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Mid-Year ETP MAP Update

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Mid-Year ETP MAP Update

Unread postby shortonoil » Mon 18 Nov 2019, 16:18:33

DAILY UPDATE (November 17th to 18th) -- In Response to Weak Production and Retail Sales, Both the New York and Atlanta Fed Slashed 4q2019 Real Annualized GDP Growth Forecasts, Respectively to 0.3% and 0.4% / FOMC’s “Sustainable, Moderate Economic Growth” Is Gone / Expanded FOMC Accommodation Is Needed and Market Expectations Should Shift Accordingly / Deepening Recession, With October 2019 CASS Freight Index Dropping Year-to-Year for the 11th Straight Month / Indications of a Deepening Downturn and Risk of GDP Contraction by Year End / October Industrial Production Continued to Collapse, Down 0.8% (-0.8%) in the Month, Still Down by 0.5% (-0.5%) Separate from the Auto Strike / Both Mining and Manufacturing Were in Sharp Monthly Decline, with Deteriorating Annual Growth / Second Consecutive Real Month-to-Month Decline in October Retail Sales Was First Since the Disastrous 2018 Holiday Season / Boosted by Gasoline Prices, Both October PPI and CPI Inflation Hit Seven-Month Highs of 0.4%, Exceeding Consensus Expectations / Real Earnings Dropped in the Month / Inconsistent Seasonal-Adjustment Revisions Bloated October Payrolls / Irrespective of the Auto Strike, Annual Payroll Growth of 1.4% Was Tied at a Two-Year Low, Otherwise Weakest Since Coming Out of the Great Recession / Unemployment Notched Higher Across the Board

http://www.shadowstats.com/

By 2022, liquidity will have been drained out of the system to the point that it will no longer function. Repo was just the tip of the iceberg.


The price of the S&P is going to the moon! During its upward, to over 3,000, it was driven completely by stock buy backs. They have bought back so many that original sellers are getting rare. With a lot of half desperate buyers, and only a few sellers available the price is going one way↑

That must be what Trump is betting on? Then again, in the first place, maybe the credit markets have gotten so tight that companies can't even fiance buy back for their stock. We just had a $ ¾ trillion problem in repo, and CLOs are getting hammered. Then, stock prices don't go the moon, they just buzz along. The DOW will be at 33,600 next year at its present (today’s - 0.05%) growth rate. Trump can make all kinds of guttural sounds over that, but the FED saving in the stock market (again, again, etc.) isn't going to save the economy.
https://www.zerohedge.com/markets/going ... worst-year
The oil age is ending and it is hardly even being mentioned. The next, soon to arrive depression, will not be televised.
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Re: Mid-Year ETP MAP Update

Unread postby rockdoc123 » Mon 18 Nov 2019, 16:40:13

The line connecting the maxima includes the maximum of July 2008 of 145$. The oil price has never been above this line. Why should something happen which has never happened before ?


lets see .....why would someone land on the moon?, why would someone break a 2 hour marathon? why would Japan beat Ireland in World Cup Rugby? None of those things ever happened before either.

A corollary of Peak Oil is that if there is less supply than demand price must rise. Demand has not really backed off and continues to increase year on year. When oil hit $145 it was from the fear of rapid growing demand in Asia outpacing supply that had constrained spare capacity......absolutely no reason that oil could not go over that price in the future. Lots of analysts were predicting it could go to $200/ bbl at one point.
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Re: Mid-Year ETP MAP Update

Unread postby dcoyne78 » Mon 18 Nov 2019, 17:46:09

A basic problem with the ETP model is that it considers only the petroleum production process, where the system boundry of the World economy would include all energy production processes. Energy from coal, natural gas, wind, solar, hydro, and geothermal energy can all be utilized in the petroleum production process. Isolating oil production (or more generally petroleum production) is only valid in a World where no other types of energy enter into the petroleum production process. We do not live in such a world.

An analysis by a mechanical engineering professor found some error's in Hill's analysis. See

http://peakoilbarrel.com/on-the-thermod ... lls-group/
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Re: Mid-Year ETP MAP Update

Unread postby asg70 » Mon 18 Nov 2019, 18:40:34

dcoyne78 wrote:A basic problem with the ETP model is that it considers only the petroleum production process, where the system boundry of the World economy would include all energy production processes. Energy from coal, natural gas, wind, solar, hydro, and geothermal energy can all be utilized in the petroleum production process. Isolating oil production (or more generally petroleum production) is only valid in a World where no other types of energy enter into the petroleum production process. We do not live in such a world.


True, and brought up countless times in the past. B Hill and his tiny cadre of yesmen simply brush this under the rug and soldier on.

