[JohnDenver]

Hi to all the old-timers. It's JD from Peak Oil Debunked.
Long time no see. Hope you guys are all doing well.

This writer from Bloomberg thinks oil is going to hit $10-20, and he seems to have a pretty good handle on things. What say ye?
http://business.financialpost.com/news/ ... y-shilling

[vtsnowedin]

Explain how good things are to the refugees climbing out of the boats on the Greek islands after their trip from Syria.

[Cog]

Explain how good things are to the refugees climbing out of the boats on the Greek islands after their trip from Syria.

That situation has zero to do with oil prices.

[vtsnowedin]

Explain how good things are to the refugees climbing out of the boats on the Greek islands after their trip from Syria.

That situation has zero to do with oil prices.

Everything that happens in the middle east has to do with oil supply and oil prices.

[Peak_Yeast]

One thing I miss in the argumentation is the influence from demand destruction across a long list of countries.

If the demand has lessened in many countries I suppose it puts a downward pressure on prices also.

If china imports are stagnating or even going down it should have a huge impact - due to its size.

While I do not have the time to find all the graphs I am having a picture of significant demand destruction/reduction in:

1. Libya
2. PIIGS / EU
3. USA
4. China
And possibly Syria, Egypt, Tunesia, Liberia and many others.

Also I wonder what impact ISIS is having - It could have a lot of cheap oil to sell to shady people.

It also seems to me the US military is taking somewhat of a rest from its conventional style of murdering - using low cost drones instead to spread terror.

[diemos]

Eat, drink and be merry!

[sparky]

.
...10 ....$ 20$ .....yeah sure , why not ?
the spot and future markets is made of a bunch of screen jockeys who don't see any further than the next close
seriously the OPEC basket is heading down , big time !
a weekly price of 30$ is looking likely for October , after that , all bets are off and there is going to be a few
late investors in the sooooo promising fracking bonanza , looking at the pavement from the ledge
the only nope for wall street is if Daesh break into the Iraqi oil fields or the Houtis get into Dahran suburbs

[Paulo1]

$20 oil simply means a very poor economy and few have cash to spend to keep the consumption orgy going, imho. I was in Crappy Tire (Canada) yesterday to look for a replacement throtle cable for a lawn mower. I have kept this mower going for 25 years, and when it quits we should have all lawns decommisioned to ferns and wax berries. (I hope ) They had halloween candy and decorations on display. I wanted to puke. Do we really need plastic gravestones made by prison labour in China? Or, boxes of treats that people go home and eat a month early?

This society is sick. We need more expensive oil, yesterday.

[Tanada]

My prediction stands, OPEC will keep oil as low as they can through October when all the Frackers loan standing get revisited by the banking industry. With all the hype about $10-20/bbl oil the USA Fracking industry is doomed to crash hard. Around the first of November when the bankruptcies starts flooding the prices will start their gradual rise. Between the LTO decline rates and all the companies folding up shop the LTO industry in 2016 will be where the Natural Gas industry was when their bubble popped, no bank or investment company is going to be willing to dole out cash to an industry that just self destructed.

Consequence, even if OPEC keep pumping flat out through 2016 as LTO production falls like a rock supply declines will meet even weak global demand curves and prices will start edging up. If there is a war or OPEC decides to set lower quotas prices will rise faster, but either way prices will rise. By the time they are back over $100/bbl it will be clear the 'fracking miracle' was another mirage and people will be very reluctant to take another spin on that wheel.

Thus Sayeth Tanada the Wise(cracking) and Powerful(ish)!

[ROCKMAN]

China demand destruction??? You need to watch exactly how those headlines are not correctly stated. Chinese oil demand hasn't decreased: the rate of increase has slowed. During the first 6 months of 2015 Chinese oil consumption INCREASED 7% over the same period 1 year ago. If I recall correctly China is currently importing oil at an all time record high: 11.12 million bbls per day.

[dissident]

$10 oil implies the demand will collapse even more. The OP is basically trolling in some lame attempt to insinuate that peak oil is a bogus concept. I guess a world depression makes peak oil wrong.

We all know demand never affects oil price, but only supply, the much hyped glut, does. /sarc

[Outcast_Searcher]

One thing I miss in the argumentation is the influence from demand destruction across a long list of countries.

While I do not have the time to find all the graphs I am having a picture of significant demand destruction/reduction in:

1. Libya
2. PIIGS / EU
3. USA
4. China
And possibly Syria, Egypt, Tunesia, Liberia and many others.

No citations I see. This is the opposite of what I've seen from the objective oil demand observations and projections for US and global consumption for 2015 and 2016. For example, in the US, low oil product prices are spurring travel demand and demand for big SUV's and trucks (i.e. more consumption).

http://www.eia.gov/forecasts/steo/report/us_oil.cfm

So per the EIA, note how in the US, jet fuel and motor gasoline and fuel oil and total consumption are all increasing 2013 through 2015, and total consumption is forecast to increase in 2016. So how is that reflecting demand destruction?

https://www.iea.org/oilmarketreport/omrpublic/

And for the IEA, a solid oil supply AND demand increase is projected through 2016, and has been occurring since 2013.

