Awl Bidness

[toubab]

We Are Never Going to Run Out of Oil

http://www.realclearpolitics.com/ar...are_never_going_to_run_out_of_oil_124828.html

"In a chilling 2010 column, Paul Krugman declared: “peak oil has arrived.”

So it’s really not surprising that the national average for a gallon of gas has fallen to $2.77 this week – in 10 states it was under $2.60 – and analysts predict we’re going to dip below the two-dollar mark soon. U.S. oil is down to $75 a barrel, a drop of more than $30 from the 52-week high.

Meanwhile, the Institute for Energy Research estimates that we have enough natural gas in the U.S. to meet electricity needs for around 575 years at current fuel demand and to fuel homes heated by natural gas for 857 years or so – because we have more gas than Russia, Iran, Qatar and Saudi Arabia combined.

With prices returning to ordinary levels and a few centuries’ worth of fossil fuels on tap, this is a good time to remind ourselves that nearly every warning the left has peddled about an impending energy crisis over the past 30 to 40 years has turned out to be wrong. And none of them are more wrong than the Malthusian idea that says we’re running out of oil."

You mean the sky ain't falling?

 

[RobDownSouth]

"Institute of Energy Research"? Whar have I heard of these guys before?

Oh yeah.


Fringe right, koch-financed public relations herpaderp.

 

[toubab]

"Institute of Energy Research"? Whar have I heard of these guys before?

Oh yeah.


Fringe right, koch-financed public relations herpaderp.

You mean oil production and natural gas production aren't actually up and prices aren't actually down, and we don't have tremendous proven reserves of both oil and natural gas? It's all an illusion created by the Koch brothers?

 

[Busybody]

You mean oil production and natural gas production aren't actually up and prices aren't actually down, and we don't have tremendous proven reserves of both oil and natural gas? It's all an illusion created by the Koch brothers?

opps

you just kicked him in the balls

 

[trysail]

http://www.bloomberg.com/image/ixSkGmMlbCR0.png


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[Busybody]

Hey Yo, Trsail


why is oil plunging

is demand down that much

is supply up that much in past 3 months?

why did oil go fro 155 to about 20 in 2008 or so, when Bush said DRILL EVERYWGHERE

tell me.....I'll wait

still waiting, TRYSAIL

 

[trysail]

OPEC Sees Weakest Demand for Its Crude in 12 Years in 2015

OPEC cut the forecast for how much crude oil it will need to provide in 2015 to the lowest in 12 years amid surging U.S. shale supplies and reduced estimates for global consumption.

The Organization of Petroleum Exporting Countries lowered its projection for 2015 by about 300,000 barrels a day, to 28.9 million a day. That’s about 1.15 million a day less than the group’s 12 members pumped last month, and the 30-million barrel target they reaffirmed at a meeting in Vienna on Nov. 27.​

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[Busybody]

still waiting, TRYSAIL

 

[trysail]

http://instituteforenergyresearch.org/wp-content/uploads/2014/01/WSJExxonChart.png


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[Busybody]

they have no fucking clue for next week

stfu about 20 yrs from now

 

[Busybody]

•Loss in stock market value tops $137 billion since June 2014.
•Loss of stockholder wealth is roughly $467 per capita.
•Energy issues paid dividend yields in excess of the SPY average.



Should investors be cheering the sharp decline in energy prices? Probably not. Since June 30, 2014, the loss of stockholder wealth in four stocks has topped $137 billion. That works out to $457 per capita or $1,830 for a family of four assuming the population is 300 million.

A recent Wall Street Journal article stated:

“
Consumers: Consumers spent $370 billion on gasoline last year. With prices expected to fall around 20% from their average during the first half of the year, the drop in gas prices over the past six months amounts to a $75 billion tax cut for consumers, according to an analysis by Kris Dawsey, an economist at Goldman Sachs

----

The benefits to consumers also accrue over time as drivers fill up their tanks. So far, lower gas prices have saved the average household around $80, according to ClearView Energy Partners. If prices were to stay at their current levels for a year, the savings could rise to around $340 a household

Consumers benefit by $75 billion from the drop in gasoline prices while stock investors in four issues have lost over $137 billion in wealth. It looks like the decline in energy might have negative economic consequences.

 

[trysail]

Thanks to the idiots in the media, very few people comprehend the fact that monopolies are maintained by LOWERING prices.


We all know what's going on. The Sauds are punishing the quota cheaters and destroying the high cost producers.

1986 is the perfect analogue.

What nobody knows is how long this is going to go on. As 1986 progressed, talk arose of even the major energy companies cutting their dividends. As weak owners cried "Uncle" and puked up their shares, incredible bargains emerged.



