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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 » Mon 11 Dec 2017, 13:07:49

Brent hit a new high in intra-day trading this afternoon: $64.82. Looks like Brent has pulled further away from WTI because of a temporary pipeline shutdown in the North Sea. Tightness in the fundamentals may be causing volatility.

Oil Prices Rise On Solid Chinese Demand

Oil prices rose on Friday morning after Chinese data showed that China’s crude oil imports rose to the second-highest on record in November, and after U.S. total non-farm payroll employment increased last month.
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Re: THE Price of Crude pt 14

Unread postby Cog » Mon 11 Dec 2017, 13:10:37

This news will make some folks sad.
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Re: THE Price of Crude pt 14

Unread postby GoghGoner » Fri 22 Dec 2017, 16:24:40

Nothing spectacular but Brent inched up a new high.

Brent crude futures, the international benchmark for oil prices, ended the session up 35 cents at $65.25 a barrel, its highest close since June 2015.

U.S. West Texas Intermediate (WTI) crude futures settled 11 cents higher at $58.47 a barrel. WTI has also been touching values not seen since mid-2015 over the past two months.
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Fri 22 Dec 2017, 16:44:12

!2-22-17 WTI close $58.47 ETP MAP price $54.25. No excitement noticed at the gas pumps. 8)
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Re: THE Price of Crude pt 14

Unread postby GoghGoner » Tue 26 Dec 2017, 15:43:47

$16 higher than June. Nice 6 month move, no big fireworks just plodding higher. At this rate, will be closing in on $100 before the end of 2018...

WTI crude oil hits $60 per barrel for the first time since mid-2015

Brent crude, the international benchmark for oil prices, rose $1.69, nearly 3%, to $66.42 a barrel at 2:30 p.m. ET. West Texas Intermediate Crude oil, the US benchmark, added nearly 3% and briefly hit $60 per barrel.
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Re: THE Price of Crude pt 14

Unread postby GoghGoner » Sat 30 Dec 2017, 16:12:49

WTI ended the year above $60 and Brent above $66.

https://oilprice.com/Energy/Oil-Prices/The-Biggest-Oil-Story-Of-2017.html

Nevertheless, the U.S. has averaged exports of 1.5 mb/d in the fourth quarter, which is very high historically and makes the U.S. a significant player in the global oil market. At that level, the U.S is shipping more oil than 6 of the 14 OPEC members.

Moreover, even as U.S. oil exports may ease a bit next year, there are some forces working in its favor. The WTI discount remains exceptionally large, with front-month prices still trading almost $7 per barrel lower than Brent. That will keep exports high. Argus Media notes that transport costs of very large crude carriers (VLCCs) run at about $3.75 per barrel, which means the differential between WTI and Brent is supportive of U.S. exports.

The discount is helped along by the fact that U.S. shale output is surging, which acts as a drag on WTI. The EIA predicts that the U.S. will average 9.9 mb/d in 2018, an all-time high. OPEC and other analysts expect growth of U.S. shale by about 1 mb/d; the IEA sees slightly less but still robust growth of about 870,000 bpd.
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Re: THE Price of Crude pt 14

Unread postby Subjectivist » Sun 31 Dec 2017, 12:45:20

2018 here we come!
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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Ten Years Ago Oil Was Worth $100 More Than Today

Unread postby AdamB » Tue 02 Jan 2018, 10:22:42


As the calendar changes, the price of West Texas Intermediate oil (WTI) is hovering around $60 per barrel. WTI is the U.S. benchmark oil and the underlying commodity used by the New York Mercantile Exchange in oil futures contracts. It is based on a type of light, sweet oil that was produced primarily in Texas in the first part of the 20th century. After WTI fell at the end of 2014 and ultimately hit prices below $30 less than two years ago, most oil traders and oil producers are thankful for what is seen as a rebound. A trader wearing 2018 glasses works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Dec. 29, 2017. (Michael Nagle/Bloomberg) About a decade ago, though, WTI was trading at $145 per barrel (in July 2008). In inflation-adjusted dollars


Ten Years Ago Oil Was Worth $100 More Than Today
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: THE Price of Crude pt 14

Unread postby Tanada » Tue 02 Jan 2018, 17:12:03

Unless my math is screwy the difference between 145-60 is $85, not $100.
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Tue 02 Jan 2018, 18:54:22

Accidental double post. The site was acting slow and a bit screwy.
Last edited by Outcast_Searcher on Tue 02 Jan 2018, 19:00:07, edited 1 time in total.
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Tue 02 Jan 2018, 18:57:00

Tanada wrote:Unless my math is screwy the difference between 145-60 is $85, not $100.

