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Don't argue with an insomniac.
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"It is perfectly understandable why we might feel freaked out in 21st century America. Everything is really screwed up—our cliff-diving economy, our unrepentant, bailed-out financial oligarchy, our overwhelming debt, our paralyzed political system, our impoverished state governments, you name it. Writing a diatribe blaming all the world’s ills on Goldman Sachs is better than a headlong flight from reality, which is the preferred solution of most Americans. I largely agree with Taibbi: if America is now circling the drain, Goldman Sachs has found a way to be that drain. But Goldman Sachs is not our only problem, not by a long shot."


This is an excerpt from a great article on the problem of oil supply / demand, and is a must read for anyone who would like to be able to claim an understanding of this process, and by extension the concept of peak oil.


MUST READ: It’s Not Black Or White :: ASPO-USA: Association for the Study of Peak Oil and Gas
 

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Thanks for the link. The author's comment; "If we're going to trade crude oil like a currency, we should regulate it like a currency, too" is a most astute observation.

Generally when a journalist throws out multiple statistics, absorption of this data can be problematic unless one makes the effort to verify the numbers. The ease with which information can manipulated and laundered by those with a particular axe to grind makes it all the more difficult to sift through.


 

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Thanks for the link. The author's comment; "If we're going to trade crude oil like a currency, we should regulate it like a currency, too" is a most astute observation.

Generally when a journalist throws out multiple statistics, absorption of this data can be problematic unless one makes the effort to verify the numbers. The ease with which information can manipulated and laundered by those with a particular axe to grind makes it all the more difficult to sift through.

Lies, damn lies, and statistics.
 

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Don't argue with an insomniac.
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Discussion Starter #4
True enough, however one set of statistics aren't his, they are in the report he's critiquing:

In the six months before prices spiked, according to the U.S. Energy Information Administration [EIA], the world oil supply rose from 85.24 million barrels a day to 85.72 million. Over the same period, world oil demand dropped from 86.82 million barrels a day to 86.07 million. Not only was the short-term supply of oil rising, the demand for it was falling - which, in classic economic terms, should have brought prices at the pump down.

He notes that the amount of oil supply is less than the demand, so whether either is rising or falling, the price will trend up based upon that fact itself.
 

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"It is perfectly understandable why we might feel freaked out in 21st century America. Everything is really screwed up—our cliff-diving economy, our unrepentant, bailed-out financial oligarchy, our overwhelming debt, our paralyzed political system, our impoverished state governments, you name it. Writing a diatribe blaming all the world’s ills on Goldman Sachs is better than a headlong flight from reality, which is the preferred solution of most Americans. I largely agree with Taibbi: if America is now circling the drain, Goldman Sachs has found a way to be that drain. But Goldman Sachs is not our only problem, not by a long shot."


This is an excerpt from a great article on the problem of oil supply / demand, and is a must read for anyone who would like to be able to claim an understanding of this process, and by extension the concept of peak oil.


MUST READ: It’s Not Black Or White :: ASPO-USA: Association for the Study of Peak Oil and Gas
This is a giant pet peeve of mine ... the way oil is purchased, traded & priced in the international & local markets. I have studied this for a long time and we are screwing some and getting royally screwed by others.

SOS
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Don't argue with an insomniac.
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Discussion Starter #6
This is a giant pet peeve of mine ... the way oil is purchased, traded & priced in the international & local markets. I have studied this for a long time and we are screwing some and getting royally screwed by others.

SOS
.
So do you agree with this guy's conclusion that it isn't only the gap between supply and demand, or the buying and selling of futures at ever-inflated prices, but BOTH that led to the sudden spike in prices?
 

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So do you agree with this guy's conclusion that it isn't only the gap between supply and demand, or the buying and selling of futures at ever-inflated prices, but BOTH that led to the sudden spike in prices?
Some of the former and most of the latter.

IMO .. Spec buying & selling (at all levels) shoves the price in both directions much, much faster (with more volatility too) than any pure supply/demand pricing ratios. True supply/demand price ratio changes are usually much more gradual in nature.

SOS

PS ... As I posted before (perhaps on this site) .. it is a shame that the original sellers of the oil ... can bid up their own prices via brokers (that they control or influence) from Abu Dhabi, UAE to Wall Street. Then pass those inflated prices on to their best customer, the USA.

It's all about making faster money before the oil runs out or we get a substitute for dino fuels.
A lot of people are making a lot of money ... both in oil & war these days. ... It's ALL about money. .... :eek:

PPS .. Goldman Sachs has been the most connected (in the US) with several top government officials coming from their ranks. Lots of the TARP money was doled out according to "GS buddy system rules of the road".
.
 

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Volatility of oil prices is a direct result of the developments in four stroke motocross bikes. Gone are the days of mixing oil with gas (two strokes), plus there is improved overall fuel efficiency with the appearance of fuel injection.

