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Oil Prices Should Fall, Possibly Hard

Oil Prices Should Fall, Possibly Hard thumbnail

Oil prices should fall, possibly hard, in coming weeks. That is because fundamentals do not support the present price.

Prices should fall to around $30 once the empty nature of an OPEC-plus-Russia production freeze is understood. A return to the grim reality of over-supply and the weakness of the world economy could push prices well into the $20s.

Saudi Arabia's Minister of Petroleum & Mineral Resources Ali Al-Naimi speaks at the annual IHS CERAWeek global energy conference Tuesday, Feb. 23, 2016, in Houston. (AP Photo/Pat Sullivan)

Saudi Arabia’s Minister of Petroleum & Mineral Resources Ali Al-Naimi speaks at the annual IHS CERAWeek global energy conference Tuesday, Feb. 23, 2016, in Houston.

A Production Freeze Will Not Reduce The Supply Surplus

An OPEC-plus-Russia production cut would be a great step toward re-establishing oil-market balance. I believe that will happen later in 2016 but is not on the table today.

In late February, Saudi oil minister Ali Al-Naimi stated categorically, “There is no sense in wasting our time in seeking production cuts. That will not happen.”

Instead, Russia and Saudi Arabia have apparently agreed to a production freeze. This is meaningless theater but it helped lift oil prices 37% from just more than $26 in mid-February to almost $36 per barrel last week. That is a lot of added revenue for Saudi Arabia and Russia but it will do nothing to balance the over-supplied world oil market.

The problem is that neither Saudi Arabia nor Russia has greatly increased production since the oil-price collapse began in 2014 (Figure 1). A freeze by those countries, therefore, will only ensure that the supply surplus will not get worse because of them. It is, moreover, doubtful that Saudi Arabia or Russia have the spare capacity to increase production much beyond present levels making the proposal of a freeze cynical rather than helpful.

Chart-US-RUSSIA-SAUDI Incremental Prod MAR 2016

Figure 1. Incremental liquids production since January 2014 by the United States plus Canada, Iraq, Saudi Arabia and Russia. Source: EIA & Labyrinth Consulting Services, Inc. (click image to enlarge)

Saudi Arabia and Russia are two of the world’s largest oil-producing countries. Yet in January 2016, Saudi liquids output was only ~110,000 bpd more than in January 2014 and Russia was actually producing ~50,000 bpd less than in January 2014. The present world production surplus is more than 2 mmbpd.

By contrast, the U.S. plus Canada are producing ~1.9 mmbpd more than in January 2014 and Iraq’s crude oil production has increased ~1.7 mmbpd. Also, Iran has potential to increase its production by as much as ~1 mmbpd during 2016. Yet, none of these countries have agreed to the production freeze. Iran, in fact, called the idea “ridiculous.”

Growing Storage Means Lower Oil Prices

U.S. crude oil stocks increased by a remarkable 10.4 mmb in the week ending February 26, the largest addition since early April 2015. That brought inventories to an astonishing 162 mmb more than the 2010-2014 average and 74 mmb above the bloated levels of 2015 (Figure 2).

Crude Oil Stocks_5-Year AVG MIN MAX 6 FEB 2016

Figure 2. U.S. crude oil stocks. Source: EIA and Labyrinth Consulting Services, Inc. (click image to enlarge)

The correlation between U.S. crude oil stocks and world oil prices is strong. Tank farms at Cushing, Oklahoma (PADD 2) and storage facilities in the Gulf Coast region (PADD 3) account for almost 70% of total U.S. storage and are critical in WTI price formation. When storage exceeds about 80% of capacity, oil prices generally fall hard. Current Cushing storage is at 91% of capacity, the Gulf Coast is at 87% and combined, they are at a whopping 88% of capacity (Figure 3).

Cushing & Gulf Coast Inventory & Utilization 6 Feb 2016

Figure 3. Cushing and Gulf Coast crude oil storage. Source: EIA and Labyrinth Consulting Services, Inc. (click image to enlarge)

Prices have fallen hard in step with growing storage throughout 2015 and early 2016. Since talk of a production freeze first surfaced, however, intoxicated investors have ignored storage builds and traders are testing new thresholds before they fall again.

The truth is that prices will not increase sustainably until storage volumes fall, and that cannot happen until U.S. production declines by about 1 mmbpd.

Despite extreme reductions in rig count and catastrophic financial losses by E&P companies, production decline has been painfully slow. The latest data from EIA indicates that February 2016 production will fall approximately 100,000 bpd compared to January (Figure 4).

