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Spot The Odd Commodity Out

Tyler Durden's picture





 

Oil is dropping rapidly once again - while the rest of its commodity peers remain tied to the USD movements this week. The reason? More market speculation that the House of Saud is doing everything in its power to send crude to lows just ahead of the presidential election, even as Infinite QE takes the Dow to 36,000. Just as we wrote yesterday.

WTI is down 6.2% this week as Copper/Gold/Silver hang to USD's strength-implied weakness...

 

and from pre-Bernanke...

 

Chart: Bloomberg

 


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Wed, 09/19/2012 - 09:59 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

 

What are you going to do with your QE3?

 

Wed, 09/19/2012 - 10:02 | Link to Comment Dalago
Dalago's picture

wed

Wed, 09/19/2012 - 10:08 | Link to Comment francis_sawyer
francis_sawyer's picture

The algos read on the newswire that the power generating plants to fire the Chevy Volts were converting to burning FRN's for electricity conversion... Hence the move...

Wed, 09/19/2012 - 10:12 | Link to Comment Dalago
Dalago's picture

Bernanke would have more success stimulating the economy if he rode a tiny moped.  "Bernanke's Bearnanke Folly's"

http://americandad.wikia.com/wiki/Boris_the_Russian_Circus_Bear

Wed, 09/19/2012 - 10:13 | Link to Comment malikai
malikai's picture

I suspect all commodities will join Crude's bearishness.

Wed, 09/19/2012 - 10:18 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Better just focus on oil.....cause Grandma doesn't give a crap about gold.

 

Wed, 09/19/2012 - 10:42 | Link to Comment fuu
fuu's picture

Do you not actually bother to read the thread you are posting in anymore?

Wed, 09/19/2012 - 10:46 | Link to Comment francis_sawyer
francis_sawyer's picture

