[BahamasEd]

The price of WTI is now the most overpriced it's ever been compared to the ETP MAP at $31.87 (current weekly WTI price - the current MAP).

My thinking is that since everything takes energy and we built this world on cheap energy that's no longer cheap (affordable). Since we HAVE to have energy to do any kind of work we've been going into debt to pay for it, just put it on the credit card, I'll gladly pay you Tuesday. So either the price of energy will fall in 2020 or the worldwide debt will have to go up at least another 12 trillion dollars or more next year to pay the different.

I haven't been posting much, I'm enjoying life and burning energy as fast as I can. I sure hope they can keep this thing rolling for a few more years.

Enjoy life my friends,

It seems I can't upload a .png chart right now, but the MAP is right around $27.38 now

[Outcast_Searcher]

The price of WTI is now the most overpriced it's ever been compared to the ETP MAP at $31.87 (current weekly WTI price - the current MAP).

My thinking is that since everything takes energy and we built this world on cheap energy that's no longer cheap (affordable). Since we HAVE to have energy to do any kind of work we've been going into debt to pay for it, just put it on the credit card, I'll gladly pay you Tuesday. So either the price of energy will fall in 2020 or the worldwide debt will have to go up at least another 12 trillion dollars or more next year to pay the different.

I haven't been posting much, I'm enjoying life and burning energy as fast as I can. I sure hope they can keep this thing rolling for a few more years.

Enjoy life my friends,

It seems I can't upload a .png chart right now, but the MAP is right around $27.38 now

So if oil is moderately priced, you claim we can't afford it, but we clearly can. (Hint, since we could afford it fine near $100 four four years from 2010 to 2014, we can certainly afford it at a little over half that in nominal dollars.) If it's cheap )but still above the MAP), you claim ETP and the MAP are working.

Yeah, what you say is totally convincing.

Meanwhile in the real world, the MAP is an utter failure, re its price predictions, and now here we are with the WTI over double the predicted MAP, and the global and US economy keep growing, despite the usual/constant alarmist cries of the doomers.

In fact, oil is still such a good deal, that most electric cars aren't yet even affordable to the middle class. Now, if oil were truly unaffordable and gas were say, over 10 bucks a gallon on a sustained basis, then suddenly folks would be showing MASSIVE demand for EV's, to avoid buying that unaffordable gas.

And re ICE's, it's not like people are moving to econo-boxes because they can't afford to put gas in cars. On the contrary, they're buying stupid-big gas guzzlers, and making AGW worse. If oil were "unaffordable", you'd see people rushing to buy fuel efficient cars, like they were in the 70's, in response to the repeated oil crises.

[dirtyharry]

The price of WTI is now the most overpriced it's ever been compared to the ETP MAP at $31.87 (current weekly WTI price - the current MAP).

My thinking is that since everything takes energy and we built this world on cheap energy that's no longer cheap (affordable). Since we HAVE to have energy to do any kind of work we've been going into debt to pay for it, just put it on the credit card, I'll gladly pay you Tuesday. So either the price of energy will fall in 2020 or the worldwide debt will have to go up at least another 12 trillion dollars or more next year to pay the different.

I haven't been posting much, I'm enjoying life and burning energy as fast as I can. I sure hope they can keep this thing rolling for a few more years.

Enjoy life my friends,

It seems I can't upload a .png chart right now, but the MAP is right around $27.38 now

So if oil is moderately priced, you claim we can't afford it, but we clearly can. (Hint, since we could afford it fine near $100 four four years from 2010 to 2014, we can certainly afford it at a little over half that in nominal dollars.) If it's cheap )but still above the MAP), you claim ETP and the MAP are working.

Yeah, what you say is totally convincing.

Meanwhile in the real world, the MAP is an utter failure, re its price predictions, and now here we are with the WTI over double the predicted MAP, and the global and US economy keep growing, despite the usual/constant alarmist cries of the doomers.

In fact, oil is still such a good deal, that most electric cars aren't yet even affordable to the middle class. Now, if oil were truly unaffordable and gas were say, over 10 bucks a gallon on a sustained basis, then suddenly folks would be showing MASSIVE demand for EV's, to avoid buying that unaffordable gas.

And re ICE's, it's not like people are moving to econo-boxes because they can't afford to put gas in cars. On the contrary, they're buying stupid-big gas guzzlers, and making AGW worse. If oil were "unaffordable", you'd see people rushing to buy fuel efficient cars, like they were in the 70's, in response to the repeated oil crises.

Take out all the billions/trillions stuffed under QE and ^Not QE ^ + benefits of NIRP and ZIRP and I really like to see from where you will have the money (worthless currency) not only to buy oil but even a loaf of bread .This is crazy economics . The President get impeached and the stock market goes to 3200 a new record , hey why not a new pearl harbor or 9/11 and it would go to 6400 .

[Cog]

ETP adherents will come up with a million excuses of why their theory has failed to predict oil prices. But bottom line is it failed to take into account supply/demand.

Oh and shorty, pay your wager.

