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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 vtsnowedin » Sun 06 Feb 2022, 09:54:21

Pops wrote:Pump price has nothing to do with when oil was refined or even what the distributor charges—except that retail is always more. It's all about local competition and what the guy on the next corner charges.


Nonsense and your graph proves it. A barrel of $75 oil will have a direct cost of $1.79 so today's $3.40 has a mark up, from refining ,shipping etc. including profit, for all the players of $1.41 a gallon. Now local gas wars can play with that for a while but you will notice that such wars are few and far between during high gas price times.
So when if oil gets back to $100/b we will see 100/42= 2.38 then + 1.41=$3.79 as a bare minimum and probably considerably higher due to rising transportation and staffing costs.
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Re: THE Price Of Crude Pt. 15

Unread postby Pops » Sun 06 Feb 2022, 10:59:59

vtsnowedin wrote: Nonsense and your graph proves it.

You said
The $3.40 national average gas we are buying today was refined from oil costing about $70 per barrel as there is a lead time between entry to the refinery and delivery at your local gas pump.

The graph shows retail price moves with the futures market, todays unleaded reflects today's oil price, $90, not yesterdays or 3 months ago, today's.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Sun 06 Feb 2022, 11:44:38

Pops wrote: After 10 years of goofing off I'm back to thinking about hunkering down.


Because of prices not even being all that high compared to either the 2008 spike or the multiple years of $100+ or so, or because you are think peak oil #6 was indeed the final peak of this century and we're back to the good ol' days of MZBs and suburban hordes fleeing to the countryside and whatnot?
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."

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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Sun 06 Feb 2022, 13:14:09

Pops wrote:
vtsnowedin wrote: Nonsense and your graph proves it.

You said
The $3.40 national average gas we are buying today was refined from oil costing about $70 per barrel as there is a lead time between entry to the refinery and delivery at your local gas pump.

The graph shows retail price moves with the futures market, todays unleaded reflects today's oil price, $90, not yesterdays or 3 months ago, today's.

You said this:
Pump price has nothing to do with when oil was refined or even what the distributor charges—except that retail is always more.

That is nonsense. Front month or two months prior matters not , it still closely tracks the price paid for the oil used. Your graph shows that retail sometimes has to chase price changes and even goes too far in one direction or the other for a few weeks but always comes back to correlation with crude price.
If you get into the nitty gritty there is the volume in storage and the price paid for that which fiddles with the numbers for weeks or even a few months at a time but that too will always regress towards the mean given time.
So I will boldly predict once again that if WTI gets above $100 we will be paying $4.00+ for gas soon after.
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Re: THE Price Of Crude Pt. 15

Unread postby Pops » Sun 06 Feb 2022, 14:01:23

AdamB wrote: peak oil #6


I realise that the only thing you have to contribute. I guess it makes you feel better.

I expect there will be another "liquids" maximum this year or next, '24 at most. But the plateau in conventional is what matters. Fracking was profitable last year because the Queen was on vacation and the Permian plastic precursor was in good demand, prior to that she was just turning tricks for OPM. This year she'll be back at it except she's up to 4 or 5 mile laterals now. The whole LTO bit was a free throw to prepare for peak, I used it to make some cash.

I'm not really affected by oil price directly all that much. I haven't commuted in ...about 28 years. I couldn't tell you what the local gasoline price is, I filled up the pickup 3 or 4 months ago and the car maybe 2 months ago. But I live in a small town and am dependent on its meagre infrastructure, and it's frankly not all that resilient. Our town utility burned it's cash surplus in the nat gas market gouge during last year's big freeze. They raised the electric rate sufficient to repay the $5M bill over 5 years. The problem is problems multiply, there are only so many turns at the well before things get ugly.

But it isn't just my little town, general conditions are about the same. I have hope for a miraculous transition but there are problems all over. The world is in debt to the tune of 256% of income. Just look around, if you actually believe the situation is peachy there isn't much evidence I can give to change that belief.
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Re: THE Price Of Crude Pt. 15

Unread postby Pops » Sun 06 Feb 2022, 14:23:02

vtsnowedin wrote: Your graph shows that retail sometimes has to chase price changes

The graph is retail gas price vs front month futures— either you accept that as evidence that gas tracks futures on the way up and eventually on the way down or not.

