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Stock Market Crash! (merged) Pt. 3

Discussions about the economic and financial ramifications of PEAK OIL

Re: Stock Market Crash! (merged) Pt. 3

Unread postby shortonoil » Thu 10 Jan 2019, 16:28:42

Hi Abdi,
Welcome to the nut house. This site has more nut jobs than could be jammed into a Volkswagen bus! Wear a spiked collar when you come here; they go for the throat. Some of them have rabies.

Hi shortonoil, i have been paying a close attention to the global economy and oil production In the last 2 years. It seems things have gotten much worse in the last 6 months. Something tells me global oil production has peaked in 2018 and the US government are just doing everything they can to stay bau.

When do you think the next turn will come? Behind closed doors the global economy already does seem to be in a recession but when do you think will we see the real troubles as in no more BAU for the people in US and UK.


To first answer your question about Peak, the world is Peaking at present. My previous post in this, and in the "Is ERoEI Important" thread show that Shale, which has been the only reason that world production has not Peaked to date, is now itself peaking. Its legacy decline has become so high (1.43 mb/d) that it can no longer be overcome. Production for Shale is now going down from the decline in existing wells and that is faster than new oil can be brought on online.

Europe is fast heading into recession with Germany's economy already there.
https://www.businessinsider.nl/germany- ... on-2019-1/
The EU experiment is failing fast from a combination of stupid policies, and the overall energy deficit (which is presently 20.7 quad BTU from petroleum, or $4.2 trillion per year). China is hopeless, and with the West cutting off its technology transfers to China it will only be the strength of its dictatorial regime that will prevent it from falling into complete chaos. China is a good place not to move to, and that is why so many Chinese that could afford it have already left.

North America, the UK, parts of Scandinavia, and Russia will be the last holdouts as the rest of the world descends into a new, and ever deepening perpetual depression. Looking at the energy equations we will be there in no more than three to four years. During that three to four years, net energy delivery from petroleum will fall by an additional 10%. That will probably be similar for all fossil fuels. That will be more than enough to blow up the debt bomb the world is now sitting on.

The economies with enough free capital remaining that do survive will reorganize into much lower energy entities, with much lower GDPs. BAU as we now know it will be gone. Our present monetary system will not work in that future economy that will have to concentrate on maintenance rather than growth. It will be a rough ride down, but if you are lucky enough to be in the right place existence should be tolerable. In Bangladesh your main worry may be your neighbor trying to eat you.

BW
http://www.thehillsgroup.org/
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby Abdii » Thu 10 Jan 2019, 18:07:47

Thank you very much for your reply shortonoil and thanks for the welcome. I live in the UK and i can see things are falling apart slowly, im fully aware of the reasons why its happening most people here just blame Brexit.

I have read most of your forum post on this site and im trying to fit the pieces together with an estimated timeline on how this will unfold. Since worldwide oil has peaked like you mentioned this will mean no more recovery once we go into recession.

Right now in the UK everything is BAU but when can i expect Venezuela conditions here in the UK? And im fully aware that UK, USA and Russia will be the last holdouts because of their power and history. Putting all those years of knowledge and expertise together and putting the pieces to together at what timeline can i expect to see myself and seeing people around me here in the UK fighting over last pieces of food, no law enforcement etc basically anarchy.

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Re: Stock Market Crash! (merged) Pt. 3

Unread postby shortonoil » Fri 11 Jan 2019, 10:21:12

@ Abdi,

Right now in the UK everything is BAU but when can i expect Venezuela conditions here in the UK? And im fully aware that UK, USA and Russia will be the last holdouts because of their power and history. Putting all those years of knowledge and expertise together and putting the pieces to together at what timeline can i expect to see myself and seeing people around me here in the UK fighting over last pieces of food, no law enforcement etc basically anarchy.