Why post a few uncited outliers you think (or hope) show demand destruction when the global trend for both demand and consumption are clearly higher (at least by cited, reasonably reliable sources)?

Demand destruction is much more of a force when prices rise strongly. With the global economy slowly growing, the folks on this site continually talking like people can no longer prefer oil products when they are FAR cheaper than in the 2010-2014 period, when global economic growth also occurred, is silly.

Claiming that if oil gets down to dirt cheap levels (below $20) it is because people can't afford oil products, it's ludicrous when the global economy is growing.

The near term price issue is fears of far too much supply in the short term, not demand destruction as motorized transportation gets far cheaper with the short term economic "gift" of dirt cheap oil.

[Outcast_Searcher]

$20 oil simply means a very poor economy and few have cash to spend to keep the consumption orgy going, imho.

This society is sick. We need more expensive oil, yesterday.

Right. Because with a growing global economy and oil averaging nearly $100 per barrel for the four years from mid-2010ish to mid-2014ish, people could obviously afford oil products overall, since the global (and US) economies grew.

And now, with the US and global economy continuing to grow, people can't afford oil at roughly ONE FIFTH of the former price (or less, as the thread title implies might happen)?

Hint: using hopes for all doom all the time is a very poor substitute for basic micro-economic principles.

Now, show me significant shrinkage in the global economy for a few years AND a big reduction in overall global oil consumption during that time AND sub $20 prices with a big oil GLUT and THEN you just might have a point, at least for the short term.

(By the way, made up figures like the folks on this site that continue to say we've been a US recession since 2007 or even a depression (by their emotional definitions and/or personal anecdotal observations) are meaningless for such analysis).

[Outcast_Searcher]

China demand destruction??? You need to watch exactly how those headlines are not correctly stated. Chinese oil demand hasn't decreased: the rate of increase has slowed. During the first 6 months of 2015 Chinese oil consumption INCREASED 7% over the same period 1 year ago. If I recall correctly China is currently importing oil at an all time record high: 11.12 million bbls per day.

Right. You'd think numbers had no objective meaning, the way economics are often described on this site, especially if it manages to fill some "we are doomed short term" meme.

If one of the goals of this site is to increase awareness that long term global BAU growth in generally unsustainable and leading to disastrous consequences in time -- the constant abuse of clear and obvious objective facts is NOT exactly buying the site a lot of credibility.

Oh, and claiming that anything contradicting the doom mean coming from the MSM is all lies doesn't exactly inspire credibility for the average curious person who may want to check out the site either -- no matter how much the doom echo-chamber enjoys hearing it.

[Peak_Yeast]

Sorry Rockman - I miswrote - I wrote china stagnating demand first, but forgot to add that to the line below. Perhaps stagnating is not covering reduced increase? Ok- what I meant to write was that the rise in consumption was slowing - perhaps even going down. - The reason for "going" down is because the chinese has bought a lot of oil for storage and the economy is slowing down quickly. - Not many knows what the real rise/fall in consumption is at this very minute. I am not just refering to imports - I am speculating about actual consumption.

And I write its an impression - not a fact - since I did not have time to look up the numbers at that time.

And I am actually just asking for other peoples opinion of the influence of demand destruction/reduction. Not stating what it actually does.

Outcase seacher: I was looking at this graph:
http://www.forbes.com/sites/mikepatton/ ... it-fall/2/

I believe what that graph is showing is stagnating even reduced demand in the US. - What happens in the future or whole 2015 - is something i do not know.

PIIGS:
http://itsoureconomy.us/2013/06/are-oil ... -recovery/
Looks like reduction to me.

[ROCKMAN]

PY - It wouldn't shock me to see China slide backwards. I can't do the calculus with all their monetary and stock market gyrations. Just need to be patient: in a few months everyhing should be clear as mud. LOL.

[Paulo1]

Outcast and Rocky,

You don't get my point, so take your caulk boots off before jumping on me.

My point about the economy and $20 oil is that most of what we think of as robust, regardless of the price of oil, is needless consumption of crap. Cheap oil gave us that mindset; North Sea supply increase coinciding with Reagonomics. So it's buy buy buy, and oil hits $100 and people still buy buy buy, but with debt and refi money. Remember GW's famous words in 2007? Transcript:

"As we work with Congress in the coming year to chart a new course in Iraq and strengthen our military to meet the challenges of the 21st century, we must also work together to achieve important goals for the American people here at home. This work begins with keeping our economy growing. … And I encourage you all to go shopping more."

