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THE Oil Demand Thread Pt. 2 (merged)

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

Re: Oil demand could be more elastic than we used to think..

Unread postby Pops » Wed 06 Jul 2011, 11:47:10

pstarr wrote:I don't know Pops. Sometimes you seem to be debating yourself here. :razz: Neither the article nor the comments made reference to the overall economy breaking down,

Probably so, but it's just because you're no challenge to debate. :razz: :-D

Daves title says "more elastic than we thought" I took that to mean "we" thought there would be greater obvious, overall damage than it appears right now. The story talked about driving less as if those trips had been only to put the baby to sleep.
My thought is there has been damage beyond just driving less and it is ongoing - but - it's not that obvious because it happens job by job, mortgage by mortgage and not in the big, societal collapse "we" so often talk about.
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Re: Oil demand could be more elastic than we used to think..

Unread postby Plantagenet » Wed 06 Jul 2011, 16:51:20

We're still on the oil production plateau, and already we've seen (1) oil prices shoot to $148/barrel followed by (2) a global credit crunch and (3) a massive global recession that sent oil briefly down to $40/barrel.. As a result (4) the economy started growing again, but (5) its growing so slowly that the EU and the USA are both in the process of going bankrupt and just to make it worse (6) we're involved in an oil war in Libya, which has taken 1.5 million barrels of oil/day off the market, causing (repeat #1) oil prices to be heading up again, followed by...........

And all that without any decrease in global oil output. Just wait till we start seeing actual reductions in global oil production....
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Re: Oil demand could be more elastic than we used to think..

Unread postby GASMON » Wed 06 Jul 2011, 17:02:56

I'm halfway between Liverpool & Manchester. I can say that traffic (car use) is down a great deal. Busy in morning / evening - folks have to go to work, but evenings / weekends quiter than usual. More people using buses & trains. Trains to Liverpool / Manchester allways full these days. A good sign.

I have cut down quite a bit with car use. Petrol has gone down 10 pence recently, but still expensive at £1.30 / litre. Recent car insurance hikes of >40% a killer also.

Talk here of reopening old rail lines, new stations etc - we will see.

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Re: Oil demand could be more elastic than we used to think..

Unread postby davep » Thu 07 Jul 2011, 04:44:05

Pops wrote:
pstarr wrote:I don't know Pops. Sometimes you seem to be debating yourself here. :razz: Neither the article nor the comments made reference to the overall economy breaking down,

Probably so, but it's just because you're no challenge to debate. :razz: :-D

Daves title says "more elastic than we thought" I took that to mean "we" thought there would be greater obvious, overall damage than it appears right now. The story talked about driving less as if those trips had been only to put the baby to sleep.
My thought is there has been damage beyond just driving less and it is ongoing - but - it's not that obvious because it happens job by job, mortgage by mortgage and not in the big, societal collapse "we" so often talk about.


The reason I used that title was because in the old days when I first arrived on this site there was a lot of talk about oil demand being inelastic. That is obviously not the case. The harsh reality of this elasticity is reduced living standards and unemplyment etc for individuals like you and me. And it will only get worse with time.
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Re: Oil demand could be more elastic than we used to think..

Unread postby lowem » Thu 07 Jul 2011, 05:08:21

davep wrote:The reason I used that title was because in the old days when I first arrived on this site there was a lot of talk about oil demand being inelastic. That is obviously not the case. The harsh reality of this elasticity is reduced living standards and unemplyment etc for individuals like you and me. And it will only get worse with time.


Reminds me also of the discussions we had of whether the oil prices could crash faster or the economy could crash faster. Post-2008, now we know that both of them can crash - hard - together. At least, unless or until we hit our Zimbabwe or Weimar moment. Actually I have a bad feeling about this. Oil just went past $97 on the way back to $100 again and we all know the economy is going nowhere fast.
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Re: Oil demand could be more elastic than we used to think..

