea
prodigious_idea's picture

Damn, I knew I shouldn't have searched new Dodge vehicles.  I could have had the bling and gold.

Mon, 06/11/2012 - 02:03 | 2513458 Cosimo de Medici
Cosimo de Medici's picture

I'm no expert on code and BOTS, but I think there are plenty on this site who can chime in.  My browser immediately deletes all cookies, including LSOs (but saves zerohedge), so I believe the BOTS feed off of the words on the page, not my cache.  Every time somebody gets all religious, I get ads for Christian Singles.  Somebody mentions Robert Wagner and I get Reverse Mortgages.  On this page refresh, it's all FX trading schemes.  I have no idea where all the t-shirt ads come from, but ZH seems to have cornered that market.


Mon, 06/11/2012 - 04:29 | 2513659 joe6px
joe6px's picture

Your browser doesn't care.  Your computer doesn't care.  Garbage in garbage out.  ZH is a for profit site.  Sorry, your socialism goes only so far.  We are all adults and take responsibility for our own browsing.  Sorry the gorvernment hasn't held your hand this far.  Good Luck.

Mon, 06/11/2012 - 08:04 | 2513885 Cosimo de Medici
Cosimo de Medici's picture

I have no idea what you are talking about.

I noted that after responding to GF's "hippie chick" comment, I happened to get an ad tossed on to the page that had a "hippie chick" in it.  The next fellow joked that he was only getting truck ads, no "hippie chick".  Then I responded.

Somehow from that casual and joking exchange, you need to lecture about socialism (?), personal responsibility, and the government.  I can only conclude that you might be under the influence, or your comment was posted in the wrong spot.

Sun, 06/10/2012 - 22:47 | 2513223 Newsboy
Newsboy's picture

Bumpy Road, keep your eyes on the horizon.

When oil prices are too high you get cyclic crashes, which bring the prices down, but also inhibit investment  in production, because the investment is aimed at producing the new, expensive oil. The producers have just seen the new, expensive oil is unaffordable and collapses the economy. They turn to squeezing the last bit out of the old fields, because there's more profit.

Then it runs dry.

Then there's nothing.

Mon, 06/11/2012 - 00:07 | 2513374 mcguire
mcguire's picture

which is why i have always figured that "they" would want to build the 4th reich before it all runs dry...  and that is the basis for believing that a global EMP strike makes sense.. it culls and saves some oil for the construction of their luciferian utopia..

Sun, 06/10/2012 - 22:36 | 2513225 valkir
valkir's picture

my son died in the Middle East fighting for international banksters  should be  .

Mon, 06/11/2012 - 04:38 | 2513664 Lednbrass
Lednbrass's picture

This is WAY overstated.  While it is tragic that any lives are lost in the stupidity over there, casualties have been very low compared to those in the US.

I had the misfortune of growing up in Baltimore, one of the nastiest scumholes in the country.  Just out of curiosity, last fall I did a comparison of combat deaths in Afghnistan vs. murders in that city. Through the end of September 2011 it was 1700 dead in Afghanistan vs. 2500 murdered in Bmore in the same time span.

We lose 70-80K a year on the highways and in killings nationally, the losses overseas are tiny in comparison.

Mon, 06/11/2012 - 05:43 | 2513701 jeff montanye
jeff montanye's picture

the losses here and especially south of the rio grande in the debacle that is the war on drugs have eclipsed u.s. losses in vietnam.  still nowhere near the vietnamese losses but give it time.  just as pointless (unless you make booze or tranquilizers).

Mon, 06/11/2012 - 08:57 | 2514009 StychoKiller
StychoKiller's picture

How many get maimed by IEDs in Baltimore?

Mon, 06/11/2012 - 18:35 | 2516238 Moe Howard
Moe Howard's picture

How many get carjacked in Kabul?

Sun, 06/10/2012 - 22:38 | 2513228 UTICA CLUB XX PURE

Thats worth repeating:

"It Only Took A Global Depression To Reduce Gas Prices By 40 Cents"


Sun, 06/10/2012 - 22:39 | 2513229 q99x2
q99x2's picture

Jamie Dimon got fined $30,000 (by the SEC?) for keeping oil over $100/barrel. They do it with fake trades. Price has little relationship to supply. Economics now runs on fraud and financial terrorism.

Sun, 06/10/2012 - 23:03 | 2513231 DavidPierre
DavidPierre's picture


Until you understand the Who, the Why and the How of 9/11 you are  pumping more useless smoke with your cribbed charts and graphs . Just more of your aiding and abetting Bull Shit.

9/11 is the Litmus Test for any 21st century writer. 

Any person that is incapable or uninterested in critically thinking about 9/11Truth is a politician’s best friend.  Your ignorance is not a state of being uninformed about 9/11 or unaware about the implications of those issues.  You have made a choice: to be ignorant.  An informed, interested, questioning person is a danger to the government.  The combination of uninformed, ignorant by choice,  and intellectually dishonest will be fatal for the country.  Only a fool like you would believe there won’t be consequences. 



Mon, 06/11/2012 - 00:01 | 2513369's picture

You're right. Anybody who fails to understand that Bigfoot used his magic UFO to replace the Manhattan skyline with a hologram on 9/11 is living in a fantasy world.

