Yoshua wrote:The WTI price chart reached its end point and blew up with a price spike.
We have now reached the point where money is being destroyed as we go down the Net Energy Cliff.
Yoshua wrote:This is what Shortonoil predicted would happen.
Yoshua wrote:The point where this would happen seems to be when half of the world's petroleum production reached EROI < 1:1 in 2021.
Armageddon wrote:How long can dementia Joe keep draining 1mbpd for the SPR?
AdamB wrote:Armageddon wrote:How long can dementia Joe keep draining 1mbpd for the SPR?
500+ million last month available, being removed at 5 million a week,the normal physics of fluid flow means that as pressure drops the rate will be forced to decrease at some point (but not if the things really are just big tanks, then they'll drain just like a tank), but call it 100 weeks tops.
Doesn't matter really to the market. The assumptions I just made are also made by the traders, and they know that reducing inventory was meant as a STRATEGIC reservoir, not as a market price manipulator. Biden doesn't know any more about economics apparently than peak oilers do. But the optics are better than doing nothing, and that is mostly what matters to politicians from either party, pretending to do something.
Alfred Tennyson wrote:We are not now that strength which in old days
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.
Tanada wrote:Politicians of all stripes want to appear to be working hard so they flail around 'doing something" which as often as not makes the problem worse, not better.
Yoshua wrote:Peak Oil 2018
We live now in a Post Peak Oil world. We are actually in a Post Peak Oil Natural Gas and Coal world.
The WTI did drop to zero in 2020 as Shortonoil predicted.
In 2021 we saw price spikes in oil natural gas and coal as artificial demand from trillions in printed money by the central banks hit a decline supply.
We are now seeing the destruction of money with high inflation around the world.
Peak Oil...EROI...Finance...Economy...turns out to be a very complex event.
Yoshua wrote:Peak Oil 2018
Yoshua wrote:We live now in a Post Peak Oil world. We are actually in a Post Peak Oil Natural Gas and Coal world.
Yoshua wrote:The WTI did drop to zero in 2020 as Shortonoil predicted.
Yoshua wrote:In 2021 we saw price spikes in oil natural gas and coal as artificial demand from trillions in printed money by the central banks hit a decline supply.
Yoshua wrote:Peak Oil...EROI...Finance...Economy...turns out to be a very complex event.
randomguyonabike wrote:It is a shame BW passed away. Wonder what he would say today....
AdamB wrote:U.S. Plans to Push Down Oil Prices Won’t Be Straightforward
The Biden administration announced plans Tuesday for the next tranche of sales from the strategic petroleum reserve, as well as a proposal for future purchases to refill the SPR.
Link
AdamB wrote:U.S. Plans to Push Down Oil Prices Won’t Be Straightforward
The Biden administration announced plans Tuesday for the next tranche of sales from the strategic petroleum reserve, as well as a proposal for future purchases to refill the SPR.
Link
vtsnowedin wrote:AdamB wrote:U.S. Plans to Push Down Oil Prices Won’t Be Straightforward
The Biden administration announced plans Tuesday for the next tranche of sales from the strategic petroleum reserve, as well as a proposal for future purchases to refill the SPR.
Link
That is behind a paywall so you have said nothing.
About the author: Mark Finley is a fellow in energy and global oil at Rice University’s Baker Institute, and former senior U.S. economist at BP.
The Biden administration announced plans Tuesday for the next tranche of sales from the strategic petroleum reserve, as well as a proposal for future purchases to refill the SPR.
The sales announcement is the latest under the administration’s plan announced in March to sell 180 million barrels from the SPR over a six month period, part of a coordinated release of strategic stocks by members of the International Energy Agency.
The repurchase plan is subject to final Department of Energy rule-making. But as announced, it would allow the Department of Energy to arrange future purchases on a fixed-price basis—that is, agreeing a sales price in advance rather than buying barrels at an unpredictable future price. The administration argues that these new purchase terms (for oil to be purchased after fiscal year 2023) would boost investment by giving producers greater confidence in future prices.
Neither sales from the SPR nor its refilling are without problems, both practical and political in nature.
Crucially, the ability to purchase crude oil in the future—under fixed-price arrangements or the current protocols—is dependent on a future Congress authorizing the funds needed.