Unread postby SeaGypsy » Thu 07 Jul 2011, 06:02:21

Actually, much to most American's chagrin, the economy is growing still in many parts of the world. Asian currencies are stabilizing, China hasn't fallen in the hole so many have been predicting for so long. Outside USA and Europe, things aren't looking nearly as bad. The longstanding theory that the USA would pull the rest down with it has so far not rung true.
There is far more elasticity in Asia than in the west.
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Re: Oil demand could be more elastic than we used to think..

Unread postby Pops » Thu 07 Jul 2011, 07:19:56

davep wrote:The harsh reality of this elasticity is reduced living standards and unemplyment etc for individuals like you and me. And it will only get worse with time.

That's exactly right and that's why I had to laugh at the Yergins who crowed about "Peak Demand" as if it were the singularity or the Rapture or a change we had decided to make instead of one we had imposed upon us by geology and affordability.


SG wrote:Outside USA and Europe, things aren't looking nearly as bad.

Somewhere beck there I wrote that each unit of fossil fuel is much more valuable to the guy who uses 6 gallons of "Oil Equivalent" a year than to the guy who uses 600 or 6,000 gallons a year. Boiling drinking water, cutting and hauling firewood, pumping water for irrigation or getting to a doctor or market are way more valuable to him than most of what I do with FFs.

Since the "demand" part of supply and demand is made up of "desire" and not just "ability to pay", even though I make 100 times what he does and have a greater "ability", since he gets a greater benefit per gallon he could well have a greater desire and so out bid me.

It's like the man said: "Hot, Flat & Crowded" - that's the "Flat" part.
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Re: Oil demand could be more elastic than we used to think..

Unread postby SeaGypsy » Thu 07 Jul 2011, 07:55:23

Well put.
I wrote this article for Dmitry Orlov's blogspot a couple of years ago when I 1st set up home in the Philippines:

Tuesday, November 18, 2008
Poverty an asset; assets a burden
Another guest post from Chris, most recently from the Outback, but now ensconced in a place that seems much more collapse-proof.

Chris writes of a paradox: lack of assets may be the greatest asset of all. I don't believe that this is a paradox: the higher you climb, the harder you fall. A place that is used to an artificially high standard of living inevitably develops artificially high standards. These standards cannot be undone overnight, as soon as the standard of living collapses, delaying commonsense adaptations until it is too late. Prosperous places have expensive infrastructure, and, once it can no longer be maintained, it becomes much worse than no infrastructure at all. Lastly, poverty takes practice, and a sudden lapse into poverty is far more traumatic than the habit of a stable but constrained existence.

I have recently moved from Australia, where Peak Oil issues are just beginning to gain traction belatedly in the mainstream press, to the Philippines, where seemingly nobody has even heard of peak oil -- yet.

I have read that the USA is leveraged up to a debt ration approaching 15/1 (1 real dollar for each dollar borrowed). I believe Australia's ratio is about 3/4 of that. The Philippines has a debt ratio of approximately 1/1. Hence when the wolf is finally at the door the Philippines may be in a better fiscal position than countries currently far richer.

However, this is all semantics. The real issue is preparedness.

I believe Australia is in a similar position to the USA and Europe in many regards, beyond financial issues.
The looming disaster in these countries is mostly to do with the feckless assumption that the status quo will somehow continue: private car ownership and food being transported over vast distances being prime among many key vulnerabilities in these societies. Other factors include simple laziness, poor health generally, and addictions to substances both legal and illegal.

Very few people in these countries under the age of about 80 remember anything about what it means to have to survive somehow in the environment, from that environment. Look to the evidence online; how many sites are telling people to stock up on guns and ammo or to stockpile massive amounts of food? The guns will attract violence, the ammo will make those using it targets for those who have less ammo; the food will perish, attract rodents and thieves. In comparison, how many are teaching how to build suburban gardens, recycle small power and methane generators, and other practical adaptations?

The Philippines, like a number of other countries, is living in a paradox of different proportions. Outside of the biggest cities here, food is growing everywhere, in the villages themselves, as well as the agricultural lands around them. Most people here can tell you how to grow a list of useful plants and to raise chickens.
They are also very much used to sharing. There is virtually no government safety net here. To become eligible for social welfare payments, one must have held the same job for ten years; this almost never happens. Yet even in the moderate-sized cities, nobody starves. Interdependence is local and regional rather than national and international. Of course, there is a degree of modernization contributing to the welfare of people. Some people work in the cities or overseas and send money home to support the extended family. But even without this money life would go on.