Mon, 06/11/2012 - 00:23 | 2513390 Paul Atreides
Paul Atreides's picture

What does Bigfoot, UFOs or holograms have anything to do with cutter charges, nanothermite and a treasonous government?

Mon, 06/11/2012 - 00:38 | 2513403's picture

It's foolish to believe that TPTB wouldn't use Bigfoot's UFO to further their agenda. If you stopped listening to the MSM you'd understand that.

Mon, 06/11/2012 - 01:25 | 2513433 Paul Atreides
Paul Atreides's picture


Mon, 06/11/2012 - 01:28 | 2513436's picture


Mon, 06/11/2012 - 05:48 | 2513704 jeff montanye
jeff montanye's picture

sounds like the pot calling the kettle black to me.

you seem to be doing some serious denying.   oh you were being sarcastic? how funny.

the investigation run by the u.s. government would alone give one reason to fear the worst.

Mon, 06/11/2012 - 10:07 | 2514259's picture

The fact is that the 9-11 commission omitted any reference to Bigfoot whatsoever. That should cause you to fear the worst (and more). Look at the evidence for once:

Mon, 06/11/2012 - 00:47 | 2513407 DavidPierre
DavidPierre's picture

Your Ignorance Is your Strength!

Two years on ZH and you're still dumb as a fencepost.


Mon, 06/11/2012 - 01:19 | 2513420's picture

You don't seem like just a regular troll. You are most likely a Mossad agent paid to spread the official story of 9-11. But we know the "truth."

Mon, 06/11/2012 - 05:50 | 2513705 jeff montanye
jeff montanye's picture

got a feeling you'd know the mossad if you saw it.

Mon, 06/11/2012 - 10:09 | 2514266's picture

Nice false flag post, shill.

Mon, 06/11/2012 - 00:37 | 2513400 Ignatius
Ignatius's picture

Here's what "Andrew" wrote at another blog:

"I truly hate the way 'conspiracy theory' is used to discredit anyone who suggests a bunch of people with common interests might actually put their heads together to engineer outcomes that work to their own benefit.  Your sneakers are a conspircy.  Ice cream is a conspiracy.  Cat food is a conspiracy, for God's sake.   We know men sit in boardrooms to decide which store shelf to put anchovies on next week so they can sell 5% more, yet we are supposed to believe that when multi-trillion dollar cash flows and geopolitical balances of power are at stake, nobody can be bothered  to plan how things will work out?  That's a theory that's way more daffy than any conspiracy theory I've ever heard.  The simplest question you need to ask to figure out who did what is -- cui bono?  Who benefits?  Cui bono is Latin and that was the Romans.  They knew the score 2000 years ago.  It's a shame that we've deliberately chosen to forget what they knew."

Mon, 06/11/2012 - 01:53 | 2513417 DavidPierre
DavidPierre's picture

Cui Bono

20 areas of criminal profiteering.

Profiteering is a breach of fiduciary obligations by government officials with the help of the Congress, media, judiciary and the private members of the military-banking cartels that control the US governmental apparatus:

1. Over $3.3 trillion missing and unaccounted for from the US Treasury and no efforts by the US Treasury to find the money or get it back.


2. Failure by the US Department of Justice to enforce securities and money laundering laws regarding the pump and dump of the US stock market and no effort to find money fraudulently laundered and to get it back.


3. Arbitrage in the Federal Credit System designed to generate profits for the benefit of private financial interests in combination with relaxed monetary policies.


4. Global deployment of US military and policing.


5. Military presence and/or occupation in Iraq and Afghanistan and other Eurasian oil and gas interests.


6. Special legislation favoring the insurance industry.


7. Special legislation favoring the airline and other industries.


8. Significant increases in military, intelligence and enforcement powers and appropriations.


9. Special legislation favoring commodities and financial markets.


10. Fundraising for trusts and endowments purporting to help 9/11 victims.


11. Privatization and taxpayer funded redevelopment and financing of the WTC and New York real estate.


12. Significant increases in airport and building security contracts to private companies, much of it government funded.


13. Suppression of the media-sponsored Florida ballot recount and institution of “black box” voting machines – voting systems that do not have a verifiable paper trail.


14. Adoption of the US Patriot Act to, among other things, consolidate the banking and money laundering market share.


15. Cutbacks in retirement benefits and raiding/bankruptcy of the Pension Benefit Guaranty Corporation, Social Security and the Federal retirement systems.


16. Emergence of corporate media as primarily propaganda.


17. Explosion in expenditures for invisible weaponry – including HAARP, ocean, space and satellite weaponry with no citizenry understanding of the potentially frightening impact on human and other planetary quality of life and survival.


18. Significant opportunities for large law firms resulting from the continuing centralization of the economy through the US governmental apparatus.


19. Failure by the US Department of Justice to successful prosecute those responsible for Enron or to identify missing money and get it back.


20. Promotions for numerous military and government officials who had failed to protect the national security during the events of 9/11.


Look at the sources of income and financing of those who served in the Clinton Administration or the first Bush Administration, including Iran-Contra, or who serve in the second Bush Administration.