[BahamasEd]

As long as your willing to go into debt and/or someone is willing to lend you money then you can afford anything you want and you can afford it NOW.

But if you spend twice what you earn, making up the different in debt, then you may have a lot of nice stuff but having stuff doesn't make you rich. Someday the bill will come do.

Energy is the base of the economy, without it all you do is die! We (humans) will beg, borrow and/or steal whatever it takes to keep it flowing.

As to the ETP model if you can show me a different model that does a better job of predicting the amount of affordable oil I'll have a look at it?

I keep getting an error trying to upload an attachment
"Could not upload attachment to ./files/49386_d20a50b...."

[Cog]

The best and only model that predicts oil price is supply and demand. It's worked since the first barrel came out of the ground.

How many sock puppets does shorty really need?

[dirtyharry]

The best and only model that predicts oil price is supply and demand. It's worked since the first barrel came out of the ground.

How many sock puppets does shorty really need?

No demand and supply model fails for oil as it fails for gold and silver . The reason is that it is a financialised product just like PMI . Too many paper barrels compared to physicals . In addition it is subject to geo political acts which have nothing to do with demand and supply but with logistics ,sanctions,currency fluctuations etc . It is not subject to a pure demand supply model .

[shortonoil]

ETP adherents will come up with a million excuses of why their theory has failed to predict oil prices. But bottom line is it failed to take into account supply/demand.

Saying that it failed, and demonstrating that it failed appear to be the same thing according to your bizarre, messed up way of thinking. The MAP failed (which is not the Etp Model) as a result that it didn't take into consideration that $29 trillion in counterfeit money would be stuffed into economy. We never imaged that anyone could be that stupid; we were wrong.

We stated seven years ago that as a result of the entropic decay of the petroleum production system that specific portions of that system would be phased out first. They were:

1) extra deep water (its gone)
2) bitumen production (what happened to unlimited oil from the tar sands?)
3) extra heavy (hows the dog stew in Venezuela)
4) Shale (Conoco Phillips has an $11 billion deal for you)

Hydrocarbon production that doesn't generate a net energy surplus can not generate a net positive cash flow. Oil production is about producing "energy", that's what powers the economy. Selling black goo in a barrel is about Arabic street hawkers, and Snake Oil salesmen. Selling a collapsing monetary system is about central bankers.

Petroleum depletion, and debt growth are marching in sync. They are going into the abyss together:

[asg70]

As to the ETP model if you can show me a different model that does a better job of predicting the amount of affordable oil I'll have a look at it?

It's called the invisible hand of supply/demand dynamics and it explains everything just fine.

It is not subject to a pure demand supply model

You can be damned sure that if oil becomes truly scarce, prices will increase, fiat currency or no fiat currency, debt or no debt.

[Yoshua]

So the WTI breaks the MAP and now the Fed is cutting rates, doing repo operations and QE.

Well...maybe it's just a coincidence.

[BahamasEd]

shortonoil wrote

Saying that it failed, and demonstrating that it failed appear to be the same thing according to your bizarre, messed up way of thinking. The MAP failed (which is not the Etp Model) as a result that it didn't take into consideration that $29 trillion in counterfeit money would be stuffed into economy. We never imaged that anyone could be that stupid; we were wrong.

The ETP model and the MAP has not failed yet, ie the math behind the model is still valid. What went wrong is people think that the Maximum Affordable Price equals the Maximum Price of WTI, two different things. A lot of things are Un-Affordable but people buy them anyway with the promise to pay for it in the future

What is the MAP? from the report (my bold)

To determine the affordability range it is first observed that the price of a unit of petroleum can not exceed the value of the economic activity that the energy it supplies to the end consumer can generate. To exceed that value would imply that the value of petroleum to the economy would have a neutral effect; its use would not increase GDP by more than its cost. This analytical technique does not negate the economic premise of supply and demand, it supersedes it. Producers must receive a price that is at least equal to its cost of production, and consumers can pay no more than the value of the economic activity that it can generate. When production costs exceed what the end consumer can afford to pay; production is curtailed, and eventually ceases.

YES, the Producer can sell a produce for less then the cost of production and YES, the Consumer can pay a price higher then the value of an item. Both will go broke sooner or later but we can keep partying until the repo man shows up.

[asg70]

What went wrong is people think that the Maximum Affordable Price equals the Maximum Price of WTI, two different things. A lot of things are Un-Affordable but people buy them anyway with the promise to pay for it in the future

Short was once confident enough to think the two would be one in the same, hence his failed bet. If the two decouple then there's no longer a way to prove OR disprove ETP. In that case, you can continue to live in your own reality bubble while the world just keeps chugging along indefinitely, which is how it's pretty much gone for the year or how long it's been since Short lost his bet.

Oh, and the math behind ETP is NOT valid. It's been pointed out many times that the EROEI calculations are way off.

the Producer can sell a produce for less then the cost of production

What makes you think that's what is in fact happening, and what would motivate them to do this?

