Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on August 20, 2015
The Peak Oil Crisis: A $4 Trillion Hole
Last week reporters at the Wall Street Journal sat down and did some arithmetic. They looked at how much oil was selling for in the spring of 2014 (over $100 a barrel); looked at what it is selling for today (under $50); and concluded that if prices stay low for the next three years, the global oil industry and the countries it finances will be out $4.4 trillion in revenues. As these oil companies, nationalized and publically traded, will be producing roughly the same amount of oil in the next few years, the $4 trillion will have to come mostly out of profits or capital expenditures.
This is where the problem for the future of the world’s oil supply comes in. The big oil companies, especially those that export much of their production, have been doing quite well in recent years. National oil companies have earned vast profits for their political masters. Publically traded ones have developed a tradition of paying out good dividends which they are loathe to cut.
This leaves mostly capital expenditures on exploring for and producing more oil in coming years to take a dive as part of the $4 trillion revenue hit. Even if oil prices of $50 a barrel or less do not continue for the next three years, this still works out to a revenue drop of $1.5 trillion a year or about three times the planned capital expenditures of some 500 oil companies recently surveyed.
The International Energy Agency just came out with a new forecast saying that while current oil prices have the demand for oil products increasing rapidly, there is still so much over-production that the oil glut is expected to last for another year or more before supply/demand comes back into balance. The return of Iran to unfettered production would not help matters.
In looking at the next five years there are several trends or major issues that are likely to impact the supply and demand for oil. First is the recent price collapse that no longer makes it profitable to start projects to produce new oil, most of which now comes from deepwater, tar sands, or shale oil fields and is far more expensive to produce than “conventional” oil. As a result, investment in new oil production projects has dropped substantially in the last year and is likely to fall further.
On the demand side of the equation China is the biggest unknown. For the last 30 years the Chinese have enjoyed unprecedented economic growth, but recently the “world’s factory” has not been doing as well. Its government has been thrashing around wildly trying to stimulate growth and fend off a collapse in its stock market. Some believe China is a huge economic bubble that is about to collapse taking much of the world with it, and obviously reducing its ever-increasing demand for more oil.
The other 800-pound gorilla looming out there is climate change. Except for the drought in California and the storm that flooded New York a few years back, much of America and China for that matter has not been hurt badly enough by anomalous weather to reach an agreement that stopping climate change is the number one priority of all of us. Reports of “feels like” 159°F coming out the Middle East this summer have little impact on those convinced that climate change is a hoax. Should the effects of climate change worsen in the near future to the point that “do something before life on earth becomes impossible” becomes the majority perception of the issue, consumption of fossil fuels could be severely restricted. Although not widely appreciated, there do seem to be viable alternatives to fossil fuels waiting to be exploited.
The violence in the Middle East has grown worse in recent years. Although oil production in some areas has been restricted by geopolitics and violence, most of the oil continues to be produced. It is useless to talk about the next five years in the Middle East; however, we should keep in mind that there are at least a half dozen confrontations going on in the region that could morph into situations where oil production becomes more restricted.
When we net this all together, what do we have? Conventional wisdom currently says that oil prices are likely to be closer to $50 a barrel than to $100 for the next year or more. Capital spending on new production to offset declining production from existing oilfields is likely to drop still further leaving us in the situation where depletion may exceed the oil coming from new wells or fields. This is the argument that those who believe that we are at or near the all-time peak of world oil production about now are using.
The International Energy Agency says that the demand for the cheaper oil is rising rapidly, that production of shale oil currently is falling and the rest of world’s production is relatively static so we should be seeing oil prices rising again by 2017. This is where the turning point in the history of oil production could occur. In recent history rising prices have led oil producers to increase drilling for new oil production again. However the next time around, as mentioned above, there are new factors that may come into play. Will China be increasing its demand for oil in another two years? Will the Middle East still be exporting as much oil, and producing oil given the turmoil and the need to increase air conditioning? Will the world have decided the time has come to clamp down seriously on carbon emissions?
If global oil production does reach some kind of a peak this year and is lower in 2016, can it recover to reach new highs in the years following? Anything from inadequate investment stemming from persistently low oil prices to a major conflict in the Middle East could keep production from rebounding to new all-time highs. We are living in interesting times and just could see peak oil before we realize it.