Not to mention that the ZH thread yesterday on this topic got 52,000 page views and almost 500 comments...

~~~

http://www.zerohedge.com/news/tungsten-filled-10-oz-gold-bar-found-middle-manhattans-jewelry-district

Wed, 09/19/2012 - 10:46 | Link to Comment fuu
fuu's picture

It can be hard to click on page 2 I guess.

Wed, 09/19/2012 - 10:54 | Link to Comment francis_sawyer
francis_sawyer's picture

lol

Wed, 09/19/2012 - 11:58 | Link to Comment NewThor
NewThor's picture

THERE IS A PAGE TWO????

Wed, 09/19/2012 - 12:04 | Link to Comment exi1ed0ne
exi1ed0ne's picture

Sadly, no page 6 though.

Wed, 09/19/2012 - 11:59 | Link to Comment Alpo for Granny
Alpo for Granny's picture

The hell I don't sonny!  It tastes better than this damned prime cuts in gravy!

Wed, 09/19/2012 - 11:15 | Link to Comment JohnKozac
JohnKozac's picture

The PPT can gyrate, mutate and sodomize oil, slv and gld all they want but food is soaring....seems barry can't control food prices.

Wed, 09/19/2012 - 14:17 | Link to Comment chart_gazer
chart_gazer's picture

commodity market is small.  ben is 2 steps ahead. they want $ in stock market, not commods.  will manipulate commods down. would expect precious metals next to get waxed.

Wed, 09/19/2012 - 16:34 | Link to Comment neidermeyer
neidermeyer's picture

Crude is a special case ... AFAIK storage facilities are full or near full , tankers are parked with full loads... the refined product has a shelf life that cannot be ignored and it must be produced for winter and summer...

Metals production is pretty much redlined at 110% you can't push it up...

Wed, 09/19/2012 - 10:31 | Link to Comment DaveyJones
DaveyJones's picture

"wed"

That reminds me, enough with the meaningless financial headlines, did anyone see the true news story today: "Was Jesus married?" Which got me thinking of a number of possible answers:

1. Yes, but it was an open marriage

2. Technically, but it turns out Mary M. had documents with 6 other guys so the whole thing was swept under the shroud.  

3. Yes and the temple reception was a blast, that is until the bankers showed up

 4. Who wants to know?

5. The marriage was simple but the divorce, oh vey, there was no end to the community property

6. The reception food was fabulous but the wine was watered down

7. If I answer, do you promise not to burn down my embassy?

8.

9.

10. 

Wed, 09/19/2012 - 11:15 | Link to Comment Stock Tips Inve...
Stock Tips Investment's picture

This happens when trying to "manipulate" the market. The crcen price movements in the short term. However, in the medium term, market forces will always prevail. In any case, we have a great opportunity when prices rise. And we can also benefit when prices fall. Finally, it is not our fault that the authorities committed many errors.

Wed, 09/19/2012 - 10:05 | Link to Comment nope-1004
nope-1004's picture

Hammering oil futures was arranged prior to the QE announcement.  All the broke government allies are in on it together, in an attempt to bail out the banks, keep the status quo, re-elect Osama, maintain power for the elites, and hide true inflation.

To believe otherwise - that there is some kind of a 'free' market' driving commodities - is a bit naive.

 

 

Wed, 09/19/2012 - 10:06 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It will work....

....for a few weeks maybe.

Wed, 09/19/2012 - 10:12 | Link to Comment francis_sawyer
francis_sawyer's picture

let's just call the SPR what it is... The "Incumbent Re-election Slush Fund"...

Wed, 09/19/2012 - 10:16 | Link to Comment malikai
malikai's picture

If you view oil as money, like I do, then the SPR is the world's biggest slush fund.

Wed, 09/19/2012 - 10:45 | Link to Comment tip e. canoe
tip e. canoe's picture

they don't call it the Petrodollar for nuttin.

question is: how big is the SPR actually?

Wed, 09/19/2012 - 10:41 | Link to Comment DaveyJones
DaveyJones's picture

funny, it's always been the "odd commodity"

I hear Neil Simon is working on a stage interpretation

Wed, 09/19/2012 - 11:15 | Link to Comment Flakmeister
Flakmeister's picture

No, thats commodity not comedy.....

Badda bing!

Wed, 09/19/2012 - 10:10 | Link to Comment aint no fortuna...
aint no fortunate son's picture

stealth spr release w/ no announcement - is that even possible?

Wed, 09/19/2012 - 10:47 | Link to Comment AGoldhamster
AGoldhamster's picture

either that - or somebody wants the oils down before Israel opens Pandoras box ... Sep 25th, if the rumors are not just that: rumors ...

Wed, 09/19/2012 - 11:19 | Link to Comment Lewshine
Lewshine's picture

Thank YOU NOPE!! I was wondering how long I would have to put up with all the witty stupidity post before someone NAILED the facts!!. I can tell you, there is not one trading vehicle that the Fed doesn't have complete control of at this point. Oil was run up for Goldman and their like to get ripe short positions on the QE annoucement...Down 7.50 in three trading sessions at this point (WTF)!?!?! Gold and Silver are being set up for a crushing too (and I'm a big holder of both physical and paper).

