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THE 2017 po.com Oil Price Challenge

Discussions about the economic and financial ramifications of PEAK OIL

Re: THE 2017 po.com Oil Price Challenge

Unread postby Outcast_Searcher » Fri 17 Nov 2017, 19:01:53

Tanada wrote:Having plummeted all the way to 21st place perhaps it is obvious why I have not played in the past. I am pretty terrible at guessing and I never denied it in any serious manner.

You should NOT feel bad. Professional and serious traders of all markets rarely do better than random chance over time as far as picking winners vs. losers. This is why long term passive investing is so strongly advocated -- all the trading expenses and timing randomness is eliminated.

The talking heads who make their living making market predictions based on charts, fundamental analysis, etc. are no better.

It's entertainment. I use it as an opportunity to remind myself why I should NOT make such bets with real money.
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Re: THE 2017 po.com Oil Price Challenge

Unread postby dolanbaker » Sat 18 Nov 2017, 09:15:31

Outcast_Searcher wrote:
Tanada wrote:Having plummeted all the way to 21st place perhaps it is obvious why I have not played in the past. I am pretty terrible at guessing and I never denied it in any serious manner.

You should NOT feel bad. Professional and serious traders of all markets rarely do better than random chance over time as far as picking winners vs. losers. This is why long term passive investing is so strongly advocated -- all the trading expenses and timing randomness is eliminated.

The talking heads who make their living making market predictions based on charts, fundamental analysis, etc. are no better.

It's entertainment. I use it as an opportunity to remind myself why I should NOT make such bets with real money.

Same here, I was convinced we had bottomed out at the start of the year....
Based on gut feeling and no research at all.
Ronald Coase, Nobel Economic Sciences, said in 1991 “If we torture the data long enough, it will confess.”
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Re: THE 2017 po.com Oil Price Challenge

Unread postby PeakOiler » Tue 05 Dec 2017, 11:34:59

We have a new leader as of Nov. 28th:

Image

Congrats Salinski!

Reminder: I'm not going to be the scorekeeper after this year, so if y'all are going to play this game next year, someone better start a new thread so players can start making their guesses!
There’s a strange irony related to this subject [oil and gas extraction] that the better you do the job at exploiting this oil and gas, the sooner it is gone.

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Re: THE 2017 po.com Oil Price Challenge

Unread postby Revi » Tue 05 Dec 2017, 15:09:45

I have dropped to 8th! Oh well, I was a contender at one point. We'll see, but it looks like oil will hang around $60 until the new year.
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Re: THE 2017 po.com Oil Price Challenge

Unread postby Subjectivist » Tue 26 Dec 2017, 08:22:05

Looks like I will end around 17th place. Bah Humbug!
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Re: THE 2017 po.com Oil Price Challenge

Unread postby PeakOiler » Wed 27 Dec 2017, 06:28:14

Yeah, I didn't do as well as I had hoped either. Looks like I was too early to guess oil would get to $70 this year. Perhaps in 2018.

Here's the scorecard as of Dec. 12th:
Kublikhan took 1st place!
Image
There’s a strange irony related to this subject [oil and gas extraction] that the better you do the job at exploiting this oil and gas, the sooner it is gone.

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Re: THE 2017 po.com Oil Price Challenge

Unread postby vtsnowedin » Wed 27 Dec 2017, 07:52:16

Middle of the pack for me is my best ever finish. Wait tell next year I tell yah. :)
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Re: THE 2017 po.com Oil Price Challenge

Unread postby onlooker » Wed 27 Dec 2017, 08:52:34

So when can we start with our guesses for next year?
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Re: THE 2017 po.com Oil Price Challenge

Unread postby PeakOiler » Wed 27 Dec 2017, 09:12:20

As I mentioned above, Onlooker, I'm not going to be the scorekeeper anymore. Someone else needs to host the game...
There’s a strange irony related to this subject [oil and gas extraction] that the better you do the job at exploiting this oil and gas, the sooner it is gone.

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Re: THE 2017 po.com Oil Price Challenge

Unread postby PeakOiler » Fri 29 Dec 2017, 05:32:39

Here's the scorecard as of Dec. 19th:
Image

and the scorecard for Dec. 27th after a new high price for the year:
Image

I'll post the final scorecard for 2017 after the EIA report next week.
There’s a strange irony related to this subject [oil and gas extraction] that the better you do the job at exploiting this oil and gas, the sooner it is gone.