91 Comments on "The Peak Oil Crisis: A $4 Trillion Hole"
Truth Has A Liberal Bias on Thu, 20th Aug 2015 12:27 pm
Tom forgot to mention how Rossi and his ecat low energy fusion device that takes nickel and hydrogen plus 2 times atmospheric pressure and a small electric current is going to produce a large electric current for free and save us from our energy crisis.
shortonoil on Thu, 20th Aug 2015 12:34 pm
We posted this 4 days ago:
08/16/15 PO News
Approaching A Global Deflationary Crisis?
Anyone with any sense for global economic trends ought to be worried. The signs are everywhere of a serious deflationary crisis.
A deflationary crisis is now baked into the cake. One look at the petroleum industry confirms it. Determining how the industry, or any oil producer is fairing is quit simple. You take their profit that was generated during the last high priced year (such as 2013) and divide by the number of barrels produced. That gives profit per barrel for that year. Then subtract the difference in per barrel price between now, and then. That gives present profit, or loss per barrel. The present spread in prices is now about $55. If you find a producer that was making $55/ barrel in 2013, they were making a 43% profit on their gross sales. The industry has historically turned a 5 to 10% profit on gross sales.
The Etp Model, which is a best case scenario, projects a downward trend in petroleum prices from 2012 forward:
http://www.thehillsgroup.org/depletion2_022.htm
The WSJ is probably being optimistic, losses over the next four year will probably be greater than $6 trillion. Even if prices revert to our curve above, the industry will never be able to recoup the losses it is now taking. The oil age will end when producers can no longer make a profit producing petroleum.
http://www.thehillsgroup.org/
BobInget on Thu, 20th Aug 2015 12:43 pm
If oil stays this low for another five years, We will be back to only a hand-full of oil companies.
One by one, picked off for pennies on the loonies.
On the bright side, Saudi Arabia will need to cut back on arms purchasing. Russia might trying to build decent consumer goods. Farmers might make good money again. GM might bring back the Hummer so daddy can play soldier.
It’s clear to me now, we will never run out of oil.
Long as we have great PR people telling us so.
BC on Thu, 20th Aug 2015 12:56 pm
Speaking of the potential for another deflationary event, gentlemen, the deterioration in the breadth of the equity market internals since the beginning of the year have only occurred at cyclical tops or at the very early stages of bear markets.
In fact, the current stock market is exhibiting a list of coincident conditions occurring only twice in US stock market history going back to the early 20th century: 2007 and 1929.
With the exception of non-financial debt to GDP, today’s conditions also occurred in 2000.
IOW, we now have the same conditions that coincided with the tops that preceded the largest US stock market crashes in history.
Consider how much the central banks are going to print the next time.
Surreal.
rockman on Thu, 20th Aug 2015 1:39 pm
So clever of the WSN to connect the dots to oil prices, capex outlays and drilling activity. It would all the more impressive if they had forecast this potential 2 years ago. But always easier to report a train wreck after it happens before when you see it speeding to a washed out bridge. LOL.
penury on Thu, 20th Aug 2015 1:40 pm
As long as “money” can be produced by CBs at the touch of a keypad, price is not important. National oil cos will be given all the support that they need to remain operational. Oil will remain in a ‘glut” however, consumers will became endangered. Peak consumption is probably a greater threat than peak oil in this economy. As far as alternative energy does “Show me the money.”
BC on Thu, 20th Aug 2015 1:55 pm
penury, peak consumption is the other side of Peak Oil, i.e., the increasing energy cost of energy extraction that does not permit growth of real GDP per capita in order to justify ongoing growth of oil production (and increasing oil consumption by the energy and energy-related transport sectors).
The 5- and 10-year average price of WTI is $100-$105, a price that historically is 2 1/2 times or more the price that has permitted the 5- to 10-year growth of real GDP per capita.
So, peak consumption is a function of the overall economy being incapable of growing in real terms per capita at the high price of oil, which in turn makes the cost of energy extraction unprofitable, resulting in production per capita peaking and eventually declining to converge with the level and rate of growth of demand outside the energy and energy-related transport sectors.