And: The International Monetary Fund (IMF) reported in April 2012: "Household debt soared in the years leading up to the Great Recession. In advanced economies, during the five years preceding 2007, the ratio of household debt to income rose by an average of 39 percentage points, to 138 percent.

I know many on this site, (and I had this disagreement with Short the other day), state that cheap oil is the impetus for economic growth. I submit it is more complicated than that. Certainly, oil is the energy source of industrial growth (our way of life) and that lower prices do in fact release some discretionary money which might be spent elsewhere. But it is nowhere close to goosing the cat that debt achieves. The pain of expensive oil was alleviated by increasing consumer debt loads. And when credit dried up after the housing collapse, so did the economy. High oil prices stayed high throughout the great recession. Now they are low. Do you think the economy is actually improving as a result? I don't. Do you think it will improve at $20? Maybe the sale of full size trucks and SUVs will stay high, but the trucks are still financed with with cheap loans and sub-prime credit. Did fracked LTO occur out of cash flows and robust oil company health due to $100+ oil price tag for producers? Of course not. It simply turned into another debt investment with other people's money. $100 oil sucked people in.

Please don't lump me in with 'doomers', and toss me under the 'ignorant bus' just because I don't accept in total your opinion. I would never ever pretend to tell you about your industry and have always accepted your POV as inside wisdom. But what I am talking about is the profligate waste of all FF for mindless consumption. The idea that oil is cheap, plentiful, unlimited, and affordable has created a mindless rush that almost seems like we are trying to hurry up and use it all up as fast as we can.

Oil is and has been the life blood flowing in our veins. I accept that. I have hired many an excavator and backhoe to prep my construction sites. I spent 20 years flying bush planes that kept logging and mining camps working. And you know what, most of it was for mindless consumption...a waste of resources.

An old high school buddy of mine inherited a logging comapny. He was a rich kid who had every toy known to mankind. Flash forward 20 years and I used to fly into his camp for crew changes. They worked 10 and 4. I remember one day he chartered me to fly into his camp because he left his wallet in his room. I couldn't believe it. I remember thinking at the time, "these guys are going down. Soon". Sure enough, they went broke...a company that had been around for 50 years finally spent and pissed everything away they had ever built in mindless and wasteful consumption like $1,000 trips to pick up the owner's wallet. That is what our economy seems like to me. Tropical vacations for working guys....weekend trips to Vegas.....whatever. It is unaffordable in every snese of the word, despite the price of Jet-A.

My point on $20 oil is this. Whatever the price might be, people will not be buying like they have in the past because they will be broke. Of course, if the free money tap remains open and somehow there are no consequences of living beyond ones' means I might very well be wrong. The low price refects current excess production, sure, but it also reflects a shitty economy that doesn't need it for much of anything because a great deal of what we buy now is simply unnecessary for life, health, happiness, and satisfaction.

regards

[ROCKMAN]

P - I don't see much to disagree with what you just said. As far as low oil prices go I see as much or more of the dynamics hang on the global economy (and not just China) as the increased in production. IMHO it's not difficult to speculate that low oil prices are a symtem of a weakening GLOBAL economy...at least partially.

[Plantagenet]

China demand destruction??? You need to watch exactly how those headlines are not correctly stated. Chinese oil demand hasn't decreased: the rate of increase has slowed. During the first 6 months of 2015 Chinese oil consumption INCREASED 7% over the same period 1 year ago. If I recall correctly China is currently importing oil at an all time record high: 11.12 million bbls per day.

I've been making this point for months on the "news" page. When you look at the actual data oil demand is UP.

Of course if we go into a global depression all bets are off.

[Subjectivist]

China demand destruction??? You need to watch exactly how those headlines are not correctly stated. Chinese oil demand hasn't decreased: the rate of increase has slowed. During the first 6 months of 2015 Chinese oil consumption INCREASED 7% over the same period 1 year ago. If I recall correctly China is currently importing oil at an all time record high: 11.12 million bbls per day.

I've been making this point for months on the "news" page. When you look at the actual data oil demand is UP.

Of course if we go into a global depression all bets are off.

We currently burn well over half a Billion barrels of oil every week. Even if you cut demand 25 percent with a real global economic depression we would be burning 490 million bbl a week, almost 26 Billion bbl a year even in a depression. Just how long do you think we can keep burning tens of Billions of barrels ever year before we can't produce as many as we want to burn? Even if there are two Trillion barrels of economically recoverable oil left at today's consumption every drop would be gone in 60 years assuming we maintain a plateau rate until we cliff off the last years. I just don't understand why people can not do this simple math, I learned this in grade school!