Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

The Imminent Peak in US Oil Production

Discuss research and forecasts regarding hydrocarbon depletion.

Moderator: Pops

Re: The Imminent Peak in US Oil Production

Unread postby Tanada » Tue 14 Feb 2017, 04:49:12

The biggest problem with EIA projections in my opinion is they always assume the end consumers can afford whatever price is necessary to keep supply growth going forward. In reality those 'less productive zones' are more and more expensive to produce going into the future. Like everything else determined by real world economics, supply is in balance with demand based on price. As ROCKMAN has pointed out dozens of times in the last two years every barrel of oil produced during the 'glut' of the recent months has found a buyer. A small number of those barrels were sold for numbers in the $35/bbl range but a great many more were sold at $50-$60/bbl.

I have pointed people to the numbers several times so here I go again. Prices stayed at or above $60/bbl for the first six months of the 'glut'. Then they declined in fits and starts through the rest of 2015 before bottoming out in January 2016 when the Iran sanctions were lifted and it made a huge media splash. Between the bottom around the second week of January 2016 and six weeks later at the start of March 2016 prices bounced back up into the $40+/bbl range and they cycled between $40-$55 from March through December. With the OPEC+ announcement in November they stabilized above $50/bbl for WTI contracts and they have been sitting in the low fifties the last 11 weeks. From $80/bbl in October 2014 to $ 37/bbl in January 2016 and right back to $56/bbl last month there has not been a single day when the barrels offered for sale by the producers have been left sitting as 'too expensive' by the refiners who ultimately buy and process them.

Those are the real world facts. Models and theories and a thousand pages of justifications are fine entertainment, but the facts remain the facts observable by anyone willing to actually look at them.
I should be able to change a diaper, plan an invasion, butcher a hog, design a building, write, balance accounts, build a wall, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, pitch manure, program a computer, cook, fight efficiently, die gallantly. Specialization is for insects.
User avatar
Tanada
Site Admin
Site Admin
 
Posts: 13656
Joined: Thu 28 Apr 2005, 02:00:00
Location: South West shore Lake Erie, OH, USA

Re: The Imminent Peak in US Oil Production

Unread postby AdamB » Tue 14 Feb 2017, 09:53:20

pstarr wrote:From the ETP thread, just posted.

More indication that shale is done.


Random spurious relationships have nothing to do with shale being "done". Internationally, shale hasn't even begun, for good reason...because there is too much of the low hanging fruit in discrete reservoirs yet to be had, and American exceptionalism has worked out in our favor pretty strongly with this particular type of resource development.

pstarr wrote:Contrary to that psychotic chart above from EIA. (Those psycho's need new jobs.)


Those "psycho's" were one of the few groups that didn't fall for peak oil hysteria, putting them,credibility wise, head and shoulders above the crowd that did. You know pstarr...folks like you.
AdamB
Light Sweet Crude
Light Sweet Crude
 
Posts: 1935
Joined: Mon 28 Dec 2015, 16:10:26

Re: The Imminent Peak in US Oil Production

Unread postby AdamB » Tue 14 Feb 2017, 10:03:02

Tanada wrote:The biggest problem with EIA projections in my opinion is they always assume the end consumers can afford whatever price is necessary to keep supply growth going forward.


Sort of. Their models certainly presume that a given demand corresponds with a given price, and amount of supply. Those 3 concepts are pretty tightly woven together. But the price they have for world oil, and domestic natural gas, certainly are well within the bounds of what has been paid by the consumers before. In that sense, their modeling results are based on pretty solid fundamentals. But black swans, I don't think you see any economically based assessments of the future including those. Singularities just don't work in models, as peak oilers have proven o multiple occasions now.

Tanada wrote:I have pointed people to the numbers several times so here I go again. Prices stayed at or above $60/bbl for the first six months of the 'glut'. Then they declined in fits and starts through the rest of 2015 before bottoming out in January 2016 when the Iran sanctions were lifted and it made a huge media splash. Between the bottom around the second week of January 2016 and six weeks later at the start of March 2016 prices bounced back up into the $40+/bbl range and they cycled between $40-$55 from March through December. With the OPEC+ announcement in November they stabilized above $50/bbl for WTI contracts and they have been sitting in the low fifties the last 11 weeks. From $80/bbl in October 2014 to $ 37/bbl in January 2016 and right back to $56/bbl last month there has not been a single day when the barrels offered for sale by the producers have been left sitting as 'too expensive' by the refiners who ultimately buy and process them.

Those are the real world facts. Models and theories and a thousand pages of justifications are fine entertainment, but the facts remain the facts observable by anyone willing to actually look at them.


Mike Lynch explains short term movements, as well as long term movements, in price quite well in his video series. I recommend everyone watch all 3, because he has this one nailed.

And the EIA runs short terms estimates as well as long term estimates, don't avoid the facts at all in those estimates, and have far more people with far more experience, using all the proprietary information provided to only them, to utilize. There is a reason why the market uses their information, and the government requires this kind of short and long term, domestic and international projections, from them. Because the complexity of even attempting to answer this question isn't something you hand off to bloggers and whatnot.
AdamB
Light Sweet Crude
Light Sweet Crude
 
Posts: 1935
Joined: Mon 28 Dec 2015, 16:10:26

Previous

Return to Peak oil studies, reports & models

Who is online

Users browsing this forum: No registered users and 4 guests