The UK will probably not end up as bad as Venezuela; Venezuela was a dysfunctional society to begin with. The UK will probably wind up looking more like the Irish Potato famine, than a mass die off in central India. The UK's Achilles heal is that it is highly dependent on its banking system, and weapons production. Neither are likely to do well once the monetary system begins to seriously unwind. Watch the banking system, and the price of gold for indications of how advanced the situation has become. Once the banking system begins to fail supply chains will also. That is likely to start within the next couple of years. It is a matter of how efficiently existing capital can be converted into the energy needed to support oil production. Since that started to become necessary in 2012 the conversion has been fairly smooth. When general awareness sets in that Peak has arrived, that will change rapidly. There will be a lot of confusion as to what that really means.
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby Cog » Fri 11 Jan 2019, 12:54:44

Please take your school lessons to another thread shorty. This thread is about your mythical stock market crash.
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby Observerbrb » Fri 11 Jan 2019, 13:51:35

And do you still wonder why Trump wants to build a wall and declare a national emergency?

https://www.bloomberg.com/news/articles ... =hootsuite

If you allow me... "the writing is on the wall" LOL
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby dolanbaker » Fri 11 Jan 2019, 14:49:02

shortonoil wrote:@ Abdi,

Right now in the UK everything is BAU but when can i expect Venezuela conditions here in the UK? And im fully aware that UK, USA and Russia will be the last holdouts because of their power and history. Putting all those years of knowledge and expertise together and putting the pieces to together at what timeline can i expect to see myself and seeing people around me here in the UK fighting over last pieces of food, no law enforcement etc basically anarchy.


The UK will probably not end up as bad as Venezuela; Venezuela was a dysfunctional society to begin with. The UK will probably wind up looking more like the Irish Potato famine, than a mass die off in central India. The UK's Achilles heal is that it is highly dependent on its banking system, and weapons production. Neither are likely to do well once the monetary system begins to seriously unwind. Watch the banking system, and the price of gold for indications of how advanced the situation has become. Once the banking system begins to fail supply chains will also. That is likely to start within the next couple of years. It is a matter of how efficiently existing capital can be converted into the energy needed to support oil production. Since that started to become necessary in 2012 the conversion has been fairly smooth. When general awareness sets in that Peak has arrived, that will change rapidly. There will be a lot of confusion as to what that really means.

At the moment the biggest issue for the UK is Brexit! It is a political problem that will require a political solution, until the Brexitations are sorted out, there is no way of having a clear view of the UK's short term future. The UK is in far better shape than many countries around the world, they have in recent years built up quite a considerable amount of wind generating capacity and still building this up.

Ignore the doomerations above, there will be a recession soon but it will not be as bad as the previous one and the 0.01% will continue to get richer and the west will become more and more reliant on the (soon to be) Chinese empire for most mass produced goods.
Ronald Coase, Nobel Economic Sciences, said in 1991 “If we torture the data long enough, it will confess.”
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby Outcast_Searcher » Fri 11 Jan 2019, 15:03:28

Cog wrote:Please take your school lessons to another thread shorty. This thread is about your mythical stock market crash.

School lessons?

"Achilles heal" - SIC

Random fast crash doomer predictions of financial calamity (with a track record very near zero).

I know our public schools are bad, but "school lessons" don't deserve to be compared with shorty's nonsense.
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: Stock Market Crash! (merged) Pt. 3

Unread postby Outcast_Searcher » Fri 11 Jan 2019, 15:07:25

Observerbrb wrote:And do you still wonder why Trump wants to build a wall and declare a national emergency?

https://www.bloomberg.com/news/articles ... =hootsuite

If you allow me... "the writing is on the wall" LOL

As if any temporary problem never gets better. :roll:

As if building a wall, which won't help the overall problem significantly, has anything to do with temporary fuel distribution issues.
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: Stock Market Crash! (merged) Pt. 3

Unread postby shortonoil » Sat 12 Jan 2019, 09:56:46

Ignore the doomerations above, there will be a recession soon but it will not be as bad as the previous one and the 0.01% will continue to get richer and the west will become more and more reliant on the (soon to be) Chinese empire for most mass produced goods.


