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So I don't follow the little price burps you two find so intriguing.

$100/bbl destroyed demand all over the world. 

European countries for example cratered after $100/bbl and have never returned.

pstarr wrote:Doesn't Eurasia include the world's greatest oil producer and consumer? It seems your bias is showing Rock.

tell me stop!

oesn't Eurasia include the world's greatest oil producer and consumer? It seems your bias is showing Rock.

pstarr wrote:You want to blame Euro taxes? That is complete nonsense. They were in place when Euro consumption was high and getting higher 1993-2008. Taxes didn't bite then. After the 2008 Great Oil Recession oil-consumption dropped to historic lows. Not taxes, high oil prices.

pstarr wrote:

rockdoc123 wrote:So to summarize the $100/bbl oil had virtually no effect on global consumption (global demand increased continuously throughout the period and after) and the Europe picture has no clear relationship with the $100/bbl oil period either

Wouldn't the chart go the other way, to make your point? Call me confused.

Insatiable Demand
But what about demand? Isn’t it declining? No. Our Western-centric view of the world may give us the impression that oil demand is declining, but the truth is quite different:



Over just the past decade global oil consumption increased by an average of 900,000 bpd each year, and consumption has risen in 18 of the past 20 years. If we look back 30 years, global oil consumption increased by an average of 1.1 million bpd annually. Demand did decline in member countries of the Organisation for Economic Co-operation and Development (OECD) — the grouping of the world’s developed countries. But demand growth in developing countries overwhelmed the declines in the developed world. In just the past five years, demand in developing countries has increased by an average of 1.6 million bpd annually, and now exceeds OECD demand.

Note that there was hardly any negative impact on demand in developing countries even with oil prices at $100/bbl. What drives consumption in these countries is a very large number of people using just a little bit more oil than they did before. High oil prices will do little to dissuade them from buying a little bit more when it can make such a big impact on their lives, especially when incomes are rising.

This is why, in my opinion, oil can’t go to $20/bbl. Despite very vocal predictions of much lower oil prices, many people are aware of the dynamics I have laid out here.

Conclusions
In the long run, $40/bbl oil is not a price sufficient to entice enough oil producers to produce at a level that can satisfy global demand. Hence, prices will rise.

Observerbrb wrote:Why are you so adamant on the demand issue?

The ETP model says that the annual price average will not exceed the following values
...
It doesn't say anything about the demand or the supply (in terms of volume) at any particular time.

shortonoil wrote:Demand will be going down because production is now going down. We have now reached Peak All Liquids sooner than we expected; we were anticipating early 2016. We seem to be about six months late.
...
As the general economy slows, demand slows, and with it the price of oil. With reduced demand, inventories grow.
...
The world will never again be able to consume all the petroleum that is produced!

Wouldn't the chart go the other way, to make your point? Call me confused.

Why are you so adamant on the demand issue?

The ETP model says that the annual price average will not exceed the following values (US dollars) :

Observerbrb wrote:Why are you so adamant on the demand issue?

The ETP model says that the annual price average will not exceed the following values (US dollars) :

2016 - 65.94
2017 - 54.18
2018 - 41.16
2019 - 26.88

(BTW, Oil prices won't fall to 0, shortonoil has already explained this before, and he even put some arrows that start to deviate in his famous graph)

It doesn't say anything about the demand or the supply (in terms of volume) at any particular time.

We have seen a 65% reduction in price with a 3% increase in demand. If a retailer cut their prices by 65%, and only saw a 3% increase in sales they would shut their doors. The Etp Model predicts a 2.5% increase in demand from the production side alone. The end consumer is not responding to price declines; even gigantic ones!

Your cherished, and malfunctioning supply/ demand curve is now perfectly vertical. It is saying that regardless of the size of the change in price demand will not be affected. The function has reached a point of discontinuity. What we are witnessing is not a typical producer/ consumer relationship; it is tantamount to a going out of business sale on the part of the producers. The only way the industry can increase demand would be to give out a free barrel with every package of Cracker Jacks. Simply put, on one wants anymore of the stuff. The Etp Model says that they will never again.

Observerbrb wrote:What I understand is that oil companies need to get more and more oil out of the ground each year if they want to stay in the market and don't get bankrupt in the process. The logical outcome is that they will try to balance the financial losses by producing more volume.

Observerbrb wrote:Steve Ludlum warned about this outcome in 2012, long before the price plunge (I have seen people in this same forum talking about the Triangle of Doom before the oil slump happened).

Observerbrb wrote:The other logical outcome is that they will fail in doing so and will go bankrupt, so the production will finally fall and the economy will be severely disrupted (as I explained in my last post, that's my way of thinking).

Observerbrb wrote:I am not obsessed about the date of Peak Oil, as I understand that the volumetric analysis is not as important as knowing how much energy we use in the process before oil final products reach the end consumer.

Observerbrb wrote:It's ironic that I end up explaining Hills model since the thing which made complete sense for me was from the beginning Mr. Ludlum's explanations.

BahamasEd wrote:Yes, and by the EIA we are still producing more then we are using so we can't start working off the glut until then balance.

So by their forecast it should balance sometime next year and I would think it would take another year to work down the glut so prices can start to rise again, maybe sometime in 2018.

But the EIA predicts the future about as well as I do.

So I stand by my statement, Oil is not cheap yet, it needs do drop back down into the $20s to clear the market. I think that if the price stays between $45 to $60 then production will continue to out pace consumption

https://www.eia.gov/forecasts/steo/repo ... al_oil.cfm

SumYunGai wrote:The thing that made complete sense to me from the beginning was that civilization was headed for a rapid collapse.
For me, the Etp model just gives the most exact way to time it.

Its not possible to analyze it without knowledge of the details.