Most people here are very fit compared to developed nation's. I have seen hardly any overweight people, let alone obese. Washing is done by hand in water pumped by hand from the ground. "Sounds horrible," I hear the average reader murmur: but it works and it means the people are physically fit. The main diet is locally grown rice with similarly grown meats and vegetables. Fruit can be expensive because a lot of it is exported, yet whatever is in season is abundant. The fishing trade here is mostly very small boats with small crews using small nets and lines; there are very few industrial scale fishing boats. I live near a fishing village where 95% of the income is derived from fishing in these small boats; the population of over 2,000 people is the healthiest, happiest bunch I have ever met.

Transport here is a world away from that in developed nations, yet there is no problem getting anywhere. Locally, there are tricycles and jeepneys going past all the time in all directions; these and the buses are very affordable for most people. Only about 2% of households have a car, and maybe half have a private 125cc motorcycle or tricycle. These vehicles get about 100 miles to a gallon of fuel.

The paradox is this: the Philippines greatest asset in the future may be its lack of assets now. Less debt, less dependence on expensive gadgets, less laziness and complacency. More communalism, more integration.
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Re: Oil demand could be more elastic than we used to think..

Unread postby pstarr » Thu 07 Jul 2011, 13:13:50

Ultimately is it about water, food, energy, warmth, shelter, and personal physical security. Here in the USA our relatively underpopulated continent has blessed us with plenty of water, food, and energy but not a lot of warmth in the winter. So we rely on our extra energy and shelter to keep us warm and thus all the expensive infrastructure (roads, power/pipelines, big buildings, shopping malls, etc.)

The Philippines has an abundance of warmth and less need for shelter and energy so the country doesn't have a fancy system of delivering energy and warmth to people like the USA. Life looks simple there because it is.

But there is one very important measure where the USA trumps about everyone. We have more arable land per person than most countries, big or small. We have most of the mineral resources we need to go it alone. And a big army to get the rest. You can not say the same about the Philippines.
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Re: Oil demand could be more elastic than we used to think..

Unread postby davep » Thu 07 Jul 2011, 16:30:22

We have most of the mineral resources we need to go it alone. And a big army to get the rest. You can not say the same about the Philippines.


I'm sure you're dosing that with a bit of irony. We all know that once the US can no longer fuel its resource extraction (aka democracy) escapades abroad it will fail seriously. It will be the end of an empire, which is nothing new historically speaking. Resource constraints have been the cause of the demise for many great societies.
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Re: Oil demand could be more elastic than we used to think..

Unread postby SeaGypsy » Thu 07 Jul 2011, 19:57:52

The Phils legalized contraception over the last few years, in the face of massive Catholic resistance. The current pope has accepted that condoms need to be freely available for disease prevention. The president is almost an out gay. Times are changing.
The USA does have the greatest agricultural revival potential on the planet IMO. Currently the cheapest also. Rich the man who knows to do wisely with little, poor the one who wastes though he hath much.
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Solving The Global Energy Eqtn: Demand-Supply-Infrastructure

Unread postby Graeme » Wed 28 Mar 2012, 19:48:17

Solving The Global Energy Equation: Demand-Supply-Infrastructure

Little remarked by most analysts of the OECD-wide financial and debt rout in 2008-2011, world energy demand rebounded fast from its sharp plunge in 2008-2009. For the year 2010 the BP Statistical Review of 2011 painted a dramatic rebound story. World energy demand jumped by 5.6% led by coal demand growing over 7%, gas demand growing almost as much, and oil consumption by 3.1% as China moved to become the world's biggest single energy using nation. With no surprise, oil prices rose by 29% on average in 2010 from the year previous.


