You might have heard that CLZ07 went through $90 today...
Posted by Prof. Goose on October 25, 2007 - 9:00pm
Topic: Miscellaneous
Tags: oil, peak oil [list all tags]
here's a place to talk about it. is it going to $100? will crack spreads ever come to where they should be? is OPEC incapabale or are they just making us take our medicine? Or is this all just another meaningless flash in the pan that means we're all overreacting to circumstantial evidence?
Here's a good summary piece to whet your appetite...
And it kept going up after hours, too....
Oil Rises to Record Above $91 on Supply Drop, Iran Sanctions
Crude oil for December delivery rose as much as 64 cents, or 0.7 percent, to $91.10 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since trading began in 1983. It traded at $90.78 at 7:36 a.m. Singapore time.
And this one... (hat tip to Ace)
Michael Klare: Beyond the Age of Petroleum
This past May, in an unheralded and almost unnoticed move, the Energy Department signaled a fundamental, near epochal shift in US and indeed world history: we are nearing the end of the Petroleum Age and have entered the Age of Insufficiency. The department stopped talking about "oil" in its projections of future petroleum availability and began speaking of "liquids." The global output of "liquids," the department indicated, would rise from 84 million barrels of oil equivalent (mboe) per day in 2005 to a projected 117.7 mboe in 2030--barely enough to satisfy anticipated world demand of 117.6 mboe. Aside from suggesting the degree to which oil companies have ceased being mere suppliers of petroleum and are now purveyors of a wide variety of liquid products--including synthetic fuels derived from natural gas, corn, coal and other substances--this change hints at something more fundamental: we have entered a new era of intensified energy competition and growing reliance on the use of force to protect overseas sources of petroleum.
May you live in interesting times.
Is that saying supposed to be a blessing or a curse?
I think I'd like boring times. I can deal with boredom more easily.
It's known as a Chinese curse. But it seems it has nothing to with China, it's just a tricky way of cursing people...
BTW, Tapis at $93.32. Is the sh*t hitting the fan already?
I don't have much luck in my life.
1991. Street fights in Belgrade, almost got hit by a stone.
1992. I went to Sarajevo for studying, I was bombed.
Then I went back to my Belgrade, sanctions, chaos, refugees - misery again.
1999. NATO bombed me.
2001. - A revolution, Milosevic overthrown.
2003 - now. I am here in Australia. Finally peace! But no..
Interesting times, for sure. I'm sorry you've had to go through all that. In my experience you Serbians are friendly, sophisticated and tolerant people, much more so than many others... And yet you were demonised no end and probably still get accused for all that horrible stuff that happened in former Yugoslavia. (Western media, as you know, basically made it out to be all Serbia's fault.)
Let's hope things will be OK for you in the future.
The Serbian government deserved a good bombing, but not the Serbian people. There are a couple of Serb guys I used to work with and when I first met them they said they were from Yugoslavia. I looked right back at 'em and said, "Oh, you mean Serbia." They grimaced a bit, then nodded.
Now we Americans will know how it feels - a government that is just slimy, but only one in four of us support what they are doing.
Something like that. I tell people, especially if they are visitors from the USA, that GWB is an American Milosevic. Everything that's going on now in the USA seems to me like 'deja vu' - patriots vs. democrats, media brainwashing, clumsy lies, insecurity, fear. But there is a difference too, when we compare SM and GWB: our president wasn't dumb. He was cunning and corrupted, driven by only one thing, and that was his pathological desire to stay on power. But I would never say he's stupid, or something similar. GWB, however, sounds like a man that really lacks not just education but also 20 or 30 points on the IQ scale. Now, how it's possible that a man so incompetent becomes a president of the most important country, I don't know. It's a mystery to me. Plus, to be re-elected. I don't get it.
At this moment, as I perceive things, no one in the world expects ANYTHING from the current administration. There are many ongoing crises and conflicts in the world, but people don't expect Bush and Cheney to come with some solution. They must feel blessed. They can push their agenda, no one will try to stop them. Everyone is just waiting for them to leave, AND THEN to start solving problems.
What are you talking about? He's got a BA from Yale and an MBA from Harvard, two of the finest universities in the US! How could such a man be uneducated? ;)
SAT score conversions and socio-historical analyses (sic) put his IQ somewhere between 111-138 on classic IQ scale. Clearly not dumb (at the time of tests), if those are any figures to go by. However, clearly among the least intelligent of the US presidents so far (if you go by the same data/studies).