Peak Oil remains largely misunderstood.
Jerry McManus on Thu, 20th Aug 2015 2:08 pm
Resource depletion. Climate chaos. Overpopulation. Industrial pollution. Ecosystem collapse. Economic collapse. Food crisis. Water crisis. Dying forests. Dying oceans. Dying planet.
Pick your poison.
I know I’m probably a little bit too fond of pointing this out, but isn’t it funny that this is more or less exactly the scenario presented in the Limits to Growth study some 40-odd years ago?
It’s really not that hard to grok, any civilization as dependent on non-renewable resources as we are would probably fall into the same progress trap.
And sure enough, here we are, right on schedule our lifeblood is becoming so costly (and no I don’t mean the price in worthless dollars) that it is literally sucking the life out of us.
No worries, we are not the first species to enjoy the roller coaster called overshoot and collapse, and we probably won’t be the last.
idontknowmyself on Thu, 20th Aug 2015 2:40 pm
Some energy can be cut down such as stopping Ipad production, shutting down car manufacturing, putting an high taxes on gasoline to discourage cars driving. This energy can be redirected to extract unprofitable oil.
I agree with penury, money is not a concerned if we are wise enough to starve some part of the system from energy and use that energy to extract unprofitable oil.
That is what energy balance is all about, finding useless energy like building Ipad and redirecting this energy to survival of society like extract tar sand.
Debt is not a concerned, good efficient management of energy or good efficient management of the energy balance equation is.
I agree with penury on this.
shortonoil on Thu, 20th Aug 2015 3:36 pm
“As long as “money” can be produced by CBs at the touch of a keypad, price is not important. National oil cos will be given all the support that they need to remain operational. Oil will remain in a ‘glut” however, consumers will became endangered”
By our calculations it will cost the world’s economies $39 trillion over the next ten years to keep oil production operating. That would translate into an expansion for the balance sheets of the world’s CBs by about 3 times. To accomplish its present balance sheet explosion they have needed to buy up a good sized portion of the world’s sovereign debt. In essence the world’s CBs are rapidly running out of liquid assets to acquire. Since a debt backed currency can only be backed by debt, when you run out of debt to acquire you have run out of currency. The expansion of the monetary system is not infinite; nothing is!
Nony on Thu, 20th Aug 2015 3:47 pm
POD, taking a 60% fist to the face. Woot, woot!
Dodge, ram, hemi!
https://www.youtube.com/watch?v=4bHZRSlhJxY
Davy on Thu, 20th Aug 2015 5:02 pm
How about the carnage on Wall Street! You got to have brass balls to be a corn on a day like this.
GregT on Thu, 20th Aug 2015 5:15 pm
“That is what energy balance is all about, finding useless energy like building Ipad and redirecting this energy to survival of society like extract tar sand.”
Society as we know it is not sustainable, and will not survive indefinitely. The longer we pursue BAU, the more damage we do to the planet Earth, and the more likely that we will cause the near term extinction of our species. Some 80% of known remaining fossil fuel reserves must stay in the ground, or we will create hell on Earth within most of our lifetimes.
Davy on Thu, 20th Aug 2015 5:20 pm
The horror, the horror, the horror
Makati1 on Thu, 20th Aug 2015 8:07 pm
I think we are about to begin the second act of the extinction play. Will there be a fat lady to sing at the end?
Fat Lady on Thu, 20th Aug 2015 9:53 pm
TRA-LAAAAAAAAAAA
Apneaman on Fri, 21st Aug 2015 12:26 am
Oil Companies Sit on Hands at Auction for Leases
“HOUSTON — With oil prices collapsing and companies in retrenchment, a federal auction in the Gulf of Mexico on Wednesday attracted the lowest interest from producers since 1986.
It was the clearest sign yet that the fortunes of oil companies are skidding so fast that they now need to cut back on plans for production well into the future.