Ignore? Is that like ignoring the Mac Truck heading your way? The world runs on oil; without it we are back to a very primitive age. Back to the world where the average man died at 35, and half of the children born never reach the age of five. That is the future without oil, and we have reached Peak, and the back side of the curve goes straight down. Those who ignore an obvious, and in your face hazard, deserve our admiration. They are doing their duty to mankind! They are raising the average intelligence level of the species.

December 2018,
US shale production 8.03 mb/d.
Legacy decline 17.8% per year (89% first 60 months)
Yearly decline 8.03 mb/d * 0.178 = 1.43 mb/d
New production per operating rig 679 barrels per day*1
Rigs required to compensate for decline = 1.43 mb/d/ 679 = 2106 rigs
There are now less than 900 rigs running in the shale patch

Shale can not overcome its 1.43 mb/d legacy decline with less than 2,106 rigs. The age of Shale is over, and the remainder of the oil age is following close behind!


US production has not increased in 10 weeks, and counting!

1) https://www.eia.gov/petroleum/drilling/
2) http://www.eia.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby dolanbaker » Sat 12 Jan 2019, 10:23:01

shortonoil wrote:That is the future without oil, and we have reached Peak, and the back side of the curve goes straight down. Those who ignore an obvious, and in your face hazard, deserve our admiration. They are doing their duty to mankind! They are raising the average intelligence level of the species.

December 2018,
US shale production 8.03 mb/d.
Legacy decline 17.8% per year (89% first 60 months)
Yearly decline 8.03 mb/d * 0.178 = 1.43 mb/d
New production per operating rig 679 barrels per day*1
Rigs required to compensate for decline = 1.43 mb/d/ 679 = 2106 rigs
There are now less than 900 rigs running in the shale patch

Shale can not overcome its 1.43 mb/d legacy decline with less than 2,106 rigs. The age of Shale is over, and the remainder of the oil age is following close behind!


US production has not increased in 10 weeks, and counting!

1) https://www.eia.gov/petroleum/drilling/
2) http://www.eia.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm

We may well have reached peak production, but the downslope will be very slow running into several decades.

Many of the health issues you mention have nothing to do with oil, but lack of sanitation and infrastructure, even Roman times had similar infrastructure.

The lack of oil in the future will not bring down civilisation, but it will most certainly put an end to "growth" and the current economic model.
To avoid severe disruption, I expect there will be an enhanced transition from oil based energy to renewables and Nuclear.
Ronald Coase, Nobel Economic Sciences, said in 1991 “If we torture the data long enough, it will confess.”
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby Abdii » Sat 12 Jan 2019, 12:45:31

shortonoil wrote:@ Abdi,

Right now in the UK everything is BAU but when can i expect Venezuela conditions here in the UK? And im fully aware that UK, USA and Russia will be the last holdouts because of their power and history. Putting all those years of knowledge and expertise together and putting the pieces to together at what timeline can i expect to see myself and seeing people around me here in the UK fighting over last pieces of food, no law enforcement etc basically anarchy.


The UK will probably not end up as bad as Venezuela; Venezuela was a dysfunctional society to begin with. The UK will probably wind up looking more like the Irish Potato famine, than a mass die off in central India. The UK's Achilles heal is that it is highly dependent on its banking system, and weapons production. Neither are likely to do well once the monetary system begins to seriously unwind. Watch the banking system, and the price of gold for indications of how advanced the situation has become. Once the banking system begins to fail supply chains will also. That is likely to start within the next couple of years. It is a matter of how efficiently existing capital can be converted into the energy needed to support oil production. Since that started to become necessary in 2012 the conversion has been fairly smooth. When general awareness sets in that Peak has arrived, that will change rapidly. There will be a lot of confusion as to what that really means.


Thank you for your reply short. I think i know how this will unravel. The Central Banks can manipulate the economy keeping it bau aslong as the world oil production doesn’t go into a steep decline and i think once the people that run the show start losing control because of steep decline they will do a runner!