Personally I don't mind dumb. Lem showed in Cyberiad that even an average sailor is smart enough to run a country and much better than a evil prankster.
But for the sake of balance you have to have:
- competent staff around you (Cheney, Rumsfled, Wolfowitz, Bolton... need I go on?)
- honesty of character (hmm... what did he say about: WMDs, Iraq, oil, 911-intel, torture, domestic spying, withdrawing troops, Katrina, tax cuts, clean air, energy security, global warming... I've lost count on this administration's patent lies)
- ability to lead (New Orleans, anyone, 911 anyone? current polls...)
- uncorruptability (Bin Ladens, DoD deals, Iraq oil deals, ...)
- respecting and protecting the lives of other people (1+ M dead, 2+ M displaced, 2 countries bombed, 2 occupied, more on the list... please don't give us any more of that 'love')
I know I've been critical of my own country's leaders, but Bush as a president with his current staff is like an nightmare that refuses to end. And I don't even live in the US.
And I do agree, it does reflect somewhat poorly on Yale and Harvard.
I wouldn't put too much weight on the Yale and Harvard degrees. My sister was on the Harvard faculty for awhile, and she said everyone knows about the "happy bottom quarter." They are the students who are happy just to pass. Their parents are alumni, often very wealthy and famous alumni, or they would never have gotten in. (She also said grade inflation is insane. Nobody wants to give a student a C, let alone a D or F, because their last name might be Rockefeller.)
There's another possibility as well. Maybe he was once very bright, but fried his brains with drug use. It's pretty well established that long-term abuse of drugs and alcohol can cause permanent impairment.
He was definitely a coke-snorting, heavy drinking frat boy. A friend of mine was roommate with GW at Yale and testifies to the fact ("Shoulda killed the SOB when I had a chance..." he says only half in jest).
GWB, however, sounds like a man that really lacks not just education but also 20 or 30 points on the IQ scale.
That isn't true. This guy has made it to the top of the State and now Federal government - hell, he even managed to get elected to president ONCE!
He's not dumb; but he's out of his depth in his current job. Luckily, for him, he's surrounded by people who know just what to do with someone like him and so we see cronyism and the corruption of the government from within - the polluters now in the EPA "regulating" themselves, corporations ensuring short term profits over the long term health of the planet, government being bloated, spending & debt & deficit utterly out of control while the destruction of the social safety net goes unabated as the middle class gets fleeced.
Him and his handlers have visions and dreams and they are realizing them - the common people, the world, and reality be dammed.
That isn't true. This guy has made it to the top of the State and now Federal government - hell, he even managed to get elected to president ONCE!
Here's what I say to that;
We have gotten our heart's desire.
Where are all the BUSH bumper stickers now?
I think everyone who had a bush bumpersticker should have to wear it on their forehead.
Next election season do something that would DRIVE THEM NUTS.
Elect RON PAUL. If for nothing else to than to drive the FED crazy.
Go Ron Paul -
Come on, give the man some credit. He got elected to president twice.
Just not by voters.
Well I think he is doing exactly what he was elected for. And by that, I mean, he is doing exactly what the people that elected him wanted him to do.
It seems that voters, though, are catching up a bit with the scheme. With any luck, they might Actually Do Something (TM). But the odds are heavily stacked against them.
That is the problem when you get an early version of something, be it an Operating System or Democracy. You get to have all the problems and try out many things that do not really work. The trick is upgrading.
He was elected by cheating--twice!
To answer your question as to how GWB could have been elected:
GWB is a mere puppet, under the effective control of a clique of people with a far-reaching agenda. He does what he is advised to do (flattering & fooling himself by thinking that he is "the decider", when in fact he is "the manipulated one"), and says (approximately) what he is advised to say.
The U.S. voting public is manipulated by media propaganda.
All bush had to do to get elected was exactly what he was told to do by his 'advisers', having to much intelligence would have been an impediment.
It's harder to blindly follow orders when you think about stuff.
I can think of dozens of governments that deserve a good bombing. The problem is, you (even if you are the world police) cannot bomb a government without mostly hurting innocent civilians. While I think Saddam deserved to be bombed to eternity, Iraqis in no way deserved any of that.
