[Tikib]

Anyone have any bets on when prices will go above $145.

[ennui2]

Current WTI crude is $48.52. This is a pretty juicy thread for bad predictions.

[Paulo1]

I would say, never, unless the Straits of Hormuz gets blockaded, or something...(in constant dollars adjusted for inflation.) A sudden shock could spike big time with resulting immediate consequences.

I think the economy is too sick and we are struggling, big time. If the oil price goes up the economy will falter. As the economy descends exploration and/or production will decline....the price of oil will rises again and economy tanks all over again. Like a diminishing sine wave. Like today. It is a very sick industry producing a very expensive product. At least it is expensive for the average Joe.

But hey, we are in uncharted territory here.

As an aside I have been tracking my costs for town trips. For a return trip on my MC it costs $8.00 Canadian at $1.279/litre. My truck (old Toyota) is approx $25, and our economical Yaris is an honest $18.00. Needless to say I use the MC for many many trips. I have outfitted it with a decent carrier (holds two 15 pack beer), and soft sided saddle bags which hold a huge amount of, whatever. Plus, it is a veritible rocket which allows me to zip around the tourist motorhome mammoths. It must be the low Canadian dollar, but I have never seen bigger US motorhomes or as many. They are often towing huge aluminum trailers for the their toys and 'stuff', or a huge boat or SUV. It is quite disgusting and I always give thanks they usually head right on past our turn off. I just don't understand how you need so much 'stuff'? My buddy has a trailer and it is a small 5th wheel that he tows with a small Nissan Frontier PU. He has a rack for a tin boat.

[GoghGoner]

In the news-of-the-day, the inflationary pressures on commodity prices look negative. Globally, central bankers are still fighting deflation. This would change when global growth charges ahead again. When that happens is anyone's guess but I don't see it for a few years since student debt, sub-prime auto loans, zombie corporations, baby boomers, etc... will all have a deflationary effect on the economy in the US and I don't see much activity happening elsewhere right now.

In a shocking result, the employment cost index rose only 0.2 percent in the second quarter which is far below expectations and the lowest result in the 33-year history of the report. Year-on-year, the ECI fell 6 tenths to plus 2.0 percent which is among the lowest readings on record. The record low for this reading is plus 1.4 percent back in the early recovery days of 2009 when, apparently unlike today, there was enormous slack in the labor market.

[Pops]

Here is EIAs wild ass guess


(This was put out in March, I don't really get why the high scenario starts back last year sometime? Does that mean the EIA doesn't know what is going on or the market doesn't?)


An EIA projection isn't going to predict swings, they like predictability (I can't figure out why they show little variations out 10 or 20 years as if they really know, they can't tell what is going to happen in the morning, LoL) But no one pays any attention to my predictions so I can predict swings, in fact I think swings are the future!




I think Paulo is right, prices can't go high and stay there because people simply can't continue to buy the same amount, they either cut back on fuel or cut back elsewhere and eventually get a pink slip because everyone else is cutting back too — so they don't need to commute and voilá the price falls. But price can go high for a little while, and will just enough to sucker in some more rubes to drill a few more losing holes. So prices will always shoot up on shortage and then fall on a glut, the flavor of the glut might change; supply or demand or both.

I think the swings we've seen the last 15 years are just the start.

But notice the swings trend downward in my chart. I think price pressure from the highs and general uncertainty from the swings will push the economy generally down. Add in some aging population induced deflation, some automation and labor arbitrage effects on the middle class, and the great sucking squid of financialization and trickle up economics and you have deflation just as GoGone pointed out.

Or not, LoL

[GHung]

Ask Steve.....



http://www.economic-undertow.com/author/steveludlum/

.

[Pops]

http://euanmearns.com/oil-production-vi ... #more-9496

If you look at every 4th to 1st quarter since the recession there is a decline in demand.
There is a good demand increase from the 1st to 2nd qtr in 4 of the 6 years of this chart, not much last year but another decline this year though not as steep as in 2011.

2 months decline in a row is really the first sign of demand fail I can seen since '11, 3 will be a dot.

