[StarvingLion]

Admit it already, the fusion reactor is your only hope otherwise you will end up in front of the judge.

The Peoples Court will be merciless as always.

[rockdoc123]

So I don't follow the little price burps you two find so intriguing.

3.5 years with Brent at or above $100/bbl is a "price burp"?

[rockdoc123]

$100/bbl destroyed demand all over the world. 

OK perhaps we need to look at the actual data again.



Given prices were at or above $100/bbl from January 2011 through August 2014 and demand climbed throughout that period it is pretty hard to argue that “$100/bbl destroyed demand all over the world” unless you are perhaps out on day pass from the local looney bin

European countries for example cratered after $100/bbl and have never returned.

Wildly misleading given European consumption/demand has been gradually decreasing since 1978, through all sorts of price swings. It is not related. Here is the chart from the BP annual review.

[vtsnowedin]

Doesn't Eurasia include the world's greatest oil producer and consumer? It seems your bias is showing Rock.

tell me stop!

Please do.
The greatest consumer is the USA and a long way from Europe. Russia maybe the current largest producer but their population is low as is their demand.
At any rate European consumption has been driven down for decades by high fuel taxes so the graph and the market it charts has been artificially manipulated by government action.

[rockdoc123]

oesn't Eurasia include the world's greatest oil producer and consumer? It seems your bias is showing Rock.

Oh for crying out loud....here is the Europe only data. Please note from the bank crisis onwards oil demand was decreasing in Europe...the $100/bbl from Jan 2011 to Aug 2014 was completely unrelated.



So to summarize the $100/bbl oil had virtually no effect on global consumption (global demand increased continuously throughout the period and after) and the Europe picture has no clear relationship with the $100/bbl oil period either

[Observerbrb]

Why are you so adamant on the demand issue?

The ETP model says that the annual price average will not exceed the following values (US dollars) :

2016 - 65.94
2017 - 54.18
2018 - 41.16
2019 - 26.88

(BTW, Oil prices won't fall to 0, shortonoil has already explained this before, and he even put some arrows that start to deviate in his famous graph)

It doesn't say anything about the demand or the supply (in terms of volume) at any particular time. What I understand is that oil companies need to get more and more oil out of the ground each year if they want to stay in the market and don't get bankrupt in the process. The logical outcome is that they will try to balance the financial losses by producing more volume. Steve Ludlum warned about this outcome in 2012, long before the price plunge (I have seen people in this same forum talking about the Triangle of Doom before the oil slump happened).

The other logical outcome is that they will fail in doing so and will go bankrupt, so the production will finally fall and the economy will be severely disrupted (as I explained in my last post, that's my way of thinking). I am not obsessed about the date of Peak Oil, as I understand that the volumetric analysis is not as important as knowing how much energy we use in the process before oil final products reach the end consumer.

It's ironic that I end up explaining Hills model since the thing which made complete sense for me was from the beginning Mr. Ludlum's explanations.

[kublikhan]

You want to blame Euro taxes? That is complete nonsense. They were in place when Euro consumption was high and getting higher 1993-2008. Taxes didn't bite then. After the 2008 Great Oil Recession oil-consumption dropped to historic lows. Not taxes, high oil prices.

So then would you say Europe's increase in oil consumption in 2015 & 2016 was because of lower oil prices?

[kublikhan]

So to summarize the $100/bbl oil had virtually no effect on global consumption (global demand increased continuously throughout the period and after) and the Europe picture has no clear relationship with the $100/bbl oil period either

Wouldn't the chart go the other way, to make your point? Call me confused.

Check out a global chart. it backs up his point. After 2009 global oil demand just kept increasing even with $100 oil:

Insatiable Demand
But what about demand? Isn’t it declining? No. Our Western-centric view of the world may give us the impression that oil demand is declining, but the truth is quite different:



Over just the past decade global oil consumption increased by an average of 900,000 bpd each year, and consumption has risen in 18 of the past 20 years. If we look back 30 years, global oil consumption increased by an average of 1.1 million bpd annually. Demand did decline in member countries of the Organisation for Economic Co-operation and Development (OECD) — the grouping of the world’s developed countries. But demand growth in developing countries overwhelmed the declines in the developed world. In just the past five years, demand in developing countries has increased by an average of 1.6 million bpd annually, and now exceeds OECD demand.

Note that there was hardly any negative impact on demand in developing countries even with oil prices at $100/bbl. What drives consumption in these countries is a very large number of people using just a little bit more oil than they did before. High oil prices will do little to dissuade them from buying a little bit more when it can make such a big impact on their lives, especially when incomes are rising.

This is why, in my opinion, oil can’t go to $20/bbl. Despite very vocal predictions of much lower oil prices, many people are aware of the dynamics I have laid out here.

Conclusions
In the long run, $40/bbl oil is not a price sufficient to entice enough oil producers to produce at a level that can satisfy global demand. Hence, prices will rise.

Why the $20 Oil Predictions are Wrong

[kublikhan]

Why are you so adamant on the demand issue?

The ETP model says that the annual price average will not exceed the following values
...
It doesn't say anything about the demand or the supply (in terms of volume) at any particular time.

Shortonoil does talk about demand in more general terms though. And he has been arguing for demand falling, not rising as it has been:

Demand will be going down because production is now going down. We have now reached Peak All Liquids sooner than we expected; we were anticipating early 2016. We seem to be about six months late.
...
As the general economy slows, demand slows, and with it the price of oil. With reduced demand, inventories grow.
...
The world will never again be able to consume all the petroleum that is produced!

