Oil falls to $136 today........

Maybe some good news for a change?


http://www.marketwatch.com/news/story/oil-futures-accelerate-losses-hit/story.aspx?guid=%7B5B4CDE73%2DEBB8%2D4C67%2D9F1F%2D2BB76615E3F3%7D&siteid=rss


It's a shame when $136/barrel oil is something to be happy about.

Everyone back to your SUVs and drive to the mall.

Thank you.

Gas prices are still high, and most people have gotten the snot and spit knocked out of them sufficiently. But I think that something is moving in the oil market that bears watching. A possible shakeout and moderation, if you will.

The Dow is up 150+ points.

It'll take another big one day drop to bust the bubble, though.

Probably reflects the impact of demand destruction more than anything else.

For a good overview of Peak Oil in monetary terms, you can learn more here.

http://anz.theoildrum.com/node/4260#more

you don't go from $1 a gallon to over $4 in such a short time period. This has everything to do with speculation, plain and simple (eventhough the Iraq war and this idiotic administration certainly don't help).

The major reason gas has gone from $1 to $4 is the weak US dollar, not speculation. If the dollar were at 2002 levels, gas would only be about $2.70 right now.

- Demand in china/India continues to grow rapidly
- the US dollar is very weak, which causes oil (which is priced in dollars) to be cheaper for non-dollar countries to buy, so they buy more and stockpile it - Also increasing demand.
- Supply is not increasing and from what I've read, this isn't necessarily due to OPEC or E&P companies not wanting to increase supply to meet demand (which they have every incentive to do at these prices). but that there just isn't available supply to increase. Essentially the earth is running out of oil

Facts 1 and 2 seem to be conspiring to frighten everyone about oil scarcity and it's having a doubly negative effect.

I've read numerous articles which says that speculation has little to no effect. I realize, consider the source - it's from economists and people who understand the market. But it appears to me that it's more due to the stagnant global supply, increased global demand, and the weak dollar as the main reasons why gas is so expensive.

Total world consumption increase:

2007: 1.1%
2006: 1%
2005: 1.4
2004: 3.5
2003: 1.8
2002: 1.2
2001: .73%
2000: 1%

India was 3.3% of world consumption - in 2007! average demand growth 2000-2007 = about 3.5%. What's 3.5% of 3.3%? Not much.

China was 9.3% of world consumption in 2007, but it produces 1/2 its own oil, which means its demand in the open market is about 4.5%.

The US & EU use about half the world's oil. Consumption stagnant or down for the last several years.


World market demand as a whole is growing slowly by historical standards.

http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statistical_energy_review_2008/STAGING/local_assets/downloads/pdf/oil_section_2008.pdf

Repeat until true: "it's not peak oil!"

eom

"Repeat until true" -- More of a jibe than a statement, bold or otherwise. People who claim "it has nothing to do with peak oil!" seem to repeat it a lot. IMO, they're whistling past the graveyard. They've got it wrong.

BTW, the Oil Drum reference material is good, and I've been following it for some time now.

eom

Okay, yes, I see it. I've seen it since I first came across dieoff.com in about 2001.

Yes, I'm a peaknik. Not sure what your point is...

Then you would have learned the same.

But a drop for now buys some time, something we need.

I would also like to say that I do not know enough about Jerome 'a Paris, Kos Kredentials or not, to be able to successfully vet his material. It seems overheated and apocalyptic. I saw people get burned with Mike Ruppert. I don't want to see it happen again.

I, for one, do not look forward to a destruction of civilization, a huge die-off of people and economic destruction across the face of the earth. I know some of my contemporaries do, but I find that irresponsible and venal.

.. resonates heavily with me.

It's sad, but my preparations for a - (umm.. how shall I put this?) - a more difficult tomorrow are built on us having "more time." I wish I had known earlier.

Mike Ruppert was all about the apocalypse of 9/11.

A separate issues me thinks.

Peak oil has a very strong quantitative analysis base.