And now that the US is most assuredly guilty of genocide in Iraq, would it be OK for you if somebody gave a good bombing to your government? I mean, you wouldn't start whining about terrorism, right? Even if 100,000 people were collaterally damaged?
Yes, one can. The reason that no big governemnt seem to try that route is a mistery to me.
Just think a moment. ¿What happens if someone in a local government in the USA (or any other reasonably functioning country) misbehaves and breaks the rules?
¿Does someone bomb them? No.
The bigger government sends the police. The local police does not stand in the way, there is no shootout and no bombing. The offender is detained and brought to justice.
¿How does that work? ¿Why does that work in that scenario, and not in an international scenario?
I guess there is a whole wing of my university's library full of books trying to answer that question, but speaking off my end hole I would simplify it to:
A) A set of rules that are specific enough, and provide people with expectations on what is going to happen.
B) A government with enough force and/or persuasion arguments to convince people to follow those rules.
If you have those things, you do not need to bomb anyone. You might need violence, like the Italian government trying to get a Mafia boss in Calabria, but usually not in the level of 25-TNT-ton bombs. It makes for much better living for almost everyone.
Jussi,
Might makes right.
End of discussion.
It _is_ as simple as that.
Now in Australia? Godzone Country? Things can only look up mate - she'll be right! We can wish away the water crisis, the global warming threat, the destruction of topsoil, the wheat harvest crash, the impoverishment of the rivers and seas, the failure of infrastructure, and the peak oil storm-clouds - as we all know, it's the Lucky Country!
One would think so.
Oil at $93. Why haven't gas prices been going up?
Gasoline prices have finally started to creep up in NJ. I've seen them go from $2.45 to $2.59 in the past week. My feeling is that we'll see another hike by next Monday.
One thing that does tend to keep prices stable in my state is that they can only be changed once a day. For the toll roads, the gasonline stations can only change them once a week. It may be that we get bit in the ass with that when the stations decide to bump the price $.30 in anticipation of their costs going up.
- Scott
"Winter is coming"
For whatever reason (I'm not going to speculate on motive), my understanding is that the margin on distillates has dropped from 30% to 5% as the price of oil has gone up. (I just read that yesterday ... wish I could remember where! I'm embarrased that I can't cite in this instance.) The result is the price of gas has been relatively stable.
The downside of that is that there are limits to that kind of buffering. At some point, you have to increase the price per gallon for gas or the refineries would be operating at a loss, which ain't gonna happen.
I think we're at that point now, which is why the price of gas is again seeing some upward motion.
Maybe refineries can be operated at a loss when owned by a multinational conglomerate that also extracts oil at the current high price. It would be worth it to keep off the tax pressure from Congress.
I guess we should watch the difference between independent refineries (if there are any) and refineries owned by the majors in terms of financial distress.
the losses would be in the millions of dollars per day for the industry.
not happening.
385 million gallons per day is used.
a one penny loss on each gallon per day puts you at 3.85 million dollars a day out the window or roughly 1.2 billion dollars a year.
Thats for a single penny.
Probably demand destruction.
Here gas is cheap (2.60) but diesel is at 3.20/gal
Hopefully gas prices in the U.S. will hit all time highs as well. The general public needs to open their eyes to the reality of Peak Oil.
Since the U.S. military is completely dependent on oil and its refined products, why aren't they transforming their might at lightning speed into the post-oil world?
Energy Independence from Fossil Fuels is the United States top National Security priority.
____________________
myspace
Just the stirrings of the greater understanding. We haven't seen panic or over-reaction yet...
We read that major oil consumers have been post-poning purchases and drawing down stores in the meantime yet oil is at record price levels. At some point either this pent up demand rockets price well beyond $100 or we start seeing permanent demand destruction. My concern is that consumption of stores is masking rather signficant production declines, even though I have no evidence to that effect.
At the same time, however, masked production decline seems the most parsimonious explanation for our present situation. Does anyone have hard data?
Given the increasingly frequent appearance of three of the Four Horsemen - falling oil production, falling dollar, falling agricultural stores/yields - I am surprised that we are not seeing the fourth Horseman - falling financial markets.
