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THE Price Of Crude Pt. 15

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

Re: THE Price Of Crude Pt. 15

Unread postby Outcast_Searcher » Wed 26 Aug 2020, 21:02:43

asg70 wrote:
sparky wrote:the ratio of speculative trading to real industry operators was 50/1


Funny how reluctant peakers were to acknowledge speculators back in the runup of 2008, though... Speculation or really any accusation of financial manipulation is the convenient excuse when prices aren't where one expected or hoped them to be.

And liberals are the most outrageous about this at high pricing extremes, BTW.

When prices are high, it's all about windfall profits taxes, and liberal politicians are falling all over themselves to try to scoop up votes proclaiming their desire for that, ala Bernie the taker style.

But when prices are very LOW (which is as random, re speculation, as when they're very high), do ANY liberals THANK the producers for the low prices? OF COURSE NOT. :lol:

Because THAT, of course, would be highly unlikely to BUY VOTES.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Price Of Crude Pt. 15

Unread postby sparky » Wed 26 Aug 2020, 22:29:18

.
My point on the price of crude with speculation is somewhat more nuanced
speculation act as a froth on top of the price of production ,
since all production prices are different , some very low other quite high ,
it's the price of the "ultimate traded barrel" which fix the world wide quoted price
you can see the problem
a lot of the industry has little commonality with world wide quoted price
for reason of logistics , refineries location , politics or grade of oil real prices are quite variable

speculators were riding an expansive market with a very short cycle
there is the real market , airline companies usually arbitrage their fuel cost by taking position on the oil market
other actually use the physical oil that's the 1/50 of the trade market
speculators have no use for crude , they mostly don't even know much about it
they can buy and sell with no regard to the real quantities used in the refineries

producers does , when the refineries throttled down their inputs , the real buyers disappeared and the music stopped ,
it turned out to be a game of musical chair with very few chairs indeed

now the price is more or less trending reality ,
again the crude oil market is a big place with various local condition , reality is here and now
not next month in New York
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Re: THE Price Of Crude Pt. 15

Unread postby REAL Green » Wed 09 Sep 2020, 06:20:51

“IEA: Oil Demand Recovery Has Stalled”
https://oilprice.com/Energy/Crude-Oil/I ... ews+Update)

“In its latest Oil Market Report for August, the IEA downgraded its oil demand forecast for this year by 140,000 bpd compared to the estimate from the previous month’s report. This was the first downgrade in several months, “reflecting the stalling of mobility as the number of Covid-19 cases remains high, and weakness in the aviation sector,” the IEA said. The IEA expected in the middle of August that crude oil demand this year would be 8.1 million bpd lower than it was in 2019. The market will be waiting for the most recent assessment from the IEA in its next report scheduled to be released on September 15.”
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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Wed 09 Sep 2020, 10:08:01

I doubt the oil industry will see any good news as long as Covid hangs over their heads. Not to worry though as the oil in the ground will wait for the demand and price for it to return. Perhaps in a year or more.
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Re: THE Price Of Crude Pt. 15

Unread postby evilgenius » Wed 09 Sep 2020, 18:04:09

rockdoc123 wrote:
And now Canada can't take up the slack.


what "slack" would that be? Refineries are full, storage is full, nobody is buying oil because there is so much of it around and the refineries have lost a lot of the market for their products. Have you been living under a rock? :roll:

You didn't read the next line. You cut it right out. It said before these cheap prices they couldn't. I guess you did that because you like to accuse people of living under rocks? Anyway, it's an allusion to the state of things, where Canada was already having trouble before prices got this cheap. There were fires. There was the usual political tension. Then the oil price broke.

I wondered if West Africa, which has always been the next big thing just a few years of development away would be adversely affected. West Africa was always a hedge against Venezuela blowing up in America's face, and against Canada being able to pull off the sort of environment end run which they did. There is a lot going on in the Gulf of Guinea. The powers there are fed, in part, by oil. Nigeria is a very important nation in Africa. They recently managed to remove a ruler from power, when most African nations who elect a person can't seem to shake them once they have burrowed themselves in. Does that mean that these cheap prices have reduced the impact that crude plays in those kind of domestic shenanigans? Is king crude on his way out, or just laying low? King crude has been a major player in many country's domestic politics. Will that role continue.
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Re: THE Price Of Crude Pt. 15

Unread postby sparky » Wed 09 Sep 2020, 20:59:59

.
Just now the price is controlled by the OPEC production limits ,
the compliance has been pretty good but now the quota have been eased and the traded price is softer

I guess it's to keep the US production from surging back
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Re: THE Gasoline Price Thread Pt. 5

Unread postby AdamB » Mon 08 Feb 2021, 13:00:33

dissident wrote:The US is in a circularity. It cannot have expensive gasoline since it has developed a consumer economy which requires cheap gasoline.


