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Messages - BuddyJ

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31
Energy / Re: Oil Price Crash: Who Cooda Node?
« on: December 08, 2019, 08:01:50 PM »
I didn't say that, and certainly didn't even mean to say that. I said that we showed the world the potential of light, tight crude. To date, no one appears interested, and this could actually be a GOOD thing, if they are thinking along the lines of "leave it in the ground".

What we showed the world is that if you have infinite power to create money and borrow it, you can keep extracting oil until everyone is dead broke and in debt.

RE

Well, Venezuela has the infinite power to print money

No, they don't.  If you believe that, you don't know how the BIS works or how FOREX is traded.

RE

My comment wasn't based on the theory of Venezuela printing money, but more the reality of it. The expected has happened to it of course.

https://www.npr.org/2019/04/08/711169832/how-venezuelas-currency-became-so-worthless

I assume that the US as the world's reserve currency has more flexibility in this regard than Venezuela, but certainly just making more money didn't help them. Allowing inflation to destroy your country as a consequence isn't very helpful either.

Certainly Venezuela can just pay themselves tons of bolivars to build their own drilling and oil production equipment, as the US does, and begin more oil production with their now booming economy! Don't need the FOREX involved for that do they?

Now, for buying the expertise on HOW to build all the equipment they need, that could be tricky. Something the US has, and countries that can't drill their way out of a wet paper bag might like!

PS: You haven't clarified if the "its the demand" comment is about the thought that demand has been going down over some period of time, or if this thread is about demand increasing the entire time?

32
Energy / Re: Oil Price Crash: Who Cooda Node?
« on: December 08, 2019, 07:05:26 PM »
From what I understand, profitability for shale oil depends on higher prices than we have seen for the last few years. Leaving it in the ground is our best collective action, but is unlikely to happen since we don't do anything collectively anymore.

The US light, tight oil being the current global marginal oil production, it isn't a surprise that as price finally stabilized with them in the new global oil equation, it would be "marginal" in all the expected ways.

In the US industry, this most likely means the strong will eat the weak, consolidation will take place aplenty, and the survivors will be more like Conoco.

https://www.bloomberg.com/news/articles/2019-10-29/conocophillips-profit-beats-estimates-as-shale-oil-output-gains

Quote from: Surly1
What is essential is for us to rapidly cut our energy consumption, which is going to require a number of tech rabbits pulled from even more hats, since few of us are ready to cut our driving or our thermostats. What also gives me pause is that as China, India and the third world start to demand better standards of living, they will expect happy motoring lifestyles, X Boxes and server farms for bitcoin mining. Following our example.

I find it unlikely that selling austerity in the US will work any better than it has for Macron. Forced austerity, i.e. "economy fall down, go boom, and stay there" is the more likely the scenario at the end of the day. But the fun part is trying to figure out what causes that to happen. Peak oil was a great fast crash scenario generator, but didn't work out. Climate change is too slow, so it has to be some economic disaster or another, markets, debt, etc etc.

33
Energy / Re: Oil Price Crash: Who Cooda Node?
« on: December 08, 2019, 06:56:50 PM »
I didn't say that, and certainly didn't even mean to say that. I said that we showed the world the potential of light, tight crude. To date, no one appears interested, and this could actually be a GOOD thing, if they are thinking along the lines of "leave it in the ground".

What we showed the world is that if you have infinite power to create money and borrow it, you can keep extracting oil until everyone is dead broke and in debt.

RE

Well, Venezuela has the infinite power to print money, and offer it up for infinite amounts of loans, and yet they can't seem to produce oil for shit using that particular business model.  But they do appear, in the trying of devaluing their currency in this way, to be headed towards "dead", or at least creating a starving populace.


34
Energy / Re: Oil Price Crash: Who Cooda Node?
« on: December 08, 2019, 05:29:12 PM »
The US has spent the last decade showing the rest of the world of the potential of light, tight oil and according to the global volumes estimated, the US changed global oil markets with only 1/4 of the total amount. The rest of the world has the other 3/4's, and hasn't even begun tap into those resources yet.

Yeah, "light, tight oil" is our ticket to paradise.

I didn't say that, and certainly didn't even mean to say that. I said that we showed the world the potential of light, tight crude. To date, no one appears interested, and this could actually be a GOOD thing, if they are thinking along the lines of "leave it in the ground".


35

Three guys you've probably never heard of recently broke a speed record most people don't care about—the New York to Los Angeles run referred to colloquially among aficionados as the Cannonball.