​

 

[Busybody]

still waiting, TRYSAIL

so like all LIB LOONS

you have been caught

and now pretend IGGY

right?

#typical

 

[trysail]

IEA Cuts Global Oil Demand Forecast for 4th Time in 5 Months

Global oil demand next year will be weaker than previously estimated and supply from non-OPEC producers will be bigger, the International Energy Agency said.

Consumption will expand by 230,000 barrels a day less than estimated in November, the Paris-based adviser to 29 nations said in a report today. Output from nations outside of the Organization of Petroleum Exporting Countries will grow at a faster pace than the agency predicted last month. Production rising faster than demand could strain some nations’ ability to store oil by the middle of next year, it predicted.

The agency cut projections because the economies of producer nations are being hurt by tumbling prices, according to the report. Most of the reduction in next year’s estimate is attributable to Russia, where sanctions are hobbling growth, it said. Brent crude costs that collapsed 43 percent this year are too low for 10 of OPEC’s 12 members to balance their budgets.

The IEA also cut estimates for the amount of crude needed next year from the Organization of Petroleum Exporting Countries by 300,000 barrels a day. The group will need to pump an average of 28.9 million barrels a day in 2015, about 1.4 million less than its 12 members produced last month and below the 30-million-barrel target agreed on Nov. 27.

World oil consumption will increase by 900,000 barrels a day, or 1 percent, next year to average 93.3 million barrels a day, according to the report. The IEA curbed estimates for Russian oil demand in 2015 by 195,000 barrels a day to 3.4 million a day. It kept estimates for global demand growth this year unchanged at 700,000 barrels a day.

“Some of the places where demand had been growing particularly fast in recent years had been producer countries because record-high prices were a huge stimulus,” Antoine Halff, head of the IEA’s oil industry and markets division, said by phone from Paris. “Now those countries are affected very adversely.”

The IEA boosted projections for supplies outside OPEC in 2015 by 200,000 barrels a day, forecasting output will expand by 1.3 million barrels a day to 57.8 million a day. Non-OPEC supply will climb by a record 1.9 million barrels a day this year, it estimated.

“Despite lower crude oil prices, we expect U.S. production to continue to grow apace in 2015,” expanding by 685,000 barrels a day, the agency said.

OPEC output declined by 315,000 barrels a day last month because of disruptions in Libya, where production fell by 180,000 barrels a day to 690,000 a day following an attack at El Sharara, the country’s biggest oil field.

Production in Saudi Arabia, OPEC’s biggest producer, fell by 70,000 barrels to 9.61 million barrels because of the closing of the Khafji oilfield that the kingdom shares with Kuwait, the IEA said. ​

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[Busybody]

means shit!

 

[Busybody]

THIS is what BUNNY SLIPPERS said

and

Know nothing TRYSAIL poked fun at



What Really Caused Oil Prices to Plunge So Far -- So Quickly



NEW YORK (TheStreet) -- The 35% drop in oil prices this fall has been breathtaking. No one -- not even energy experts -- expected prices to fall this far, this quickly. And the slide doesn't seem to be over.

What happened? True, the U.S. has nearly doubled its oil production over the past five years, while OPEC and other suppliers have been unwilling to cut back on production. Demand has also been softening. But that still doesn't explain why prices suddenly fell off a cliff.








The answer seems to have less to do with supply and demand and more to do with how oil is traded. In short, the slide in oil prices appears to be mainly investor-related, not based on fundamentals. For that reason, oil prices could rebound just as quickly and violently as they fell.

Here's what may have happened. As oil prices began falling this summer, an increased number of traders and other big investors appears to have bet that prices would bottom, especially in October as evidenced by record energy options contracts traded on the CME, the large options and futures exchange. When that didn't happen -- in part because of the strengthening dollar -- these investors found themselves on the wrong side of a very dangerous trade.

Exposed to even bigger losses, they had to get out quickly. It's what is known in investing as trying to catch a falling knife. This rush to the exits only exaggerated the selloff in oil prices, which quickly spread to energy stocks such as ConocoPhillips (COP) and BP (BP) and other related investments. We are still feeling the fallout.

When will the carnage end? No one knows. But there are plenty of reasons why fundamentals may return soon and oil could start climbing again.

For starters, 70% of all crude oil is used for transportation. Despite the viability of Tesla (TSLA) and the electric car, that industry is not yet challenging combustion engine vehicles as many had hoped. So Americans are likely to keep driving gas-guzzling cars, which will help oil prices find support.

 

[trysail]

...On December 17, Governor Andrew Cuomo decided to ban hydraulic fracking of shale in New York State. The important Marcellus formation is in the southern and-western part of the state, which is experiencing economic stagnation. The governor referred to his experts who cited unspecified health concerns. As the Wall Street Journal stated: “In other words, all of the Governor’s men couldn’t find conclusive evidence that fracking presents a significant risk to public health or the environment. So they’re going to ban fracking until they do.” Hydraulic fracturing has been used since 1947 and the EPA has yet to uncover credible evidence that it causes groundwater contamination...