They cited inflation as the difference (across time, even just a decade, constant dollars or PPP dollars need to be used to compare prices).

About a decade ago, though, WTI was trading at $145 per barrel (in July 2008). In inflation-adjusted dollars for November 2017, that $145 would be worth over $160. In other words, WTI is today valued at $100 less than it was valued nine and a half years ago.
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Tue 02 Jan 2018, 19:13:29

The final paragraph of the Forbes article on the price of oil with a ten year perspective caught my eye, re oil price prognisticators (including self appointed "experts" re oil price doom on this site. (Red font mine, for emphasis. And note that this author has some credibility re oil and KSA discussions -- not just an ability to quote random doomer blogs)).


Amidst all of the 2018 market predictions it is important to remember that 10 years ago few thought that oil prices would be this low today. The lesson here is that oil prices are fickle and despite the many predictions claiming to pinpoint the price of oil in a year or the average price throughout 2018, no one can forecast the future.

Ellen R. Wald, Ph.D. is a historian & consultant on geopolitics & energy. She is a Non-Resident Scholar at the Arabia Foundation.


Edit: forgot to copy the link to the article:

https://www.forbes.com/sites/ellenrwald ... 67eb7ba191
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Re: THE Price of Crude pt 14

Unread postby GoghGoner » Wed 03 Jan 2018, 10:29:30

Here is Ellen's prediction from another article on the net. Although she doesn't name a specific price she does make a statement that market is oversupplied and she says the prices need to be propped up at this level by rising demand.

There is nothing indicating the market is oversupplied, she is probably basing this assumption on her view of how quickly shale supply is going to grow in 2018. Also, if minor incidents are causing swings in prices that also indicates the fundamentals are very tight.

WTI over $61 today! Brent over $67! So far Ellen is wrong but it is only 3 days into 2018 8)

The oil market is likely to remain volatile in 2018. There is still an oversupply of oil and demand from countries like China and the United States is still integral to keeping prices from dropping. We will likely continue to see relatively minor incidents make significant impacts on the oil market.
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Re: THE Price of Crude pt 14

Unread postby ROCKMAN » Wed 03 Jan 2018, 12:18:53

goner - And this is where I still have a problem with their concept of an "oversupplied market". In my petroleum world a market is over supplied when I have no buyer for my oil. IOW I have to shut in some of my wells. To the best of my knowledge no producer in the world has had to do so to any meaningful level. IOW every bbl produced has been sold: to a refinery or to a speculating buyer sending it to storage.

It seems many are basing the "oversupplied" concept based on the price of oil. So they say the market is oversupplied when oil was $40-$50 per bbl. I that case the market has been grossly oversupplied for the vast majority of the petroleum age since its average inflation adjusted price has been lower for the vast majority of the period. But I didn't see much oversupply talk when oil hit $40/bbl around 2006. In fact just the opposite: lots of reports about a developing "tight" oil market and concerns over the inflation of oil prices.

Or put it this way: the oil market is "oversupplied" because the current price is significantly higher then it has been for most of the petroleum age. And that makes sense to some people???

And now oil has reached a record high over the last 2 years. In fact it is now selling 100% more then it was at its lowest recent price. So that represents an "oversupplied market": oil prices double in a couple of years???
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Wed 03 Jan 2018, 13:23:24

GoghGoner wrote:Here is Ellen's prediction from another article on the net. Although she doesn't name a specific price she does make a statement that market is oversupplied and she says the prices need to be propped up at this level by rising demand.

While I'll certainly acknowledge that while there are various hard to predict issues re supply, including some of the mechanical and geopolitical uncertainties occurring now/recently, the rising demand is certainly there. All one has to do is look at any graph of the global crude supply/demand aggregate numbers, and aside from the 2008-2009 major economic slump, it's steadily rising numbers as a trend, every year. Oh, and consider that recent economic forecasts show an acceleration in global economic growth for 2018.

So barring the economic armageddon the fast-crashers tend to forecast several times a year or more, the odds of increasing demand over the next 5 years or so look pretty solidly baked into the cake. (Net ICE production will FAR outpace any demand reduction from EV's for that timeframe in aggregate, IMO).
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Wed 03 Jan 2018, 13:33:54

When you look at production vs. consumption graphs I'm stuck by a few base truths. One is that no one can consume it before somebody has in fact produced it. Second that over production for any length of time will use up all available storage and force producers to drop the price to increase demand and consumption. Long term graphs show the lines repeatedly crossing showing that that eventually everything produced has been consumed as you would expect. Some other graphs show production exceeding production over long terms by a percent or so. I expect this is just the fuzzy math in the data that has to be compiled from hundreds of sources some of which have a casual relationship with the truth.
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Wed 03 Jan 2018, 13:41:46

Outcast_Searcher wrote:
So barring the economic armageddon the fast-crashers tend to forecast several times a year or more, the odds of increasing demand over the next 5 years or so look pretty solidly baked into the cake. (Net ICE production will FAR outpace any demand reduction from EV's for that timeframe in aggregate, IMO).