Most oil is sold on contracts negotiated —hedged— months in advance. Oil going into the refinery today may have been contracted last year —at who knows what price.

What that chart tell you is $3.5-$4 unleaded correlates with $100 futures price.

But whatever
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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Sun 06 Feb 2022, 15:08:15

Pops wrote:
vtsnowedin wrote: Your graph shows that retail sometimes has to chase price changes

The graph is retail gas price vs front month futures— either you accept that as evidence that gas tracks futures on the way up and eventually on the way down or not.

Most oil is sold on contracts negotiated —hedged— months in advance. Oil going into the refinery today may have been contracted last year —at who knows what price.

What that chart tell you is $3.5-$4 unleaded correlates with $100 futures price.

But whatever

Futures price is the one that is publicly known and traded on so it is "the price".
While say Exxon does not have to charge itself anything for oil coming from it's own fields going to it's own refinery it could also have sold it elsewhere for the going price
so has to keep that in it's accounting. Same for airlines that have hedged their bets with long term contracts. Long term those will all wash out to the average as no producer would sign a contract assured to cost them money.
What that chart tell you is $3.5-$4 unleaded correlates with $100 futures price.

I have said that repeatedly. You are just quibbling about the word futures.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Sun 06 Feb 2022, 15:37:36

Pops wrote:
AdamB wrote: peak oil #6


I realise that the only thing you have to contribute. I guess it makes you feel better.


Making sure that any peak oil claim is kept in the proper context is more like it.

Pops wrote:I expect there will be another "liquids" maximum this year or next, '24 at most. But the plateau in conventional is what matters.


Well, the only thing not conventional at this point within the oil and gas development world would be Canadian tar sands, and any US oil shale development (hydrates and GTL beyond that), which have been there forever and no one can make it work economically. And I'll give you that this exception is a HUGE caveat, volumetrically.

As far as the development of continuous formations, that has a long history, and yes, only recently have the geologically uninformed noticed the volumes possible from it. And it was just these resources being developed in time and with the right price that queered up the entire original peak oil claim, I'll give you that. But with another 400+ billion of it floating around internationally (just in what's been quantified when folks began looking), there doesn't seem to be as much a need to focus on the discrete reservoirs as you indicate. The proof being what has happened in the US alone since 2005-2010 of course.

Are you familiar with how resource cost curves work, and how they explain perfectly what happened 2011-2015 with creating the shale "revolution"?


Pops wrote:Fracking was profitable last year because the Queen was on vacation and the Permian plastic precursor was in good demand, prior to that she was just turning tricks for OPM. This year she'll be back at it except she's up to 4 or 5 mile laterals now. The whole LTO bit was a free throw to prepare for peak, I used it to make some cash.


Fracking was profitable every year I did it back in the 1980's and 1990's. Don't confuse the silliness of boomer companies trying to grow themselves with borrowed money into significance with those of us who grew up during the lean times and were developing these continuous resources.

As far as it being just lateral length increase, it turns out that when you normalize for it, THAT isn't the cause. But certainly improved completion design most likely is, see the 2nd chart for details.

Pops wrote:I'm not really affected by oil price directly all that much. I haven't commuted in ...about 28 years. I couldn't tell you what the local gasoline price is, I filled up the pickup 3 or 4
But it isn't just my little town, general conditions are about the same. I have hope for a miraculous transition but there are problems all over. The world is in debt to the tune of 256% of income. Just look around, if you actually believe the situation is peachy there isn't much evidence I can give to change that belief.