Fortunately car makers have been providing a cure for that for a decade or more now. Hard to say an EV driver even notices gas prices. The things were a great prep for peak oil fears of a decade or more ago, and now they are just good rides.

dissident wrote: If you have to get in a car to do grocery shopping, then the gasoline price becomes an issue.


Not at all. Doesn't matter when the wife goes shopping on the other side of the belt way either. Or to work. Or picks up a kid at school. Or anything else. Maybe you live in an area where it is illegal to be gasoline free?



dissident wrote: The 2008 recession was linked to the gasoline prices in the USA since the exurbs became nonviable and helped precipitate the subprime meltdown. People try to dismiss the link of this meltdown to gasoline prices but they have no substitute explanation. All bubbles inflate until something bursts them. So what other cause in 2008 was there to deflate this bubble?


Oil prices spiked some 6 months or more AFTER the 2008 recession started. The same folks who lived farther from work then, are still doing it now, and hasn't caused a recession from then, to now. But far more folks are looking for those charging stations from their employers, that's for sure! Free fuel as an employment perk has worked out great for the wife and I over the years.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Thu 11 Feb 2021, 12:50:00

Crude oil price recovery too fast for its own good

"The OPEC+ alliance of oil producers will face a big test of its cohesion in a few weeks’ time, when ministers meet to discuss the next step in their historic production deal aimed at rebalancing the world’s oil supply with recovering demand. Things have almost moved too quickly in their favor."
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Plant Wed 11 Apr 2007 "I think Deffeyes might have nailed it, and we are just past the overall peak in oil production. (Thanksgiving 2005)"
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Re: THE Gasoline Price Thread Pt. 5

Unread postby AdamB » Sat 13 Feb 2021, 15:18:13

How much higher can oil prices go?

Oil prices have rallied back to the point they are almost ready to match pre-Covid levels. There are two key drivers for this miracle, which no one predicted early on as being possible in this period of time.
Plant Thu 27 Jul 2023 "Personally I think the IEA is exactly right when they predict peak oil in the 2020s, especially because it matches my own predictions."

Plant Wed 11 Apr 2007 "I think Deffeyes might have nailed it, and we are just past the overall peak in oil production. (Thanksgiving 2005)"
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Wed 03 Mar 2021, 17:12:31

Super cycle oil prices.

Two of the biggest banks on Wall Street are calling a new “supercycle” in oil, with JPMorgan Chase and Goldman Sachs both predicting prices will soar when the pandemic abates.
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Re: THE Price Of Crude Pt. 15

Unread postby Pops » Wed 03 Mar 2021, 17:51:34

I've been seeing "supercycle" quite a bit.
I think it is BS.
The last "Supercycle" was basically China making a big growth push and buying up everything in sight up against a lack of investment in the late 90's overproduction.

Just a way for the talking heads to justify their salary and fill their slot when it can all be explained by supply/demand.

Says me, LOL
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Re: THE Price Of Crude Pt. 15

Unread postby Tanada » Mon 02 Aug 2021, 19:35:11

I think we have been stuck above $70/bbl long enough now to consider this an upper boundary level, at least for the present.
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Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Mon 02 Aug 2021, 19:41:17

Tanada wrote:I think we have been stuck above $70/bbl long enough now to consider this an upper boundary level, at least for the present.

I think perhaps a lower boundary level not an upper.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Tue 03 Aug 2021, 00:01:40

vtsnowedin wrote:
Tanada wrote:I think we have been stuck above $70/bbl long enough now to consider this an upper boundary level, at least for the present.

I think perhaps a lower boundary level not an upper.


Ah. 4-6 mmbbl/day in spare capacity, the US E&P's sitting on building cash flows without spending it, buying back shares, paying off debt, and with another 1-2 mmbbl/day available should they decide to go back to spending (stacked rig inventory is as large as current working rigs), with a dash of "gee what might demand do in the post Covid world", I figure price is likely to do what it usually does, maybe up, maybe down.
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Plant Wed 11 Apr 2007 "I think Deffeyes might have nailed it, and we are just past the overall peak in oil production. (Thanksgiving 2005)"
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Re: THE Price Of Crude Pt. 15

Unread postby Outcast_Searcher » Thu 05 Aug 2021, 16:38:01

AdamB wrote:Ah. 4-6 mmbbl/day in spare capacity, the US E&P's sitting on building cash flows without spending it, buying back shares, paying off debt, and with another 1-2 mmbbl/day available should they decide to go back to spending (stacked rig inventory is as large as current working rigs), with a dash of "gee what might demand do in the post Covid world", I figure price is likely to do what it usually does, maybe up, maybe down.