-The Science and Environmental Policy Project
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[Busybody]

who cares there is no evidence

we ALL know how BAD fracking is

 

[thør]

we ALL know how BAD fracking is

Ban it so the price goes up!

 

[trysail]

Brent contango
​

http://www.bloomberg.com/image/iWCiLgddpVN4.png



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[trysail]

by "WW"

​

Why is everyone still surprised at Saudi behavior? The simple story is they're tired of carrying everyone else in OPEC and beyond on their backs. Notice how OPEC is still producing above quote. The Saudi's are within their quota, so it's their "partners" who are cheating and producing more then they should. Why, then, should Saudi Arabia take the hit when all it will do is make room for more production from everyone else?

Maduro, Morales, and Putin are all speculating that it's some CIA conspiracy to cut Putin down to size (as if that vertically-challenged ewok weren't short enough already). Well, it's not the CIA - it's the House of Saud. The Saudis actually sent an envoy to Moscow in the first half of 2014 asking for two things: a reduction in oil price to help balance the market, and the withdrawal of support for Assad. They got neither. In fact, Russia is now producing more oil than it ever has since the USSR breakup.

Then you turn to Iran, Saudi's thorn in the side. Notice how nice Teheran's been playing recently. The low oil prices are busting their budget, and the only thing that will ease that pain is the withdrawal of sanctions on their economy so they can develop their non-oil sectors. That country has tremendous potential, wasted by the mullahs, and it takes a very, very low price for them to allow that opening to happen. Keep in mind, high oil prices allow the theocracy to fund their revolutionary guard regardless of what happens in the rest of the economy. Low oil prices mean lower central government resources, and therefore more breathing room for everyone else.

Coming around we have Venezuela. The last time the Saudi's allowed the price of oil to collapse, it was in response to their overproduction and the rapid rise of Russian production early in the post-USSR breakup. The market was flooded, and the myriad projects in the Orinoco were promising significant increases in Venezuelan production. At the time, Venezuela was pushing for a doubling of their OPEC quota to reflect their natural reserves (in which they included both the conventional that OPEC has always counted, and the heavy that has been excluded from OPEC quota calculations). The Saudis refused, so Venezuela went out on their own. And they got slapped down hard. End result: oil falls, economy tumbles, and Chavez comes into power. Didn't take long for Chavez to completely derail PDVSA and turn that company from a leader in heavy oil development into a deeply-indebted social benefit institution. For the Saudis, that problem solved, since they won't need to worry about Venezuelan production going up anytime soon.

And back to Russia. Notice how Chavez and Putin came to power around the same time. If you graphed their careers on a chart with the price of oil, you'd see an incredible correlation. They came in when low oil prices brought a rapid loss of support to their predecessors, and managed to hold that power thanks to the gradual rise in oil prices, which allowed them to ratchet up social spending to maintain support. Putin's budget is now built on $90+ oil, and the two largest outlays in that budget are social payments and military expenditures. Unlike Saudi, however, which can maintain their budgetary commitments for 2-3 years, Russia has sufficient reserves to maybe make it through this year. And unlike a normal economy, which in rough times would go to the international market to raise funds, Moscow's cut off from the world financial markets. That means in due course they'll need to start cutting. Maybe their Ukrainian adventure will need to be cut short. Or perhaps they'll finally cut some of those military programs that are nothing but gravy projects to support their corrupt officials and oligarchs. However, I'm willing to bet they'll also cut social spending, with the false belief that the Russian people will be willing to suffer the pain. When that happens, we'll start to see some serious unrest.

Important to keep in mind is that Russia has somewhat of a hedge on the oil price. Not only do they have contracts that run for at least three to six months, but also their gas sales to Europe are priced against petroleum products with a three to six month delay. That means their budget won't feel the initial pain until April or May, and will begin hemorrhaging only in the middle of the summer. So the biggest impacts will only be felt then, and the first to really begin to feel that pain will be those who either depend on the rentier state the most - in the capital, or those far enought from the capital to get those cuts first. That means unrest will begin with the middle class in Moscow and probably Vladivostok, then elsewhere. And if all hell breaks loose, you know the Saudis will be happy - not because it serves the interests of the west, but because Russian production will be impacted and a lot of barrels will be withdrawn from the market.

U.S. producers are of course not immune. While we can assume a lot of U.S. production is hedged, it's hard to know just how far out, and in all likelihood, not further out than the second half of this year. And that means we'll see wells shut in, and many of the smaller producers getting very weak. I'm sure someone in the Woodlands or San Ramon is salivating at the prospect of picking up good acreage in the Bakken or Permian for cheap.