Ben has his Fu**ing fingers in everything that anyone on the planet can trade - (especially if the vehicle reveals inflation) Yet only a few in advance know what he intends to do before it happens. Helen Keller, you and I can see this - Why do all others struggle to get it??? Dow will hit 14,000 by October 15th, oil will trade around 78.00 and Gold will trade around 1690. BECAUSE BEN OWNS AND CONTROLS IT ALL!!! True price discovery is complete history!!

Wed, 09/19/2012 - 10:07 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

"I'm surpressing prices!"

"I'm issuing false flags through re-captured mass media!"

"Hookers and Blow!"

Wed, 09/19/2012 - 10:18 | Link to Comment CPL
CPL's picture

What am I going to do?

 

Watch political dogma hit the wall of reality Karma of supply.  Nothing to see here, take it for what it is.  Cheap oil for a little while.  

The price is elastic and so far with the dogmatic shinanigans on supply we've recieved a couple of things.

  • Refineries were shut down to skeleton bones.
  • The engineers that do the work to make the oil laid off and never looking back at the industry.
  • All countries are now blind to supply issues

 

Fer christ-sakes...I'm in farm country in Ontario and attempting to locate diesel was tricky this summer.  Can't imagine anything good comes from this except the price snaps back to where it should be.  WTI 180 and Brent 198

Wed, 09/19/2012 - 10:26 | Link to Comment JohnKozac
JohnKozac's picture

BTFD. Saudis can artificially suppress prices only so long. They need lots of $$$ for their military to hold their masses in check.

 

Where's Nancy P. complaining about the 'evil speculators?'

Wed, 09/19/2012 - 09:59 | Link to Comment mrktwtch2
mrktwtch2's picture

at this point it doesnt matter who wins..

Wed, 09/19/2012 - 09:59 | Link to Comment Spastica Rex
Spastica Rex's picture

Rumor has it that oil is abiotic.

Wed, 09/19/2012 - 10:04 | Link to Comment Flakmeister
Flakmeister's picture

It must be avatar that allows you to pull off the sarc like that...

"You were a little hard on the Beaver last night...."

Wed, 09/19/2012 - 10:07 | Link to Comment Ralph Spoilsport
Ralph Spoilsport's picture

LOL

Wed, 09/19/2012 - 10:17 | Link to Comment malikai
malikai's picture

That's Bob Dobbs. The world's greatest salesman and my personal savior.

http://www.youtube.com/watch?v=Qt9MP70ODNw

Wed, 09/19/2012 - 10:07 | Link to Comment Scalaris
Scalaris's picture

Fuck that, everybody knows that oil comes from comets.

- Immanuel Velikovsky

Wed, 09/19/2012 - 10:34 | Link to Comment gdogus erectus
gdogus erectus's picture

Exactly. Worlds in Collision. Everyone should read it. Guy was brilliant. He actually explains why Titan has a hydro carbon OCEAN. Hint: not from dead dinasours

Wed, 09/19/2012 - 10:37 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Right, now when does the next shipment from titan come in again?

Wed, 09/19/2012 - 11:16 | Link to Comment Flakmeister
Flakmeister's picture

This has to be the greatest example ever of Poeing a thread....

Tell us what you think of AGW, you can do it, you're on a roll!

Wed, 09/19/2012 - 10:23 | Link to Comment CPL
CPL's picture

It is but it requires the pressures contained in the earth to make it happen.  We can do it on the surface.  It would only take a year to make a limited volume that was already paid for and spent.  Growing oil requires the energy of oil to make it.  The magical natural process takes 150,000 years couple of miles beneath the surface of the planet with temperatures running fairly high for a sustained period of time.

 

From the production of abiotic oil...it requires about 1800 barrels of energy in joules to manufacture one barrel of oil.  People would be more sympathetic to burning kittens for household heat and power generation.

Wed, 09/19/2012 - 10:40 | Link to Comment Flakmeister
Flakmeister's picture

Hey! We could achieve energy independence and create jobs by getting people use vise grips and magnifying glasess (only during the day!) to convert kerogen into oil....

Wed, 09/19/2012 - 11:01 | Link to Comment NooooB
NooooB's picture

Woah!... BACK UP... We could be burning KITTENS?!...

Wed, 09/19/2012 - 10:45 | Link to Comment DaveyJones
DaveyJones's picture

it's also an antibiotic

and a dessert topping

Wed, 09/19/2012 - 10:49 | Link to Comment Spastica Rex
Spastica Rex's picture

It can also be used as part of a salad dressing.

Wed, 09/19/2012 - 11:19 | Link to Comment Flakmeister
Flakmeister's picture

You're soaking in it....

Wed, 09/19/2012 - 10:06 | Link to Comment LongSoupLine
LongSoupLine's picture

uh...you're a day late.  Tyler did a whole thingy on it yesterday.

Wed, 09/19/2012 - 10:23 | Link to Comment kill switch
kill switch's picture

Hard to keep ahead of these guys!! 

 

Thanks

 

LongSoupLine...

 

That's right,,,food stamps did away with your handle.

Wed, 09/19/2012 - 11:43 | Link to Comment LongSoupLine
LongSoupLine's picture

yep...for now.

Wed, 09/19/2012 - 10:00 | Link to Comment Jlmadyson
Jlmadyson's picture

To print so much and oil go the other way things are definitely amiss.