U.S. Production Forecast MAR 2016

Figure 4. U.S. crude oil production and forecast. Source: EIA STEO, EIA This Week In Petroleum, and Labyrinth Consulting Services, Inc. (click image to enlarge)

That is an improvement over the average 60,000 bpd monthly decline since the April 2015 peak.  It is not enough, however, to make a difference in storage and storage controls price.

EIA and IEA will publish updates this week on the world oil market balance and I doubt that the news will be very good. IEA indicated last month that the world over-supply had increased almost 750,000 bpd in the 4th quarter of 2015 compared with the previous quarter. EIA data corroborated those findings and showed that the surplus in January 2016 had increased 650,000 bpd from December 2015.

Oil Prices and The Value of the Dollar

Why, then, have oil prices increased? Partly, it is because of hope for an OPEC production freeze and that sentiment is expressed in the OVX crude oil-price volatility index (Figure 5).

VIX & WTI 5 MARCH 2016

Figure 5. Crude oil volatility index (OVX) and WTI price. Source: EIA, CBOE and Labyrinth Consulting Services, Inc. (click image to enlarge)

The OVX reflects how investors feel about where oil prices are going. It is sometimes called the “fear index.” That suggests that investors are feeling pretty good and less fearful about the oil markets than in the last quarter of 2015 when oil prices fell 47%. Since mid-February, prices have increased 37%.

But there is more to it than just hope and that may be found in the strength of the U.S. dollar. The negative correlation between the value of the dollar and world oil prices is well-established. The oil-price increase in February was accompanied by a decrease in the trade-weighted value of the dollar (Figure 6).


Figure 6. U.S. Dollar value vs. WTI NYMEX futures price. Source: EIA, U.S. Federal Reserve Bank and Labyrinth Consulting Services, Inc. (click to enlarge)

Now, that trend has reversed. The U.S. jobs report last week was positive so continued strength of the dollar is reasonable for awhile. Assuming the usual correlation, that means that oil prices should fall.

 Oil Prices Should Fall Hard

It is a sign of how bad things have gotten in oil markets that we feel optimistic about $35 oil prices. It should also be a warning that the over-supply that got us here has not gone away.

Oil storage volumes continue to grow and that is the surest indication that production has not declined enough yet to make a difference. It is impossible to imagine oil prices rising much beyond present levels until storage starts to fall. In fact, it is difficult to understand $35 per barrel prices based on any measure of oil-market fundamentals.

The OPEC-plus-Russia production freeze is a cynical joke designed to increase their short-term revenues without doing anything about production levels. An output cut would make a difference but a freeze on current Saudi and Russian production levels means nothing.  It apparently made some investors feel better but it didn’t do anything for me. Iran got this one right by calling it ridiculous.

No terrible economic news has surfaced in recent weeks but that does not change the profound weakness of a global economy that is burdened with debt and weak demand. The announcement last week by the People’s Bank of China that it sees room for more quantitative easing may have comforted stock markets but it only added to my anxiety about reduced oil consumption and future downward shocks in oil prices.

I hope that oil prices increase but cannot find any substantive reason why they should do anything but fall. As market balance reality re-emerges in investor consciousness and the false euphoria of a production freeze recedes, prices should correct to around $30. A little bad economic or political news could send prices much lower.

Art Berman via

46 Comments on "Oil Prices Should Fall, Possibly Hard"

  1. Apneaman on Sun, 13th Mar 2016 6:45 pm 

    Oil and Natural Gas Drilling Rigs Hit 70-Year Low

  2. geopressure on Sun, 13th Mar 2016 6:52 pm 

    I don’t think anything that Art Berman says is credible…

  3. Apneaman on Sun, 13th Mar 2016 7:12 pm 

    geotard, thanks for that insightful rebuttal of Berman. Your best work to date. Frame it and show it to mom and dad.

  4. geopressure on Sun, 13th Mar 2016 7:17 pm 

    If you want to better under understand the crude oil marker or learn how to pull money out of the market, then I suggest you take anything Art Berman says with a grain of salt…

    That is just my 2 cents… I’m sorry if you don’t agree… I don’t agree with 90% of your post either…

  5. bs on Sun, 13th Mar 2016 7:30 pm 

    Seems like figure 4 would frighten you…

  6. Boat on Sun, 13th Mar 2016 7:58 pm 

    The Iraq Turkey pipeline that has been out is within days of returning online. Capacity 600,000 bpd.