Witness the 2010 Yamaha YZ450F with batteryless EFI. Not black or white indeed. :lol:





Oh wow, I need to get myself one of these. I can't wait to try one and have my arms stretched after twisting the throttle. I am stoked!!


.
 

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I figured gas got expensive when Mr. Creosote drives / floors his RCSB!
 

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It actually gets mileage comparable to my Gen 1 RCLB if I granny it. I can get 600 km in the city out of one tank. Unfortunately granny stays in a senior's home, so the 5.7 drinks fuel and runs very rich....lots of black soot in the tailpipe.
 

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Volatility of oil prices is a direct result of the developments in four stroke motocross bikes. Gone are the days of mixing oil with gas (two strokes), plus there is improved overall fuel efficiency with the appearance of fuel injection.

Witness the 2010 Yamaha YZ450F with batteryless EFI. Not black or white indeed. :lol:





Oh wow, I need to get myself one of these. I can't wait to try one and have my arms stretched after twisting the throttle. I am stoked!!


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Mr. C,

Your "dry witted" posts have given me many laughs ... :D

SOS
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It actually gets mileage comparable to my Gen 1 RCLB if I granny it. I can get 600 km in the city out of one tank. Unfortunately granny stays in a senior's home, so the 5.7 drinks fuel and runs very rich....lots of black soot in the tailpipe.
We'll hook you up to the tailpipe and feed you from it then. :D :devil:

Sanosuke!
 

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Don't argue with an insomniac.
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Discussion Starter #15
Is it about Peak Oil?

(Maybe should think about starting another thread on the topic, but for now, I'll post it here on a related thread.)

Peak oil, see quote below:



LONDON — Peak oil supply will be hit this year after the economic crisis and low prices in the first quarter of 2009 slashed much needed investment, a senior executive at Australian investment bank Macquarie said.

“This is our view – capacity has pretty much peaked in the sense that declines equal new resources,” Iain Reid, head of European oil and gas research at Macquarie, told Reuters.

The peak oil theory that oil supply is at or near its peak was long considered marginal.

It gained currency when prices zoomed towards their record of nearly $150 (U.S.) hit in July last year, with leading exponents suggesting various dates for the supply peak to be reached.

Some oil majors have acknowledged the prospect of dwindling production, but others have argued better extraction techniques and other technological advances will offset any decline.

Mr. Reid's latest research report – The Big Oil Picture: We're not running out, but that doesn't mean we'll have enough – sees global oil production capacity topping out at 89.6 million barrels per day (bpd) this year, a far more pessimistic view than most other banks or traditional forecasters.

Underinvestment in mature fields, rising resource nationalism, and the cost and difficulty of retrieving oil from discoveries in ultra-deep water could see global production capacity fall to 87.3 million bpd by 2015, according to Mr. Reid.

Mr. Reid, who spent 16 years with oil firms Shell and Amerada Hess, saw the current spare capacity cushion of around 5.2 million barrels wiped out by 2012.

“With the reduction in spending on mature fields, that's the major driver. Then really it's about, ‘where do the new sources come from?'” Mr. Reid said, adding the economic crisis had further restricted investment.

“If you look around the world it's either locked up in countries which are difficult to access or it's locked up in countries where they are tightening access or it's in these huge mega-structures which are very difficult to develop technically and cost-wise.”

The International Energy Agency, adviser to 28 industrialized nations, has predicted global supply will continue to rise through 2015, but that demand might grow faster than that.

Macquarie saw the potential for a huge supply deficit to emerge, with global oil demand predicted to rise to 90.9 million bpd by 2015 from 84.2 million bpd today because of rising consumption from China and other emerging markets.

“Adding sufficient productive capacity on time is nearly impossible,” Mr. Reid said in his report.

Episodes of higher oil prices would be an obvious consequence, without either a greater political push for efficiency savings or new technological advances, he said.

But his price forecasts were still relatively conservative.

He expected the benchmark U.S. crude contract will average $84 a barrel in 2012, compared with around $71 now. The bank's “long run” forecast is for an average price of $75.

The level of nearly $150 hit last year was unlikely to be repeated, Mr. Reid said, because of its immediate damaging effect on the world economy and on fuel demand.

“One hundred dollars a barrel is perhaps liveable with in certain scenarios, but I would say gasoline will reach the $4 level again and that will naturally force more efficiency in the United States,” Mr. Reid said, adding it was difficult to forecast when such levels would be hit.

Eventually, the trend could be towards peak demand, rather than peak supply as higher prices drive the quest for greater efficiency and alternative energy sources.

“(Oil near $150) would very soon create another set of global economic drivers which would spell much lower demand in the future,” said Mr. Reid.

“In the very long term, we can see demand for oil falling quite substantially.”
 
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