[Plantagenet]

…. SA oil production.

The numbers on KSA oil production are pretty clear---they produced more oil in 2015 then in 2005.

Too bad you can't understand what the numbers mean.

Cheers!

[AdamB]

No Adam, SA is very very pertinent to the peak-oil dilemma, much more so than IEA's cooked books and failed predictions.

I didn't reference the IEA, but, whatever. And by peak oil dilemma, which one are you referring to? The one we thought we were going to get, or the one according to Jeff Brown, and apparently you as a supporter of his ideas, that we really got?

I have to admit, I like the one we got as much as the next guy.

SA was the swing producer among the entire OPEC cartel, the one country with excess wealth and a reserve cushion that granted it power to stabilize prices and production when other member were hard pressed for income and needed to produce full out. That it can no longer do so in the face of $30 oil is further proof that Saudi Arabia is pumping full out.

Not quite. What Saudi Arabia pumping AS MUCH AS THEY WISH (which is different than "full out") indicates is that they are afraid of where the marginal barrel has landed, in the surplus supply situation created by the US bringing online the two largest producing oil fields in the western hemisphere.

While the Saudi's are quite comfortable cutting supply to balance things out among the other cartel players, there is no fair competition among the US independents...if the price is right...they will produce...nothing else matters. So the only way to tame them isn't to provide price support for them to make a mint and flood the world with oil, it is to fight a war from a position of strength, a test of attrition that the Saudi's think they can win.

And might.

We need to wrap our heads around this dismal truth. Every major oil producer is pumping full out. Yet oil prices have tanked. Is that a glut? Or is that demand destruction. I'll leave it up to you to mull over. But I will be back to this debate.

I need only take a trip to the corner gas station to understand the dismal truth. And, as the EIA says in the chart above, such a truth might be with us for awhile.

And you realize what this means don't you? Everyone and their grandmother should be thinking about taking advantage of it while it lasts.

[AdamB]

I don't see how a book cover refutes OPEC's death? Nor your lie regarding SA oil production.

I checked. It wasn't a lie, anymore than you knew Jeffrey's profession, or that the chart I utilized came from the EIA, rather than the IEA.

Do you do this stuff on purpose, or do you really not know and just make stuff up?

[Shaved Monkey]

So you think the last remaining vestige of Pravda (the USSR propaganda outlet) carries more weight than Reuters?

That's cherry-picking for you.

They both have their barrows to push neither is more legitimate than the other.

[AdamB]

Listen Adam, I got carried away with my claim that SA total production peaked. It has not.

And "carried away" is a euphemism for....making stuff up? And yes...WE already knew that SA hadn't peaked, you were the one getting "carried away" and not knowing it.

This isn't new information, it isn't as though some blog somewhere published yesterday afternoon that surprise surprise, the ELM was wrong because SA production had just squeaked out a tiny bit more, this stuff has been going on since last year.

But rather it's exports peaked, for most of a decade in the face of relentless high oil prices above $100 dollars/barrel.

Really? Looks like you should have checked this info as well, prior to getting "carried away" again. Saudi exports peaked back in the late 1970's....and I can promise you, oil wasn't $100/bbl then. So, you were saying...about getting "carried away"....?




So, Jeff has been all atwitter about Saudi peak exports back in 1978 or so, and claimed that by 2006 the world would be in the grip of a an export shock! And a decade later, when that didn't happen, you want us to pretend that the peak in Saudi exports was because of $100/bbl oil....back when they peaked in exports in 1978?

How does this work, exactly?

How would one expect the country to constrain its income at $30 (by reducing exports) when it was unable to do so at $100 dollars? That makes no sense.

Oh, I think it is obvious what doesn't make sense, but you are doing such a good job highlighting it, I don't think I need to rub it in.

[ennui2]

The Export Land Model simply states that oil exporting nations, enriched by sales, will consume more of their production at the expense of exports. This simple fact explains the current world Depression.

There you go trying to reclassify the cause of recessions again. ELM has nothing to do with what's going on with stock retrenchment and China. It has everything to do with markets overheating and what comes up must come down.

[ennui2]

So you think the last remaining vestige of Pravda (the USSR propaganda outlet) carries more weight than Reuters?

That's cherry-picking for you.

They both have their barrows to push neither is more legitimate than the other.

Then why are you citing Pravda if you concede they are biased? Don't you think it would be in their best interest to pump up the idea of oil prices spiking?

[Tanada]

This is not an oil glut, rather it is an economic slowdown. Too much oil and money have essentially disappeared forever down the bore hole on energy-intensive oil production. I would be surprised if oil rebounds much higher than $40 for any appreciable length of time. That is still not enough to produce what is left in the ground. Much of that oil will remain in the ground forever.

Ever-increasing amounts of money continue to be lost daily to the general economy as oil companies are forced to buy back and squander their own oil on expensive energy-intensive operations like tight-shale, tar sands, and deep offshore GOM. Little gets multiplied in the general economy. This is the economic consequence of falling net-energy.

Money is also lost to the general economy when oil is purchased overseas; some $600 billion/year essentially disappeared when we were forced to purchase oil on the open international market at $100 barrel.