HALL OF SHAME:
-Short welched on a bet and should be shunned.
-Frequent-flyers should not cry crocodile-tears over climate-change.
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Re: Mid-Year ETP MAP Update

Unread postby AdamB » Mon 18 Nov 2019, 23:01:18

Yoshua wrote:OPEC is the largest cartel in the world.

Q: The purpose of a cartel?
A: To manipulate to the price.


Pretty amusing that they've failed in just that ever since Saudi America began to control the marginal barrel, isn't it?
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Mid-Year ETP MAP Update

Unread postby AdamB » Mon 18 Nov 2019, 23:03:41

dcoyne78 wrote:An analysis by a mechanical engineering professor found some error's in Hill's analysis. See

http://peakoilbarrel.com/on-the-thermod ... lls-group/


SOME? We've been making fun of the absolute nonsense contained in the analysis since about 5 minutes after it came out. It only required the ability to fire off a few synapses in the right sequence, hardly a professorship required.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Mid-Year ETP MAP Update

Unread postby Yoshua » Tue 19 Nov 2019, 03:25:08

AdamB wrote:
Yoshua wrote:OPEC is the largest cartel in the world.

Q: The purpose of a cartel?
A: To manipulate to the price.


Pretty amusing that they've failed in just that ever since Saudi America began to control the marginal barrel, isn't it?


It's pretty scary when even OPEC loses control of the oil price.

The Etp Model is an analysis of only petroleum production. No one knows what the EROEI is of the entire Energy Mix.

The Etp Model isn't all knowing...but it's the best analysis out there.
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Re: Mid-Year ETP MAP Update

Unread postby shortonoil » Tue 19 Nov 2019, 10:11:52

The Etp Model is an analysis of only petroleum production. No one knows what the EROEI is of the entire Energy Mix.


The Etp Model is simply the application of an equation that can be found in any engineering textbook on thermodynamics. It tells us only about petroleum, but petroleum is the most important of all our known energy sources. It is a calculation that quantifies the fact that entropy increases in any system with an operating process that can be defined by boundaries. Anyone who doesn't understand that are having delusions about living forever; and seriously need their brain rewired. Or, they are uneducated, ignorant troglodytes who are left overs from the world of 300 years ago before the development of modern science.

Even though the Etp Model doesn't describe the behavior of other fossil fuels, we can be quit certain they are following a similar pattern of degradation. They all deliver energy through the operation of a heat engine, and they have not, and are not replacing petroleum. If coal had the EROI that it had a hundred years ago we would all be driving some modern version of a Stanley Steamer.

The malaise that is striking the world's economy is a clear indication that the age of fossil fuels is coming to its conclusion. Tinkering with an obsolete monetary system to stimulate economic activity is an exercise in futility. It clearly ignores the simple fact that all economic activity requires energy to be performed, and that needed energy supply is getting ever more constrained. The world's economy is dying of energy starvation, and its failing strength is being treated with doses of digital dollars. It is the modern equivalent of bleeding a sick patient until they die.

There may be solutions, but as long as we fail to identify the real problem there is not much chance that those solutions will be found! Maintaining the status quo is taking precedence. Maintenance of an obsolete, and broken status quo has a long history. The French populous solved that problem in the 18th century with a guillotine. It looks like the world is getting ready to try the same method.
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Re: Mid-Year ETP MAP Update

Unread postby Baduila » Tue 19 Nov 2019, 15:29:54

A basic problem with the ETP model is that it considers only the petroleum production process, where the system boundry of the World economy would include all energy production processes.


That the reason why i observe the oil price. The price includes all energy production processes.

Image

The price is falling since 2008. In only rare cases the price reaches the line connecting the maxima.

An analysis by a mechanical engineering professor found some error's in Hill's analysis. See


I don't believe in stonedoctors or professors, i prefer to do the calculations myself. The professor did not even recognize the steady state entropy rate balance in the Hills model, so i could not take him seriously.
Image Take care of the second law.
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Re: Mid-Year ETP MAP Update

Unread postby sparky » Tue 19 Nov 2019, 16:26:36

.
the WTI is not a very good index , Brent and Tapis are more significant
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Re: Mid-Year ETP MAP Update

Unread postby rockdoc123 » Tue 19 Nov 2019, 16:26:44

The price is falling since 2008. In only rare cases the price reaches the line connecting the maxima.


you realize you are just correlating points with no understanding of what controls the inflection points? In this case they are all unrelated and nothing to do with some fictitious maximum price that can be absorbed.
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Re: Mid-Year ETP MAP Update

Unread postby shortonoil » Tue 19 Nov 2019, 16:31:44

I don't believe in stonedoctors or professors, i prefer to do the calculations myself. The professor did not even recognize the steady state entropy rate balance in the Hills model, so i could not take him seriously.