Look at the campaign funding sources of those who sit in Congress.

Look at the board memberships and other sources of compensation and investment profits of those who serve on the National Commission.

Look at the rising power of the companies who make money from war as opposed to companies that make money from healthy and happy citizens.

Ultimately you must conclude that for those who profit from the centralization of economic and political power, 9/11 was great for business.

9/11 can be said to be a significant national security success.

9/11 profitering generated what is easily estimated as the highest return on investment to campaign donors in the history of Presidential politics. The Bush war chest for 2004 speaks for itself.

The treason and murder of 9/11 has more than replaced the loss of Enron, the largest donor for the 2000 campaign.

Catherine Austin Fitts

Mon, 06/11/2012 - 05:58 | 2513708 jeff montanye
Mon, 06/11/2012 - 01:21 | 2513424 Cathartes Aura
Cathartes Aura's picture

love that quote - how is it that people still want to believe that everyone in elected government, or financial markets manipulating are all "bumbling idiots"?  that may be the appearance projected, but please - these are cunning, devious people, they're hardly stupid in the way we traditionally use "stupid" - why continue to pretend there are not "conspiracies" to maintain their control over?

it's the only perspective that actually makes sense

(edit: as DavidPierre's post more eloquently suggests)

Mon, 06/11/2012 - 07:13 | 2513791 Cui Bono
Cui Bono's picture

Lies, all lies.... Cui Bono is not latin.... Cui Bono is just an animal passing through.....

Seriously Iggy that is an excellent comment to repeat. The trail may not always be obvious or easy to follow. But it always tells the story. CB

Mon, 06/11/2012 - 07:49 | 2513850 Jim Quinn
Jim Quinn's picture

Broken record.


Sun, 06/10/2012 - 22:44 | 2513237 El
El's picture

I spend a lot of time traveling back and forth between upstate New York and Kentucky. Gas is always thirty cents a gallon cheaper in Kentucky...except this trip. Today it is the same price in Kentucky as it is in upstate, New York. Weird.

Sun, 06/10/2012 - 22:46 | 2513240 kekekekekekeke
kekekekekekeke's picture

someone should import and start a camel business in the US with those fancy Saudi camels none of that ugly Egyptian camel nonsense


get ahead of the curve


Sun, 06/10/2012 - 22:48 | 2513242 dolph9
dolph9's picture

Most of the oil use in the United States is not really needed in any meaningful sense.

Most people can sit at home with the telly and internet and make a few trips to the grocery store for the food stamp rations of the week and persist for some time.

The entire transcontinental tourism industry in the U.S., powered by oil, is an exercise in human wastefulness.  We do it because we can.

Before all is said and done, the pickups and SUVs will be abandoned, and we'll all crowd 4 to a Civic to go a few miles.  And we'll thank the lucky stars we haven't starved yet.

Mon, 06/11/2012 - 03:19 | 2513615 Poor Grogman
Poor Grogman's picture

Why not just walk?

That will make fuel last longer for pickup drivers, he'll if you are nice they might even give you a lift.

In the back of course...

Mon, 06/11/2012 - 06:00 | 2513709 jeff montanye
jeff montanye's picture

and then there is wilbur and orville wright's economic mainstay, the bicycle.

Sun, 06/10/2012 - 22:47 | 2513244 orangegeek
orangegeek's picture

WTI Oil has gone for a slide too.

Sun, 06/10/2012 - 22:49 | 2513245 jeff montanye
jeff montanye's picture

i had no idea wind power was so efficient!

let's wire up the buffalo commons.

Sun, 06/10/2012 - 22:52 | 2513251 HowardBeale
HowardBeale's picture

All of the above; all previous arguments are bullshit--missing the essential point by a civilization or two: The real end game in all this pseudo-analysis is: Average EROEI (for all resources)/Capita (world population). Think about it...

Until someone starts doing such calculations, these articles are just circle jerks.

Sun, 06/10/2012 - 22:53 | 2513254 blindman
blindman's picture

someone recently spilled the beans that the wash trades
were manipulating price above 100 per, again paper manipulation and
future market pocket stuffing. supply and demand
come into play eventually, not at the end of the day,
at the end of the fixed price, manipulated futures
contract price. where was that discussion? sheesh,
i think i heard it like two days ago?
maybe here.
On the Edge with Warren Pollock
Posted on June 9, 2012 by stacyherbert

Sun, 06/10/2012 - 22:53 | 2513255 rsnoble
rsnoble's picture

Meanwhile, as I said would happen in another post, futures are pumped and HFT's are shitting all over themselves to be the first one to trade 10,000,000 shares in the opening seconds. But no, everyone wanted to argue that it was bad news that Spain had to be bailed out. It's beyond me how anyone around here that's been paying any attention could come to the conclusion that it's anything but spectacular news for the precious markets. I share the same end game thoughts but really? I'd like to know how many fucking idiots were short over the weekend lmao.

Sun, 06/10/2012 - 22:54 | 2513257 googlenerd
googlenerd's picture

Too bad the only stuff I'm buying is vintage stereo equipment off craigslist to play my records so loud I forget WTF is happening across the pond...and in NY. April Wine is up next...