I've got no complaint with a deteriorating economic picture...any more than I did with the same claims during the first decade of this century when Savinar and Ruppert were making the same claim, with the same consequences, without achieving the claimed result. It is blaming it on oil that I tend to notice. I recommend solid economic decisions at the individual level myself, something I doubt you disagree with. And that requires no peak oil dogma as a causal factor whatsoever. You've mentioned you are as much a prepper/self reliant type than anything else. Hence my question to see how far you are trending towards the old style oily whack-a-doodle.
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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Sun 06 Feb 2022, 18:14:49

I expect as world demand increases due to population growth and economic growth that oil and oil equivalent prices to rise well past $100/B and that will make a lot of marginal plays like Canadian tar sands viable and after a period of short supply while these sources are brought on line we will have yet another surplus in supply for a time.
The economies of the world will adjust to the then current price levels and volatility and profitability will become a factor of oil efficiency as separate from other energy resources. The product made with more solar and less oil will become cheaper then the alternative.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Sun 06 Feb 2022, 18:49:20

vtsnowedin wrote: The economies of the world will adjust to the then current price levels and volatility and profitability will become a factor of oil efficiency as separate from other energy resources. The product made with more solar and less oil will become cheaper then the alternative.


Pops just mentioned in another thread that the word "economist" was a dirty one, back during the height of the membership in The Church of Peak Oil. He was correct in that statement, and I have found it interesting that after admitting he knows this, he doesn't seek to apply what they knew that so easily dispatched the first mighty 5 claimed peaks of this century.

In exactly the way you just did in words to arrive at a completely reasonable conclusion encompassing all 3 specialties involved, including the economic. I gave him a hint as well, asking if he was familiar with resource cost curves, because they put into math and graphics exactly what you just did in words.
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."

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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Mon 07 Feb 2022, 20:20:49

AdamB wrote:
vtsnowedin wrote: The economies of the world will adjust to the then current price levels and volatility and profitability will become a factor of oil efficiency as separate from other energy resources. The product made with more solar and less oil will become cheaper then the alternative.


Pops just mentioned in another thread that the word "economist" was a dirty one, back during the height of the membership in The Church of Peak Oil. He was correct in that statement, and I have found it interesting that after admitting he knows this, he doesn't seek to apply what they knew that so easily dispatched the first mighty 5 claimed peaks of this century.

In exactly the way you just did in words to arrive at a completely reasonable conclusion encompassing all 3 specialties involved, including the economic. I gave him a hint as well, asking if he was familiar with resource cost curves, because they put into math and graphics exactly what you just did in words.

Note that I said the "economies of the world" not economist which are a bunch of over educated fools that make pronouncements about the economy that are very seldom correct.
The economies of the world are driven by the millions of people struggling to get by and constantly adapting to overcome whatever adversity has befallen them. The constant trial and error by so many participants eventually finds the best solution.
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Re: THE Price Of Crude Pt. 15

Unread postby suxs » Mon 07 Feb 2022, 20:49:53

Thanks to Pops for grounding the conversation with a necessary dose of reality.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Mon 07 Feb 2022, 21:38:28

vtsnowedin wrote: Note that I said the "economies of the world" not economist which are a bunch of over educated fools that make pronouncements about the economy that are very seldom correct.


Economies of the world....economists who can't get stuff right....but the precepts within their social science, as you described in words, are reasonable.

When I began my foray into the world of economists, I was reminiscing with a Harvard PhD...in mathematics....and I asked him what his opinion of economists were, considering the two of us technocrats were working with them now. And his answer to why it was important to listen to their ideas, was "because economists run the world"......which struck me as an answer that I ponodered on for awhile before it really registered. And I had more experience working with them.

Sure...economic forecasting makes astrology look good....but that doesn't mean the basics of their understanding aren't of value to us technocrats.

vtsnowedin wrote: The economies of the world are driven by the millions of people struggling to get by and constantly adapting to overcome whatever adversity has befallen them. The constant trial and error by so many participants eventually finds the best solution.


And economics understands the basics of that system better than anything else us clever monkeys have dreamed up....which doesn't make it perfect....but does make understanding those basics useful.
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Re: THE Price Of Crude Pt. 15

Unread postby Armageddon » Mon 07 Feb 2022, 21:51:51

At 30T US debt at basically 0% interest rates and real inflation running rampant, does the FED have the balls to raise rates?

We’ll be at 50T in 5 years. Imagine 3-4% interest payment on 50T? Our deficit will exceed 5T really quickly.

