BahamasEd wrote: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 wrote:BahamasEd wrote: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.
Cog wrote: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?
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.
BahamasEd wrote: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?
dirtyharry wrote:It is not subject to a pure demand supply model
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.
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.
BahamasEd wrote: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
BahamasEd wrote:the Producer can sell a produce for less then the cost of production
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
Yoshua wrote:I haven't got a clue.
Merry Xmas!
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 ETP model and the MAP has not failed yet, ie the math behind the model is still valid.
Yoshua wrote:World debt ratio is 3:1 to world GDP.
rockdoc123 wrote: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.
BahamasEd wrote:It seems I can't upload a .png chart right now, but the MAP is right around $27.38 now
shortonoil wrote: Who's coaching you in mathematics; your dog?
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