Mon, 06/11/2012 - 00:10 | 2513378's picture

There's a guy on my block, he lives for rock, he plays records day and night...



Sun, 06/10/2012 - 22:54 | 2513258 RobotTrader
RobotTrader's picture

Peak Oil will prove to be one of the greatest investment scams since Y2K.


So many guys were sucked into buying that theme, only to get burned over and over again.

Just compare the OIH with XRT and IYR the last 5 years.

And on an inflation-adjusted basis, natural gas, coal, and solar are trading at depression-era lows.

Sun, 06/10/2012 - 23:59 | 2513367 icanhasbailout
icanhasbailout's picture

anyone blaming today's economic crisis on oil supplies has a fucking screw loose

Mon, 06/11/2012 - 01:54 | 2513454 TheMerryPrankster
TheMerryPrankster's picture

Money is a proxy for work. Oil equals work.

Everything that happened in the 20th century happened because of cheap oil. WWII wouldn't have been possible without cheap petroleum.The freeways,commerce,suburbs,infrastructure,life styles,food,water,all come from cheap oil.

Finance is merely an illusion made possible by cheap oil.The mortgage fraud bubble economy was pricked by fraudsters, but it was built on cheap oil, about a centuries worth.


Mon, 06/11/2012 - 02:06 | 2513461 icanhasbailout
icanhasbailout's picture

The core problem is the creation of so much money that is not a proxy for actual work plus so much government interference that it has wrecked the price signals that organically regulate a free economy. This misallocates capital which leads to the mess we got now. Oil need have nothing to do with it.


Mon, 06/11/2012 - 06:06 | 2513713 jeff montanye
jeff montanye's picture

and the banksters instigated the "interference".  the only thing that will change the world's economic trajectory, even a little, for the better is to transparently reorganize the banks, wiping out shareholder equity, most subordinated debt and a good bit of the mortgage debt on which the house of fantasy cards is based.

Sun, 06/10/2012 - 22:55 | 2513259 geoffb
geoffb's picture

Ok if oil pumping only pays at $85 dollars a barrel, how come it only cost 20-30 dollars a barrel all the way until 2004? How were they covering their costs or did the cost of production suddenly go up 400% in just a few years?? Something doesn't add up.

Sun, 06/10/2012 - 23:10 | 2513280 Poor Grogman
Poor Grogman's picture

Feed back mechanisms at work?

Higher costs of the oil required to manufacture the equipment required to transport the equipment required to make the equipment etc etc......

Sun, 06/10/2012 - 23:49 | 2513343 Ignatius
Ignatius's picture

In time it perhaps will become common knowledge that oil (the Saudis, in particular) was always selling at $xx/barrel plus x amount of gold.  This allowed it to trade at the lower dollar amount.  I understand this was accomplished via direct off-take from hedged miners financed by oil (future oil for future gold).  This began to change as competition for gold increased.  The Arabs aren't stupid; they are ancient, intelligent and determined to acquire value (gold) for value (oil).

Mon, 06/11/2012 - 09:03 | 2514029 geoffb
geoffb's picture

I had not heard of that. Got any links Ignatius?


oh and who neg's a post for asking or answering legit question??

Mon, 06/11/2012 - 12:07 | 2514983 geoffb
geoffb's picture

Thanks! Great article. Makes me want to run out and buy more physical now. :)

Sun, 06/10/2012 - 22:58 | 2513261 lolmao500
lolmao500's picture

Bullish, they can only go up from here... war with Iran... bullish. Economy going back up (in 20 years) bullish... Printing? Bullish.

All bullish...except the ``depression`` part... when China collapses, the US collapses and Europe collapses... then yeah, oil might tank to 30$ or lower a barrel... (in real terms because who knows where the dollar value will be by then)

In other news, in Canada, oil dropped from 5.25/gallon to 5.02/gallon... even if the barrel dropped 20%... we're getting SCREWED!

Sun, 06/10/2012 - 22:59 | 2513264 q99x2
q99x2's picture

From the optimists at CNBC: 'The latest set of data on China’s economy released over the weekend indicate that authorities’ easing measures are working, with economist pointing to strong internal demand and investments as signs the country is avoiding a sharp slowdown feared by many in the markets.'

Bullshit. If anything they are preparing for WWIII.

Sun, 06/10/2012 - 23:00 | 2513266 rational
rational's picture

If the author thinks the 2008 recession was causes by oil prices, I'd like to know what he is smoking in his bong.

Mon, 06/11/2012 - 06:13 | 2513718 jeff montanye
jeff montanye's picture

well, rationally, a shot from $60 to $140 a barrel in less than a year, putting parentheses around the onset of recession, must be regarded as a possible aggravating factor.

Mon, 06/11/2012 - 15:51 | 2515807 SelfGov
SelfGov's picture

If the production of sweet crude oil could have kept up with demand since 2004 and the price never spiked, the housing bubble would still be... a bubble...


Plan Ahead - Plant A Garden

Sun, 06/10/2012 - 23:52 | 2513268 zorba THE GREEK
zorba THE GREEK's picture

My father rode a camel, and sometimes when no one was watching.......