  7. geopressure on Sun, 13th Mar 2016 8:02 pm 

    The Kurkuk-Ceyhan Pipeline was back online last Friday…

    I think it may be down again though… The media doesn’t report pipeline outages until weeks after the outages occur…

    There was a Mustard Gas issue near the pumping station of the Kirkuk Pipeline this weekend… I would imagine that it has been taken out again, but there is no way to know for sure…

  8. geopressure on Sun, 13th Mar 2016 8:07 pm 

    The Mustard Gas story is probably fake… It’s more than likely just an excuse for more US troops to go in & guard the pipeline…

    The bad guys are not dumb enough to use chemical weapons they know what it would bring down on them… Most of the time it’s the “good guys” using the chemical weapons as an excuse go in & kill more “bad guys”…

  9. Boat on Sun, 13th Mar 2016 8:08 pm 

    Kirkuk-Ceyhan oil pipeline to be operating again in coming days

  10. geopressure on Sun, 13th Mar 2016 8:31 pm 

    Look at the date… That article is from 10 days ago…

  11. makati1 on Sun, 13th Mar 2016 8:32 pm 

    “Limbo lower now … how low can you go?”

    This is the Year of the Red Fire Monkey. A year filed with chaos and unexpected events, according to the Chinese calendar. Seems to be right on, doesn’t it? And it will last until 27 January next year … at least.

    “…Elements of chaos and creation dance together with wild abandon. Scams, delusions and illusions are plentiful …”

    Crash the system now. Are you prepared?

  12. twocats on Sun, 13th Mar 2016 8:35 pm 

    Another factor is the long vs short bets on oil – the push/pull of financial markets.

    Starting in earnest in January, short positions began accumulating (people truly short on oil). Short-build-up acceleration mimics selling creating downward pressure on oil (which it did from the 6th to the 21st of January). But eventually short selling has to be covered, creating upward pressure.

    Longs are now Net Above Shorts. So the squeeze factor at least has been eliminated temporarily.

    Iran, the Iraq-Turkey pipeline issue, actual production declines (if any), those could strongly determine prices over the next month.

    Looks like January to February fell -100 kbpd. Not too shabby of a decline.

    Also what about the switch to summer blends, doesn’t that usually increase prices?

    And then there’s the Energy Complex Bankruptcy Contagion – if March is worse than February, could spell trouble.

  13. Roland von Schwitzen on Sun, 13th Mar 2016 9:40 pm 

    Spare us your analysis. Your HOPE is that AMERICAN oil prices collapse..ONLY. Keep up the negative karma and all that and hopefully the 3 or 4 millionaires you are pissed off about will pay the price….alongwith the 800000 other regular guys trying to make ends meet. You clowns are like the eastern European Jews who fled socialism and the pogroms of Russia and the Ukraine..only to attempt to destroy this country to do what? Establish another communist?socialist paradise. God….spare us all.

  14. geopressure on Sun, 13th Mar 2016 10:49 pm 

    there are still approximately 150MM BBLs worth of open short contracts on Nymex alone…

  15. Joe Blow on Sun, 13th Mar 2016 10:51 pm 

    All of the extra money that people are not paying at the pump can be used to stimulate other areas of the economy or people can save that money towards home projects like solar…which will further reduce our need for oil. Win-win!!

  16. ennui2 on Sun, 13th Mar 2016 10:56 pm 

    It’s STILL a glut 🙂

  17. Transgenderisanothernameformentaldisorder on Sun, 13th Mar 2016 10:57 pm 

    Here in CA they will not let prices dip too low. They just raise prices and blame it on “summer blend” or a refinery problem or the gov needs more taxes to spend on other things than what the gas tax was for.

  18. Dean on Sun, 13th Mar 2016 11:08 pm 

    Nobody needs oil anymore.
    Don’t believe me? Watch the HG channel shows about people looking for houses around the world. Everywhere in the world has a mini-split heat pump hanging on the wall, hooked to a setback thermostat, insulated windows that uses very little electricity, not to mention sensor switched LED lights that reduce home energy costs by 10% all by themselves.

    Oil? I don’t think you’ll be able to give it away.

  19. Dean on Sun, 13th Mar 2016 11:12 pm 

    The Baltic States can reduce their energy requirements enough to get by on their own electric power plants, and kick Putin to the curb.

    Why don’t I see anything written by Peak Oil about that.

  20. Herman Good on Sun, 13th Mar 2016 11:14 pm 

    Stop using dirty oil and gas. Start using clean, renewable energy that God provides for free so that we quit destroying our air and water and quit making climate change worse. Wind and solar energy create good jobs in the USA that Middle East enemies can’t take away from us. Keep America strong without fighting expensive foreign wars that maim good American people.

