« Ignorance Is Bliss | Main | DOTE Quiz, Open Thread »

02/07/2013

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Jim

Pretty much all info about oil prices, especially in the mainstream press, is pure BS. Even the most credible sources have to be parsed with other credible sources, and even then one only has a hazy picture.

A relatively good source:
http://aspousa.org/2013/01/peak-oil-review-january-21-2013/

While the U.S. unconventionals are increasing regional supply, certain other global supplies are dwindling. Saudi Arabia pulled about 500 mbpd in December. And while U.S. oil demand continues to decline, China's demand is rising faster. As oil is priced on the global scale, regional trends are only a part of the picture.

Speculation certainly adds to the price, but it's only a fraction of the reason for the current high (and rising) prices. We're caught in a vice grip on prices now, where if oil prices drop below a certain level ($50-$80), it causes a wide range of problems. It would suddenly make unconventionals unprofitable again, and nations like Saudi Arabia currently need the high prices to fund subsidies to its citizens and prevent internal crises. So, if oil drops too low, those sources potentially have problems, and the overall picture only gets worse.

But, if oil stays above $80, then the Western countries have problems with easy economic growth - and so you have Keynesian responses like QE Infinity and zero percent interest rates. This also is a trap - it's a one-way street that can neither be ended without economic chaos or continued indefinitely.

I just see signs that we're in the end game. Everyone is in 'extend and pretend' mode, and the greatest worry is doing something that will cause the markets to suddenly realize they're standing on air, with the 'optimistic' hope that a miracle will come along to cause everything to get back on solid ground and keep going as it has the past century.

But the likeliest outcome is continuously rising gas prices reaching higher and higher until it triggers another (at least acknowledged) recession.

Dave Cohen

@Jim

Well, of course I know Tom Whipple, though I haven't talked to him for some time now.

Tom has a "peak oil" axe to grind, and I don't see how you could possibly know whether what he's telling you is true or important since there is not a single link to an outside source (let alone any data) in the article you cited. Not one.

Now, that said, when I post a an accurate satire of a broken commodities market like I did today, I do not especially want somebody giving me the "standard lecture" about crude oil, especially in so far as I know a great deal about the subject.

In fact, before you were reading, or at least before you were commenting, I used to post a biweekly Saturday Oil Report which explained various aspects of the oil markets. I discontinued publishing it because 1) there was little interest; and 2) the oil markets are bullshit, as I described today.

So, please spare me the talk about China's demand accelerating, and the effect of high oil prices on economies.

And on China's lack of accelerating demand growth in 2012, see this--

http://www.chinadaily.com.cn/cndy/2013-01/31/content_16189089.htm

-- Dave

Jim

Okey doke. I understand your post is satire, and it's mostly about the fact that there is little credible info on oil on the internets. Like I said, it's unreasonable to trust any one source (like Whipple) - one has to look a multiple sources and then gather a best guess. Apologies for the lecture.

Rumor

Sometimes you just make my day, Dave.

Diogenes

"Sometimes you just make my day, Dave"

That's each and every damn day, Dave.

Best

James

US administration officials quickly pointed to the increased manure as signs that the president's energy policy is working.

"The increase in potential biofuel options has been a key part of our decreased reliance on fossil fuels," Whitehouse spokesman Ima Moron stated in a recent press conference,"And to us this smells like success." Other commentators have pointed out how this is likely the result of the economic recovery since it indicates consumers are spending more.

Wall Street endorsed the good news and volume was up, closing higher for the week. One brokerage analyst indicated that this continued trend would likely continue for the foreseeable future before lighting a cigar with a $100 bill.

Oliver

Your straight factual reporting is devastating enough, but this satire is an utterly lethal weapon. Pity the poor rich commodity speculators and other econo-crooks who are found writhing at the bottom of tall buildings as Dave's Deft Darts of Disdain strike home.

Mike

"Just a week ago I paid under $4 a gallon. I'd like an explanation."

I actually snorted some coffee when I read that.

Bravo! We all want some explanations from TPTB (not bullshit!)

ABSolute Vapors

Great site and your comments are dead on. In today's world we can not be silent any more, but must start voicing our opinions for the silence has put us where we are today, in turmoil.

JohnWDB

how to make it big as a banker

1) convince millions and millions of Americans to live outside their means, getting many hundreds of thousands in debt

2) manipulate the price of the most important commodity so that the cost of every product increases as does the cost of commuting to work, and the razor thin margins they are living on crumble

3) watch the economy collapse when the ripple effects of said manipulation cause job losses, company failures, defaults

4) begin to worry that you may have been to ambitious and that said collapse threatens your hefty bonus checks

5) ask...no, tell the government to buy all the bad debt from you with the money of tax payers who aren't even born yet

6) collect hefty bonus check. sue government for not giving you a favorable enough bailout package.

John D

Never a shortage of bullshit!

http://www.theonion.com/articles/massive-flow-of-bullshit-continues-to-gush-from-bp,17564/

I think the Dept of Energy will have to investigate this, as the amount of bullshit exceeded analysts consensus estimates for Q1 and are trending upward.

Dave

Some gas stations here in Worcester County Massachusetts are out ahead of Winter storm Nemo. Everyone is rushing to fill their tanks and cans for their generators. Everyone has a generator because it's impossible to live without grid power, even for a short while.

John D. Wheeler

According to PricedInGold.com, the price of oil this month for oil, 1.82 gm Au/bbl, is actually below the historical average of about 2.5 gm Au/bbl.

Makati1

Lets face it, if the hot air coming out of DC were captured by wind generators, it could power the East Coast, and if all of the methane produced by the Bull Shit there were captured, it could heat all of those homes waiting for "Nemo" this weekend.

Alexander Ač

Well Dave, I think you know ;-)

"Why would anyone care about the price of oil with respect to the price of gold?" - All the "gold bugs" who believe that everyone can be saved by buying gold, which is the only and true sustainable currency :-)

peak oil and climate change solved by gold, of course...

Alex

Alexander Ač

OT, but interesting, from prof. Kevin Anderson:

"I don't think it's OK to walk past a mugging on the way to pay the mortgage. Climate scientists need to be good citizens too. Our science tells us we are killing people in poor parts of the world by putting our lights on and we need to make people think about that. Scientists need to start standing up for what they believe in. By staying quiet we are legitimizing it."

http://environmentalresearchweb.org/cws/article/opinion/52289

Alex

The comments to this entry are closed.