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Re: THE 2017 po.com Oil Price Challenge

Unread postby vtsnowedin » Fri 29 Dec 2017, 06:24:28

WOW Revi really took a hit this week.
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Re: THE 2017 po.com Oil Price Challenge

Unread postby Tanada » Fri 29 Dec 2017, 08:55:06

Hasn't Salinsky won before? Say, could you create a list of the top five place holders for each year you ran the contest? It seems to me those people who scored in the top five more than once should be given more consideration when they post about oil economics.
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Re: THE 2017 po.com Oil Price Challenge

Unread postby Outcast_Searcher » Fri 29 Dec 2017, 11:26:53

Tanada wrote:It seems to me those people who scored in the top five more than once should be given more consideration when they post about oil economics.

Could be, but don't forget small sample set size. If we had 30 years of data and someone finishing top 5, say 10 times or more -- that would start to look significant to me.

Active mutual fund managers (i.e. even "top pros" at stock picking) who do well for a while (often due to a style working, like momentum or value investing), will be among the WORST when the market shifts. (Which makes sense -- regression to the mean happens, and the math demands such performance average out).

Just looking at how random various results are year to year and month to month in this contest in recent years, I wouldn't read too much into that. Not to take anything away from those who did well - I'm happy for them.

Disclosure: I'm clearly a random number generator in this game, and am not surprised at all by that. I've done OK in oil stocks over a 25+ year period with the brilliant formula of LOTS of patience, buy low, sell high, plus bank the dividends. :lol:
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Re: THE 2017 po.com Oil Price Challenge

Unread postby kublikhan » Fri 29 Dec 2017, 19:20:05

Tanada wrote:Hasn't Salinsky won before? Say, could you create a list of the top five place holders for each year you ran the contest? It seems to me those people who scored in the top five more than once should be given more consideration when they post about oil economics.
Here are the top 5 for the last 5 years.

Oil Price Challenge top 5 winners(in order)
2017: salinksy, kublikhan, Beefski, KiloBerlin, Cog
2016: Gasmon, salinksy, Peakoiler, kublikhan, davep
2015: SteinarN, salinsky, kublikhan, Observerbrb, careinke
2014: Timo, kublikhan, JV153, oximan, jdmartin
2013: Daniel_Planview, TheAntiDoomer, kublikhan, SteinarN, basil_hayden

If you want to go farther back there is a link here. I'll add 2017 results after it's official:
PO.com Oil Price Challenge Previous Results
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Re: THE 2017 po.com Oil Price Challenge

Unread postby Outcast_Searcher » Fri 29 Dec 2017, 20:24:49

OK. Kub in the top 5 the 5 most recent years.

That's pretty impressive, even if not formally proving anything. So congrats.

So I'll ask: Any strategy or insights you wish to share, even if just general observations about oil or the economy (or anything else?)

I'm always happy to learn something new. Thanks in advance if you care to share anything.
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Re: THE 2017 po.com Oil Price Challenge

Unread postby kublikhan » Fri 29 Dec 2017, 21:36:51

Thanks Outcast. Well for one thing I tend to predict less volatility than most. Here was the high low spread in actual annual oil prices for the past 5 years:

year spread kub predicted spread
2017 18 15
2016 28 20
2015 27 30
2014 54 25
2013 22 35

That's an average high-low spread of only $30 a year. And that's including the the highly volatile year 2014. The average spread is only $24 for the other 4 years. After being deluged with oil glut news I started factoring that in as well. I figured the large volumes of oil in storage would act to mitigate any supply side shocks and put a lid on volatility. So I reduced my spread further in 2016 and 2017.