But a major difference between the way oil is produced in these areas, and the way oil is produced in Russia, or Brazil, or West Africa, is that it's more of a manufacturing process. That means when demand is low, you slow down the assembly line, and when demand (and prices) picks up, you just turn things up again. The current low oil prices therefore mean that the growth trajectory for production int he Bakken won't be as steep - or even flat - as was initially expected, but when the conditions improve, so will oil output there. For others the perspectives are not as positive. Russians are moving production into the northern reaches of Siberia and the Arctic offshore, where conditions are harsh, and development costs sky-high. Brazil's pre-salt is proving challenging, and the technology to develop these fields is not being developed as quickly as anyone thought. This has meant delays, and in a low-price environment, it will mean some of the projects will be shelved for the time-being. Extracting oil in Venezuela also requires increasing investment, and with PDVSA essentially bankrupt, it's the Chinese and the Russians who are bankrolling the projects. You can be sure that with low oil prices the Russian's won't have the money, and the Chinese won't have the need. I'm giving Maduro until October. Then the country begins to burn, and their oil production plummets.

In the meantime, enjoy the low oil prices. On a net basis a low oil price is good for the U.S. economy, since we're still a net importer. And starving the Middle East of cash is generally a good thing, since it leaves them with less spare change to fund their madrases, their jihadi armies, and their weapons development programs. Heck, if we get lucky we'll even see those "islamic state" wack-jobs run out of cash.

So smile America - we're now a bastion of stability while the world goes on a wild ride.


http://www.bloomberg.com/news/2015-...-glut-seen-persisting.html#comment-1775005680

 

[trysail]

It's always been a boom and bust business— and, historically, it's been a long-cycle business.

You don't see the results of exploration and development expenditures for many, many years.

The greybeards know this.



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[trysail]

The mismanagement of Petrobras has been of epic proportions— rivaled only by that of PdVSA and Pemex.

The Latin Americans appear to have a special talent and capacity for installing colossally stupid, incompetent and corrupt managements. This is not especially surprising when government controls companies.



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[trysail]

Muqrin bin Abdulaziz (Arabic: مقرن بن عبدالعزيز آل سعود‎; born 15 September 1945) is the Crown Prince of Saudi Arabia.

Prince Muqrin studied at the Riyadh Model Institute. He, then, went to Britain's RAF College in Cranwell and graduated with a degree in aeronautics at the rank of flight lieutenant in 1968. He also received a diploma, equivalent to a master's degree, from the General Staff course in the US in 1974.


http://en.wikipedia.org/wiki/Muqrin_bin_Abdulaziz_Al_Saud

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Muhammad bin Nayef bin Abdulaziz Al Saud (Arabic: محمد بن نايف بن عبد العزيز آل سعود‎) (born 1959) is the Deputy Crown Prince...

Muhammad bin Nayef was educated in the United States and received a bachelor of arts degree in political science from Lewis & Clark College in 1981. He attended the FBI's security courses from 1985 to 1988, and was trained at Scotland Yard's anti-terrorism units from 1992 to 1994.

http://en.wikipedia.org/wiki/Muhammad_bin_Nayef

___________


Salman bin Abdulaziz Al Saud (Arabic: سلمان بن عبدالعزيز آل سعود‎, Salmān bin ʿAbd al-ʿAzīz ʾĀl Saʿūd; born 31 December 1935) is the King of Saudi Arabia

http://en.wikipedia.org/wiki/Salman_of_Saudi_Arabia







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[trysail]

If I was a betting man, I'd be inclined to bet that either (1) the price of petroleum is going to fall or (2) the price of natural gas is going to rise or (3) some combination of (1) and (2) was likely to occur.

http://alfred.stlouisfed.org/graph/alfredgraph.png?&chart_type=line&graph_id=&category_id=&recession_bars=On&width=800&height=480&bgcolor=%23B3CDE7&graph_bgcolor=%23FFFFFF&txtcolor=%23000000&ts=8&preserve_ratio=false&fo=ve&id=GASPRICE_OILPRICE&transformation=lin_lin&scale=Left&range=Custom&cosd=1993-01-01&coed=2010-11-01&line_color=%230000FF&link_values=&mark_type=NONE&mw=4&line_style=Solid&lw=1&vintage_date=2010-12-24_2010-12-24&revision_date=2010-12-24_2010-12-24&mma=0&nd=_&ost=&oet=&fml=b%2Fa&fq=Monthly&fam=avg&fgst=lin​

Sometimes, it takes a while for these things to work out but as Herb Stein so accurately observed:

"If something can't go on forever—

it won't."​

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