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Old 12-05-2008, 09:15 PM   #106
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I thought you did that because it was the headline of a Guardian article.
No, it was the title I chose for a thread I posted with a link to a Guardian article.

I think, however, that I read the phrase on some blog or other. I do not claim originality regarding the phrase.

I strongly suspected the oil price was going to collapse, but I am kicking myself that I didn't really clean up.
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Old 12-05-2008, 09:19 PM   #107
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I think the Guardian article again was referring to some person who used the phrase. Isn't it a common phrase in English, anyways? I think it fits the situation very well, and the Icelandic government is in my eyes responsible for bringing the country in that position.
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Old 12-05-2008, 09:23 PM   #108
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In my opinion the summer '08 oil bubble was due to speculation, pure and simple. There were no sound supply/demand reasons to support the oil price at that level, in my view.



Domestic crude stocks were well below average (and critically low) over the summer, according to DOE. We are now back above average, and demand has fallen something like 5% or more.
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Old 12-05-2008, 09:37 PM   #109
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Domestic crude stocks were well below average (and critically low) over the summer, according to DOE. We are now back above average, and demand has fallen something like 5% or more.
Sorry, am I missing something here? A drop in demand of 5% is consistent with a price drop of nigh on 75%? That would surely imply an unusally steep supply/demand curve? I am really not getting this. Admittedly my recollections of college courses in microeconomics are a bit hazy.
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Old 12-05-2008, 09:47 PM   #110
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Yes, the oil demand and supply curves are steep. Oil went from $3 to $40 from 1973-1980 for example. I think the longer we stay at prices below cost (for many fields), the sharper the next upward spike will be.
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Old 12-05-2008, 09:56 PM   #111
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Yes, the oil demand and supply curves are steep. Oil went from $3 to $40 from 1973-1980 for example.
Yes, but that was a supply crunch. I agree that it was down to fundamental supply and demand. It wasn't speculation - of course, we didn't have hedge funds back then.


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I think the longer we stay at prices below cost (for many fields), the sharper the next upward spike will be.
I agree, but, again, my argument is speculation is a big factor these days, more so than in the 1970's. Some day, all these hedgies that are now shorting oil will rapidly reverse position and go long.
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Old 12-05-2008, 10:11 PM   #112
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Here's a question from a novice: is it not possible that peak oil might simultaneously a. not be the cause of the immediate dramas around the world, and b. but, nonetheless not a scam?

After all, we aren't claiming the supply of oil (on a downward slide) and the demand for it (ever growing) won't cross paths at some point, surely? Whether that is soon or not-so-soon? (and thirty years from now would still be pretty 'soon', I think).
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Old 12-05-2008, 10:19 PM   #113
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Here's a question from a novice: is it not possible that peak oil might simultaneously a. not be the cause of the immediate dramas around the world, and b. but, nonetheless not a scam?

After all, we aren't claiming the supply of oil (on a downward slide) and the demand for it (ever growing) won't cross paths at some point, surely? Whether that is soon or not-so-soon? (and thirty years from now would still be pretty 'soon', I think).
Demand was growing until a few months ago, and it suddenly started retreating faster than supply. The changes in demand and supply are bumpy, not smooth, which explains the volatility. The most convincing evidence I've seen is the export numbers - I posted a wsj graphic before. Despite record high prices over the summer, most large exporters were not able to increase output to take advantage of the high prices. Their 2008 output was actually lower than it was in prior years, when oil was a fraction of the price.
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Old 12-05-2008, 10:19 PM   #114
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Here's a question from a novice: is it not possible that peak oil might simultaneously a. not be the cause of the immediate dramas around the world, and b. but, nonetheless not a scam?

After all, we aren't claiming the supply of oil (on a downward slide) and the demand for it (ever growing) won't cross paths at some point, surely? Whether that is soon or not-so-soon? (and thirty years from now would still be pretty 'soon', I think).
That is certainly possible, yes. My current thinking is leaning towards peak oil being a scam but I could be wrong on this.

But, if the advocates of the peak oil theory are correct, then they really overstated their case when they claimed 2005 was the year of peak oil and we now have a price no higher, and trending lower, than in 2005.

As you say, thirty years from now is nothing, really, but if the peak oil advocates claimed it has already happened in order to win advocates for their theory, or for whatever other reason, then they did a very foolish thing, which is likely to backfire.

It's a bit like the old story about the boy who cried wolf, I guess.

Sooner or later, the wolf does arrive at the door.
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Old 12-05-2008, 10:33 PM   #115
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On the one hand, but then on the other hand!

Thanks for the replies. I have a feeling you both could be right. All those occasional stories about producers possibly already being at their limit of production (regardless of demand) are a bit of a worry. At the same time, well, 'Peak Oil' is part of a group of doom-y musings on the future, and some bits can come off as loopier than others.

Even if the wolf doesn't arrive at the door for thirty years, I'd still say we'll be in a great deal of trouble. Because every time the heat goes off, the sense of urgency about developing a replacement energy source (to power a global civilisation, mind you), seems to dissipate as well.
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Old 01-02-2009, 06:43 PM   #116
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My prediction:

$85-$95 per barrel
who would have thought this guess would have been way too high?

thank you president bush for lifting the ban on offshore drilling
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Old 01-02-2009, 07:57 PM   #117
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who would have thought this guess would have been way too high?
Yeah I know! Everyone underestimated the depth of the recession.

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thank you president bush for lifting the ban on offshore drilling

This point is really of minor significance in the context of the collapse in oil prices.
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Old 01-03-2009, 07:42 PM   #118
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This point is really of minor significance in the context of the collapse in oil prices.
yeah, it's kind of a lame jab really.

so financeguy, care to have a go at predicting prices at the end of 09?
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Old 01-06-2009, 07:12 PM   #119
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so financeguy, care to have a go at predicting prices at the end of 09?
It's like throwing darts at a dartboard while blindfolded.

$80? It's as good a number as any.

Let's assume that as Ntalwar says the market is fundamentally supply and demand driven and the speculative element is minor.

Global demand is arguably down 40-50% from peak for consumer goods bar basic foods and necessities.

Take 40% off the peak oil price and we get around $80.
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Old 01-06-2009, 10:48 PM   #120
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Let's assume that as Ntalwar says the market is fundamentally supply and demand driven and the speculative element is minor.

Global demand is arguably down 40-50% from peak for consumer goods bar basic foods and necessities.

Take 40% off the peak oil price and we get around $80.
I'm not sure I agree with the math here. I'm of the opinion that the demand and supply curves for oil are steep, so a small change in demand or supply causes a large movement in price. E.g. oil rose 40% in price (from $35 to $50) in a few weeks - and demand or supply did not shift that much. People don't drive a quarter as much when gas quadruples in price (from $1 to $4), etc. ($4 to $16 is another story).
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