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Is fast crash likely? Pt. 8

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Is fast crash likely? Pt. 8

Unread postby pstarr » Fri 12 Jan 2018, 17:52:42

"Horeshit. If you exclude the 2015 and 2016 time period with bottomed out oil prices oil companies have been pretty consistent in their profitability. You and Short have a serious problem in understanding oil and gas accounting and what that means to the bottom line. But maybe you should call up all the executive at the hundreds of oil and gas companies around the world and tell them they don’t understand that they aren’t making any money and they have a losing economic proposition."

I call horseshit on that. :x Practically all the oil companies and NOC's are going broke, one way or another. Your much vaunted "Swing Producer" is asking for an IPO handout and is firing its wealthy princesses.
/sarc
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Re: Is fast crash likely? Pt. 8

Unread postby onlooker » Fri 12 Jan 2018, 17:58:44

"decreasing oil demand". Not necessarily but a downward trend in the oil price to try to balance with supply. So. that is why this is the pivotal year to test the ETP. If the price continues high, that would undermine the ETP but if it plunges it confirms its validity. I expect a plunge
The Big Economic Plunge is approaching
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Re: Is fast crash likely? Pt. 8

Unread postby pstarr » Fri 12 Jan 2018, 18:52:38

onlooker wrote:"decreasing oil demand". Not necessarily but a downward trend in the oil price to try to balance with supply. So. that is why this is the pivotal year to test the ETP. If the price continues high, that would undermine the ETP but if it plunges it confirms its validity. I expect a plunge

It will plunge along with the stock market. Just like last time.
Image
such short memories :cry:
/sarc
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Re: Is fast crash likely? Pt. 8

Unread postby creedoninmo » Fri 12 Jan 2018, 20:02:50

Oil price, the stock market, bond yields are all rising and the dollar is falling. This can not go on a lot longer. Two years at most.
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Re: Is fast crash likely? Pt. 8

Unread postby Outcast_Searcher » Fri 12 Jan 2018, 20:18:54

creedoninmo wrote:Oil price, the stock market, bond yields are all rising and the dollar is falling. This can not go on a lot longer. Two years at most.

Looking back over the past several months, the dollar isn't falling much.

How do you know this "can't go on much longer"? Because of past correlations? Let's remember that past performance is no guarantee of future results.

I'm not saying you're wrong. (I have no idea -- I don't pretend I can predict markets, especially in the short run). I'm just looking for more than a stated opinion with no reason, no citations, etc.
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Re: Is fast crash likely? Pt. 8

Unread postby shortonoil » Fri 12 Jan 2018, 20:25:10

Your much vaunted "Swing Producer" is asking for an IPO handout and is firing its wealthy princesses.


The last thing that I read they where hanging them upside down, and beating them with clubs. They say that that the "means justifies the end"; when you are going broke by the day the means can get pretty brutal.

Well .... no one else has the time to put some graphs together for me; I still have some broken pipes, and we have another cold snap coming. Oh crap!

To figure out why the price did a sudden jump up look at the export data, and total product inventories. $64 dollar oil is going to put an end to that real quick. Throw in a break in the Forties pipe line, that hit European refiners, and a couple other snafus and you'll see why the price jumped. It is also obvious why it is going back down. There is no mystery here.

http://www.eia.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm

PS: use the EIA graphing function. It makes it all a lot clearer.
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Re: Is fast crash likely? Pt. 8

Unread postby Outcast_Searcher » Fri 12 Jan 2018, 20:25:58

pstarr wrote:It will plunge along with the stock market. Just like last time.
Image
such short memories :cry:

And if so, why is the correlation between oil prices and the stock market looking negative instead of strongly positive between the beginning of your chart and 2008?