[Outcast_Searcher]

Here is EIAs wild ass guess


(This was put out in March, I don't really get why the high scenario starts back last year sometime? Does that mean the EIA doesn't know what is going on or the market doesn't?)


An EIA projection isn't going to predict swings, they like predictability (I can't figure out why they show little variations out 10 or 20 years as if they really know, they can't tell what is going to happen in the morning, LoL)

Pops, from the EIA reading I've done, their long term forecasts differing low/reference/high price scenarios are primarily about major factors like differing assumptions about underlying economic fundamentals over time. (Like price affecting both supply and demand, economic vitality affecting demand, etc).

Actually, I think the complete lack of price "squiggles" in the long term forecasts is refreshingly honest. They admit they don't know the details -- and at least they are documenting their basic methodology and major underlying assumptions (unlike the pundits here, including yours truly). And after all, basic components like Chindia demand will have a FAR larger impact on longer term prices than say, a given year's US inflation rate.

Not having gotten into the nitty gritty, I like you, am baffled at then starting the three projection lines from different starting dates (but no, I don't want to take the time to figure it out).

I know the EIA takes a lot of heat for their projections. But at least they're using more economics and science and definitions than a giant herd of broker/bankers and investment news letter writers).

[Outcast_Searcher]

I think the economy is too sick and we are struggling, big time. If the oil price goes up the economy will falter. As the economy descends exploration and/or production will decline....the price of oil will rises again and economy tanks all over again. Like a diminishing sine wave. Like today. It is a very sick industry producing a very expensive product. At least it is expensive for the average Joe.

Interesting how folks on this site keep saying how "sick" the economy is, and yet growth continues despite all the projections of doom, claims we are really in a depression or recession, etc.

I was just reading "The Conundrum" today, and it reminds us that:

1). Global burning of fossil fuels continues to increase, with rare big economic dips like the 2008-2009 recession the rare exception.

2). The reason we're burning more fossil fuels net is mainly that stuff is so CHEAP. More affordable stuff means more consumption. This is a sign of overall economic health, even as it invites us to consume (including expanding the population of consumers) until we ruin the planet. Thus the conundrum.

....

One example: Rents, along with housing prices are rising markedly in the US, even as the rental vacancy rate reaches a 20 year low. Hint: this is due to economic strength, not because people can't afford to pay their rent.

https://research.stlouisfed.org/fred2/series/USRVAC

[Pops]

One example: Rents, along with housing prices are rising markedly in the US, even as the rental vacancy rate reaches a 20 year low. Hint: this is due to economic strength, not because people can't afford to pay their rent.

Well yeah rental vacancies are low, if you are afraid or unable to buy that's what you do.



You are poking "doomers" for picking cherries; you are doing the same.

[Pops]

But that is the thing about this very moment that seems so strange to me, or maybe how much my POV doesn't jibe with the situation. There doesn't seem to be any big obvious trend—lots of big obvious dots but nothing I can hang my hat on.

Average RE prices are up, because cheap houses aren't selling
oil production is up and price in the tank but demand is down 2 months in a row
employment is "at Historic Lows" but smallest wage increase in forever
equities are at records too, but then so is leverage
interest rates have been falling since 1970-whatever and have been negative now for years
but there is no inflation

I could go on but you all get the gist; whatever angle you want to grind, you are likely to find plenty of evidence to back it up. Plenty strange.

[Outcast_Searcher]

One example: Rents, along with housing prices are rising markedly in the US, even as the rental vacancy rate reaches a 20 year low. Hint: this is due to economic strength, not because people can't afford to pay their rent.

Well yeah rental vacancies are low, if you are afraid or unable to buy that's what you do.



You are poking "doomers" for picking cherries; you are doing the same.

Geez. Picking cherries, huh? So the whole thread about the US Economic Demise is Greatly Exaggerated where OF2 consistently posts news about economic strength, and basically makes the whole crowd of constant "tomorrow we're doomed, this time for sure" crowd look silly single-handedly is also "picking cherries", huh?

So the "recession" (or "depression") the doomers were crowing about recently that now it turns out there wasn't even one quarter of negative growth (recent revised figures), that's picking cherries too?