Wed, 09/19/2012 - 10:10 | Link to Comment kaiserhoff
kaiserhoff's picture

The House of Saud wants Israel to be a glass covered parking lot?  Who knew?

Jews for Barrack Hussein, what a concept.

Wed, 09/19/2012 - 10:26 | Link to Comment tmosley
tmosley's picture

The banks are taking a break from buying treasuries with printed money, and are instead shorting commodities and PMs.

Wed, 09/19/2012 - 10:01 | Link to Comment LongSoupLine
LongSoupLine's picture

 

 

yay...recovery.

Wed, 09/19/2012 - 10:01 | Link to Comment gjp
gjp's picture

And equities roll on trading toy stocks up or down a penny every now and then while the world boils around them.

Wed, 09/19/2012 - 10:06 | Link to Comment gjp
gjp's picture

I take it back.  Looks like the Fed fron-run brigade has had their breather, recharged, and ready to bid it up again.  Who's a seller in this market, really?  But it does make you wonder what the hell is going on with oil ... things are going just too swimmingly for these central bank devils

Wed, 09/19/2012 - 10:00 | Link to Comment Hedgetard55
Hedgetard55's picture

It ain't dropping at the pump, mofos.

Wed, 09/19/2012 - 10:14 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

Starting to.  Down .07 here in Knoxville (2%), TN since last Friday.

Wed, 09/19/2012 - 10:16 | Link to Comment Dr. Engali
Dr. Engali's picture

It's dropped .15 here in Indiana.

Wed, 09/19/2012 - 10:21 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

So far......so good.

 

Wed, 09/19/2012 - 10:18 | Link to Comment fuu
fuu's picture

Down $0.10 in MPLS since Friday.

Wed, 09/19/2012 - 10:01 | Link to Comment Robot Traders Mom
Robot Traders Mom's picture

Even though it is obviously artificial and short-lived, I'm happy to see my investments (metals) up and my cost of living (oil) down...

 

Central planners have fucked us long enough. It is nice to enjoy a day in the sun!

Wed, 09/19/2012 - 10:24 | Link to Comment insanelysane
insanelysane's picture

even if it is the eye of the storm, 2008-2012 storm hitting us, today the eye, and then the storm passing us 2013-2017.

Wed, 09/19/2012 - 10:36 | Link to Comment Nothing To See Here
Nothing To See Here's picture

Getting a break on oil prices in this case is like getting your daily ration of rice in North Korea. Just what it takes to keep you alive one more day and working for your masters until the day they choose to finally break you.

Wed, 09/19/2012 - 10:48 | Link to Comment cxl9
cxl9's picture

Sounds like you attribute far too much control of your life to other people.

Wed, 09/19/2012 - 10:25 | Link to Comment CPL
CPL's picture

Indeed, until the weather changes of course.  Could be tommorrow, but enjoy the gift for now.

Wed, 09/19/2012 - 10:03 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Global demand collapse and promises of more supply - A big FAIL on both accounts.

Wake me when it goes below $90 a barrel and then BTFD.

Wed, 09/19/2012 - 12:45 | Link to Comment beachdude
beachdude's picture

WTI at 92 and change is right at its 50 dma and well below the 200.

Brent making a golden cross right now.

BThisFD.

Wed, 09/19/2012 - 10:02 | Link to Comment AynRandFan
AynRandFan's picture

Could be oil traders are catching on that oil isn't a good currency hedge when demand is falling rapidly.

Wed, 09/19/2012 - 10:24 | Link to Comment ZeroPower
ZeroPower's picture

Nothing is a good 'currency hedge' against QE to infinity.

Wed, 09/19/2012 - 10:03 | Link to Comment Quintus
Quintus's picture

The Saudis better deliver this time or the credibility of their 'Excess Capacity' story is shot to hell.

I recall that they promised to pump more oil to replace the lost Libyan supply when that country was being 'Liberated'.  Didn't happen.  Won't happen this time either.  The Saudis are about to have their 'Swing producer' bluff called for the first, and last, time.

 

 

Wed, 09/19/2012 - 10:18 | Link to Comment Al Huxley
Al Huxley's picture

They've been watching Europe and come to the obvious and logical conclusion that it's only what you SAY that's important, there's no longer a requirement to DO anything.

Wed, 09/19/2012 - 16:46 | Link to Comment DaveyJones
DaveyJones's picture

both excess capacity and capacity stories are bull

Wed, 09/19/2012 - 10:03 | Link to Comment fonzannoon
fonzannoon's picture

oh god here comes the existing home sales recovery bullshit

Wed, 09/19/2012 - 10:07 | Link to Comment Dr. Engali
Dr. Engali's picture

Yeah I just got the news alert from CNBC on my phone. I think I have to wipe it off from their orgasm over the number.

Wed, 09/19/2012 - 10:38 | Link to Comment Nothing To See Here
Nothing To See Here's picture

The Matrix is really starting to lose it when they feel the need to push propaganda such as a recovery occuring mere days after the central planner announced his grand plan.

Wed, 09/19/2012 - 10:08 | Link to Comment kralizec
kralizec's picture

Yes, and equities are up...all is well.

/

Wed, 09/19/2012 - 10:08 | Link to Comment Dr. Engali
Dr. Engali's picture