  21. Boat on Sun, 13th Mar 2016 11:46 pm 

    geopressure on Sun, 13th Mar 2016 6:52 pm
    I don’t think anything that Art Berman says is credible…

    I think the post is pretty good. What he did not cover is the billion dollar question of the impact of drilling shutting down. How many more drilling rigs need to shut down to equal the oversupply. twocats mentioned a few other important inputs. Like market forces and pipeline problems. How much new production will Iran dump on the market.

  22. twocats on Mon, 14th Mar 2016 12:00 am 

    Nobody needs oil anymore.
    Don’t believe me? Watch the HG channel shows about people looking for houses around the world. Everywhere in the world has a mini-split heat pump hanging on the wall, hooked to a setback thermostat, insulated windows that uses very little electricity, not to mention sensor switched LED lights that reduce home energy costs by 10% all by themselves.
    Oil? I don’t think you’ll be able to give it away. [dean]

    first off, you’re mixing heating and electrical. 2nd, a lot of home heat is natural gas (or electricity). and even if 10% was a good number, which it’s not, let’s assume 10% energy savings. Assuming every house in the US that uses LPGs for home heating does that, well gosh, that reduces US oil consumption by 1/2 of 1%.

    Try again.

  23. Femi Adesina on Mon, 14th Mar 2016 12:01 am 

    Oil producing countries lose more if they keep production at current levels than if they cut production. I wonder why prices of other oil by-products such as chemicals are not dropping. If OPEC member countries plus Russia (15) cut production by a tiny amount such as 50000bpd to 100000bpd which is not much the problem of oversupply will disappear.

  24. Rodger C. Olsen on Mon, 14th Mar 2016 12:02 am 

    The author ignores the fact that US & Canadian oil production has fallen and will continue to fall hard.
    There is no need for Russia and Saudi to decrease production as pure economics is taking care of that. US oil from fracking and from deep water rigs is already losing money and the wells are shutting down. Canadian oil sands wells are some of the most expensive in the world and they will eventually shut down at any oil price under $50. The current glut will take care of itself as Russia and Saudi force the competition out of business and oil will rise close to, but not above, the $50 price that would re-activate the more expensive wells.

  25. Bob Yaffe on Mon, 14th Mar 2016 12:16 am 

    In America the politicians are taking advantage of the people by letting the big oil companies over charge for gasoline when oil per barrel for the last year has dropped $20.00 per barrel but Americans are still being ripped off by Congress and Senate

  26. Boat on Mon, 14th Mar 2016 12:20 am 

    Femi Adesina,

    .”If OPEC member countries plus Russia (15) cut production by a tiny amount such as 50000bpd to 100000bpd which is not much the problem of oversupply will disappear”.

    Humans are not capable of compromise.This is why the world will spend a trillion on weapons instead of climate change. Even when the world agrees climate change is a huge threat. Crazy eh?

  27. Alphonso on Mon, 14th Mar 2016 12:38 am 

    Hey Boat, regarding “the world agrees that climate change is a huge threat:” how about a link to the supporting documentation?

  28. GregT on Mon, 14th Mar 2016 12:53 am 

    There’s no point Alphonso. Boat ignores reality, and makes shit up as he goes along to support his make believe world view. 90% of what he types is utter non-sense. The other 10% is mostly unintelligible.

  29. StPatrick on Mon, 14th Mar 2016 12:55 am 

    Geopressure, you say that you “don’t think anything that Art Berman says is credible.” Let’s see how he does with his predictions over the next year. I’m able to come up with the following 5 predictions from his article.

    1. In the coming weeks, oil prices should hit $30. So let’s say he gets this one right if oil prices do hit $30 within 10 weeks, say by May 22.
    2. Prices could go down “well into the $20s”. Let’s give him this one if they drop below $27 sometime in 2016.
    3. OPEC and Russia will agree on production cuts “later in 2016”. So we’ll give him this one if OPEC and Russia actually agree to production cuts by the end of the year (even if they don’t actually cut).

    Further on he says “The truth is that prices will not increase sustainably until storage volumes fall, and that cannot happen until U.S. production declines by about 1 mmbpd.”

    4. In look at the decline in oil prices from another chart, it looks like oil prices dropped into the 50’s sometime around the end of 2014, beginning of 2015. Looking at his chart, it looks like storage capacity at that time was around 65%. So turning this into a prediction, lets say that if storage drops to 65%, oil should be at at least, I don’t know, $40.