Derivative prices, which reflect market fear, are up some but no so much by historical standards. I am at a loss to explain why. Surely everyone isn't feeling sanguine about our prospects. It would interesting to see if foreign investors are buying our assets out from under us on the cheap and keeping our market propped up. If so, the recession-triggered market plunge will be stupendous.
I thought we had five years or so before the pain really set in. I don't think so any more. Drought, natural gas constraints, falling dollar, food inflation, etc. are coming together in a perfect storm for consumers.
There are massive numbers of mortgages yet to reset at astronomical interest rate levels. Bernanke can't bail us out without hammering the dollar and making the problem even worse. The Fed is powerless, although I expect they will act to postpone the pain and distribute it as widely as possible.
- Shunyata
From a global perspective, why would a falling dollar and falling agricultural stores be negative signals, let alone horsemen?
As I commented a few days ago, inventories of just about all good have fallen sharply as transportation efficiencies have improved the enterprises reduce working capital. It would appear that lower agriculture inventories are no different than other lower product inventories. I haven't seen any evidence of sustained decreases in agricultural yields.
The falling dollar would seem to be a necessary response to a legacy of bad economic policy. It may well be that the US permanently loses its economic leadership, but whether that is good or bad would seem to depend on where you stand.
Why would foreign investors be buying US assets, if they everyone is feeling sanguine about US economic prospects?
I do think the US is heading into a harsh recession and doubt the world economy can just skate over it. I also suspect that the dominant role of the US in the global economy may be approaching an end.
However, I do think this may well be just a standard garden variety correction. A slowdown would give energy markets a much needed rest and push any supply driven crisis back a bit.
From an economic standpoint, I don't see how we are going to unravel this massive US-China co-dependence, which seems to have reached the breaking point. I expect it will be very painful and end up in a negotiated solution. But compared to other crises of this century, it seems fairly average. Compared to an apocalypse, a walk in the park.
I don't know what you mean when you say derivative prices are up. I thought many (think structured credit, CDOs) had crashed. Spreads on risky debt are a bit higher and banks seem very cautious about trusting each other, which is reflected in money markets.
I agree that mortages are going to be a huge problem, and maybe beyond the US.
Shunyata,
Look up the Weimer Republic, i.e., post-World War I Germany. To pay for war reparations they printed money like there was no tomorrow. I think Jim Sinclair is on to something when he says replace "war reparations" with "OTC derivatives" and you get the picture. The Federal Reserve is printing money like mad (so are other central banks, but we're currently king of the hill in that respect) and the stock market is one of the early "beneficiaries" of all this added liquidity. This is believe it or not still the relatively early stages of inflation, where prices seem to remain stable (at least in the "core rate", which apparently doesn't measure much more than the price of a burrito supreme at taco bell).
But if you examine the Weimer Republic during the hyperinflationary stage their stock market went to the moon, while the Mark went to 0. Just wait another year and all the bad effects of out of control inflation here will be too apparent to ignore.
Actually, I definitely do expect crack spreads to recover, but on the back of higher prices for gasoline and other refined products, not lower crude. I'm afraid that the futures traders have smelled the peak and that's what's driving them now...the myriad other reasons in the press notwithstanding.
--C
Energy consultant, writer, blogger www.getreallist.com
I see the phrase "crack spread" and it makes me think fetish pr0n for those who like plumbers.
I saw a "crack spread" in the store today . . . It was funny. Makes me wonder why people do that . . .
http://www.upstreamonline.com/market_data/?id=markets_crude
Oil Prices continue to increase today
Tapis 93.40
Minas 91.65
Must be strong demand for that rare oil - light sweet crude
And WTI spot closed at $92.81.
Wait until Oct31
OPEC to heliBen = Go ahead, make my day.
I wonder if these stubbornly high crude oil prices are an indication of limited or reduced supplies from exporters. Perhaps when the oil production and export data for October is published and revised, it will reveal demand destruction. I cannot justify these record prices otherwise. Is there some other explanation?
And perhaps the market is reacting to the "tucked" some same "hidden" request for some very large specialized bunker busting bombs. Located in the recent request for more funds for Afghanistan and Iraq.
http://abcnews.go.com/Politics/story?id=3771522
and the saying is an old Chinese curse I beleive, its roots are anything but wishing you well.