I don't know if it's the house of Saud or not,but I do know that I am sick of this country making deals with the devil. I'm tired of so much outside influence on the politics of this country, along with our meddling in the affairs of others.

Wed, 09/19/2012 - 10:48 | Link to Comment Sparky_ZA
Sparky_ZA's picture

I am not American and I can say that many people outside America see you as the devil. Not you but your financial and millitary interventions. It would be interesting to take a poll of how peeps outside your country percieve America.

I think you may be suprised. 

I am selling my house because I think I see what the Fed QE will mean for my financial welfare here in africa. You print , we have to to maintain exchange rates. Food and energy inflation here hurts.

Wonderful fucking world where some fuck wit overseas ctrl P and I see the shit storm coming. So much for my freedom and liberty when my welfare in the hands of your fed.

 

 

Wed, 09/19/2012 - 11:11 | Link to Comment Gene8696
Gene8696's picture

You should quit voting for leaders based on their headdress. If you can vote?

Wed, 09/19/2012 - 11:08 | Link to Comment Gene8696
Gene8696's picture

Dup

Wed, 09/19/2012 - 22:46 | Link to Comment DaveyJones
DaveyJones's picture

we uh, will do anything to keep the empire fed. That's what empires do.

"The american way of life is non negotiable" Don't worry mr. cheney, the math will soon negotiate it for you

Wed, 09/19/2012 - 10:03 | Link to Comment fuu
fuu's picture

RECOVERY!

Wed, 09/19/2012 - 10:27 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

As was pointed out yesterday, Saudi Arabia doesn't have to increase production to get the price down.

THEY CAN JUST LOWER THE PRICE OF WHAT THEY SELL.  No refiner is going to insist on paying more than KSA will accept.  NYMEX means nothing.  It's Saudi oil.  They can price it any level they like and NYMEX will just have to adjust to it.

It's all bullshit and always has been.  KSA hit new highs this past summer on domestic consumption.  They subsidize oil domestically so consumption is climbing far faster than any increase in pumping they might claim.  This means they can say "sure, we'll increase production of oil, but sorry, we're going to burn it all ourselves and what goes out to the world market will decrease."

 

Wed, 09/19/2012 - 10:59 | Link to Comment malikai
malikai's picture

And, the Saudis can do this for now. But it won't work forever.

For those who don't understand:

http://en.wikipedia.org/wiki/Export_Land_Model

Wed, 09/19/2012 - 10:05 | Link to Comment hangemhigh77
hangemhigh77's picture

They would rather have oil explode up from $94 than $104 when they start the war.

Wed, 09/19/2012 - 10:24 | Link to Comment AL_SWEARENGEN
AL_SWEARENGEN's picture

Today's announcement by the CFTC will no doubt be akin to their last one as they hapily announce their intentions later today to vigorously look into the cause of this move just like they did earlier this week when oil plunged.  And will announce their findings in four years or after they have ruled on Silver manipulation.  Which ever comes first.

Wed, 09/19/2012 - 10:06 | Link to Comment Flakmeister
Flakmeister's picture

So the naked shorts come out.... look for an SPR release to cover their asses.....

Wed, 09/19/2012 - 10:06 | Link to Comment AC_Doctor
AC_Doctor's picture

Obammy calls in past reach around favors from his bankster butt buddies.

Wed, 09/19/2012 - 10:07 | Link to Comment SelfGov
SelfGov's picture

The world is about to fall off a cliff in production. The right side of the world's production curve is being drawn mathematically by tapping and depleting the least valuable energy sources.

Thanks to IrritableBowels to pointing out page 17 in the PDF below...

https://www.dmr.nd.gov/oilgas/presentations/ActivityandProjectionsWilliston2010-08-03.pdf

That, ladies and gentlemen, is what the right side of the world's production curve is going to look like.

Enjoy...

And plant a garden.

Wed, 09/19/2012 - 10:08 | Link to Comment SelfGov
SelfGov's picture

In fact, tapping oil resources that deplete like that GUARANTEES the shape of the right side of the curve.

Wed, 09/19/2012 - 10:29 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

No one dares challenge the extent of my doomsterism but accuracy is everything and you're wrong, guy.

Page 17 is the decline profile for a Bakken well.  That Is Not Globally Typical.  Shale wells are horizontal.  "Horizontals die vertically".  That chart shows the verticality production profile post peak of a horizontal well as it dies.

But most wells are not horizontals.  Conventional wells die much more gradually than this and somewhat by definition, conventional wells are the majority.

Presently producing wells in the world decline at about 5-6% per year on average.  The Bakken's well count is exploding and will serve to steepen that 5% number, but not by much.

So no, that's not what the right side of the world's production curve will look like.

Wed, 09/19/2012 - 10:39 | Link to Comment SelfGov
SelfGov's picture

I hope you're right.