These run together on the other side of the equation. We can make calculations on what it would cost to match the present rates of energy demand growth, but energy resource and infrastructure development runs on several levels and responds to both anticipated and policy-desired change of world, regional or national energy supply and demand. Using a rough figure for world oil and gas E&P (exploration and production) spending in 2011 of about $400 billion and taking only the oil side, the net result of this spending, worldwide, was to grapple 0.1 Mbd growth of net supply, after depletion losses, with global oil demand in 2012 estimated by the IEA at 89.9 Mbd.

The bang for the buck on the gas side was much higher, with a net gain of at least 1 Mbd of gas energy supply from much less than one-half of the $400 billion spent by the world's major energy companies, including the large National Oil Corporations. The drift of Big Energy E&P spending away from oil, to gas - and coal - is easy to understand. Shell is now a gas-dominant energy company by share of its energy output, and in 2012 Exxon will produce more than 50% of its energy output as gas.


The 2017-2020 horizon is shaping up as a probable hinge point for world energy, at which the shift to renewables and gas become so strong that investment and action in fossil energy will plummet. The already three-year-long, year on year fall in energy demand, led by oil in several major European countries like Spain and Italy, can break out to many other OECD developed countries, not obligatorily under all-out recession conditions but through policy decision and the prressure of public opinion. For the Asian emerging giants, national-focused energy policies and programmes will surely take the high ground, in which the renewables and energy conservation will have a leading role, in a future for world energy that will every year be less and less like the present.


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Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.
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World energy agency sees record oil demand next year

Unread postby Graeme » Thu 11 Jul 2013, 18:55:53

World energy agency sees record oil demand next year

Emerging economies will be the main force in the global oil market next year, driving demand to a record high level, International Energy Agency (IEA) data showed on Thursday.

Raising its demand forecast this year because of unseasonally cold weather, the IEA also signalled that in 2014 emerging economies will drive demand to a record 92.0 million barrels per day.

The agency said improving prospects for global economic growth would pull demand, despite increasing efficiency in energy use in advanced countries.
But the overall tone of the IEA monthly report suggested that the oil market is heading into a sea of uncertainty, partly because oil production in the United States is "set to grow strongly".

Supply from other countries outside the Organization of Petroleum Exporting Countries (OPEC), notably Brazil, Kazakhstan and South Sudan, would also rise, the agency forecast.

"Emerging markets and developing economies are forecast to lead demand growth in 2014," the IEA said.

This would more than offset continued shrinkage of demand in the 34 countries in the OECD area, with China forecast to remain "the main engine of demand growth in 2014."


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Re: THE Oil Demand Thread (merged)

Unread postby Tanada » Fri 11 Sep 2015, 06:37:52

copious.abundance wrote:Just because vehicle miles traveled is starting to rise does not mean gasoline consumption is starting to rise.

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All those Priuses and hybrid Escapes can start to add up, you know.


From the looks of the graph the USA has gone on a massive Gasoline burning binge this year as prices fell substantially. Even though domestic oil production has been falling for about six months now the world price has remained very low relative to the last five years.

So to see if I could get a clearer picture of oil imports to the USA I dug through the archives and found oil import numbers for this week just to compare.

pup55 wrote:
Summary of Weekly Petroleum Data for the Week Ending September 3, 2010
U.S. crude oil refinery inputs averaged 14.9 million barrels per day during the week ending September 3, 90 thousand barrels per day above the previous week’s average. Refineries operated at 88.2 percent of their operable capacity last week. Gasoline production increased last week, averaging 9.5 million barrels per day. Distillate fuel production remained relatively unchanged last week, averaging 4.3 million barrels per day.

U.S. crude oil imports averaged 8.9 million barrels per day last week, down by 794 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 9.5 million barrels per day, 500 thousand barrels per day above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1.1 million barrels per day. Distillate fuel imports averaged 253 thousand barrels per day last week.

pup55 wrote:
Summary of Weekly Petroleum Data for the Week Ending September 9, 2011
U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the week ending September 9, 426 thousand barrels per day below the previous week’s average. Refineries operated at 87.0 percent of their operable capacity last week. Gasoline production increased last week, averaging about 9.4 million barrels per day. Distillate fuel production decreased last week, averaging nearly 4.5 million barrels per day.

