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113 comments on The Economics of Oil, Part I: Supply and Demand Curves

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robert2734 on August 19, 2007 - 10:57am Permalink | Subthread | Comments top

Depends on what The Economist means by producing. We can obviously consume no more oil than we extract.

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thomas deplume on August 19, 2007 - 3:27pm Permalink | Subthread | Parent | Comments top

Smithson makes a mistake in that oil companies 'produce' oil. What they produce is refined products from extracted oil. They sell refined products to the consumers. I have no desire to put West Texas Intermediate in to my tank. It would gum up the filter in very short order if it doesn't foul the plugs first. I want the gasoline which could come from any of several sources and processes. Being in Iowa it is only polite to use a little ethanol out of consideration for my neighbors.

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jteehan on August 19, 2007 - 9:27pm Permalink | Subthread | Parent | Comments top

The US alone has total product storage currently 1.7 BILLION barrels and there's that much more again in the rest of OECD.

http://tonto.eia.doe.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm

Production could go to zero and demand could still be met for a long time.

I like three egg omelettes, but I only have two chickens. Fortunately, supply and demand are still in balance because I had a dozen eggs in the fridge.

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robert2734 on August 19, 2007 - 9:37pm Permalink | Subthread | Parent | Comments top

Long time being defined as a month. The purpose of the SPR is so our military can fight long enough to capture an oil field.

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robert2734 on August 20, 2007 - 5:31am Permalink | Subthread | Parent | Comments top

I like three egg omelettes, but I only have two chickens. Fortunately, supply and demand are still in balance because I had a dozen eggs in the fridge.

What do you eat on day 13? A two egg omelette? What do you eat after your chickens die of old age? You turned all your eggs into omelettes and none into chicks. I know, you can eat chicken for a long time.

Do you work on wallstreet teehan? Sounds like you'd be perfect for buying mortgages and selling synthetic CDOs and taking your salary out of the price difference.

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