Sun, 06/10/2012 - 23:10 | 2513276 El Tuco
El Tuco's picture

They got so much f'n oil in Alberta they are pouring it into the Red Deer River.

Fuck Yeah....who needs water when we can drink oil.....

Mon, 06/11/2012 - 06:17 | 2513725 jeff montanye
jeff montanye's picture

are they pouring it in or is it more seeping in on its own?  

as for water, not as much to drink because so much must be used to extract the oil.

wind power is more efficient right now (look it up in the post above).  alberta's got plenty of that and the red deer river doesn't get polluted as much.

Sun, 06/10/2012 - 23:14 | 2513289 Tom Green Swedish
Tom Green Swedish's picture

Question is. Why is gas still 4 dollars a gallon?  What a manipulated bunch of crap.  In 10 years when we are all riding around on fuel cells from Nat Gas and Coal we'll be laughing our asses off at the Saudis and how poor their asses are.  And how dry their country is.  They will be begging for 5 dollar dixie cups of water like it's Starbucks.

Mon, 06/11/2012 - 06:19 | 2513727 jeff montanye
jeff montanye's picture

those benighted saudis.  u.s. americans really are an exceptional people.

Sun, 06/10/2012 - 23:20 | 2513303 Triple A
Triple A's picture

since gas has dropped from 105 dollars a barrel to 85 dollars a barrel i have only seen gas prices near me drop from 4.39 to 4.23 no joke. Anyone else notice how gas prices have not budged even though it has dropped 20 dollars a barrel. I dont understand..

Mon, 06/11/2012 - 00:40 | 2513405 Bear
Bear's picture

Based on EIA statistics, gasoline deliveries to retailers are 50% of what they were in 2006. We should be swimming in gas. I don't understand either.

Mon, 06/11/2012 - 01:13 | 2513418 RmcAZ
RmcAZ's picture

Agreed... I think gas in my locale has dropped from around $4.50 to about $4.20... If the percentage was the same as the drop in oil prices it would be around $3.65... This is where the oll companies absolutely RAKE is when oil prices drop and gas prices trickle down slowly afterwards.

Mon, 06/11/2012 - 02:28 | 2513502 myshadow
myshadow's picture

$4.15 a gallon in Seattle  as of today 6/10/12

Mon, 06/11/2012 - 04:18 | 2513655 Lednbrass
Lednbrass's picture

I filled up Friday for $3.12 in SC. I felt ripped off afterwards, while driving to the airport the next evening I saw a truck stop along I-85 advertising for $2.99 cash price.

There is definitely something to be said for very low state gas taxes.

Mon, 06/11/2012 - 01:15 | 2513419 RmcAZ
RmcAZ's picture

Although a couple of the arguments that are out there for this are lower refining capacity (I heard awhile back that several large refineries were shutting down for certain periods of time) as well as the summer blends of gas for places like California anyway.

Sun, 06/10/2012 - 23:31 | 2513326 blueskies123
blueskies123's picture

Here in San Francisco, gas prices average $4.20/gallon and that's for unleaded. I WISH I could find gas at $3.60/gallon!


Gas prices in California average 15% higher on average than in the rest of the US, we have to pay thru the nose because the Texas oil companies HATE HATE HATE California.



Sun, 06/10/2012 - 23:34 | 2513329 Tom Green Swedish
Tom Green Swedish's picture

You think that's bad. Where I live in Chicago its 4.47 a gallon. Highest in the country.

Sun, 06/10/2012 - 23:52 | 2513364 otto skorzeny
otto skorzeny's picture

Chicago is turning into its usual hot-weather shooting gallery-and gangs of youths(be raciss to say their ethnicity on ultra-lib Chi. media outlets that are Obama water-carriers) are attacking tourists in the Loop-keep the seat warm -Rahm- until Richie's punk kid can be appointed king

Mon, 06/11/2012 - 00:37 | 2513401 Cathartes Aura
Cathartes Aura's picture

are the refineries still offline in CA?  isn't that what the price difference excuse is, that the refineries that make the "special blends" required by CA law are "in maintenance" and the one up in Washington suffered damage in a fire?

sadly, states have different laws about their "blends" and this gets passed onto the consumer/driver.

not saying there's not any manipulation going on - taking the CA refineries offline right before Memorial Day 3-day driving w/e for example - just that there's a lot of reasons cascading right now.

Mon, 06/11/2012 - 01:45 | 2513445 prodigious_idea
prodigious_idea's picture

About the same in Oregon.  Anything less than $4 would be a bargain.  But I don't think it's hate that sets prices.  Wait a minute.  Hawaii is about the same as California.  Yep, could be hate.

Mon, 06/11/2012 - 04:31 | 2513661 Lednbrass
Lednbrass's picture

Most of the people outside that state HATE HATE HATE it.

I actually read an article in one of the CA papers awhile back that it was voted most hated state in the country elier this year, it was hilarious reading all the comments from Californians covinced that it is jealousy.  It isnt, its outright contempt.

I also suspect that state regulations and taxes play a role in the prices for gas.

Sun, 06/10/2012 - 23:39 | 2513337 NidStyles
NidStyles's picture

The peak oil myth is still annoying and still ignores inflation.