And despite the usual fast crash doomer claims, neither a few dollars up NOR down for gasoline or diesel will make a big difference re "crash" or "survival", beyond inconvenience, to ALL, but people on the margin.

And in the current first world environment, there will be NO END of additional social programs to "help the helpless" (because to a liberal, we absolutely CAN'T expect people to plan ahead, AT ALL), should oil prices hang around $150 for, say, any meaningful length of time (which I doubt), given how roughly $70 seems to be a barrier already.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Gasoline Price Thread Pt. 5

Unread postby theluckycountry » Fri 06 Aug 2021, 02:19:45

AdamB wrote:
dissident wrote: Hard to say an EV driver even notices gas prices.


40% of the cost of an EV is in the battery. Drivers mightn't notice the price of gas but after 5 years they will be seriously looking at the price of a replacement battery :roll: . EV's are a novelty item, a super expensive niche product well out of range of the average consumer and always will be. And second hand they are junkers, who wants an 8 year old Tesla with a worn out battery when a replacement is around $30,000 :lol:
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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Fri 06 Aug 2021, 04:55:26

AdamB wrote:
vtsnowedin wrote:
Tanada wrote:I think we have been stuck above $70/bbl long enough now to consider this an upper boundary level, at least for the present.

I think perhaps a lower boundary level not an upper.


Ah. 4-6 mmbbl/day in spare capacity, the US E&P's sitting on building cash flows without spending it, buying back shares, paying off debt, and with another 1-2 mmbbl/day available should they decide to go back to spending (stacked rig inventory is as large as current working rigs), with a dash of "gee what might demand do in the post Covid world", I figure price is likely to do what it usually does, maybe up, maybe down.

That capacity is only "spare" because of the continuing market disruptions from Covid-19. Once we finally get past the pandemic, perhaps a full year from now, I expect demand to rise to record levels and stay high for years to come. All those Green new deal proposals will take years to build and much of the equipment will be made using fossil fuels.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Fri 06 Aug 2021, 19:20:12

vtsnowedin wrote:
AdamB wrote:
vtsnowedin wrote:
Tanada wrote:I think we have been stuck above $70/bbl long enough now to consider this an upper boundary level, at least for the present.

I think perhaps a lower boundary level not an upper.


Ah. 4-6 mmbbl/day in spare capacity, the US E&P's sitting on building cash flows without spending it, buying back shares, paying off debt, and with another 1-2 mmbbl/day available should they decide to go back to spending (stacked rig inventory is as large as current working rigs), with a dash of "gee what might demand do in the post Covid world", I figure price is likely to do what it usually does, maybe up, maybe down.

That capacity is only "spare" because of the continuing market disruptions from Covid-19. Once we finally get past the pandemic, perhaps a full year from now, I expect demand to rise to record levels and stay high for years to come. All those Green new deal proposals will take years to build and much of the equipment will be made using fossil fuels.


Not quite. Currently, 100.0 mmbbl/day crude and all liquids stands as the pre-covid year, and the EIA has 101.3 mmbbl/day as the 2022 number. Latest STEO

97.3 expected to be the 2021 number.

So we eat away all the 4 to get from 2021 to 2022 and 101.3, and still might have the extra 2 in reserve. Also, it should be noted that the US itself is sitting on another couple million a day, should the E&Ps decide it is worth their effort i.e. price allows return on investment AND growth in volumes.

So the EIA is doing what you envision. And there can still be spare capacity.
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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Fri 06 Aug 2021, 20:21:26

As good as the EIA is it does not have a crystal ball so has no real clue to future demand up or down. Also the oil producers can not just increase production at the flip of a switch and the lag time between increased demand and the corresponding increase in production is measured in months and sometimes a year or more. Add it the Biden administration's restricting production on Federal land and we may well experience shortages that drive prices to historic highs.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Fri 06 Aug 2021, 21:07:56

vtsnowedin wrote:As good as the EIA is it does not have a crystal ball so has no real clue to future demand up or down.


There are no facts in the future. But the better informed do have an advantage at speculating into the infinite probabilities contained therein.

And in either case, they seem to generally support your opinion. So buck up! Real live experts appear to agree with you!

vtsnowedin wrote: Also the oil produscers can not just increase production at the flip of a switch and the lag time between increased demand and the corresponding increase in production is measured in months and sometimes a year or more. Add it the Biden administration's restricting production on Federal land and we may well experience shortages that drive prices to historic highs.


No one increases oil production at the flip of a switch. Fortunately, demand does not change by a million barrels per day at the flip of a switch either.

Bidens restrictions on federal lands are showboating mostly. It'll take 2 years for the real federal issue, no new leases on federal lands and waters, to really begin to show up, primarily in the GOM. Good news, most new US oil won't be coming from there, but rather the Permian, which is almost exclusively private lease hold.
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