The auction, for drilling leases, attracted a scant $22.7 million in sales from five companies, but energy analysts said that came as no surprise on a day when the American oil benchmark price plummeted by more than 4 percent.”
http://www.nytimes.com/2015/08/20/business/oil-drillers-sit-on-hands-at-auction-for-leases.html?emc=edit_th_20150820&nl=todaysheadlines&nlid=38394423&_r=1
joke on Fri, 21st Aug 2015 12:48 am
The FED and Treasury have been taking great steps o try to stimulate the US to buy Chinas output but the consumer has spent most of the last ten years avoiding overspending because they are not stupid. A whole generation got burned in 07/08 they don’t just forget that.
It’s also astonishing to me why the mass media is not reporting the role that globalisation is playing in this developing situation, the fact that China and America and Japan and EU are so closely linked now is worth commenting on, but that would lead to discussion about the need for a global solution.
Despite almost zero interest rates and growing gdp, the situation has always been and remains very fragile, because an interest rate hike was supposed to signal a boom for the economy as it approaches a new election cycle instead the lack of a hike signals a weak recovery and while it’s good for high risk/return businesses like shale oil, low interest rates signal low returns for banks in say the housing sector where they seem to want to return to. A housing boom is the easiest way to show normal people that things are going well, they see cranes, they see local people getting jobs after years of no work etc it’s a trick of the eye to prevent the hand from ticking that more radical candidates box.
Bloomer on Fri, 21st Aug 2015 1:19 am
The big corporations got their way. Despite more jobs creation, wages remain stagnant. The restless consumer is still on life support. As much as the Federal Reserve would like to pull the trigger with a rate hike, they don’t want to slow an already anemic economy.
Japanese deflation is here to stay.
charmcitysking on Fri, 21st Aug 2015 2:23 am
“National oil companies have earned vast profits for their political masters.”
Had to laugh at that
Makati1 on Fri, 21st Aug 2015 8:37 am
Manila is showing all the signs of approaching a peak. I look from the roof deck of my condo tower and I can see at least 40 towers going up. Eight within two blocks. Some are condos. Some are office. They are owned by the big banks here. I resisted buying one when I came here seven years ago because I saw that they would be worthless in the not too distant future. However, the rent I paid would soon have paid for the one I live in. But, there are so many for sale now, I would not have gotten my investment back if I could have sold it at all.
Seven years ago they required 20% down plus fees. Now it is 5% and all kinds of sales gimmicks, like free trips, raffles, no fees, etc.
The paperwork for the farm is getting closer and closer to being able to build. You would not believe the hassle these past three years. The land was free but the work to get the inheritance brought forward 40+ years through birth certificates of dead parents and siblings, agreements for the sibling’s portions, road right-of-way, payment of fees and back taxes, etc. Soon about five hectares will be in clear ownership of my partner. The cost in time is unknown, but the cost in Pesos will be about 200,000 or about 4,400 USD. About 12.5 acres with two springs, 250 feet above sea level, five miles from the Pacific, good permaculture land, beautiful views, for $4,400 is a very good deal. I paid more than that for one wooded acre 40 years ago.
Davy on Fri, 21st Aug 2015 10:20 am
God I hope so Makster. When you get out of your two room Makati slum apartment and into your mosquito infested jungly lair maybe we won’t have to endure your dementia on a daily basis.
BC on Fri, 21st Aug 2015 11:16 am
“God I hope so Makster. When you get out of your two room Makati slum apartment and into your mosquito infested jungly lair maybe we won’t have to endure your dementia on a daily basis.”
😀 That tickles.
BobInget on Fri, 21st Aug 2015 1:13 pm
Besides North Korea’s intransigence which everyone seems to be ignoring.
(neither has oil so, why bother?)
1) Oil bounced off $39.70. A new all time low IMO, considering inflation.
2) China’s economy falters. Welcome to reality.
China’s grains imports hit all time record levels.
3) ISIS spreads across North Africa like hot oil.
4) India’s oil imports UP 27%
http://in.reuters.com/article/2015/08/19/india-fuel-imports-idINL3N10U4HH20150819
5) China’s July oil imports also up 27% total
http://gulfnews.com/business/sectors/energy/china-s-july-iran-oil-imports-rise-3-on-year-1.1570779
6) US consumption rises 100,000 B p/d every week for the past six.