How can you say never heard of! How can you say don't care!!

This is like the greatest, man/machine run/race/event in American history! Sort of.

But it is important, and ground breaking, and quite an example of sheer fossil fuel powered asshattery in modern America.

36
Energy / Re: Oil Price Crash: Who Cooda Node?
« on: December 08, 2019, 05:19:41 PM »
Increased demand is very explainable.  The empire grows.

I wasn't under the impression that we are talking about growing demand. I tried going back to the beginning of the thread, as it is a long one, and begin there, but became thoroughly confused by some graph that appeared to play a role in all of this. Something about price hitting some point where producers stop producing at the same time that consumers stopped buying crude.

Since that time everything seems to have functioned pretty much on a normal supply/demand basis, the US created Saudi America, that removed control of price from OPEC (otherwise known as Saudi Arabia), prices dropped to that of the cost of marginal production (again the US), and all along the way demand continued to increase. As expected, and as you've said.

That would also have been the answer back when this thread fired up, but it seemed like an entirely different argument was going on.

Quote from: k-dog
The economics of the American and globalized empire cannot abide a steady state.  Population grows and city population, the population that sucks resources, grows faster.  Rain forests razed means more land is under cultivation.  Resource extraction costs more in fuel to maintain a constant yield with time.

So as it has been, so shall it continue to be.

Right up until folks decide to use less oil anyway. Some folks are anticipating it within 3 years.

https://www.reuters.com/article/us-oil-demand-dnv-gl/oil-demand-to-peak-in-three-years-says-energy-adviser-dnv-gl-idUSKCN1VV2UQ

Quote from: k-dog
Price will not always reflect that oil becomes ever more scarce.

As long as demand is decreasing at rates equal to or greater than oil production is decreasing, you are absolutely right. Price won't much increase, and could even decrease if demand dropping outpaces oil production declines.

Oil scarcity though is entirely another topic. The US has spent the last decade showing the rest of the world of the potential of light, tight oil and according to the global volumes estimated, the US changed global oil markets with only 1/4 of the total amount. The rest of the world has the other 3/4's, and hasn't even begun tap into those resources yet.


37

Well, demand (expressed as consumption anyway) doesn't appear to have slacked off since the last recession.

What's your point?

Well, this was your point.


Quote from: RE
It's the DEMAND, Stupid!

RE

A reading of most any part of this thread would seem to indicate that a LACK of demand is what is being referred to. Your recent quote seemed to indicate the same thing.

The problem being that the only time demand really moved downward as of late was a decade ago, and while CSIS and some other sources would seem to indicate that it isn't growing as much as it has in the past, it is growing.

Was your implication that it just isn't growing as much as expected? The consumption graph sure looks like it has been growing pretty consistently since the recession.

Quote from: RE
Overall demand continues to increase because globally the population continues to increase.  However per capita they can afford less all the time, so it forcese the price down.

RE

Price goes down because there is more supply than a given demand. Since Saudi America really began screwing with how much oil is on the market, the price has been quite moderate. The recent peak oil demand claims understand that population is growing, but apparently other factors are changing the per capita usage than expected. Efficiency, electrification, environmental considerations, etc etc.

Do I understand your comment of "Its the demand, stupid" correctly?


Edited to mention I found this, which tends to confirm my speculation above.

Quote from: RE
RE
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Oil Falls as Record U.S. Crude Supplies Offset OPEC Output Cuts
« Reply #721 on: March 02, 2017, 03:21:39 AM »
Quote
MOAR GLUT!

Demand will rebound, traders are sure...

This is the best chart yet to demonstrate Collapse of the Oil Economy is in Full Swing now.  This is 35 years of records.  In the course of a couple of years, Inventories have DOUBLED!  Why?  It's the DEMAND, Stupid!  The customers can't afford it at the price you are selling it at!


As increasing consumption indicates, customers were affording oil all along, and dropping demand hasn't been in the mix since the last recession.

38
It's the DEMAND, Stupid!

RE

Well, demand (expressed as consumption anyway) doesn't appear to have slacked off since the last recession.

https://www.statista.com/statistics/271823/daily-global-crude-oil-demand-since-2006/

Although recently, peak oil demand (as compared to peak oil via scarcity) does appear to be all the rage. Is this what you mean?

https://www.reuters.com/article/us-oil-demand-dnv-gl/oil-demand-to-peak-in-three-years-says-energy-adviser-dnv-gl-idUSKCN1VV2UQ


Quote from: RE
https://oilprice.com/Energy/Oil-Prices/Saudi-Arabia-Threatens-To-Flood-Oil-Markets-If-OPEC-Members-Dont-Cut-Output.html

Saudi Arabia Threatens To Flood Oil Markets If OPEC Members Don’t Cut Output

Its like deja vue, 1986 all over again. That threat, become reality in 1986, turned out to be quite the boon to the consumer for what...15 years afterwards?