For the price levels I pick, I tend to first look at forecasts by the major banks and/or energy organisations. I figure they must have whole teams of guys looking at this stuff, why not leverage their work? If they differ widely I use my own judgment to choose. For example, for 2017 I factored in the OPEC deal raising prices off of their 2016 values. And the global economy doing well enough to cause oil demand to continue to grow. I figured prices at the end of the year would be higher than at the beginning so I made the close closer to my high. All values rounded to the nearest $5 for simplicity.
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Re: THE 2017 po.com Oil Price Challenge

Unread postby Subjectivist » Fri 29 Dec 2017, 22:08:29

kublikhan wrote:Thanks Outcast. Well for one thing I tend to predict less volatility than most. Here was the high low spread in actual annual oil prices for the past 5 years:

year spread kub predicted spread
2017 18 15
2016 28 20
2015 27 30
2014 54 25
2013 22 35

That's an average high-low spread of only $30 a year. And that's including the the highly volatile year 2014. The average spread is only $24 for the other 4 years. After being deluged with oil glut news I started factoring that in as well. I figured the large volumes of oil in storage would act to mitigate any supply side shocks and put a lid on volatility. So I reduced my spread further in 2016 and 2017.

For the price levels I pick, I tend to first look at forecasts by the major banks and/or energy organisations. I figure they must have whole teams of guys looking at this stuff, why not leverage their work? If they differ widely I use my own judgment to choose. For example, for 2017 I factored in the OPEC deal raising prices off of their 2016 values. And the global economy doing well enough to cause oil demand to continue to grow. I figured prices at the end of the year would be higher than at the beginning so I made the close closer to my high. All values rounded to the nearest $5 for simplicity.


Interesting! Thanks for giving away your secret, hard work is better than gut feeling...Sounds so cliche put that way but your method is persuasively more effective than mine.

Seems how there is no game for 2018 are you willing to share your estimates anyhow? The record says you will be pretty close even f not perfectly on target.

Your method reminds me of Pup55. He was such a fixture around here I still miss his weekly analisys.

Did world oil consumption go down year over year any time recently? I know America and the EU dropped because of the economy but I was under the impression that China and India increased imports fast enough the world consumption still grew.
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Re: THE 2017 po.com Oil Price Challenge

Unread postby Outcast_Searcher » Fri 29 Dec 2017, 22:10:20

kublikhan wrote:Thanks Outcast. Well for one thing I tend to predict less volatility than most. Here was the high low spread in actual annual oil prices for the past 5 years:

year spread kub predicted spread
2017 18 15
2016 28 20
2015 27 30
2014 54 25
2013 22 35

That's an average high-low spread of only $30 a year. And that's including the the highly volatile year 2014. The average spread is only $24 for the other 4 years.

Thanks kub. Nice observations and great simple explanation, especially about the volatility.

I think since I usually invest in stocks and consider commodities sort of a random number generator (due to my lack of knowledge about them), I didn't catch that smart idea about the volatility narrowing. Plus, probably let the crazy 2007 - 2010 volatility in oil weigh too heavily in my mind (though hindsight is 20-20, of course).

That's also a good point about looking at other forecasts first. Most forecasts about the stock market re specific stocks are so bad, IMO, that I probably discounted considering such forecasts by far too much and just went with gut feel and the news I was aware of.

If I were putting real money on oil futures, I'd be far more careful. :)
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Re: THE 2017 po.com Oil Price Challenge

Unread postby Tanada » Sat 30 Dec 2017, 10:15:54

Kublikahn for ranking in the top 5 for 5 years in a row,
Salinsky for ranking in the top 5 for 3 years in a row and winning once,
SteinarN for ranking in the top five twice in the last five years and winning once;

You are each now designated the new Special Rank of Master Prognosticator

Congratulations to all and Happy New Year!
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Re: THE 2017 po.com Oil Price Challenge

Unread postby Tanada » Sat 30 Dec 2017, 11:15:32

Tanada wrote:Kublikahn for ranking in the top 5 for 5 years in a row,
Salinsky for ranking in the top 5 for 3 years in a row and winning once,
SteinarN for ranking in the top five twice in the last five years and winning once;

You are each now designated the new Special Rank of Master Prognosticator

Congratulations to all and Happy New Year!


In an effort to not leave out past winners I reviewed the earlier years and Wallah!
SeaGypsy winning twice in earlier years now designated Master Prognosticator,
Daniel_Plainview winning once is now designated Prognosticator,
Obiwan winning once is now designated Prognosticator,
Obixman winning once is now designated Prognosticator,
Gasmon winning once is now designated Prognosticator,
Timo also won once but has since asked to be deleted so his account is designated closed.

If any of you do not like your new rank just let me know and I will switch you back to your prior status.
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