I thought Bakken wells started with a high initial production and then fell quick. Essentially starting at the peak. From the looks of that graph and the words used to describe it I can't see where that is, "after" peak. It looks like it starts at day 0 of production and goes out from there.

Also, conventional wells produce the majority of the oil but with how quickly the Bakken is being drilled arent there going to be more unconventional wells than conventional?

Wed, 09/19/2012 - 10:41 | Link to Comment malikai
malikai's picture

Absolutely correct. I'm glad you saved me from pointing that out.

However, I think there is a case for a steeper decline, globally.

Vertical wells exhibit standard curves until you start doing secondary or tertiary EOR. Then we're right back to a vertical cliff. And what do you do when you peak? You start pumping.. Then injecting.. So on.

The end state is a rapid decline, followed by negative EROEI.

Wed, 09/19/2012 - 10:42 | Link to Comment SelfGov
SelfGov's picture

I think I will be challenging your doomsterism on this one :).

If we did just stick with conventional wells which deplete at 5-6% then the global decline rate would be 5-6%.

Instead we're also tossing these quick-to-deplete wells into the equation thus changing the slope.

I'm not sure I have the math skills necessary to actually calculate that slope though...

Wed, 09/19/2012 - 10:52 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

No, I addressed that.

The well count of horizontals is spiking and WILL affect the 5% number and steepen it, but that count is diluted by the much, much larger number of conventional wells accumulated over 100 years.

Many of these "producing" conventional wells are in someone's Texas back yard and produce 10 barrels a day.  Uncle Jake gets up in the morning, drinks his coffee, saunters out to his pickup truck and drives out to the wellhead on his land.  He flips a switch and pumps the 10 barrels out that accumulated via drainage overnight, then switches it off 10 minutes later and goes back home.

Presto, $1000 earned.  That's $365,000 per year for flipping a switch on for 10 minutes.

The point being, next year that well will pump 9.999 barrels/day.  The decline rate will be very shallow on a well that close to dead.  If you average that well with all the other counts, and you realize how many of these near dead wells there are, you don't get vertical post peak graphs for the whole world.

The average is about 5%/year.  Don't sneer at 5%/year.  It means we have to increase production 4+ million barrels/day from new fields just to breakeven.

Wed, 09/19/2012 - 11:00 | Link to Comment SelfGov
SelfGov's picture

Well it is the 5% per year that will lead to a (moar) broken economy which won't be able to buy those 10 barrels of oil from some guy in Texas. When that happens what happens to the curve?

Wed, 09/19/2012 - 11:08 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

The world of oil is much better understood if you ignore price.

The price of oil, as it were, is 5.6 million BTUs per barrel.  Expend less than that getting that barrel and you're ahead.  We are currently.

But we're expending more and more BTUs to get that barrel than we used to in the past and this is the underlying cause of the present Apocalypse sweeping the world.  

This is physics and it predates money.  Remember that economics is all handwaving bullshit and money creation on a whim.  Physics ignores all that.  

Wed, 09/19/2012 - 11:33 | Link to Comment SelfGov
SelfGov's picture

OMFG you're right I missed a "/d"

 

Sorry about that.

Wed, 09/19/2012 - 22:57 | Link to Comment DaveyJones
DaveyJones's picture

well said crash

now go out and teach the rest of the world

Wed, 09/19/2012 - 10:17 | Link to Comment Flakmeister
Flakmeister's picture

Pg 23 is quite telling as well....

Wed, 09/19/2012 - 10:44 | Link to Comment SelfGov
SelfGov's picture

That is scary. I've got a water geologist friend who's been pulling out her hair about that for 10 years.

Wed, 09/19/2012 - 10:39 | Link to Comment samsara
samsara's picture

And as a testimony to why we are really phucked, 

3 people gave you a minus just for pointing out graphs that show Geological realities. 

Truth hurts I guess. 

Wed, 09/19/2012 - 10:42 | Link to Comment Flakmeister
Flakmeister's picture

Based on pg 23, too bad Denial wasn't a river in the Dakotas....

Wed, 09/19/2012 - 10:50 | Link to Comment samsara
samsara's picture

Yes, and page 17 show how much the Bakken will help.  400,000 barrels a day.

30 plus years of  fartin around with the field and that is the best it gets. 

400,000.     and we use 15-18 MILLION barrels a day.

400,000 means as much as fly shit on a cannon ball.  It's a rounding error on our consumption

BAKKEN WILL SAVE US.

Wed, 09/19/2012 - 10:57 | Link to Comment SelfGov
SelfGov's picture

Actually they pumped upwards of 500,000 barrels out of the Bakken in June.  That is monthly, not daily.

What the Bakken produces in a month the world consumes in 12 minutes.

Wed, 09/19/2012 - 11:05 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