U.S. crude oil imports averaged 8.5 million barrels per day last week, down by 23 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged close to 8.9 million barrels per day, 494 thousand barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 659 thousand barrels per day. Distillate fuel imports averaged 154 thousand barrels per day last week.

Rabbit wrote:Petroleum Balance Summery, Week Ending September 6th 2013

U.S. crude oil refinery inputs averaged about 15.9 million barrels per
day during the week ending September 6, 2013, roughly the same as
the previous week’s average. Refineries operated at 92.5 percent of their
operable capacity last week. Gasoline production was flat compared to
the previous week, averaging 9.1 million barrels per day. Distillate fuel
production was also unchanged last week, averaging about 5.0 million
barrels per day.

U.S. crude oil imports averaged about 8.0 million barrels per day last
week, down by 238 thousand barrels per day from the previous week.
Over the last four weeks, crude oil imports averaged over 8.1 million
barrels per day. Total motor gasoline imports (including both finished
gasoline and gasoline blending components) last week averaged 401
thousand barrels per day. Distillate fuel imports averaged 99 thousand
barrels per day last week.

Rabbit wrote:Data for week ending Sept 5 | Release Date: Sept 10 | Next Release Date: Sept 17, 2014

U.S. crude oil refinery inputs averaged over 16.3 million barrels per day
during the week ending September 5, 2014, 96,000 barrels per day less
than the previous week’s average. Refineries operated at 93.9% of their
operable capacity last week. Gasoline production decreased last week,
averaging about 9.0 million barrels per day. Distillate fuel production
increased last week, averaging 5.1 million barrels per day.

U.S. crude oil imports averaged over 7.6 million barrels per day last
week, down by 54,000 barrels per day from the previous week. Over
the last four weeks, crude oil imports averaged 7.6 million barrels
per day, 6.8% below the same four-week period last year. Total motor
gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged 324,000 barrels per day. Distillate fuel
imports averaged 87,000 barrels per day last week.

Rabbit wrote:decreased last week, averaging 4.8 million barrels per day.

U.S. crude oil imports averaged about 7.5 million barrels per day last
week, down by 396,000 barrels per day from the previous week. Over
the last four weeks, crude oil imports averaged over 7.6 million barrels
per day, 0.5% above the same four-week period last year. Total motor
gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged 589,000 barrels per day. Distillate fuel
imports averaged 130,000 barrels per day last week.


So from these snapshots USA crude imports fell substantially from 2009. Not surprising given the fracking boom that we all have heard about to the Nth degree around here. The part I find mildly surprising is, even though domestic production has been sliding for six months the rate of imports has not changed in any meaningful way despite the vast increase in gasoline consumption going on this year.

How long until we see USA crude imports climbing back to 2009 levels? The stockpiles of stored crude won't last forever. Of course the other factor as I understand it is the light tight 'fracked' oil produces more gasoline when refined than heavier oils do, so this can create something of a gasoline glut if exports go down just a little faster than decline in the fracking plays.
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Re: THE Oil Demand Thread (merged)

Unread postby Subjectivist » Fri 11 Sep 2015, 08:49:57

It looks like American refining has been pretty stagnant in terms of volume, but IIRC in 2009 there was a lot of talk about crude getting mour heavy and sour than we were prepared for. Then the Fracking took off and we had a virtual flood of light tight sweet oil instead. Now with five years of LTO having passed through our refining system I don't know how we will react as the LTO drops out of the supply system.

What I mean is, six years ago there was a lot of discussion going on about installing desulfurization equipment and hydrogen injection to deal with heavy sour crude. I haven't heard a peep about that in at least a couple years, but as LTO falls steeply over the next 6-18 months the mix of crude will shift back to the heavier sour stuff we were sure we would be using more of by now.