Short memory indeed. Or just another pstarr meaningless yet constant spreading of FUD to predict short term doom.
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Re: Is fast crash likely? Pt. 8

Unread postby rockdoc123 » Fri 12 Jan 2018, 20:28:33

I call horseshit on that. :x Practically all the oil companies and NOC's are going broke, one way or another. Your much vaunted "Swing Producer" is asking for an IPO handout and is firing its wealthy princesses.


you have previously demonstrated you have no clue how to read a financial report or what it means. If you did you would realize this statement is completely preposterous but then again saying stupid things is your raison d'etre. Using XOM as an example, it has $8.8 billion of EBITDA in 2017 3Q and has a total asset value of $349 billion. So they are going broke eh? :roll:

Saudi Arabia is doing an IPO as a "handout" ....what is wrong with your brain? They will make $100 billion in cash for offering up 5% of the shares in Aramco. If you think that is a handout then you have a particular problem understanding valuations.
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Re: Is fast crash likely? Pt. 8

Unread postby onlooker » Fri 12 Jan 2018, 20:39:58

They will make $100 billion in cash for offering up 5% of the shares in Aramco.----And may I ask how exactly you know they will make that amount?
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Re: Is fast crash likely? Pt. 8

Unread postby creedoninmo » Fri 12 Jan 2018, 20:59:36

Outcast_Searcher said:
How do you know this "can't go on much longer"? Because of past correlations? Let's remember that past performance is no guarantee of future results.
I don't know. I had thought that they had an ability to keep bond yields low forever, but there seems to be some question about that currently. 10 year bond yields above 3 percent would bust the banks according to some. The fed seems to think they can reduce their balance sheets and keep the stock market going ever higher at the same time. I question that. The U.S. is basically, totally bankrupt and living on fumes. We shall see how long the rest of the world is going to help finance our debt.
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Re: Is fast crash likely? Pt. 8

Unread postby Outcast_Searcher » Sat 13 Jan 2018, 03:31:55

creedoninmo wrote: The U.S. is basically, totally bankrupt and living on fumes. We shall see how long the rest of the world is going to help finance our debt.

The speakers of constant doom were saying that back in 1985 (when I started paying attention to such things). Back then the bugaboo was inflation and "too much US debt", called unpayable, with default claimed in our face.

And here we are 33 years later. With a system that continues to grow, and continues to be very imperfect. But if imperfect meant on the brink of failure, scores of national economies would fail pretty much every year.

So good luck trying to call, much less time that.

I'll point out that a national or a global recession doesn't imply economic doom, BTW.

If everything is so unsustainable for the US, why does the household debt to GDP ratio looking better? Doomers don't want to talk about numbers that don't fit their short term forecast, perhaps?

https://fred.stlouisfed.org/series/HDTGPDUSQ163N
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Re: Is fast crash likely? Pt. 8

Unread postby Yoshua » Sat 13 Jan 2018, 03:57:04

The oil & gas industry's ROI has been around 6% historically. The Hill's Group came to the conclusion that the price of crude oil has historically been closely linked to the cost of production.

After 2000 the oil price started to rise exponentially. If the oil & gas industry's ROI remained at about its 6% historical level from 2000 to 2014, then it would be fair to conclude that the cost of production started to rise exponentially after 2000.

The question then is: Why did the cost of crude oil production start to rise exponentially after 2000 ?
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Re: Is fast crash likely? Pt. 8

Unread postby creedoninmo » Sat 13 Jan 2018, 05:37:07

Outcast_Searcher:
The speakers of constant doom were saying that back in 1985 (when I started paying attention to such things). Back then the bugaboo was inflation and "too much US debt", called unpayable, with default claimed in our face.

And here we are 33 years later. With a system that continues to grow, and continues to be very imperfect. But if imperfect meant on the brink of failure, scores of national economies would fail pretty much every year.

In 1985 we were at pretty much the beginning of two to three decades of the cheapest and most plentiful oil supplies world wide that the world has ever known. We are now nearing the end. I can not predict the exact year or date, but due to oil depletion the world is vastly in debt and much of the world is moving away from the dollar. According to the article on the opposite page China is planning to open an oil futures trading operation in Yuan. They already have a trading market in Gold for Yuan. Right now it looks as if the world is beginning to move to the yuan and away from the dollar. It is my belief that what is saving the world right now is a plentiful supply of natural gas and that may save the world economy for a few years. There is also the question of which economies can survive an oil depleted world the best. Russia has oil and we are driving them into the arms of China. The question is, is the rest of the world going to lose faith in the dollar. If it does, expect to become poor.
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Re: Is fast crash likely? Pt. 8

Unread postby dirtyharry » Sat 13 Jan 2018, 06:56:17

AdamB wrote:
shortonoil wrote:
This insanity is the last step to collapse


Yes, most likely. We are entering "a time that will try men's souls"!



