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THE Price of Crude pt 14

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

Re: THE Price of Crude pt 14

Unread postby GoghGoner » Wed 10 Jan 2018, 07:16:36

In any discussion about oil prices, you will always find the supply side analysed to death. Remember the demand side and have some balance in your lives.

Global growth back at pre-crisis levels, says World Bank

The bank's new forecast is that the world economy will expand by 3.1% this year before slowing slightly.

It will be the first time since the financial crisis that growth is operating at its full potential.
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Re: THE Price of Crude pt 14

Unread postby GoghGoner » Thu 11 Jan 2018, 05:55:01

WTI at $64. Brent at $69.50. Looks like the ratio is closing quick between the two -- no surprise, with another major decline in Cushing stocks this week.

The consistency of these gains is amazing to behold. It has been 7 years since we have seen a market this bullish.
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Oil Reaches $70 a Barrel for First Time in Three Years

Unread postby AdamB » Fri 12 Jan 2018, 09:52:49

Oil topped $70 a barrel in London for the first time in three years as production cuts by OPEC and rising demand whittle away a global surplus. Brent crude futures, used in the pricing of more than half the world’s oil, rose as much as 1.2 percent to the highest since Dec. 4, 2014. Prices rallied after the longest stretch of declines in U.S. inventories during winter in a decade. Oil’s rally shows that the Organization of Petroleum Exporting Countries and its allies are succeeding in clearing the glut triggered by the growth of U.S. shale oil. Prices have also been supported by concerns that supply disruptions could stem from rising political tensions in OPEC members Iran and Venezuela. “Pretty much all of the fundamental boxes are supportive of the current rally and a bit more,” said Paul Horsnell, head of commodities research at


Oil Reaches $70 a Barrel for First Time in Three Years
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Oil Reaches $70 a Barrel for First Time in Three Years

Unread postby AdamB » Fri 12 Jan 2018, 09:55:23

Oil Reaches $70 a Barrel for First Time in Three Years

Can anyone say...thermodynamically impossible?

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Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Oil Reaches $70 a Barrel for First Time in Three Years

Unread postby Subjectivist » Fri 12 Jan 2018, 20:01:46

AdamB wrote:Oil Reaches $70 a Barrel for First Time in Three Years

Can anyone say...thermodynamically impossible?


Only people who haveno idea how thermodynamics works.
II Chronicles 7:14 if my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then I will hear from heaven, and I will forgive their sin and will heal their land.
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Sun 14 Jan 2018, 14:51:27

On hedging gasoline prices:

1). On a yearly average, the price of gasoline in the US hasn't changed all that much over time. (Green line in link below). Gasoline is now getting to be roughly $2.60 in central KY where I live. The vast majority of the time since early 2016, it's been in the low $2.00ish range on average. (Relying on my memory there -- and I pay attention to this).

https://energy.gov/eere/vehicles/fact-9 ... -1929-2015

So despite all the carping, for the normal consumer who might burn 520ish gallons of gasoline per family car (13,000 miles at 25 miles per gallon for a typical sedan) WITH NO CHANGES in driving behavior, the magnitude of the gasoline expense differential in a typical year is far more emotion than substance. (Until and unless oil truly rises dramatically in price and stays high. The four year stretch with oil near $100 a barrel on average from 2010-2014 is the closest we've seen to that.

And for people truly claiming a pinch, it's not like less driving, driving an efficient car, etc. is impossible for the vast majority of people.

2). So lets say you want to hedge a $500 annual change in your gasoline costs, or roughly a dollar a gallon change (a huge change, historically for a national average price). Oil stocks in solid companies like Chevron or even BP would make a fine hedge over time. Look at the way either of them have climbed over the past 6 months in response to oil climbing meaningfully over the same period.

For people willing and able to plan ahead a little, and make a little effort to hedge oil prices, it's not rocket science. (Arithmetic helps. Data helps. There's the internet and apps like CALC on Windows.)

I know, there are very poor people. The world is far from perfect. In the US, taxpayers pay roughly $1 trillion in taxes for roughly 100 federal anti-poverty programs, plus there are numerous state and local programs. My city runs the local bus system at a meaningful loss, for example. A primary reason is to help truly poor people commute to/from work.
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Re: THE Price of Crude pt 14

Unread postby ROCKMAN » Sun 14 Jan 2018, 16:31:07

Outcast - Chevron? Not just the last 6 months. Since it reached a recent low of $78/share in Sept 2015 it has increased 70% to $133/share. Typically folks tend to way over react to low oil prices with respect to stock values. As I've said many times: an oil company's profitability IS NOT determined by what it sells its oil for but what it cost to find its oil. Over 4 decades some of the biggest money losing companies I've worked for happened during periods of very high oil prices.
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Oil Could Hit $80 a Barrel This Year

Unread postby AdamB » Mon 15 Jan 2018, 00:29:18


Tightening global supplies and rising demand for crude oil helped prices for the commodity start the year with a bang—hitting their highest levels in more than three years—and many analysts believe the market has the fuel it needs to continue the rally to as high as $80 a barrel. “The reason that oil will soar is the oldest story in the oil world: Low prices created strong demand and growth, and now that demand is leading the way,” says Phil Flynn, senior market analyst at Price Futures Group. Oil futures suffered hefty declines in 2014 and 2015, as a global glut in supplies and the Organization of Petroleum Exporting Countries’ unwillingness to significantly curb production amid fear of market-share loss sliced the per barrel oil price roughly in half. On Friday, it notched its highest levels since December 2014, with West Texas


Oil Could Hit $80 a Barrel This Year
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Buy Oil, Make Money

Unread postby AdamB » Mon 15 Jan 2018, 00:35:45


The last time I got into a row over oil prices with Christian DeHaemer, the U.S. oil industry was in a far different state. It was years ago, before the Bakken in North Dakota became a household name. Back then, our shouting matches would reach a crescendo in the office, and he just happened to always take the opposing position. When I suggested in early 2007 that oil was about to make a run to $100 per barrel, he started rattling off a dozen reasons why it was about to head to 10 bucks. And he did it with a smile. Ah, but those were much simpler days, dear reader… when you saw the words “peak oil” more than you do Bitcoin today. So you can probably imagine my surprise this morning when I overheard my favorite cubicle cellmate here in Charm City mutter something about .


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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Mon 15 Jan 2018, 15:43:42

ROCKMAN wrote:Outcast - Chevron? Not just the last 6 months. Since it reached a recent low of $78/share in Sept 2015 it has increased 70% to $133/share. Typically folks tend to way over react to low oil prices with respect to stock values. As I've said many times: an oil company's profitability IS NOT determined by what it sells its oil for but what it cost to find its oil. Over 4 decades some of the biggest money losing companies I've worked for happened during periods of very high oil prices.

Not disagreeing at all. I just used six months as the timeframe I've noticed oil prices AND stocks like CVX and BP moving up relatively rapidly. Thus my comment on the general correlation, and CVX as an example.

I tend to think of my best investments as multi-decade undertakings, but we're dealing with short-attention-span world these days, and the pervasive upward trend for the past six months should be hard for even the hard core deniers to ignore (try as they might).
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