128 comments on DrumBeat: August 11, 2008
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128 comments on DrumBeat: August 11, 2008
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The oil bull is dead. Even today, nothing doing.
Eventually, demand for oil is elastic. We are there.
Time will tell.
I am now the proud owner of some DBO. Purchased today @ 43.00
what is a DBO?
An ETF that is long oil futures.
Millard, just for the record: How low is it going to go and what is a reasonable price for oil in 2008? In 2010?
Peak Oil Tarzan- I am scared of your moniker, and, of course, who knows exactly what the price of any commodity will be in 2010.
So with some trembling, let me say my stong sentiment is the oil bull has been gored, and hard. Demand is withering. The EVs are coming online.
In the future, look for a rough replay of oil prices after the 1979-80 spike. A long secular decline. Up and downs, to be sure, but the general drift is southerly. The $147 a barrel was a blow-out top, a speculator's heaven.
True, thug states control the world's oil today, and that makes things difficlt. On the other hand, the alterntaive technologies coming online today are wonderful.
The GM Volt, and similar cars, mean that oil demand can fall continously worldwide, even as we obtain higher living standards. Such cars are game-changes, OPEC-killers, death rays for speculators. And they are coming. The only way to stop them is to crash oil prices. And that may happen.
you have presented various arguments that demand is going to decline. and surely it will longer term. are you claiming that the price decline in the past few weeks is due to reduced demand ?
how 'bout supply ?
GM claims 70,000 GM Volts by 1/1/2012. USA has more than 240 million registered vehicles.
Project oil production on 1/1/2012 for Mexico, UK, Norway, Denmark, Australia, Saudi Arabia, Russia, Yemen, Venezuela, etc. Also project # of registered cars in China on 1/1/2012. Kashagan in Kazakhstan will not yet be on-line at that date (but close ?).
Your claims are *WAY* overblown.
Alan
Is Iran a "thug state" ????
Who have they invaded in the last thousand years?
I thought the Iranian women shopped at Victoria Secrets and wore makeup...maybe you know something I dont?
Doesnt Canada have oil and sell it too America?
And how about Mexico? you tellin me I gotta be worried
about Juan Valdez and his (peqito)Sp. for "little" burro?
Gosh and golly gee willikers Wally!!!...you got me thinkin now.
I sure hope the Canucks dont cut off that maple syrup
at $60.00 a gallon...ehh!
Millie, Iam shaking my Persian rug in anger right now.
That goes to show how you convinced me that Iran is
a thug state....Inshallah! and Allah Akbar!
And Iam boycotting Taco Bell too hombre!
Those thug Canadians who use Canadian coins must be
that 5th column Iam always hearin about ehh?
(No Burro's,Taco's,Iranian women,Canadians with Maple
leaf hockey shirts were harmed in this dramatization)
Yes, EV's are coming online. But Winter is coming faster, China may be 'back online' in a month, and Cantarell, Prudhoe and North Sea are listing hard to port- taking on water. etc, etc, etc..
The falling price might look like a reprieve, but unless there was news of significant new production somewhere, I'd say the price can be anywhere it wants, and we won't be able to avoid the hurt now.
I was recently reminded of a statement I made when Chrysler(who was struggling at the time) first released the Caravan/Voyager line.
"This vehicle is a game changer, it should be enough to fix Chrysler and pay back its loans."
My roomie at the time chided me about that but loaded up on Chrysler stock anyway, he is still living comfortably on the proceeds, I believe.
A radio program I heard recently claimed that GM had worked on a gas powered, electrically generator driven vehicle, sponsored by the good ol' USA, decades ago.
While the results were impressive, as so often happens, the program died an ignoble death.
IMO you will be finding greater benis from this combo than previously conjectured.
Volts, Prius plug-ins, and ramped domestic production of base Prius are coming in a few years. In the mean time there are many good choices for a fuel efficient auto including the Corolla and Focus. Other folks are simply parking their SUVs if they have a second more fuel efficient vehicle to drive. Strong demand for some models of fuel efficient used cars has actually caused price appreciation (not the customary continuous price depreciated normally expected with used vehicles). So far we've just skimmed some fat off the oil demand stew. The next dip could take a much larger volume. The current fleet of vehicles is certainly large but the median age of a vehicle in this country is approximately 9 years so about half the fleet will be replaced in the next decade. I have no doubt this batch will be far more efficient than the existing fleet. If the U.S. manages to achieve a measly 4 mpg (20%) increase in fuel economy domestic oil demand would fall by nearly 10% and there is little reason to think that number cannot be drastically higher should EV technology evolve as an affordable alternative and I see little reason to doubt it will not.
domestic oil demand would fall by nearly 10%
Not up to TOD standards.
Of the 20.x million b/day burned by the USA, slightly over 9 (9.0 to 9.3 million b/day in 2007 depending on time of year from memory) are burned by cars & SUVs. Increased fleet fuel economy by 10% over ten years will be slightly better than the increase in VMT (Vehicle miles traveled), but if we do not shrink VMT (as we are doing), then this savings will be just a couple of percent of USA oil use.
Not much better than statistical noise quite frankly.
The USA increases population by 0.8% or so every year. Add sprawl, economic growth ? and just driving more fuel efficient cars WILL NOT BE ENOUGH !
Best Hopes for Non-Oil Transportation,
Alan
Yer' talkin from yer tushie.
"Even today, nothing doing."
What's so special about today? Keep trying to grow those long-range sensors, bud. You might need them.
Well, Millie of Fillie, I'm not oil expert but I saw this price cycle at the beginning of the year. I didn't think it would go as high as $147, maybe $130 to $140, and then fall back to around $105 to $115 in the August soft season.
Daily price fluctuations prove nothing, however it does speak volumes for those that chose to predict the trends on this basis. How do these people walk anywhere when they are always looking at the tops of their shoes?
I have a high degree of certainty we won't see double digit prices again. If we do, you are hoping for very rough times. Like all the rest, we now see difficult times ahead with the winter heating season.
And I can't believe the mass stupidity as the $CDN gets downgraded because oil prices are dropping. Hello folks! It's still over $100/bbl and the energy export business is quite healthy. Market Intelligence, another oxymoron fading into the sunset...