Economic slowdowns do not lead to large increases in world demand. Ignoring this fundamental reality will not make it go away.

[Plantagenet]

The Saudi Oil Minister is giving a special speech at the CERA conference. He just said KSA is OK with oil falling to $20/bbl.

What a dope. Not only did the Saudis intentionally start pumping full out to create an oil glut and collapse the oil market---they are actually trying to talk oil prices down even further then they are now.

Look for oil prices to fall further, thanks to the Saudis.

[Tanada]

Tanada, if demand is so great why has the price of oil collapsed to $35? Shouldn't it be back to $100? Or $147? Is this a glut or demand destruction?

If Supply were not exceeding demand it might be, however world oil demand
1Q 2013 90.74 MM/bbl/d
1Q 2014 91.89 MM/bbl/d
1Q 2015 93.50 MM/bbl/d
1Q 2016 94.50 MM/bbl/d

IOW the world has consumed more oil every year for the last four year despite prices in 1Q 2013 and 1Q 2014 being in the $75/bbl-$90/bbl range.
There Is No Demand Destruction! That leaves the other side of the supply/demand equation, to wit supply. Price barring artificial factors like taxes is a relationship of supply available and the price at which that supply meets demand. As ROCKMAN has pointed out many times every barrel being offered for sale is finding a buyer at the current price. Reduce the number of barrels for sale or raise the demand to meet the supply at a higher price point and the price will go up until they are once again in balance at that new price.

If Russia tomorrow morning declared they would sell the same number of barrels of oil as they are selling today, but they require $40/bbl for every one of those barrels what would happen? I am asking you Pstarr, I want to know what you think would happen in that scenario. Remember they are not restricting supply at all, just requiring a fixed price for their supply.

[ennui2]

Tanada, if demand is so great why has the price of oil collapsed to $35? Shouldn't it be back to $100? Or $147? Is this a glut or demand destruction?

Hello? Hello? Anybody home? Huh? Think, McFly!



it's a glut

[AdamB]

ELM was wrong . . . Saudi exports peaked back in the late 1970's

How do you reconcile your two contrary statements. You agree that SA exports peaked in the 1970's . . . yet you consider ELM wrong. That makes no sense?

It does. Jeff didn't say that the decline in exports would be so slow that 35 years later, the amounts would be fairly close. He said it would cause the world an export crisis in 2006.

Here we are, a decade later, and there is no export crisis. Even more interesting, it came about because his assumption of bell shaped curves for decline didn't work either, in the case that matters most, right here in the US, the place used to prove the bell shaped curve.

Hubbert must be spinning in his grave, right, like a helicopter blade!

The Export Land Model simply states that oil exporting nations, enriched by sales, will consume more of their production at the expense of exports.

And assigned rates of how fast it happens. Which is why it didn't work for SA. For all it know, it didn't work anywhere, or only in countries that don't matter.

JD had this figured out like...a CENTURY ago....what appears to be holding up your understanding?

http://peakoildebunked.blogspot.com/200 ... gence.html

This simple fact explains the current world Depression. We saw it in the US with the devistating stagflation in the 1970's, several years after its 1972 peak.

Can't see a global depression yet. So let me guess, you made up more stuff while "carried away" again?

See all those numbers above 0%? "Carried away"...yes...I understand. Speak first, get caught with non-facts, get "carried away".

[AdamB]

This is not an oil glut, rather it is an economic slowdown.

One minute it is a global depression, the next an economic slowdown. Pick one already, and please, CHECK first, before pretending that your getting "carried away" generates facts, as opposed to things that are exactly opposite of facts.

Too much oil and money have essentially disappeared forever down the bore hole on energy-intensive oil production. I would be surprised if oil rebounds much higher than $40 for any appreciable length of time. That is still not enough to produce what is left in the ground. Much of that oil will remain in the ground forever.

It might. Then again, you might just be carried away again.

Ever-increasing amounts of money continue to be lost daily to the general economy as oil companies are forced to buy back and squander their own oil on expensive energy-intensive operations like tight-shale, tar sands, and deep offshore GOM. Little gets multiplied in the general economy. This is the economic consequence of falling net-energy.

Now you are confusing energy with money? Seriously? So now when people become more efficient, it is falling net-energy. How does that work? When I run my household off less energy, I pay out less money. I now have MORE money to generate other kinds of economic activity, because of my increased efficiency. And my efficiency is doing the same things I did yesterday, except with less energy.

And presto! increased discretionary. Woo Hoo! And you think this is BAD? It isn't.

I recommend you insulate, bicycle, use natural gas instead of fuel oil, you too can benefit by increased efficiency.

Money is also lost to the general economy when oil is purchased overseas; some $600 billion/year essentially disappeared when we were forced to purchase oil on the open international market at $100 barrel.

And obviously it was worth it, otherwise the people coughing up the cash would have chosen to do something else.

[ennui2]

And my efficiency is doing the same things I did yesterday, except with less energy.
And presto! increased discretionary. Woo Hoo! And you think this is BAD? It isn't.

It seems Monte has decided to leave the site again, otherwise he'd have chimed in again that by not "wasting" energy we're putting millions out of work, like "NASCAR workers".