The proclamations of an educated idiot is a specialty that requires the exclusive, and repetitious handling by other idiots.

No research papers, no credentials, but they are professors and engineers? Apparently it is impossible to put anything on the internet that isn't true! You can find that bit of esoteric, and valuable information only on the internet.
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Re: Mid-Year ETP MAP Update

Unread postby Cog » Tue 19 Nov 2019, 17:26:26

Only sheer desperation keeps the ETP adherents in beating on this dead horse theory.
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Re: Mid-Year ETP MAP Update

Unread postby AdamB » Tue 19 Nov 2019, 18:05:43

Yoshua wrote:
AdamB wrote:
Yoshua wrote:OPEC is the largest cartel in the world.

Q: The purpose of a cartel?
A: To manipulate to the price.


Pretty amusing that they've failed in just that ever since Saudi America began to control the marginal barrel, isn't it?


It's pretty scary when even OPEC loses control of the oil price.


They haven't been able to control price since 2014. Have you really been scared for 5 years now?

Yoshua wrote:The Etp Model is an analysis of only petroleum production. No one knows what the EROEI is of the entire Energy Mix.


The Etp model isn't an analysis of anything, its own author apparently making sure no one can find it anymore, the laughter must have achieved quite a crescendo in my absence.

Yoshua wrote:
The Etp Model isn't all knowing...but it's the best analysis out there.


Image

You picked a loser Yoshua. Time to have a good chuckle and move along to the next make believe oil theory.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Mid-Year ETP MAP Update

Unread postby Yoshua » Wed 20 Nov 2019, 05:10:32

The professor did some magic math with the entropy equation by flipping it upside down so that it started to produce negative entropy.

That was the professor's best attempt to try to sink the Etp Model. In fact he could find nothing wrong with the Etp Model.

The professor admitted that the Etp Model is correct.

The professor tried to fool the audience. He had a little bit of fun...but it was educational never the less.
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Re: Mid-Year ETP MAP Update

Unread postby shortonoil » Wed 20 Nov 2019, 08:46:25

you realize you are just correlating points with no understanding of what controls the inflection points?


A not so interesting, and not very bright assertion on your part about what he knows, and doesn't know. Since he "does" know why those inflection points are important, perhaps you need to get some Windex for your crystal ball.....................

Although the central banks fake currency printing extravaganza has significantly inflated asset prices, including oil, it has not changed the form of the curve.

If the central banks had not keep asset prices high through massive free cash injections (oil, the asset) would be following the Maximum Affordability Curve, and would now be in the $20's, and the petroleum industry would be collapsing.

The central banks' policy, which is designed and dictated by the BIS, has been to keep paper asset prices; stocks bonds, real estate, etc. high at the expense of skyrocketing debt accumulation, and the extraction of savings, and fixed capital. The debt will eventually overwhelm the monetary system, and the whole thing will shut down. Our best calculation projects that will occur when the debt formation rate becomes equal to the currency in circulation. On its present path, and depending on the accuracy of the data, that should take place by the 2'nd quarter of 2022.

The above calculation has a very high built in margin of error. GDP figures are definitely incorrect, because a large portion of the GDP process takes place in the underground economy (beyond the eye of the tax collector) and is not accounted for. Regardless, the oil age is ending, and its demise will change the fundamental structure of our civilization. To limit the immense suffering that will be associated with it, we need to address the situation honestly, and openly. The desire for political expediency by a few has so far not allowed that to happen.
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Re: Mid-Year ETP MAP Update

Unread postby Baduila » Wed 20 Nov 2019, 15:25:09

The merchant of doubt, never telling which obscure organization sponsors him:

you realize you are just correlating points with no understanding of what controls the inflection points? In this case they are all unrelated


Did your realize that the WTI price curve is a fact ? A pure, hard fact ?
The maxima are a hard facts too, total independent of interpretations.
As well as the line connecting them.
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Re: Mid-Year ETP MAP Update

Unread postby rockdoc123 » Wed 20 Nov 2019, 16:09:49

Did your realize that the WTI price curve is a fact ? A pure, hard fact ?
The maxima are a hard facts too, total independent of interpretations.


Jesus wept....you do understand what spurious correlation means don't you? This is even worse. The cause of those WTI maximum are unrelated. You claim it is the maximum the world can afford which is complete BS.
The drop from a peak in 2008 was related to the global recession which has been discussed by economists many places are comes down to the global impact of sub-prime loan derivatives and banks that were over-leveraged and under-regulated.