[rockdoc123]

Wouldn't the chart go the other way, to make your point? Call me confused.

look at the global demand chart I posted previously....demand in Europe is overwhelmed by increasing demand everywhere else. I showed the Europe plot simply because you were trying to argue $100/bbl oil killed demand in Europe which is clearly not the case, it was falling before the liquidity crisis spread to Europe and continued on independant of the higher prices in 2011 - 2014.

I'm not surprised that you are confused given the fact the global demand data has been posted several times previously when you went on about demand collapse due to high prices.

Why are you so adamant on the demand issue?

The ETP model says that the annual price average will not exceed the following values (US dollars) :

You should ask Pstar as he seems to be of the mistaken view that demand was decreasing globally due to $100/bbl oil. Which it wasn't/isn't

[SumYunGai]

Why are you so adamant on the demand issue?

They are becoming somewhat desperate. Things are starting to get tense. The oil industry really needs oil prices to rise a lot more than they have so far. The deniers hold on to their demand mantra because it gives them a sense of hope that the oil price will eventually recover. Sad. It is the last argument they have.

It is highly ironic that they fail to realize where their precious demand is actually coming from.

The ETP model says that the annual price average will not exceed the following values (US dollars) :

2016 - 65.94
2017 - 54.18
2018 - 41.16
2019 - 26.88

(BTW, Oil prices won't fall to 0, shortonoil has already explained this before, and he even put some arrows that start to deviate in his famous graph)

It doesn't say anything about the demand or the supply (in terms of volume) at any particular time.

Actually, BWHill had a very good explanation for the currently rising demand:

We have seen a 65% reduction in price with a 3% increase in demand. If a retailer cut their prices by 65%, and only saw a 3% increase in sales they would shut their doors. The Etp Model predicts a 2.5% increase in demand from the production side alone. The end consumer is not responding to price declines; even gigantic ones!

Your cherished, and malfunctioning supply/ demand curve is now perfectly vertical. It is saying that regardless of the size of the change in price demand will not be affected. The function has reached a point of discontinuity. What we are witnessing is not a typical producer/ consumer relationship; it is tantamount to a going out of business sale on the part of the producers. The only way the industry can increase demand would be to give out a free barrel with every package of Cracker Jacks. Simply put, on one wants anymore of the stuff. The Etp Model says that they will never again.

The Etp model accounts for the rise in demand. It is coming mostly from the oil industry itself! So people saying "demand is rising, demand is rising" over and over is basically just irrelevant. Rising demand does not invalidate the Etp model.

Because the oil industry itself is responsible for so much of the current growth in demand, demand will fall along with production. Thus, the price of oil will never recover.

What I understand is that oil companies need to get more and more oil out of the ground each year if they want to stay in the market and don't get bankrupt in the process. The logical outcome is that they will try to balance the financial losses by producing more volume.

Yes. Less net energy per barrel naturally drives the system to produce more barrels.

Steve Ludlum warned about this outcome in 2012, long before the price plunge (I have seen people in this same forum talking about the Triangle of Doom before the oil slump happened).

Ludlum's instincts were very good. He figured out, well in advance, the macro economic drivers that result from the physics of reaching the thermodynamic limit.

The other logical outcome is that they will fail in doing so and will go bankrupt, so the production will finally fall and the economy will be severely disrupted (as I explained in my last post, that's my way of thinking).

I think that is about to happen. But just like how the Hanjin bankruptcy will not significantly reduce the shipping glut, the fall in oil production will not be sufficient to reduce the oil glut. The glut is a permanent condition until collapse overtakes the system.

I am not obsessed about the date of Peak Oil, as I understand that the volumetric analysis is not as important as knowing how much energy we use in the process before oil final products reach the end consumer.

I agree. Energy is the most important thing.

It's ironic that I end up explaining Hills model since the thing which made complete sense for me was from the beginning Mr. Ludlum's explanations.

I end up explaining the Etp model a lot, too. The thing that made complete sense to me from the beginning was that civilization was headed for a rapid collapse. For me, the Etp model just gives the most exact way to time it.

[ralfy]

Yes, and by the EIA we are still producing more then we are using so we can't start working off the glut until then balance.

So by their forecast it should balance sometime next year and I would think it would take another year to work down the glut so prices can start to rise again, maybe sometime in 2018.

But the EIA predicts the future about as well as I do.

So I stand by my statement, Oil is not cheap yet, it needs do drop back down into the $20s to clear the market. I think that if the price stays between $45 to $60 then production will continue to out pace consumption

https://www.eia.gov/forecasts/steo/repo ... al_oil.cfm

The problem is production cost, and connected to that debt:

https://www.bloomberg.com/news/articles ... to-survive

[ennui2]

The thing that made complete sense to me from the beginning was that civilization was headed for a rapid collapse.
For me, the Etp model just gives the most exact way to time it.

There you go. You start with a conclusion and then reach for any cockamamie theory that supports it.

What was it that made you feel that rapid collapse coming on? A tingling in your toes? A buzzing in your ears?

[StarvingLion]

The rise in oil demand is due to the "Renewables" garbage which is required to save the Ponzi Shale/Hydrates Gas Industry which is supposed to save the Oil Industry.

BW Hills and Gail Tverbergs both assume there is still some kind of functioning debt monetary system....bah are they blind or what?

The energy/financial system is a full blown PONZI now. Its not possible to analyze it without knowledge of the details.

[ennui2]

Its not possible to analyze it without knowledge of the details.

And you aren't privileged with that information, so spare us your insanity.