Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Posted: Fri May 09, 2008 6:11 pm Post subject: Re: Another Record ($126.20)
Quote:
A 40% retracement is a strong possibility, providing the American dollar doesn't weaken appreciably.
As much as this has been discussed its still not understood very well. This is not about oil, it about energy. The amount of oil we have is irrelevant without understanding the amount of energy that it delivers. We use very little oil for anything other than an energy source.
The energy contribution of oil is declining, and it is declining at a fairly constant rate. Because the decline rate is constant, it is continually extracting a larger percentage of the available energy that is remaining. We are subtracting a constant amount from a declining balance.
Example: if you had $10 in the bank and you took out $1, you would reduce you balance by 10%. If you had $5 and took out $1 you would reduce your balance by 20%.
The same is true of oil. When its ERoEI was 100:1 and it was dropping by 1 unit per year, the loss on a fixed quantity was only 1%. The ERoEI went from 100:1 to 99:1. With oil production going up for many years this was not noticed, as increased production hid the decline.
Oil production is now stagnant. With the ERoEI of oil having fallen at the well head to less than 20:1, and with the ERoEI at the consumer at 7 or 8:1, each drop (now about .5% per year) is taking a huge bit out of our available energy budget.
That is, it is not oil that is getting scarce, it is the energy that it can deliver that is getting scarce. Next year the world’s energy budget will decline, unless coal and NG are ramped up, by 6.25 to 7.1%.
Like they are doing now, all energy prices will continue to skyrocket!
Joined: Jul 14, 2004 Posts: 380 Location: The Motor City
Posted: Fri May 09, 2008 8:07 pm Post subject: Re: Another Record ($124.61)
frankthetank wrote:
Pup-
My brother that kind of gets it (the part about us being doomed) says the same exact thing. He has to have it. The stuff is more addicting then any drug out.
I think somebody has this in his/her sig, but Vonnegut was right.
Quote:
Here’s what I think the truth is: We are all addicts of fossil fuels in a state of denial, about to face cold turkey.
And like so many addicts about to face cold turkey, our leaders are now committing violent crimes to get what little is left of what we’re hooked on.
Posted: Fri May 09, 2008 8:50 pm Post subject: Re: Another Record ($126.20)
Armageddon said:
Quote:
Which comes first, back to $100.00, or up to $150.00 ?
I would image that it will depend on how fast finished product prices can advance. A 10% fluctuation in the market is sort of the norm, and has nothing to do with energy. It has more to do with the physiology of the traders, but $100 would be surprising unless another Ghawar was found under the White House!
Posted: Fri May 09, 2008 9:20 pm Post subject: Re: Another Record ($126.20)
I hope it comes down a bit around June, so I can buy next winter's heating oil. It's probably going to retrench a bit, when people take profits. Nothing heads straight up without backing off once in a while.
Just my guess. I have been wrong before. _________________ Deep in the mud and slime of things, even there, something sings.
Posted: Fri May 09, 2008 11:26 pm Post subject: Re: Another Record ($126.20)
threadbear wrote:
"The prices have doubled in less than 2 years..."
Prices have been doubling about every two years since 2000 when they were way down around $10! I see no end in sight for this exponential curve, except perhaps the end of the grand old USD.
Most of the MSM will stay in denial mode, and they're explanations and rationalizations will get wackier and zanier, but many will believe because they need to.
So even as we slide toward the end, there is essentially no discussion at the highest levels of policy making about taking measures that might have some chance of slightly cushioning the blow and plan for the next stages. Everyone living today has lived their whole life in a world of ever-increasing oil availability, so it is nearly impossible for pretty much anybody to imagine a world with ever-decreasing oil availability.
Posted: Sat May 10, 2008 8:25 am Post subject: Re: Another Record ($126.20)
dohboi said:
Quote:
Prices have been doubling about every two years since 2000 when they were way down around $10! I see no end in sight for this exponential curve, except perhaps the end of the grand old USD.
There is an end in sight. Extrapolating from the ERoEI curve tells us that it is 13.25 years away. This is analogous to what happened in the lower continental 48 states. Between 1971 and 1976 oil’s energy contribution from those US fields declined by 28.9%.
A similar phenomenon is now occurring world wide, and has been for the last several years as we approach world peak. Increased coal and NG production over the period have picked up some of the slack giving us a real decline rate of about 1.5 to 2% annually. That has been enough to produce a highly stressing world wide economic crisis.
Once global oil production begins its decline, oil’s energy contribution will fall in access of 5% per year and will continue that decline for more than a decade. The effects will be felt world wide and they will be catastrophic.
Joined: Feb 20, 2005 Posts: 2525 Location: Uppsala, Sweden
Posted: Sat May 10, 2008 11:08 am Post subject: Re: Another Record ($126.20)
shortonoil wrote:
This is not about oil, it about energy.
Oh my god, here we go again.
This is not about energy, of which we have immense amounts, or even cheap energy, of which we have plenty, but about liquid fuels in general and cheap liquid fuels in particular. _________________ Peak oil is not an energy crisis. It is a liquid fuel crisis.
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