I hope you guys understand what’s coming. You can argue all you want, but there is no way around the outcome.
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Re: THE Price Of Crude Pt. 15

Unread postby vtsnowedin » Mon 07 Feb 2022, 23:20:14

Armageddon wrote:At 30T US debt at basically 0% interest rates and real inflation running rampant, does the FED have the balls to raise rates?

We’ll be at 50T in 5 years. Imagine 3-4% interest payment on 50T? Our deficit will exceed 5T really quickly.

I hope you guys understand what’s coming. You can argue all you want, but there is no way around the outcome.

At a 5% interest rate with say 10% inflation a lot of that debt will fade away. I expect that is the real plan disregarding the damage it will do to the personal finances of all us peons.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Tue 08 Feb 2022, 09:57:38

Armageddon wrote:I hope you guys understand what’s coming.


Of course. We don't listen to Alex Jones as a source of information, which puts us a mile ahead of the cretin class.
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Re: THE Price Of Crude Pt. 15

Unread postby Armageddon » Tue 08 Feb 2022, 10:28:10

AdamB wrote:
Armageddon wrote:I hope you guys understand what’s coming.


Of course. We don't listen to Alex Jones as a source of information, which puts us a mile ahead of the cretin class.




Great deflection. Very typical of you
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Tue 08 Feb 2022, 11:23:14

Armageddon wrote:
AdamB wrote:
Armageddon wrote:I hope you guys understand what’s coming.


Of course. We don't listen to Alex Jones as a source of information, which puts us a mile ahead of the cretin class.




Great deflection. Very typical of you


What deflection? The first was a fact, the second a conclusion. Did you even graduate high school?
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Re: THE Price Of Crude Pt. 15

Unread postby Armageddon » Tue 08 Feb 2022, 12:05:51

AdamB wrote:
Armageddon wrote:
AdamB wrote:
Armageddon wrote:I hope you guys understand what’s coming.


Of course. We don't listen to Alex Jones as a source of information, which puts us a mile ahead of the cretin class.




Great deflection. Very typical of you


What deflection? The first was a fact, the second a conclusion. Did you even graduate high school?




You didn’t address any of the facts I posted. . You made an assumption because I posted something about Alex Jones 15 years ago and stated it as a fact as if it’s relevant today. That how you operate. You are a troll and everybody knows it.
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Re: THE Price Of Crude Pt. 15

Unread postby AdamB » Tue 08 Feb 2022, 12:25:04

Armageddon wrote:
AdamB wrote:What deflection? The first was a fact, the second a conclusion. Did you even graduate high school?


You didn’t address any of the facts I posted. .


If you did post a fact, if you knew what a fact was, you would know they don't need addressed, ..they just are.

An example, it is a fact that you have claimed Alex Jones is a great source of information. The debt of the United States is a fact....I do not know if you recited it correctly, but it is a fact, even if you can't necessarily be counted on to find it with a flashlight and a map.

The problem is, you might on occasion mention a fact, upon which you stack a skyscraper of supposition, conjecture, and outright lies. Hence the problem having any kind of a discussion with you, when you don't know that the initial fact does not validate the rest of the crap you pile on top of it. It is a theory perhaps you didn't graduate high school, based on your inability to understand basic concepts, theories, history and...oftentimes...the definitions of words.

Plus the fact that you find Alex Jones a source of information is itself a clue as to overall ignorance discerning the difference between facts and all the other things you and he prefer to discuss.

Sorry if this isn't clear to you, perhaps your loaded father in law can help you out, sounding out the words and concepts I've just outlined?

Armageddon wrote:You made an assumption because I posted something about Alex Jones 15 years ago and stated it as a fact as if it’s relevant today.


I did state it as a fact, as it is, and the quote is available. I don't know if it is relevant today, you have gone dark on using him as a source.

Armageddon wrote:
That how you operate. You are a troll and everybody knows it.


Well, I do troll, that is true. And I have apologized for having done it so well that you revealed some of your character previously. But obviously I reserve that hobby for the likes of folks who...well...don't know what facts are, how to use them, and appear to be generally ignorant because...ummm...they don't appear capable of changing that condition.

Are you suggesting that you have LEARNED since your Alex Jones fanboi days?
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