As to 2014 first lets point out your ridiculous correlation conveniently ignores late 2010 when the price first started above $100, why is that peak not important? But the actually drop in WTI in 2014 had nothing to do with the economy which was steadily improving from the recession it was related to a gradual increase in oil supply created by new LTO coming out of a very successful shale campaign in the US combined with OPEC and Russia not reducing production accordingly. The result was a serious disconnect with supply exceeding demand. So the first two of your correlated points are unrelated.

The fall in late 2018 was part of the correction. The markets panicked due to a few signals which resulted in widespread selloff in the various North American exchanges. Oil price was a fall off of the market perception that if we were truly going into a recession and not just a correction then demand would drop and hence price would fall as it did in 2009. This was all a false alarm. So now you have three correlated points which are not the result of one common issue.

The point is here in order to correlate points they need to be related ie. result from the same events or sequence of events. This isn't the case here. It's bit like grabbing a bunch of random fruit at the market and then trying to sell it all as apples.
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Re: Mid-Year ETP MAP Update

Unread postby asg70 » Wed 20 Nov 2019, 16:35:16

Baduila wrote:Did your realize that the WTI price curve is a fact ? A pure, hard fact ?
The maxima are a hard facts too, total independent of interpretations.
As well as the line connecting them.


Could someone repost the classic ETP chart that says where oil price was supposed to be compared to what it currently is?

Last I checked, ETP decoupled with oil prices what, over a year ago (hence Short's failed bet) and has yet to fall back in sync.

There is a final moment of truth where the ETP chart projects oil is worthless ($0) and that is the final date of doomsday. Isn't that like 2022 or something? So not THAT far away.

Given all of the above, how can you really mount a compelling case for ETP now?

Sure, oil prices are relatively cheap (especially in light of the supply disruption due to the Saudi attack), but are unlikely to fall so far as to catch up with ETP's forecasts.

I just am baffled how anyone can still be a true-believer.

HALL OF SHAME:
-Short welched on a bet and should be shunned.
-Frequent-flyers should not cry crocodile-tears over climate-change.
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Re: Mid-Year ETP MAP Update

Unread postby Tanada » Wed 20 Nov 2019, 16:51:40

asg70 wrote:
Baduila wrote:Did your realize that the WTI price curve is a fact ? A pure, hard fact ?
The maxima are a hard facts too, total independent of interpretations.
As well as the line connecting them.


Could someone repost the classic ETP chart that says where oil price was supposed to be compared to what it currently is?

Last I checked, ETP decoupled with oil prices what, over a year ago (hence Short's failed bet) and has yet to fall back in sync.

There is a final moment of truth where the ETP chart projects oil is worthless ($0) and that is the final date of doomsday. Isn't that like 2022 or something? So not THAT far away.

Given all of the above, how can you really mount a compelling case for ETP now?

Sure, oil prices are relatively cheap (especially in light of the supply disruption due to the Saudi attack), but are unlikely to fall so far as to catch up with ETP's forecasts.

I just am baffled how anyone can still be a true-believer.


You mean like these?
BahamasEd wrote:Another week and the price hasn't broke out of trading between the range of between 75% to 85% of the Maximum Affordability Consumer Price (it's proper name in the ETP report) know as MAP.

I have the ETP MAP at about $61.17 this week.
The weekly close of WTI was $47.79 which is 78% of the MAP price.
The 50 week EMA closed at $49.07 which is 80% of the MAP price.

The WTI oil price has been trading in this range (75 to 85%) for the last 26 weeks, taking the EMA up to the current 80% from 71% of the MAP at the first of the year

Based on my current working theory of the ETP MAP, I expect the price to be lower each week and for the EMA weekly closing price to stay around the 80% point, which means it may drop by about 20 cents per week.

Remember that this is not investment advice, I know longer even have a brokerage account and my last active trades where all sell orders back in 2009. But I am richer and I do sleep better now.

We will have to see how long it holds in this range, only the future will tell.


BahamasEd wrote:
marmico wrote:If the M in MAP is Maximum, why does the MAP line show dollar values higher than $54 in 2017?


I take it you can read the chart & post I've been posting weekly?

short answer: It has to go from $66 on 1 Jan 2017 to $54 on 1 Jan 2018.

The Maximum Affordability Consumer Price is based on the EIA annual weekly price for the year in question. This EIA report comes out in January of the following year, like it has to as the data is not there until after the year ends.

From the chart I post.

ETP MAP Prices based on the
EIA Annual WTI price for each year
Dec 31, 2016 = $66
Dec 31, 2017 = $54
Dec 31, 2018 = $41
Dce 31, 2019 = $27
The 50 week EMA price of WTI should
be lower then the above ETP MAP prices


So to get from $66 to $54 in one year the MAP price would have to be higher then $54 for most of the year and since I want to do this weekly and not annually it makes sense to me.
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.
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