The DNL-GV angle is relatively new, but not as new as deja vu 1986 all over again. I wonder if they factored in a designed collapse in price by OPEC and the accelerating demand scenario that is likely to trigger?


39
Energy / Re: Fracker Debt Bubble
« on: September 26, 2019, 05:27:42 PM »
So this article really isn't about shale drillers going bankrupt and their wells being taken over by someone else after bankruptcy or whatnot, it is about orphaned wells? Orphaned wells have programs dedicated to handling them, and they are certainly too small. But that is a regulatory thing, and should have been cleaned up decades ago. Governmental and regulatory incompetence is the category this problem fits into.

40
Energy / Re: Hills Group Oil Depletion Economic and Thermodynamic Report
« on: September 25, 2019, 04:06:19 AM »
A fine detailing of just another one of the mechanisms that is likely to be involved in peak demand. It isn't as though the big think tanks have been calling for a peak demand scenario for the fun of it.

41
Energy / Re: 🛢️ Oil Resource Wars
« on: September 25, 2019, 04:02:49 AM »
Lying? Or just covering their bases to make sure that faith in the House of Sauds' ability to keep the black gold continues unshaken? The latter seems like a better characterization, and there are more than a few reasons why this can be happening that fall under CYA. By definition a cartel is all about market manipulation, and Saudi is about the only swing producer left within the cartel, so at this point they are the cartel.

My guess at this point is that stopping the next attack is more important than whatever they need to squeeze through the consequences of the last one.

42
https://www.cnbc.com/2019/09/22/climate-change-did-we-just-witness-beginning-of-end-of-big-oil.html

Climate change: Did we just witness the beginning of the end of Big Oil?
Published Sun, Sep 22 2019 9:00 AM EDT
Eric Rosenbaum  @erprose

The short answer, of course, is...no.



RE

Seems more reasonable.

43
It's all the fault of the Millenials!  ::)

RE

https://oilprice.com/Energy/Energy-General/Oil-Markets-Are-One-Outage-Away-From-Crisis.html

Millennials Really Do Ruin Everything, And Big Oil Is Next
By Julianne Geiger - Sep 22, 2019, 4:00 PM CDT

The trend is clear, the oil industry really does have a millennial problem—and it won’t be fixed overnight.

By Julianne Geiger for Oilprice.com

She could have just recommended people watch one of Tony Seba's video on the subject, he does the upcoming change, including peak oil and technological change and whatnot, quite well.

https://www.youtube.com/watch?v=2b3ttqYDwF0

44
https://www.cnbc.com/2019/09/22/climate-change-did-we-just-witness-beginning-of-end-of-big-oil.html

Climate change: Did we just witness the beginning of the end of Big Oil?
Published Sun, Sep 22 2019 9:00 AM EDT
Eric Rosenbaum  @erprose

The short answer, of course, is...no.

45
Energy / Re: 🛢️ Will Shale Rise From The Dead?
« on: September 22, 2019, 01:25:07 PM »
No.

RE


https://oilprice.com/Energy/Crude-Oil/Will-Shale-Rise-From-The-Dead.html

Quote from: Kurt Cobb
By Kurt Cobb - Aug 12, 2019, 12:00 PM CDT

Will shale oil rise again from the dead as it did after the 2014-2016 price decline? That will happen only if two things occur: 1) The oil price rises significantly and 2) investors have a serious bout of amnesia.

By Kurt Cobb via Resourceinsights.com

US production wasn't dead before 2014, or during the 2014-2016 time period. I wonder what Kurt means this time? His list of things that the detractors claimed in advance seems a bit cherry picked, and avoids the thing he really doesn't want to talk about at all...otherwise known as Saudi America. There has certainly been a cost....and most certainly a benefit. How can you even measure the value of what the US was able to do to global oil markets, the savings to the consumer, and all through private enterprise rather than the gubbermint getting involving and screwed it up?

https://oilprice.com/Geopolitics/International/US-Oil-Weapon-Could-Change-Geopolitics-Forever.html

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