Whether the fixed-price provision will actually boost investment in new supply is unclear. Many U.S. producers already manage future price uncertainty via crude oil futures (and options). Recent NYMEX crude futures have had daily trading volume of 700 million barrels. The ability to lock in a predictable price is particularly needed since the amount of oil that would refill the SPR is relatively small in the context of the global crude market, and therefore would be unlikely to have a material impact on global prices. In the unlikely event that Congress authorized a complete refill of the SPR to its current authorized storage capacity of 714 million barrels within a single year, purchases would add roughly 640,000 barrels per day to global oil requirements for one year—in a global marketplace of roughly 100 million barrels per day. (Note that the global reference is the appropriate one, both because oil is traded in a global marketplace and because the U.S.—as discussed below—can purchase non-U.S. crudes for the SPR.)
A less-considered issue, nevertheless of high significance, is the mismatch that exists between the quality of crude oil produced in the U.S. and the crude most U.S. refineries utilize, which has historically been the basis for crude oil stored in the SPR.
In recent years, successive administrations (with help from successive Congresses) have sold crude from the SPR, most recently to mitigate the impact of rising global crude oil prices but also to fund SPR renovations and meet other spending objectives. SPR sales have been facilitated by the shale revolution, which eliminated U.S. (net) import dependence, eliminating the country’s obligation under the IEA treaty to hold oil inventories equivalent to 90 days of imports. The SPR reached a peak of just over 726 million barrels in late 2009; it had fallen to 638 million by the end of 2020 and now stands at 475 million barrels.
Historically, crude oil was placed in the SPR to meet the requirements of U.S. refiners, and there is a significant mismatch between that and the quality of crude produced by US shale operators. In particular, the average crude oil in the SPR is a close match for the average crude used by U.S. refineries, but both are significantly heavier than typical U.S. production. Moreover, most U.S. production is also relatively low in sulfur while U.S. refineries are generally configured to process higher sulfur crudes. Perhaps not surprisingly, then, this year’s crude oil sales from the SPR have been predominantly “sour” (or higher in sulfur)—to date, roughly 116 of 119 million barrels sold have been “sour.”
Continued SPR management in a fashion consistent with the historical pattern could however, raise challenges. First, the headline figure of 475 million barrels in the SPR could overstate the potential impact for U.S. refiners and global oil markets; sour crudes, which made up 60% of the SPR at the beginning of this year, are now half of the stockpile because the market has preferred buying sour crudes from the SPR so far this year. The most recent Energy Department sales notice switches from marketing predominantly sour crudes to lower-sulfur “sweet” crude, but it remains to be seen whether U.S. refiners will have a substantial appetite for such crudes, at a time when a relatively small number of SPR sales to foreign companies have already created significant political controversy.
And similarly on any potential refill in the future—the main U.S. crude streams are a poor match for the SPR, at least based on historical management practices. Indeed, the SPR reached full capacity at the end of 2009 with a cargo of Saharan Blend crude. But purchasing non-U.S. crudes could become a political liability even if it was necessary to manage risks faced by domestic refiners.
The steps that the administration is taking are supposed to help with pain at the pump, after national gasoline prices reached record levels earlier this year. Higher prices pose risks to the economy (via stretched consumer budgets and lower confidence) as well as to the administration (via lower job approval ratings). Indeed, the White House SPR announcement also included analysis by the Treasury Department, which concluded that the SPR sales from the U.S. and its allies had reduced gasoline prices by as much as 40 cents per gallon compared with what they would have been otherwise.
However, the SPR moves under consideration are not straightforward in terms of their practical implementation. Nor is their market or political impact.
Plantagenet wrote:oil price up 4% on news of unrest in Baghdad in the Green Zone
us-embassy-being-evacuated-baghdads-green-zone-breached
vtsnowedin wrote:Plantagenet wrote:oil price up 4% on news of unrest in Baghdad in the Green Zone
us-embassy-being-evacuated-baghdads-green-zone-breached
It has come back down to $92.43. Perhaps on positive news from Ukraine.
vtsnowedin wrote:Plantagenet wrote:oil price up 4% on news of unrest in Baghdad in the Green Zone
us-embassy-being-evacuated-baghdads-green-zone-breached
It has come back down to $92.43. Perhaps on positive news from Ukraine.
AdamB wrote:vtsnowedin wrote:Plantagenet wrote:oil price up 4% on news of unrest in Baghdad in the Green Zone
us-embassy-being-evacuated-baghdads-green-zone-breached
It has come back down to $92.43. Perhaps on positive news from Ukraine.
Or "Lets Go Brandon" doing some of that, you know, non-traitorous based governing, new legislation, inflation reduction based policy stuff?
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