All recent fear based market manipulation leads me to once again confirm my January prediction for $120 oil come December 31, 2015
BobInget on Fri, 21st Aug 2015 1:17 pm
Makati, Good luck with your farm. I hope it makes you happy. The transition won’t be easy.
Don’t give up.
Bob
Boat on Fri, 21st Aug 2015 1:46 pm
Bob, for how long
BobInget on Fri, 21st Aug 2015 1:55 pm
Let’s get this straight. Markets collapsed today on fears Communist China’s population will suddenly stop buying new consumer goods.
Today, it costs over $10,000 US, just for permission to then shop a new car.
This lottery is held just once a month for a few hours.
http://www.bloomberg.com/news/articles/2015-08-20/xi-said-to-put-population-over-growth-in-china-s-economic-plan-idkp0hyy
India, a non Communist nation few seem to be concerned about. No wonder, India is currently growing at around 6.5%. In 2022 India’s population exceeds China’s.
http://indiaautoreport.com/july-2015-monthly-vehicle-sales-analysis/
Davy on Fri, 21st Aug 2015 1:58 pm
Sure Bob that is a no brainer because it could happen but Bob enlighten me on how long that price would be maintained. Do we have another U.S. shale gold rush forecasted? That is what would happen if oil stayed there.
I love how your China forcast panned out. For so long I was reading your glorious reviews of China. I was chided for being anti-Chinese. The China-phillias on this board were always referencing China as the guarantor of strong demand. That bit the dust pretty hard.
Bob, I think it is pretty clear a price that high would be a knee jerk not a real price discovery. Demand destruction is firmly in control now. Isn’t demand destruction pretty similar to deflation? Tell me how oil is going to hit $120 and stay there in a deflating world. Inquiring minds are curious Bob.
Davy on Fri, 21st Aug 2015 2:24 pm
Carnage on the street. Check out the markets. Check out the VIX. It is rare to see these type of numbers since the CB’s have been jawboning the markets for a few years now.
Apneaman on Fri, 21st Aug 2015 4:57 pm
Oil hits longest losing streak since 1986 as markets fall in worst bloodbath of the year
http://business.financialpost.com/investing/global-investor/oil-nears-longest-losing-streak-in-29-years-as-markets-tumble-in-worst-week-of-year
Apneaman on Fri, 21st Aug 2015 4:59 pm
UPDATED
Oil drops below $40 US a barrel for 1st time since 2009
Oil producers cutting dividends and spending to preserve cash
http://www.cbc.ca/news/business/oil-drops-below-40-us-a-barrel-for-1st-time-since-2009-1.3199401
Apneaman on Fri, 21st Aug 2015 5:01 pm
O no they used the D word.
Colorado oil production on path to depletion, CU study warns
Unless more rigs start drilling, Colorado oil and gas production will fall sharply as fracked wells dry up
http://www.denverpost.com/business/ci_28679370/colorado-oil-production-path-depletion-cu-study-warns
Davy on Fri, 21st Aug 2015 5:59 pm
The VIX is in the stratosphere. I watch it daily and it squirted today ending the day at 28.43 up whopping 46.45% ooch for the VIX short crowd!
Makati1 on Fri, 21st Aug 2015 9:12 pm
Bob, the change will not be as difficult as it may seem. I grew up without most of today’s conveniences. I used an outhouse for my first five years and had a hand pump in the kitchen for water. No indoor plumbing. No A/C until I was 30 and married. Party line phone wired to the wall, radio, comics and all of the outdoors for entertainment, etc. The 40s, 50s and 60s were nothing like the chaos of today.
As for my ‘slum’ condo. You should live so good. Forty square meters, modern facilities, kitchen with induction stove, A/C, tiled floors, three elevators, deck clerk 24/7/365, security guards, fire suppression system, two modern, clean, gyms on the commons level with three pools, that are better maintained than any in the US I have seen, playground for the kids also modern and only a few years old, etc. All on the edge of the business district, with the major banks, Citi, HSBC, BofC, etc., and the Stock Exchange all three blocks away. 1st class hospital, used by the US Embassy staff and Ps government officials, and malls equal to anything in the US, also within three blocks.