Short my question is when do you think the global oil production will resemble the production chart of Venezuela? We know oil discoveries has been minimal since 2014. When will it catch up to us and the world will go into steep decline?

Thanks
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby asg70 » Sat 12 Jan 2019, 12:54:23

shortonoil wrote:US production has not increased in 10 weeks, and counting!


Excuse my french but big f-ing deal. Wake me when prices at the pump spike up beyond $4, something I know you don't predict since post-peak prices go down in your narrative (oh, the horror).
"this is peak now. Wanna bet? The Real Pain starts . . . now." (11/21/18)" --pstarr
"$0/barrel soon as per etp." (12/30/18)" --pstarr
ATTN: SHORT LOST A BET AND WON'T EVEN ADMIT HE MADE ONE. HE SHOULD NOT BE WELCOME HERE!
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby Outcast_Searcher » Sat 12 Jan 2019, 13:17:56

Abdii wrote:Short my question is when do you think the global oil production will resemble the production chart of Venezuela? We know oil discoveries has been minimal since 2014. When will it catch up to us and the world will go into steep decline?
Thanks

HUGE hint (and yes, I know you were addressing short). The collective oil markets contain a huge amount of overall knowledge re oil supply and demand. If there is meaningful danger of a big global problem coming any time soon re not enough supply, a significant price rise will precede that.

Shorty's ETP theory is a big failure. The ETP MAP as well.

You'd be far better off rolling dice than asking shorty about future oil supplies, especially given his always wrong, doom is very soon bias, which he's demonstrated here in recent years over and over and over again.

Overall, oil prices have actually been rather stable since early 2015, centering near $50 a barrel for WTI. That doesn't indicate any looming crisis. And don't worry, if there is an indication of a meaningful shortage of oil, higher prices will stimulate more production and more exploration. Same as it has for many decades now.
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: Stock Market Crash! (merged) Pt. 3

Unread postby Outcast_Searcher » Sat 12 Jan 2019, 13:20:13

shortonoil wrote:Hi Abdi,
Welcome to the nut house. This site has more nut jobs than could be jammed into a Volkswagen bus! Wear a spiked collar when you come here; they go for the throat. Some of them have rabies.

Examining yourself in the mirror again? Or just reviewing your past behavior around here? :roll:
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: Stock Market Crash! (merged) Pt. 3

Unread postby shortonoil » Sat 12 Jan 2019, 15:32:03

Short my question is when do you think the global oil production will resemble the production chart of Venezuela? We know oil discoveries has been minimal since 2014. When will it catch up to us and the world will go into steep decline?


The key to that question is the Middle Eastern fields. Unfortunately our knowledge of the Middle Eastern fields is scratchy at best. Our best knowledge of those Giants comes from when the majors were still operating in that region; almost 70 years ago. But on the other hand, there it is found the remains of the bulk of the world's Giants; the less than 1% of all fields that produce 60% of the world's oil.

All of the world's Giants have been maintaining their production plateaus by means of EOR applications. That has been true for almost three decades. Venezuela is certainly the canary in the coal mine, but it is difficult, and dangerous to extrapolate from it to the rest of the world's major producers. Venezuela is a vast mud hole of very low grade road tar (think low ERoEI), operated by poor management, under the very corrupt government of a very corrupt society. The 2014 price crash took down the weakest producers first, and Venezuela was about as weak as they come.

The Etp Model informs us that we must hit an immoveable thermodynamic wall by 2030, it is, however, a best case scenario. Most likely at some point between now and then the world's oil producers will reach their Minsky Moment - "the moment of debt saturation where income does not even cover interest rate expenses, let alone capital, and where a deceleration in credit expansion is all it takes to set the tall pile of debt on fire."