Before we get to that, have you paid off on the bet you lost yet?


You are not only obnoxious and repetitive ,but also so very boring .
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Re: Is fast crash likely? Pt. 8

Unread postby Cog » Sat 13 Jan 2018, 09:05:30

Oil companies going broke again? That is not what the quarterly earning reports on telling me about the Big Seven. And my stock appreciation isn't telling me they are going broke either. ;)
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Re: Is fast crash likely? Pt. 8

Unread postby shortonoil » Sat 13 Jan 2018, 12:18:19

You are not only obnoxious and repetitive ,but also so very boring.


When all one has are two bits to put into different arrangements; boring is inevitable.

There have been a number of articles lately about people who are maxing out their credit cards to buy crypto currencies? It sounds like the last throes of a desperate society that has lost touch with reality? Society has elevated money to the status of a god, and the Great God Pan is dying. Even the Phoenician understood what was to come.
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Re: Is fast crash likely? Pt. 8

Unread postby rockdoc123 » Sat 13 Jan 2018, 12:39:19

They will make $100 billion in cash for offering up 5% of the shares in Aramco.----And may I ask how exactly you know they will make that amount?


Lets see there were 6 stock exchanges fighting for the right to list the Aramco IPO....most analysts have suggested the company has a likely value of $2 billion (much higher than any other oil company). The math is pretty straightforward (i.e. 5% of $2 billion). Getting to a valuation of $2 trillion is pretty easy. Aramco has stated remaining reserves of 268 Gbbls and that has now been audited by 2 international firms. If we assume that is 2P then recent sale of assets globally has seen oil companies sell for ~$8/bbl 2P (has been as low as $6 and as high as $10). It is also pretty easy to get to that valuation if you use current Brent pricing and estimate what EBITDA for Aramco is and compare enterprise value to EBITDA ratio with its peers. If you think for one minute that the IPO will not be oversubscribed then you really are living in a fantasy world. My guess is the average Joe won't have a chance of buying in until the stocks are freely traded on the market.
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Re: Is fast crash likely? Pt. 8

Unread postby pstarr » Sat 13 Jan 2018, 13:20:17

The prolonged program of quantitative easing has sent asset prices soaring, even if traditional signs of inflation are muted.
"With QE having multiplied the amount of fiat money issued by central banks in just a few years, it's fair to wonder: How come it didn't trigger much higher levels of inflation than what we now see? The technical answer is that the money created has ended up full circle -- on the books of the central banks."
The more fundamental answer is that QE resulted in a wealth increase for the richest, who consume relatively little of their revenue, while the middle class and the neediest largely failed to reap any benefit. Having not gained from QE, their consumption has not risen, leaving prices pretty much flat.

There are many problems with this, from growing inequality to pressures on social cohesion. But one that has received too little attention up to now is the prospect that we are heading toward a growing asset bubble that will result in a pronounced crash, as Jeremy Grantham, co-founder of the investment firm GMO, argued in a note last week. He predicts a "melt-up" -- where investors pile into assets as prices rise -- followed by a significant decline "of some 50 percent."


50% crash in the value of EVERYTHING. Because we have monetized EVERYTHING. We have monetized our homes, cars, refrigerators, children's education and our free time. That includes the value of oil. Big crash ahead.
/sarc
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Re: Is fast crash likely? Pt. 8

Unread postby onlooker » Sat 13 Jan 2018, 13:45:57

See my linked article Pete a little bit before on this thread about the impending popping of the stocks, bonds and dollar bubbles
The Big Economic Plunge is approaching
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Re: Is fast crash likely? Pt. 8

Unread postby marmico » Sat 13 Jan 2018, 13:57:17

It sounds like the last throes of a desperate society that has lost touch with reality?


You are now in your 14th year of posting at peakoil.com. You are a fookenstoopidretard. In 2004 it was $400 WTI in 2020. In 2012 it is $2 WTI in 2020.
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