The town, five miles from our farm, is about the size of the one I grew up near long ago, and has all of the necessities without the chain retailers or fast food joints. Or the crime of the US one.
Different? Yes. Difficult? No. You need change to keep alive, and I am enjoying the many changes I have made in my life. Bored? Never! Good luck on your plans and preps!
Truth Has A Liberal Bias on Fri, 21st Aug 2015 9:20 pm
Saudi loses some income on the low priced sale of its oil but if they have a lot money invested in naked credit default swaps on all the loans that the shale oil industry associated corporations are going to default on later this year then perhaps they’re going to make a lot of money that way instead.
Step one- buy naked credit default swaps on LTO industry loans.
Step two- hammer the price of oil to $40 for a year.
Step three- get rich on Wall Street.
Mike989 on Fri, 21st Aug 2015 10:24 pm
Here’s a secret for my democratic friends.
Repubs will ignore as usual.
Saving money on energy is highly profitable.
Buying a hybrid returns to you 33% per year, and EV 50-60% interest.
Buying a hybrid hot water heater, getting a home energy audit and fixing the biggest problems, costs money but returns Huge Interest Rate Paybacks.
In these times of corporate robbery of worker raises and benefits, it’s the one bright spot that can make your economic life easier. Because once installed these energy savings are near zero risk and reduce your risk of market price swings.
Remember ENRON and what might happen if a Republican or Jeb Bush comes into office.
Mike989 on Fri, 21st Aug 2015 10:25 pm
Wow, “Truth has…”
I may now be a Truther.
That’s an incredible idea, which really would explain the Saudi move.
Truth Has A Liberal Bias on Fri, 21st Aug 2015 11:18 pm
@mike989
KSA can get rich on naked credit defaukt swaps and destroy the LTO competition at the same time.
If I was running KSA that’s what I’d be doing.
MrNoItAll on Sat, 22nd Aug 2015 1:41 am
Anybody who thinks that LTO is competition to KSA is off their fucking rocker. LTO is vastly more expensive to produce and what is produced from what’s left of LTO production is an insignificant amount to what KSA is producing. Truth, are you really that misinformed? Or are you purposely spreading BS?
rockman on Sat, 22nd Aug 2015 6:16 am
Mr: Interesting how some folks can’t handle simple math – KSA = 10 million bopd = 3,650,000,000 bbls of oil per year X $50/bbl = $183 BILLION LOST KSA REVENUE PER YEAR.
So exactly how much does any
one think the KSA might have made playing the market. And remember playing any sort of hedge angle can loose as much money as might be made.
But if someone wants to point a conspiritory finger turn it north…to Canada. They are selling about 1 billion bbls of oil per year to US refineries. And their current price point is in the low $20’s. Again simple math: WTI sells for Canadian oil + $20. And what is WTI going for these days…low $40/bbl.
So why blame the KSA for not reducing production? If Canadians were to significantly reduce their exports to the US the shale players could get back into the game.
Davy on Sat, 22nd Aug 2015 7:07 am
Mike said “Saving money on energy is highly profitable. Buying a hybrid returns to you 33% per year, and EV 50-60% interest. Buying a hybrid hot water heater, getting a home energy audit and fixing the biggest problems, costs money but returns Huge Interest Rate Paybacks.
Mike are you selling snake oil? If this were fully the truth people would be breaking down the doors to the places that sell them like Walmart on Black Friday. EV’s and hybrids are not clean and don’t save that much. The have a dirty manufacturing process and waste stream. They are powered by fossil fuels. What does save is driving less. I never hear your techno-green mouth utter something like that.
Home upgrades can be good for your wallet and environment but they can also be bad. If one makes an upgrade that has not had proper cost benefit analysis done he will have made a negative investment which will equal less money and more carbon emissions. Not all efficiency investments should be made just because someone like you is selling them. Sometimes it is more economical just to keep the existing system because it has useful life remaining. Replacing it would require more damage to the environment by making something new and throwing away something that is still good.
Mike, your comment is just a green washing of the global throw-away culture. Most greens are just trying to green wash consumerism, technology, and efficiency. They are techno’s that think they can make their brown techno tendencies look better with some green paint. This is a fraud and a lie.