North Dakota reports 609K barrels Per Day in July.  

They will be rolling over soon.  There is some evidence accumulating of it, but the number is 600K bpd.  Not 600K b p month.

Wed, 09/19/2012 - 11:31 | Link to Comment Flakmeister
Flakmeister's picture

An analysis will be coming out at TOD soon that will show that the initial flow rates from the Bakken wells have declined nearly 20% over the past 5 years.... In other words, the low-hanging fruit of the Bakken has already been picked....

Wed, 09/19/2012 - 23:04 | Link to Comment DaveyJones
DaveyJones's picture

this one was a good anticipation

http://www.theoildrum.com/node/8697

Wed, 09/19/2012 - 11:51 | Link to Comment SelfGov
SelfGov's picture

OMFG you're right I missed a "/d"

Sorry about that.

Wed, 09/19/2012 - 12:09 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Don't sweat it SelfGov.  The terminology and units guarantee a mistake now and then.  Like "production".  There is no production.  There is extraction.

Wed, 09/19/2012 - 10:07 | Link to Comment EvlTheCat
EvlTheCat's picture

Anyone who can post a picture should post a "MISSION ACOMPLISHED" pic up.

Wed, 09/19/2012 - 10:12 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Or a picture of a dead Osama.....and that picture of Barry with that cigarette dangling from his lips.

 

 

Wed, 09/19/2012 - 10:09 | Link to Comment hangemhigh77
hangemhigh77's picture

I wonder what the futures are on horses?

Wed, 09/19/2012 - 10:17 | Link to Comment kaiserhoff
kaiserhoff's picture

Depends on the market for Purina.  Sad but true.

Wed, 09/19/2012 - 10:13 | Link to Comment FubarNation
FubarNation's picture

With all the shit about to hit the fan in the ME this smacks of manipulation down to blow out longs in prep for the money shot.

 

 

Wed, 09/19/2012 - 10:13 | Link to Comment GoldbugVariation
GoldbugVariation's picture

It looks like it's just big speculators opening/closing positions based on statements by the Saudis that they will increase production, there were rumours on Monday, one press report on Tuesday, and it's in the MSM (Financial Times etc) today.

This will have a half-life of a day or two, like every other piece of 'news' driving the markets at the moment.

A few days from now it will be some other piece of news pushing oil up again, maybe falling production at North Sea fields, increased risk of war in the ME, or a hurricane in the Gulf.

Meanwhile the consumers will keep on consuming oil, and the producers will keep on pumping it at the same rates they are currently pumping.

Wed, 09/19/2012 - 10:38 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

"Meanwhile the consumers will keep on consuming oil, and the producers will keep on pumping it at the same rates they are currently pumping."

You do realize this doesn't work?  The planet added 1 billion people from 2000 to 2010.  That's about 275,000 PER DAY.

Pumping at the same rates they are pumping is not good enough.  That's about what they've been doing since 2005.  

Now you understand where the upheaval came from.

Wed, 09/19/2012 - 23:07 | Link to Comment DaveyJones
DaveyJones's picture

and the wars and the Patriot Act and everyone shutting up about all the banker and government crime and.... 

Wed, 09/19/2012 - 10:13 | Link to Comment pods
pods's picture

By the time the air is out of this debt bubble we are going to be drowning in oil.

No need to drive to the job you no longer have.  Unless we are all going to pull a Falling Down.

pods

Wed, 09/19/2012 - 10:13 | Link to Comment Nawaralsaadi
Nawaralsaadi's picture

The more Saudi Arabia pumps the faster their oil depletes and the less spare capacity the world has, they are and they will throw everything at the oil price yet Brent (the real oil price) is still way above $100, I can’t imagine how would Brent react once the market understand that they have no more bullets. 

Wed, 09/19/2012 - 10:36 | Link to Comment samsara
samsara's picture

Yes, and the constant is that we pumped 85+ million barrels today that will NEVER be pumped again.

Regardless of the price.  85 yesterday, 85 today,   1 cubic mile a year that will never be pumped again.

Once it's gone, it's gone. 

Wed, 09/19/2012 - 10:44 | Link to Comment Flakmeister
Flakmeister's picture

Yeah, but we got all those neat plastic shopping bags that we can scoop up dog shit with, not to mention those nifty collapseable water bottles for the effort...

Thu, 09/20/2012 - 05:08 | Link to Comment gggunchi
gggunchi's picture

The US has over 400 years of oil in the continent alone (+ Alaska). 

Ask me how much I care about the porcupine caribou or Spotted Owl, or Delta Smelt, or whatever animal the eco-fascists are trying to save.  

 

The answer . . . zero?  Can I fill up my beemer for less than $100 a tank? If so, I am happy.  

Thu, 09/20/2012 - 08:38 | Link to Comment Flakmeister
Flakmeister's picture

Are you ignorant or do you simply make shit up?

Wed, 09/19/2012 - 10:16 | Link to Comment supermaxedout
supermaxedout's picture

Its time to start to print oil. Uups, this happens already in the future markets. Problem solved!