Sun, 06/10/2012 - 23:47 | 2513344 Pike Bishop
Pike Bishop's picture

It would be so poetic if the US people and oil go down together.  Just more of what is already here.

In clearly the most fucking ridiculous failure of neurons regarding oil, the WTI price continues to be fed to the public, while every gallon of gas has been sold based on the Brent price. If it took $140/bbl oil to get $4.25 gas, why the fuck should people be happy that $85/bbl garners them $3.55/gal gas.

Based on that, people will just shit themselves with joy when they get $3.25 gas from a $35/bbl oil price.

Supply and Demand? WTF planet have you been on for 4 years? And WTF asset class has an unencumbered pricing mechanism active? Reality-based Supply and Demand curves don't exist without an unfettered pricing mechanism. And it sure-as-shit doesn't exist when Central Bank balance sheets have quadrupled, creating an incredible stock of money, without flow.

And for 4 years, none of that has crept into the oil contract market? That's just fuckin' amazing. Who should I thank? Genzler?

And here I thought Bond prices, AAPL, and oil contracts were reflecting unprecedented impossible correlations and global monetary/fiscal policy insanity.

And Goldman and JPM only have Hedge Desks, because they want to make less money by lending, rather than betting.

Hallelujah. Thanks for straightening that out for me.

Holy shit. Where's the Tylenol?

Sun, 06/10/2012 - 23:48 | 2513357 otto skorzeny
otto skorzeny's picture

it's all conditioning-$3 a gallon will look like a Godsend after 3 years of $4 a gallon

Sun, 06/10/2012 - 23:46 | 2513354 otto skorzeny
otto skorzeny's picture

they clicked it back up 30 cents on Thurs to $4 a gallon in SW chi burbs after big Dow jump on Wed-oh well-we're not a swing state here in commie IL

Sun, 06/10/2012 - 23:48 | 2513356 Milestones
Milestones's picture

Mr. Quinn, my thanks to you for a very informative and well written piece Excellent!                     Milestones

Sun, 06/10/2012 - 23:50 | 2513360 mcguire
mcguire's picture

"Anyone anticipating a long-term decline in fuel prices must be smoking tar sands in their bong. " lol!

Mon, 06/11/2012 - 00:19 | 2513383 bankruptcylawyer
bankruptcylawyer's picture

i walked 8 miles today and biked from columbus circle to the ikea at redhook and back. 

no gas. then again, my date had a motorcycle and was riding slow to keep pace. it was funny. she being so hot on her ride and me being on a bike.

eat it gas-bingers.  

Mon, 06/11/2012 - 00:24 | 2513392 ItsDanger
ItsDanger's picture

Oil is propped up by lack of selling.  Arab states have plenty of money to apply upward pressure in all contracts.  Potential ME conflicts?  Factor in emerging economies and you have a solid base in oil prices.  Would you sell or short?  Not likely.  Better off in the equities or bonds?  Hmmmm.

Mon, 06/11/2012 - 00:34 | 2513396 monad
monad's picture

My great grandfather rode a horse, my grandfather drove a Model T, my father drove a Buick, I leased a Cadillac Escalade, my son died in the Middle East fighting for Old Money, his son will never be born. 

Fucking-A right. Now you're beginning to catch on. We're the indians in this game.

Mon, 06/11/2012 - 01:44 | 2513444 TheMerryPrankster
TheMerryPrankster's picture

To the powers that be, the problem isn't too little oil to go around. The problem is too many people wanting oil.

The answers to, too many people, has always been war.

That should make the future clearer to see.

Mon, 06/11/2012 - 06:26 | 2513734 jeff montanye
jeff montanye's picture

too many people, soon to be too many old people, later not as many people.  no shit.

Mon, 06/11/2012 - 00:40 | 2513404 HomerToeclipper
HomerToeclipper's picture

Lindsey Williams has told us all the Elite will ltake the price of oil to $150-200 bbl... !

That's all I need to know and I believe Lindsey



Mon, 06/11/2012 - 01:22 | 2513427 malek
malek's picture

What type of EROI chart is that?
Solar collectors having a worse EROI than photovoltaic??

Mon, 06/11/2012 - 01:55 | 2513455 adr
adr's picture

$80+ to pull oil out of tar sands is total fucking bullshit. This entire post is bullshit. In 2005 not a single oil company made a claim that it would cost over $50 to extract oil anywhere on the globe.

It doesn't cost anywhere near $20 to pump oil out of a Saudi well. $100 oil is the product of loose monetary policy and relaxed tradng rules allowing rampant speculation to run wild. Any other argument is completly false.

I know engineers at Exxon. People designing rigs. They have said that if you told anyone ten years ago that oil would reach $147 a barrel, they would have locked you up in a insane asylum. The true cost of oil is what it takes to transport it after the rig is paid for.

Oil is no longer a commodity, it has become nothing but an investment scam. Just like every other worthless piece of paper supposedly connected to "supply and demand". That economic concpet no longer applies.

Does anyone really think global GDP is even close to accurate? At least 75% of economic activity is a figment of an accountant's imagination to pump up stock values for the inevitable dump. When you talk to a manager of a mall store and he tells you the average take for a day is $200-300, yet the corporation claims the stores each do over $1million in sales per year, something doesn't add up.