I am all for green when applied right. The best way to be green is less with less. Drive less, eat less energy soaked food, buy less consumer items and live right per nature. Buying your way out of your brown tendencies is wrong. In some cases it is proper per a “REAL” green attitude to upgrade homes and buy hybrid auto’s but just doing it because someone says they are green is a hoax. The world is full of snake oil and your green washing is more of it.
Davy on Sat, 22nd Aug 2015 7:16 am
More than $3.3 trillion has been erased from the value of global equities after China’s decision to devalue its currency spurred a wave of selling across emerging markets.
Volatility surged as Standard & Poor’s 500 Index capped the worst week in three years while Europe entered a correction and stocks from Hong Kong to Indonesia tumbled into bear markets. Junk bond yields rose to the highest since October 2012 and U.S. Treasuries had the largest weekly gain in five months. Oil sank below $40 a barrel for the first time since 2009 and was set for its longest losing streak since 1986.
The VIX, the benchmark gauge of U.S. equity options, more than doubled during the week for its largest gain ever amid demand for contracts to protect against further losses. It is at the highest level since 2011.
Stocks Fall Most in 4 Years as China Dread Sinks Global Markets. http://www.bloomberg.com/news/articles/2015-08-20/asian-futures-fall-amid-u-s-stock-selloff-as-oil-mired-in-slump
Plantagenet on Sat, 22nd Aug 2015 7:24 am
As I predicted the oil glut has gotten worse. Ive been on a houseboat in Kashmir for the last week —-no phone TV or Internet —-so I’m quite surprised to see how fast the oil market moved while I’ve been traveling in India
Davy on Sat, 22nd Aug 2015 7:33 am
Planter, you failed miserably on the demand destruction side off the equation. OH, Planter, any tanker traffic to report on?
Makati1 on Sat, 22nd Aug 2015 7:59 am
DOW 5/19/15: 18,312.39
DOW today: 16,459.75
How low can it go….lol.
Plantagenet on Sat, 22nd Aug 2015 9:14 am
Daver. Oil gluts are caused by supply overhang. It doesn’t matter if its demand destruction or overproduction or a combination of the two as is the case in the current oil glut
AND There are so many cars on the road here in India it’s unbelievable. There’s no demand destruction here. GDP is booming at 8% growth per year as a billion people all want CARS!!!!
bug on Sat, 22nd Aug 2015 9:48 am
And people in hell eat ice water
JuanP on Sat, 22nd Aug 2015 10:18 am
Link to article on shale, QE, etc. on RI: http://russia-insider.com/en/business/market-volatility-and-twilight-dollar/ri9318
The comment section also contains an interesting month old pasted article by Kurt Cobb that has probably been printed here but I missed because I was in the Dominican Republic the last few weeks volunteering as a designer on a Permaculture project.
MrNoItAll on Sat, 22nd Aug 2015 11:05 am
It is the gluttiest glut that the glutenous glutenizing Glutster could grunt and groan out of his gluteus maximus.
I doubt that the Glutster has been to India or anywhere else in the world. He lies and misinforms all the time. He is totally unbelievable. More likely, he’s been taking remedial classes in advanced trolling at the Koch Bros School of Misinformation.
Why listen to the glutenizing fool when there is so much expert information on the big bad oil glut:
http://www.zerohedge.com/news/2015-08-21/oil-crash-result-excess-supply-or-plunging-demand-answer-one-chart
shortonoil on Sat, 22nd Aug 2015 12:05 pm
The word “glut” is a meme:
“2 : a pervasive thought or thought pattern that replicates itself via cultural means; a parasitic code, a virus of the mind especially contagious to children and the impressionable”
http://www.urbandictionary.com/define.php?term=meme
Memes are frequently used by professional trolls on the internet whose intent is obfuscate, confuse, and prevent rational discussions of important issues. The word “glut” is undefinable, and non quantifiable. It only masquerades as a word that possess meaning. Its only intent is to produce an emotional response in the reader: “OMG we have a glut”! Since the word itself contains no rationally perceivable information, once accepted by the reader it inhibits further investigation; which is why it was used in the first place!