How prepared is our refining system to deal with this shift back away from LTO?
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‘End of oil’ narratives are misleading — global oil demand w

Unread postby AdamB » Sun 05 Nov 2017, 09:37:23


The world isn’t reinventing the wheel. But we’re changing how it turns, who it carries and where it’s going. Over the next few decades we’ll be plugging in more cars, hailing and sharing them, and reminiscing about the good ol’ days of the steering wheel. To be sure, these looming mobility changes are all exciting and impactful. But none of these nascent trends extrapolate easily into a narrative about “the end of oil,” a disruptive displacement of the fuel everyone loves to hate. Contrary to armchair calculus, more electric vehicle (EV) sales do not equate to the world using less oil anytime soon. In fact, whichever way you cut the spreadsheets, the numbers are pointing in the opposite direction. By 2030, less than 15 years from now, I expect around 400 million more internal combustion engines will accumulate into the global fleet of passenger ..


‘End of oil’ narratives are misleading — global oil demand will remain at 90 million bpd
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: ‘End of oil’ narratives are misleading — global oil dema

Unread postby Outcast_Searcher » Sun 05 Nov 2017, 19:25:29

AdamB wrote:

The world isn’t reinventing the wheel. But we’re changing how it turns, who it carries and where it’s going. Over the next few decades we’ll be plugging in more cars, hailing and sharing them, and reminiscing about the good ol’ days of the steering wheel. To be sure, these looming mobility changes are all exciting and impactful. But none of these nascent trends extrapolate easily into a narrative about “the end of oil,” a disruptive displacement of the fuel everyone loves to hate. Contrary to armchair calculus, more electric vehicle (EV) sales do not equate to the world using less oil anytime soon. In fact, whichever way you cut the spreadsheets, the numbers are pointing in the opposite direction. By 2030, less than 15 years from now, I expect around 400 million more internal combustion engines will accumulate into the global fleet of passenger ..


‘End of oil’ narratives are misleading — global oil demand will remain at 90 million bpd

I thought this was a pretty good piece, as was the 3 part series on EV's vs. ICE's.

This is an argument vs the Tony Seba approach which assumes everything goes perfectly and self driving cars and ride sharing change everything by 2030. And it uses arithmetic and logic, so it's not just empty bloviating.

The truth will likely end up somewhere between this and the Tony Seba ultra-quick, nothing goes wrong scenario.

Either way, it doesn't look like economic doom. How much pain is involved is based on how much oil is left, and how expensive will it be to get once we're real world, able to extract less and less.

Now, mean time, AGW -- that might be a different kettle of fish, of course.
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Oil Demand Gushing Again

Unread postby AdamB » Fri 26 Jan 2018, 11:45:53


The price of a barrel of Brent crude oil rose to $68.88 a barrel yesterday, one of the highest recent readings since December 2, 2014. That’s a spectacular 147% rebound from the January 20, 2016 low of $27.88. It’s remarkable because it follows a 76% crash in the price of this commodity from its June 19, 2014 peak (Fig. 7). The price of oil is highly correlated with the CRB raw industrials spot price index. That makes sense since both oil and other industrial commodity prices are influenced by the global business cycle. They can diverge from time to time because the supply-demand balance in the oil market includes a geopolitical component that’s absent from other commodity markets. Just for fun, Debbie and I constructed a global economic indicator that is the average of the CRB index and the price of a barrel of Brent


Oil Demand Gushing Again
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: THE Oil Demand Thread (merged)

Unread postby Tanada » Sat 27 Jan 2018, 03:18:43

World oil consumption increased from 92 MM/bbl/d in mid 2014 to to 98 MM/bbl/d in early 2017. That is a demand increase of 2 MM/bbl/d per year for the entire period I habitually call 'the glut'. How anyone can with a straight face use the terminology 'demand is gushing again' in light of the fact that demand growth never slowed down is a mystery to me, but then again I was a History Major with a minor in Mathematics so I know how to do a simple three year analysis of demand growth.
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Re: THE Oil Demand Thread (merged)

Unread postby rockdoc123 » Sat 27 Jan 2018, 12:58:25

How anyone can with a straight face use the terminology 'demand is gushing again' in light of the fact that demand growth never slowed down is a mystery to me,


But Tanada, I thought people could no longer afford oil? Or at least that is what the ETPers have been telling us. :wink: :roll:
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