Hence, looking at numbers typically tells a solid tale.

Was out there prophesying that Peak Oil would be used to create a huge die-off amongst the poorest in the world. He wrote and spoke extensively about it. I confirmed that with my associate in World News Trust, Tace. He was out there on Peak Oil early and often.

I might also add that Mr. Ruppert has, several times, admitted he has serious issues.

PDF of the article here: http://dieoff.com/page140.pdf

Funny, Mike Ruppert is not one of the authors!

It was part of his schtick from the beginning.

e.g. crossing the rubicon 2004.

Big Oil will "delay" lowering the gas prices so they can pocket the profits in the interim.

Seems to me they're all making money right now and have no incentive to lower the price of gas against each other.

it is noticeable on the highways and city streets that people aren't driving as much.

About 10 times more bikes around the city and the campus (Duke) environs than even 1 month ago.

For those of us who can (barely) still afford to drive.

Recently my 22 mile one way commute has been taking 20 minutes instead of an hour.

haven't noticed much of a drop, though I have seen more scooters. Of course, I only drive at 4pm and midnight, so I may not get an accurate picture.

It's up most other places. China and India especially. Plus because of the extremely weak dollar, non-dollar countries can buy more oil (which is priced in dollars) for a lower price. So they stockpile it.

Unlike in the 1970s, I don't see any lines for gas, there seems to be plenty of supply. The absurd price is simply based on too much Predator Class investment cash chasing a finite supply of oil. Like skyrocketing housing prices, this will peter out and plummet - and a lot faster than housing prices have.

in the wake of this, even if it does adjust downward in price somewhat.

Memories are short.

A collapse has seemed in the cards for a bit. It was just too fast and overheated. It is causing major disruptions in Asian economies, threatening to destroy their vaunted and fetishized "free trade". It is causing pre-famine conditions to rise in a lot of places.

If I was a betting man, I would bet that the word has quietly gone out to some people to start winding down the party.

Yes, gas lines and even rationing have occurred in cases of extreme shortage, such as in the 1970's. However, there are other indicators about supply. Fact is, world oil production has been essentially flat since 2004. EIA numbers tell the story.

Note that production has actually fallen off about 0.1% in the last two years, while demand continues to rise. We'll be getting to the rationing stage soon enough.

You don't need a hole in the hull to tell if there's an iceberg ahead!

1997: 72,231
1998: 73,588 (1.8%)
1999*: 72,377 (-1.6%)
2000: 74,916 (+3.5%)
2001: 74,847 (-.09)
2002: 74,478 (-.49)
2003: 77,031 (3.4)
2004: 80,326 (+4.2%)
2005: 81,255 (+1.1%)
2006: 81,659 (+.5%)
2007: 81,533 (-.2%)

1999* = price trough, lowest oil prices in 30 yrs.

http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statistical_energy_review_2008/STAGING/local_assets/downloads/pdf/oil_section_2008.pdf


Yr to yr world consumption increases, for comparison:

1998: +.5%
1999: +2.2
2000: 1%
2001: .73%
2002: 1.2
2003: 1.8
2004: 3.5
2005: 1.4
2006: 1%
2007: 1.1%

eom

81,533 thousand barrels per day. = 81,533,000.

the figures stand.

eom

nt

even if they fall it will be pennies



I hate this

WATCH THE BANK INDEX

well, the bank index took off today (after the morning jitters) and offered phenomenal opportunity.

Up over 5% from its lows.

Refineries are at 85% capacity, gasoline inventories are high and tanker ships
are waiting off shore with oil that cost even a little more a barrel. That's right
there are tanker ships off the coasts because gasoline inventories are high and
the storage capacities are almost full.

You haven't seen any of the $130 a barrel or higher stuff yet reflected at the pump
in terms of real costs to the oil companies. But they are sticking it to you.

Just wait for the next profits reports from the oil companies.

and we're about where we should be....we'd be back around $1.50 a gallon..