    5. He also says the U.S. production needs to decline by about 1 mmbpd before storage volumes fall significantly. From his chart, it looks like U.S. oil production is currently around 9.5 mmbpd now, so the decline would be to 8.5 mmbpd. I’m not sure what the prediction should be in this case. Maybe, If storage drops to 65%, U.S. production will have dropped by at least 1 mmbpd.

    The U.S. crude production chart forecast he shows predicts 8.5 mmbpd by the end of summer. So the last two predictions could also happen by the end of the year.

    I don’t know how he will do, but we will find out.

  30. Gary on Mon, 14th Mar 2016 1:36 am 

    Welcome to the coming future.. my hybrid plug in volt is averaging 143 MPG.. if do not take a long trip anywhere my 10 gallon tank of gas will last me about a year… with more similar cars gradually gaining in market share year by year… plan for the inevitable… along with new methods of producing bio-diesel oil consumption will decline gradually over the coming decades.. Now what?

  31. steve on Mon, 14th Mar 2016 3:31 am 

    Four nations can change the price of oil overnight. Therefore any predictions based on statistics are maybe yes, maybe no, in other words it is like you bet on the roulette table black or red.

  32. Amvet on Mon, 14th Mar 2016 3:49 am 

    Having US oil storage amounts control the oil price is worse than ridiculous.

    The scam is obvious. Import more, fill the storage, and, presto, the price drops.

  33. Davy on Mon, 14th Mar 2016 5:46 am 

    Get a grip growthers without China’s ever expanding demand growth, growing growth is dead. This death is subtle but relentless and consuming. Eventually this stagnation will be a descent then the real fun starts. Oil will likely never recover this loss of global growth. Sure prices may bounce back because of supply and demand distortions from demand and supply destruction but we will never have the bull market in oil like we had with QE and China expansion. It’s over and there is nothing left but the crying.

    “There Won’t Be A Wave Of Layoffs,” “No Stimulus Is Needed”: China Insists That No One Panic”

    “It would funny to watch as Chinese policymakers attempt to pull off the impossible if it weren’t so downright frightening.”

    “When the perpetual commodities bid from China disappeared, it became quickly apparent that sluggish growth may simply be something the world has to live with for the foreseeable future – especially considering the malaise gripping Brazil and Russia and uncertainties around whether or not India will be able to carry the entirety of the BRICS’ burden.”

    “The problem for the Chinese is that although they have far greater counter-cyclical policy room than does the US or Europe, they’re effectively hamstrung by a massive debt burden that amounts to more than 250% of GDP. You don’t necessarily want to go adding more leverage at a time when an acute overcapacity problem and the attendant slump in commodities has created a situation wherein entire swaths of the industrial sector aren’t able to service their existing debt.”

    “But without more leverage, the economic deceleration becomes even more acute. Which leads us to the conclusion we drew long ago: China is attempting to deleverage and re-leverage at the same time – and that’s obviously impossible. You can see examples of this policy schizophrenia everywhere.”

    “Over the past several weeks, China has been keen to play down the extent to which eliminating excess capacity would trigger sweeping job losses after Li Xinchuang, head of China Metallurgical Industry Planning and Research Institute told Xinhua that solving the overcapacity problem would likely cost 400,000 jobs and could plunge the country into social unrest.”

    “As we wrote when discussing Li Xinchuang’s comments regarding employment in the steel industry, “just how disconnected from reality China’s official unemployment rate is, both now and one year from today, will ultimately determine how violent the social upheaval will be when – as part of its hard-landing – China proceeds to lay off (tens of) millions of low-skilled workers leading to the inevitable violent response.”

  34. marmico on Mon, 14th Mar 2016 6:56 am 

    Let’s see how [Berman] does with his predictions over the next year.

    Let’s see how he does with his predictions from last year.

    Epic failure.

  35. arkieguide on Mon, 14th Mar 2016 8:41 am 

    Back to the comment on Iran’s oil production. If Iran is the root of all evil as so many countries claim – then why would any country buy oil from Iran ?

    Sure – price and ease of delivery, counts more then human lives.

  36. Mark on Mon, 14th Mar 2016 9:00 am 

    so, if this article were about oil prices “rising”, prices for gas at the pump would jump a quarter in the blind of an eye.

    But speculation about prices dropping, and nothing happens at the pump.

    As much as I hate goverment regulation and intervention, I hate oil and gas companies being in control of gas prices even more.