I would not be so sure about that. If supply tightens considerably the first response will be a significant rise in prices which may in fact already have begun. While far from Armageddon a significant price rise will hold back or even depress demand world wide. A new ICE vehicle becomes out of the question if you can't afford the fuel for it.
All those forecasts for demand going out five years are based on current forecasts of supply and prices. Change one or both of those assumptions and you will get different results.
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Re: THE Price of Crude pt 14

Unread postby ROCKMAN » Wed 03 Jan 2018, 14:34:22

vt - Not so much fuzzy math but the nature of the system. To the best of my knowledge during the last 4 decades I have not worked for a company that has sold a single bbl of oil to a refinery. I know for a fact I haven't sold any oil to a refinery in the last 9 years. I've sold every bbl to an oil marketing company such as Plains Resources. They might have sold some/every one of my bbls to a refinery, an oil speculator that sent it to storage, to the SPR or to an overseas buyer. But regardless I reported every bbl as production.

Which brings up a question: what exact does oil "consumption" mean: oil sold by producers; oil sold by oil marketing companies; oil bought by refineries; oil used to make oil products bought by consumers?

The EIA glossary doesn't define "oil consumption". This is the closest I could find:

Crude oil acquisitions (unfinished oil acquisitions): The volume of crude oil either:
•acquired by the respondent for processing for his own account in accordance with accounting procedures generally accepted and consistently and historically applied by the refiner concerned, or
• in the case of a processing agreement, delivered to another refinery for processing for the respondent's own account.

Crude oil that has not been added by a refiner to inventory and that is thereafter sold or otherwise disposed of without processing for the account of that refiner shall be deducted from its crude oil purchases at the time when the related cost is deducted from refinery inventory in accordance with accounting procedures generally applied by the refiner concerned. Crude oil processed by the respondent for the account of another is not a crude oil acquisition.
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Re: THE Price of Crude pt 14

Unread postby ROCKMAN » Wed 03 Jan 2018, 14:39:44

"Change one or both of those assumptions and you will get different results." And thus the usefulness of the term "dynamic". As in "Peak Oil Dynamic". LOL.
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Wed 03 Jan 2018, 14:43:18

vtsnowedin wrote:
Outcast_Searcher wrote:
So barring the economic armageddon the fast-crashers tend to forecast several times a year or more, the odds of increasing demand over the next 5 years or so look pretty solidly baked into the cake. (Net ICE production will FAR outpace any demand reduction from EV's for that timeframe in aggregate, IMO).

I would not be so sure about that. If supply tightens considerably the first response will be a significant rise in prices which may in fact already have begun. While far from Armageddon a significant price rise will hold back or even depress demand world wide. A new ICE vehicle becomes out of the question if you can't afford the fuel for it.

REALLY? We're going to say that again?

Look, as KJ and others have shown, the projections are for roughly 60ish million new ICE's net a year. What I'm talking about is comparing that to the under 5 million EV's a year we're all but certain to see over the next 5 years.

For people who can afford new cars, the price of gasoline at, say $4 or $5 vs. $2.50 is a mere annoyance for the VAST majority of buyers. If they need another car because theirs has become reliable, do you think they'll walk 5 or 50 miles to work? No, but they might well buy a Corolla instead of an F-150 or equivalent SUV, if finances become a concern.

Buying a $20,000ish Corolla over a $50,000ish fancy truck or SUV saves $30,000ish.

With the average person driving 13,000ish miles a year, the fuel cost for 500ish gallons of gas is in the range of $1200ish to $2500ish under that scenario. And of course, they burn a lot LESS gas buying a reasonably efficient vehicle.

The scale is completely different.

No matter how many times pstarr and the ETPers claim that people buying new cars can't afford gasoline if the price rises a little (or even a lot), in the main, is, complete BULLSH*T. (I'm not talking about a few people on the borderline of affording a new ICE -- I'm talking about mainstream consumers).

Look, even my POOR friends, including one who literally lives in his car, don't quit driving a LOT when gas gets to $4.00 or so. They rant and rave and complain and bitch -- and they buy the gasoline, keep right on driving as normal, and presumably buy less or cheaper other things to make up the difference.

Now, imagine this scenario for "comfortable" people buying new ICE's at an average transaction price of meaningfully over $30,000. Even $5.00 a gallon is just an annoyance (and lots and lots of braying/whining), for such people.
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