Is ANY positive economic news picking cherries, even when the overall trends are positive (despite the always glum outlook of the doomers?)

Pops, I think you often make rational, convincing arguments. This time, not at all.

You see, home prices are also rising consistently overall, and a lot in many places. Is that also because people can't afford their mortgages? Give me a break.

[Pops]

LoL, you said:

One example: Rents, along with housing prices are rising markedly in the US, even as the rental vacancy rate reaches a 20 year low. Hint: this is due to economic strength, not because people can't afford to pay their rent.

I merely pointed out that, as expected, when homeownership falls, rents rise. People lost their houses, they got cramped living in the minivan so they are looking to rent.


I think part of the reason I find it hard to decipher the situation is the internet, and media in general (and of course posters everywhere) are just as partisan as the most crass populist politician. OF was posting shoots just as green in 2009 as he is today, why would I all of a sudden think he has the Vision?

[copious.abundance]

OF was posting shoots just as green in 2009 as he is today, why would I all of a sudden think he has the Vision?

In case you didn't notice, the recession ended in mid-2009, so all those green shoots articles I was posting back then were right.

[peripato]

OF was posting shoots just as green in 2009 as he is today, why would I all of a sudden think he has the Vision?

In case you didn't notice, the recession ended in mid-2009, so all those green shoots articles I was posting back then were right.

Go f#ck yourself Oily. Lying pr!ck. Just because the King, his lackeys and the court jester decided that the "recession ended" in 2009, doesn't mean sheet.


Labor participation rate is still declining. Now at 36-year lows, with no sign of a recovery, let alone strong growth as would be the case post-recession.


The velocity of money is freefalling, showing the economy is as dead as a doornail, as opposed to expanding during any textbook recovery.

Di#khead...Why are you still posting? Get a life.

[Pops]

now now

[GoghGoner]

8 years ago we would have been posting graphs of oil supply to bolster are arguments. Today we are posting economic data that affects oil demand. I think the pendulum is swinging back towards supply now. The EIA is predicting shale oil and gas supply to decrease in September vs August. The decline in global oil production has probably begun and the fallout from today's low prices will have an effect at least out to 2020.

I am finally ready to answer the OP's question. October of 2019 is my best guess. It will then fall and spike higher in 2021.

[copious.abundance]

According to peripato's chart, and his reasoning, there were, in reality, no recessions between about 1963 and 1998, because the LFPR was rising. Even though there really were. After all, if the LFPR is going to be our measure of what constitutes a recession/recovery, then there cannot be a recession when it is rising, if, as he claims, there cannot be a recovery when it is falling.



As for the velocity of money, its current low level has everything to do with the Fed's purchase of treasuries the past several years. If it weren't for that, it would be a lot more normal-looking. You'll have to research that yourself.

You see, the doom and gloom crowd is pretty desperate these days to find some way to claim there has been no recovery, so they're forced to cherry pick increasingly obscure stats and mis-interpret other stats in order to maintain their illusion of doom. But then, I've been pointing out that for at least 3-4 years too.

[yellowcanoe]

It must be the low Canadian dollar, but I have never seen bigger US motorhomes or as many. They are often towing huge aluminum trailers for the their toys and 'stuff', or a huge boat or SUV. It is quite disgusting and I always give thanks they usually head right on past our turn off. I just don't understand how you need so much 'stuff'? My buddy has a trailer and it is a small 5th wheel that he tows with a small Nissan Frontier PU. He has a rack for a tin boat.

I would consider motorhomes to be more fuel efficient than the jet boats that some members of my wifes family have in BC and Alberta. While visiting last week, I heard that my brother-inlaw had gone on a half day outing in his son-inlaws jet boat from the family cabin on Stuart Lake to Takla Lake. I asked if they had been able to do the entire trip on the boats internal tank and was told that had taken along nine extra containers of fuel -- basically every fuel can they could find. They used up all the containers and the boat was on the verge of being out of gas when they loaded it onto the trailer for the trip home! On a more positive note, the same boat was used to help with rescue efforts when High River, Alberta was flooded two years ago.

[Cog]

Their money, their rules.