  37. Practicalmaina on Mon, 14th Mar 2016 9:04 am 

    Twocats, very true, I talked to a heat pump rep and he said some of the best water based heat pump techs are not even sold in the US because of a lack of demand for now. Also if you are using a minI split it is good to not set back the temp too much in a cold environment because from time to time the refrigerant will reverse and pull heat from the inside to melt ice on the outdoor coils. If your house is 2 cold because you set the temp all the way down because you went on vaca and your house gets 2 cold you will come home to an outdoor coil that is an ice cube.

  38. Practicalmaina on Mon, 14th Mar 2016 9:09 am 

    O that was some e else’s comment. Well I live in a state that sets the shameful record (It may have changed by now but I doubt it) of being the highest oil consumption for heating per capita.
    I talked to a gentleman who heads up a division of my states energy efficiency programs. He thinks in the next decade we will go from a few thousand heat pumps in my state to several hundred thousand. Pretty much anyone who does not have the option of natgas which is a huge majority.
    So huge oil savings. Then you are also taking oil and propane trucks off the raod. So it is not just a savings at the boiler but all the way back down the supply line right to the well.

  39. GregT on Mon, 14th Mar 2016 9:26 am 

    “So it is not just a savings at the boiler but all the way back down the supply line right to the well.”

    Every little bit counts, but in the end, burning more fossil fuels is not the answer to the problems associated with burning fossil fuels.

  40. Practicalmaina on Mon, 14th Mar 2016 9:34 am 

    True Greg, I am talking about completely taking those boilers out of service, new cold climate heat pumps can pull heat out of the air to -15. I do not see these Temps occurring in my area very often at all with global warming kicking into hi gear lately. These do require a decent amount of juice but my state has a fairly respectable %of juice from renewables. (Some of which is burning wood chip which costs a significant amount t of diesel.)

    You should look into one! They go with pv really well. I want to design my own system tying the 2 together as efficiently as possible. I have got some crack pot ideas that I feel could beat the very impressive 33 seer on the newer Fujitsu units.

  41. Stabilizer on Mon, 14th Mar 2016 9:34 am 

    Storage is irrelevant, the world runs on “just-in-time” oil. There is only a week or so of storage. Full storage might cause a small blip for a short time but consumption is too high for storage to matter. Charts of individual countries are likewise irrelevant. The price of oil will follow WORLD supply and WORLD demand. The only single country that can have much effect all by itself is Iraq, and frankly, Iraq is the main teason for the price decline.

  42. kenberthiaume on Mon, 14th Mar 2016 10:52 am 

    What you’re talking about, practicalmania, is oil heating. That’s fine. BUt oil heating is a small % of overall oil demand. Cars and trucks is the bulk of it. Oil heating is a few million bpd for a few months a year.

    I have a heat pump. It doesn’t work very well below 30 degrees.

    And when he says “prices won’t go up until supplies start falling”, I’m sorry but that’s ludicrous. So if supplies are rising, then prices should fall? To what? $10? $5? 5 cents a barrel?

    Right now oil is far below it’s long term price…how do we know? Because investment is drying up. Investment dries up, and the old tired fields that provide about 70% of worldwide production decline. It takes a while for this to happen, but once it does, it’s like a glacier. As soon as production declines prices will go up or at least stabilize, if they’re far below equilibrium.

  43. Practicalmaina on Mon, 14th Mar 2016 11:08 am 

    Ken, what make model and age is that beast? The newer models that are designed for cold climates will crank heat and only really start falling off at -10 but will deliver effective heat to -15. Either your unit is several years old, probably over 5, or you may have a refrigerant leak-or dirty filters. I am trying to find a good 3rd party graph of heat output vs outdoor temp

  44. Mark on Mon, 14th Mar 2016 1:40 pm 

    Could the glut and price fall have anything to do with the most of worlds consuming economies are contracting?
    Demand has fallen out from under oil.
    Perhaps the end of the era of every expanding conspicuous consumption has ended?

  45. geopressure on Mon, 14th Mar 2016 2:06 pm 

    Demand is at record highs & still growing…

    The opposite of what the media wants you to believe…

  46. GregT on Mon, 14th Mar 2016 4:08 pm 

    “The opposite of what the media wants you to believe…”

    Exactly. The media wants you to believe that we are experiencing a glut of oil due to overproduction.

    In reality, growth in demand has fallen, just as growth in our economies is faltering.

    The media also wants you to believe that infinite exponential growth is not only desirable, but that it is possible. Nothing could be further from the truth.

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