Wed, 09/19/2012 - 10:16 | Link to Comment khakuda
khakuda's picture

Would you rather own piles of paper money in Euro, Yen or Dollars or oil?

Wed, 09/19/2012 - 10:30 | Link to Comment pirea
pirea's picture

you mean, paper oil? it is the same

Wed, 09/19/2012 - 10:18 | Link to Comment phyregold
phyregold's picture

Seriously BTD

Wed, 09/19/2012 - 10:19 | Link to Comment Hmm...
Hmm...'s picture

I doubt that the Suads care who wins the Presidential election.  they will come out just fine with Obama, and just fine with Romney. 

Instead, a lot of people are looking at the obvious slowdown in the economy, and what do people use less when the economy sputters?  oil.

Wed, 09/19/2012 - 10:23 | Link to Comment hangemhigh77
hangemhigh77's picture

We need oil so we can be further impoverished thru cap and trade.

Wed, 09/19/2012 - 10:27 | Link to Comment hangemhigh77
hangemhigh77's picture

They would never manipulate a market. Ask Gary Gennsler, he would never lie.

Wed, 09/19/2012 - 10:29 | Link to Comment gofigure
gofigure's picture

Won't be using oil soon ... 

Wed, 09/19/2012 - 10:39 | Link to Comment LawsofPhysics
LawsofPhysics's picture

many have been saying this for 40+ years.  Any new evidence to actually present?  We await you insight...

Wed, 09/19/2012 - 10:31 | Link to Comment dwdollar
dwdollar's picture

The question is... Can the manipulators pound oil down long and hard enough to significantly affect gas prices?

Wed, 09/19/2012 - 10:34 | Link to Comment debtor of last ...
debtor of last resort's picture

My car blew up, guess what, my garage found a piece of tungsten in the gastank.

Wed, 09/19/2012 - 10:35 | Link to Comment oldmanofthesee
oldmanofthesee's picture

Let's see....... Obama= no Keystone pipeline, Romney=Keystone pipeline. Yup, sounds like the Saudis are on board.

Wed, 09/19/2012 - 10:36 | Link to Comment icanhasbailout
icanhasbailout's picture

what happened to all the oil the moneymen hoarded in rented tankers a few years back?

Wed, 09/19/2012 - 10:40 | Link to Comment Meesohaawnee
Meesohaawnee's picture

so now its quite obvious crude is grossly manipulated which begs the question. .. why wasnt it manipulated down in 07? or even most of this year when fundaments sucked, main street was begging for mercy, or ever for that matter before its sent businesses to insolvency?

Wed, 09/19/2012 - 11:12 | Link to Comment tok1
tok1's picture

Iron ore and coal both have had large declines ( over 30%).
Yeaterday shell said demand from china is down to recession levels.
Today bhp head said china demand for iron ore
is 1/2 of last year now.
So china is having hard landing even if they refuse
to show it.

Gold and silver are as you guys always say
real store of money so QE is making demand.

The industrials are falling as demand from china
crashes.

I think it's that simple QE.. plus no demand equals
strong precious metals weak industrials/ energy.

Wed, 09/19/2012 - 12:05 | Link to Comment amadeusb4
amadeusb4's picture

Because bloated Oct contract delivery has nothing to do with it? Must be that evil Obama trying to get reelected to enact his real agenda that he didn't have time for in the last 4 years.

 

The economy is tanking faster than expected and commodity traders got caught with Oct contracts that they have no intention of taking ownership.

 

 

Wed, 09/19/2012 - 12:30 | Link to Comment ejmoosa
ejmoosa's picture

http://atlantagasprices.com/retail_price_chart.aspx

 

Add oil prices to the chart and display for the longest time period available.

 

See if you can spot the signal of an impending recession in the chart above.  I bet you can.

Wed, 09/19/2012 - 12:50 | Link to Comment Montezuma
Montezuma's picture

Dont buy the "election" bullshit, but what I buy that world economy is SOOO weak that it cant handle higher oil. The princes are scared that the house of cards come crumbling down...

Wed, 09/19/2012 - 13:48 | Link to Comment Venerability
Venerability's picture

Everyone knows it's incredibly irresponsible behavior, because derivative and leverage-induced moves in one direction beget equally swift derivative and leverage-induced moves in the other direction.

I think the Obama-ites will be much more prudent than the McCain supporters were in 2008, however, and not risk its going too far and bleeping the markets.

Note that while Paper Oil is going haywire, the US quietly approved exempting Japan and most of the Eurozone again from serious Iranian Oil sanctions.

Wed, 09/19/2012 - 14:12 | Link to Comment Young
Young's picture

The Saudis are just playing, they don't have the guts to risk hurting future (limited) Ghawar production. Fade the dip. Move on.

Wed, 09/19/2012 - 14:52 | Link to Comment Grand Supercycle
Grand Supercycle's picture

Due to QE3 and short covering spikes, all these daily charts are extremely overextended & significant correction expected very soon ~ SPX, NZDUSD, GBPUSD, AUDUSD, COPPER, CRUDE, GOLD, SILVER.

http://www.zerohedge.com/news/2012-12-24/market-analysis
http://trader618.com

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