How much of the 90 million barrels of oil is actually consumed by real demand? I bet nowhere close. How much is just overproduction to be stored, or swapped, or bought by China for that rainy day? How much of the production or the consumption is just a statistic based on faulty information, a survey based on something following the tracking of something else?

You can't trust any chart that comes from any government source, or anybody with skin in the game. The entire global economy is a farce, a con to confiscate wealth and diminish the value of real labor.

I don't trust a single thing I don't get to see with my own eyes. Because what I do see has never matched the story those in charge have tried to pass off as truth.

Mon, 06/11/2012 - 06:33 | 2513739 jeff montanye
jeff montanye's picture

75% of economic activity is a figment of an accountant's imagination?  

but the (fully depreciated) price of extracting tar sand oil is $50 (well in 2005) not $80?

glad you clarified things.

Mon, 06/11/2012 - 02:36 | 2513498 Tom Green Swedish
Tom Green Swedish's picture

Has anybody but me noticed all USA/Europe's problems are because of two things; China/ Cheap Labor and Oil?  Nobody was complaining about the FED before this shit crisis took place. Nobody was saying gold is the next best thing since sliced bread.  Does anybody but me realize all these problems started with Bill Clinton?  Seems silly to me he even got elected because George Bush did the right thing and raised taxes. To Bush 2 the message was clear, lower taxes to get relected.  Why are George Bush and Bill Clinton friends now?

Mon, 06/11/2012 - 03:10 | 2513602 ebworthen
ebworthen's picture

Oh God I can hear it already...

"Lower gas prices a tax cut for Americans."

"This is bullish for consumer spending."

"This will be the thing that turns this economy around."


Talk to me when it is $1.49/gallon again or we aren't $16 TRILLION fucking dollars in debt or the Supine Court decides that corporations, in fact, ARE NOT individuals or citizens the way a working stiff is.

Die ponzi, DIE!

Mon, 06/11/2012 - 03:29 | 2513622 dvfco
dvfco's picture

Sad - When Bush was President, the MSM tried to convince everyone he was the cause for the pre-election drop in prices (as if he owned the Saudis - as opposed to just being a very, very close friend.)  

No, when this dumb motherfucker is running for re-election, we here lines like, 'his energy policy just may be paying off,"  or "the fear of what his green initiatives could do in a second term has big oil frozen." (Just paraphrasing)  

Meanwhile, my oil delivery company thought I was kidding when I said I could literally save money by bringing the 1930 coal boiler left in the basement of the apartment building I own back to life, at today's energy prices and assuming someone would deliver.  I listed to bullshit being shoveled all day by the MSM, I'd be glad to shovel coal if it would cut my heating costs by 1/2.

The price of oil is $80.  Iran cannot bomb us and they are no threat to us.

If they are a threat to other nations, i.e. Israel, let Israel pay to have us defend them.

A little known fact of history is that the Kuwaiti's owed Sadaam $30 billion - what they agreed to keep Iraq off their doorstep.  This truism is thrown out in history's wastebasket as it doesn't benefit the Israelis, our "BEST FRIENDS IN THE MIDDLE EAST."

My best friend in the Middle East would be as welcome in my house as my best friend from prison after I was released (this is all theoretical - please).  After being screwed for years in the can (excuse the double entendre), I wouldn't want them coming (again, sorry) to meet my mom.  

Israel is that friend.  When they formally apologie for killing and covering up the murder of the dozens of crewman on the USS Liberty they killed, formally acknowledge that Pollack was a spy 100% against America and allow us to execute him, and purge all US government offices of Zionist presence, then I'll give a shit about Iran. Until then Turkey is and will be my only remote friend in the Middle East.

Mon, 06/11/2012 - 06:47 | 2513756 lakecity55
lakecity55's picture

We just passed the anniversary of the Liberty.

As DeGaulle said of France it is more true of the Zionistas:

"We do not have friends, we have interests."

Watch for the SCOAMF to release that little Pollack bastard and betray us for the 678th time.

We're down to Mittens. At least he doesn't eat dogs.

We need to find some honest guy who, under hypnosis, admits he does NOT want to be president. If he can pass a background check, we tell him it's his Duty to be president for 2 years.

Mon, 06/11/2012 - 03:37 | 2513623 dvfco
dvfco's picture

Sorry - got a little carried away with being bent over by Israel.  

We need to get the fuck out of the Middle East with exception of 1/3rd of our nukes, which should be pointed all over there.  As an old friend of mine said - -pave the fucking place.  Nobody would miss a single fucking person in the entire middle east.  Then, make new wells, etc.  

Why are we beholden to, like, 20,000 sheiks in Saudi Arabia.  Literally - fucking nuke them and just agree in advance to split everything according to current need among all those who have imported over the past decade.  The, send John Paul Gettty (er, uh, Exxon/Mobil) in to take what's there.  It's a fucking desert oasis with 500 criminals steaing oil the oil and charging us through the balls - nuke them.

Likewise - the Israeli lobby is giving back to our Congressmen 80% of thr $10b or so that we send to them each year.  Anyone who has spoken out agains Israel has found that they have been outspent 10-1 in the next election.  Our US Congress is Isreali held territory - with the only exception being Anthony Weiner.  In that case, his one seat was Weiner-held - - - sorry. Mucho vino!