[rockdoc123]

What went wrong is people think that the Maximum Affordable Price equals the Maximum Price of WTI, two different things. A lot of things are Un-Affordable but people buy them anyway with the promise to pay for it in the future

OK, that is just incorrect. Can the refineries not afford to buy oil as you state? IF that were the case we would see negative crack spreads. Far from that the current crack spread is $15/bbl. That means the refineries can afford to buy oil at the current price (WTI ~$60/bbl) refine it into products and make $15/bbl profit. Even when oil dropped to <$30/bbl the crack spread was positive.

Is the average citizen having to take out loans to pay for gasoline? No.

Is the vast majority of oil and gas companies declaring Chapter 11 insolvency? No.

I think you need to take a course in petroleum economics.

[Yoshua]

World debt ratio is 3:1 to world GDP.

Someone is going into debt. Who?

Governments
Corporates
Households

Everybody is going into debt.

That debt can never be repaid. It must be rolled over. The interest on that debt must continue to fall.

The central banks must continue to print money to increase the debt, since the economy can't generate the money to do so.

How long can this go on? I haven't got a clue.

Merry Xmas!

[Cog]

I haven't got a clue.

Merry Xmas!

Finally an accurate post.

[shortonoil]

Short was once confident enough to think the two would be one in the same, hence his failed bet. If the two decouple then there's no longer a way to prove OR disprove ETP. In that case, you can continue to live in your own reality bubble while the world just keeps chugging along indefinitely, which is how it's pretty much gone for the year or how long it's been since Short lost his bet.

For someone who can't tell the difference between a line graph, and a bar chart; that is pretty impressive. Who's coaching you in mathematics; your dog?

Oh, and the math behind ETP is NOT valid. It's been pointed out many times that the EROEI calculations are way off.

How many times did you have to go 1,2,3, many to come to that conclusion? The Second Derivative of your fart rate doesn't produce a meaningful energy function!

The ETP model and the MAP has not failed yet, ie the math behind the model is still valid.

The proof is that the entire world is going bankrupt at an astronomical rate, and it is following the depletion function almost to perfection. It looks like, at a debt load of around $400 trillion, the wheels fall off! The ATMs blow a fuse, and the store shelves go bare. That is, of course, a best case scenario. It would be nice if it were wrong; but it isn't!

[asg70]

World debt ratio is 3:1 to world GDP.

The debt situation != peak oil.

[Outcast_Searcher]

What went wrong is people think that the Maximum Affordable Price equals the Maximum Price of WTI, two different things. A lot of things are Un-Affordable but people buy them anyway with the promise to pay for it in the future

OK, that is just incorrect. Can the refineries not afford to buy oil as you state? IF that were the case we would see negative crack spreads. Far from that the current crack spread is $15/bbl. That means the refineries can afford to buy oil at the current price (WTI ~$60/bbl) refine it into products and make $15/bbl profit. Even when oil dropped to <$30/bbl the crack spread was positive.

Is the average citizen having to take out loans to pay for gasoline? No.

Is the vast majority of oil and gas companies declaring Chapter 11 insolvency? No.

I think you need to take a course in petroleum economics.

Or just in using common sense and observation. (When I went to K-12 school, that was part of what was taught. Today? I'm not so sure.)

All that you say is correct, rock (I assume you're right re the current crack spread, but looking at a chart over the past 4 years makes $15 a good ballpark average, so it certainly sounds about right).

https://articles2.marketrealist.com/201 ... ted-know/#


And its not like ANY of those observations are exactly rocket science.

But financial doomers repeatedly spew a bunch of nonsense, say "debt" shrilly, and expect to be taken seriously by those who can read, think, and look things up (and it's not a long trip, given that we're on the INTERNET for crissakes).

When people have to take the bus, bike, walk, or buy super cheap or EV cars in droves because they can't "afford" gasoline, that claim might be worth more careful investigation.

Meanwhile, in the real world, where a big problem re overconsumption is moderate sized and larger trucks and SUV's -- i.e. fuel INEFFICIENT vehicles are all the rage, and the average transaction price for a new light vehicle was nearly $37,600 as of October, per Kelly Blue Book -- acting like people generally can't "afford" gasoline at $60 is sheer madness.

Not to mention the common sense observation that the global economy kept growing with WTI prices of nearly $100 on average for four years prior to mid-2014.

If doomers want to preach about short term financial doom, it would be refreshing to see them do something original, and make a case that can't be disproven in minutes by a competent 9 year old, or just say "debt debt debt" with NO context at all.

[AdamB]

It seems I can't upload a .png chart right now, but the MAP is right around $27.38 now

So it most certainly isn't "seeing perfectly now", then is it?

The correct comment is, "the MAP didn't know anything before, doesn't know anything now, and it becomes ever more obvious to even the most bubble headed hafwits that it was never of value in the first place".

[AdamB]

Who's coaching you in mathematics; your dog?

Sounds as though you speak from experience.

Based on your work getting laughed out of peer review, and you needing to pull the entire thing from the web in order to hide exactly what you don't know about anything related to the oil field, equations used within the industry, and freshman semester statistics understanding, it seems to me that you really have no room to comment on this topic, greenhorn.