Keeping the world's Giants productive requires huge, and constant investment injections to cover the cost of their required EOR applications. A deceleration in credit expansion will leave the operators of the Giants short on cash. Their free cash flow is already impaired from the low price, and from the increased production cost resulting from an ever falling ERoEI. Without adequate EOR investment these tired old fields will see catastrophic rates of decline. In other words, any major disruption in the world's credit markets is likely to start a cascade of failures for the world's major producers. The failure of just one will start a credit crunch that will impact them all. They will go down like dominoes; too energy depleted to ever be restarted.
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby Cog » Sat 12 Jan 2019, 15:37:02

Its too bad your advanced knowledge of catastrophe has not enabled you to place winning wagers on the future.
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby rockdoc123 » Sat 12 Jan 2019, 18:44:07

All of the world's Giants have been maintaining their production plateaus by means of EOR applications.


that is absolute complete BS. EOR is another name for Tertiary recovery by which oil physical properties are altered (heat, chemical flood, CO2 injection etc). There are very, very few giant fields that have had any EOR applied. Ghawar has had a test program at Haradh and nothing more, the same for Burgan. Please list all of the EOR programs you claim have been applied to all of the giants. I do not know how many times you have to be corrected on this. I suppose like everything else you spew out that you believe if you repeat it enough it will be true. :roll:
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby shortonoil » Sat 12 Jan 2019, 20:54:19

PS: for information on Giant Oil Fields see

Giant oil field decline rates and their influence on world oil production
Mikael Höök*, Robert Hirsch+, Kjell Aleklett
Uppsala University, Global Energy Systems, Department of physics and astronomy
http://s3.amazonaws.com/zanran_storage/ ... 455783.pdf

THE WORLD’S GIANT OILFIELDS
Mattew R. Simmons
SIMMONS & COMPANY INTERNATIONAL
http://energyconversation.org/sites/def ... Fields.pdf

Giant Oil Fields - The Highway to Oil
Fredrik Robelius
ISSN 1651-6214
ISBN 978-91-554-6823-1
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby ralfy » Sat 12 Jan 2019, 21:15:08

dolanbaker wrote:
shortonoil wrote:That is the future without oil, and we have reached Peak, and the back side of the curve goes straight down. Those who ignore an obvious, and in your face hazard, deserve our admiration. They are doing their duty to mankind! They are raising the average intelligence level of the species.

December 2018,
US shale production 8.03 mb/d.
Legacy decline 17.8% per year (89% first 60 months)
Yearly decline 8.03 mb/d * 0.178 = 1.43 mb/d
New production per operating rig 679 barrels per day*1
Rigs required to compensate for decline = 1.43 mb/d/ 679 = 2106 rigs
There are now less than 900 rigs running in the shale patch

Shale can not overcome its 1.43 mb/d legacy decline with less than 2,106 rigs. The age of Shale is over, and the remainder of the oil age is following close behind!


US production has not increased in 10 weeks, and counting!

1) https://www.eia.gov/petroleum/drilling/
2) http://www.eia.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm

We may well have reached peak production, but the downslope will be very slow running into several decades.

Many of the health issues you mention have nothing to do with oil, but lack of sanitation and infrastructure, even Roman times had similar infrastructure.

The lack of oil in the future will not bring down civilisation, but it will most certainly put an end to "growth" and the current economic model.
To avoid severe disruption, I expect there will be an enhanced transition from oil based energy to renewables and Nuclear.


The size of the global population during Roman times was much smaller, and the type of civilization vastly different from what is currently in place. Also, the present industrial civilization is essentially dependent on the current economic model, which is based on competition and maximization of profit. Any "enhanced transition" will likely be based on the same, which will be difficult because renewables and nuclear have low returns and quantity.
http://sites.google.com/site/peakoilreports/
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Re: Stock Market Crash! (merged) Pt. 3

Unread postby shortonoil » Sat 12 Jan 2019, 21:26:56

We may well have reached peak production, but the downslope will be very slow running into several decades.


Your down slope, as you call it, will be 119,000 barrels per month. That is hardly slow? It is 1.43 mb/d per year. That will be a US decline rate of 10.2% per year. That is on par with Venezuela!
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