Mon, 06/11/2012 - 05:30 | 2513693 blueridgeviews
blueridgeviews's picture

Peak oil?  Come off it! People have been claiming peak oil since the 1920's when there were oil rigs all over Pennsylvania.

Every year new reserves are found in different places across the globe. We haven't even touched the shallow waters off the US's east coast.

No one knows when peak oil will arrive so why even mention it? To make oil prices go up? Stop the nonsense!

Mon, 06/11/2012 - 06:35 | 2513740 Redhotfill
Redhotfill's picture

But, but,  ...  the sky is falling!  ....

Mon, 06/11/2012 - 06:39 | 2513748 lakecity55
lakecity55's picture

Don't forget Soviet research into abiotic oil. I think it's probable. Of course, you cannot use it faster than the forces of pressure and heat inside the earth produce it.

The "news media?" Mostly incompetent and agenda-driven, no doubt. Real reporting is being done by bloggers.

One of my old Profs in school used to say  "a Journalist is an unemployed reporter."

In our darkened cell at work, where we are chained to our desks doing research all day, my partner blew up at CNBC a while back. Now he won't even let me listen to Bloomberg on satellite.

"It's all propaganda! You know the truth! Why do you want to listen to that Bullshit?"

All we do now is listen to religious radio blasting the SCOAMF. We put huge crosses up on the wall to ward off Evil. It's down to that.

Every time I go to the coin shop, all I see are other officers loading up.

Go long on lead. We did.

Mon, 06/11/2012 - 06:27 | 2513735 Moe Howard
Moe Howard's picture

Stopped reading after his quote about gasoline being $1.41 a gallon in 1998 as proof of "peak oil".

"The average inflation adjusted price of gasoline in 1998 was $1.41 per gallon, versus $3.55 today, a 152% increase in fourteen years. Over this same time frame the BLS manipulated CPI was up only 44%. If we are swimming in oil, as the MSM pundits claim, why the tremendous surge in price?"

1998 - Gasoline @ $1.41 gallon. Silver average price troy ounce $5.55 Price per gallon in 90% silver US coins: 3.5 US dimes or 35 cents a gallon.

2012 - Gasoline @ $3.55 gallon. Silver average price troy ounce $31.49 [ytd] Price per gallon in 90% silver US coins: 1.6 US dimes or 16 cents a gallon.

So the fact is gasoline per gallon is less than half the price it was in 1998 in silver coinage. I don't care how else you cut it, the dollar debasement makes gasoline look expensive when it has dropped in real price by more than half. No need to read any more bullshit. The drop in employment and disposable income results in greatly reduced demand in the developed countries.

Anyone who uses the manipulated, distorted and misleading BLS numbers to prove a point other than fraud is a fraud themselves.

Mon, 06/11/2012 - 06:53 | 2513763 jeff montanye
jeff montanye's picture

world crude production hasn't increased much since 2004 or so with higher dollar prices (what still buys oil, at least for a bit longer).  that looks kind of peakish. 

as an alternative reality.

Mon, 06/11/2012 - 07:59 | 2513864 sessinpo
sessinpo's picture

We  haven't even hit global depression yet. Things may seem bad, but they will get a lot worse. Shows you how out of touch these writers are. They are still part of the "It can't happen again. We are to smart and have learned from 1929" crowd. Yet here we are, similar things happening all over again from currency wars and massive physical gold movements and massive corruption and fraud prior to an absolute crash.

Mon, 06/11/2012 - 08:04 | 2513881 Cloud9.5
Cloud9.5's picture

If there are no problems with supplies,  why are we steam cleaning sand?


Mon, 06/11/2012 - 08:37 | 2513956 Cloud9.5
Cloud9.5's picture
In 1950 the United States had three capitals. The industrial capital was in Detroit. The economic capital was in New York. And the political capital was in Washington. The first has already fallen. The second is in its death throes. The third is shedding any vestures of a democratic republic and is morphing into a totalitarian state. As the first two capitals have gone so will go the third. If there is no bread, there is no point in holding a circus. The money is not real. Gold and silver are real. The scam of the century has been the forcing of the world’s centers of exchange to accept digital sums in lieu of gold and silver. The symbiotic relationship between power and profit is served by limitless digital currency. With a mouse click the power brokers can fund their patronage. Perhaps before our deaths, the world will come to recognize once again that real wealth is stored in commodities. Real wealth lies in food, energy, skills, tools and technology. The fulcrum for everything we have leveraged is energy. As energy supplies decline so to will decline all that we have leveraged. The west in one hundred years will look like Detroit.
Mon, 06/11/2012 - 08:54 | 2514005 RiverRoad
RiverRoad's picture

The oil companies took their profits up front.  It's called "planning".

Mon, 06/11/2012 - 09:10 | 2514051 Winston Smith 2009
Winston Smith 2009's picture

"It couldn’t possibly be the impact of peak oil."

Not yet.  The rise now is due to speculation with all of the "free money" flowing out of central banks worldwide, just as it was during the housing bubble.

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