Peak What? Drowning In Oil, Again
Euan Mearns blames rising production: Rampant production in the USA, the world's largest oil producer and importer, means that competition for supplies on the international markets is weakening. The world is once again drowning in oil.
Global production is rising steadily, and has been doing so since the illusory 2008 peak caused by the financial crash. Global oil production continues to grow reaching a recent peak of 93.4 million barrels per day in June 2014 confounding any notion of a pending peak in global production.
The explanation of weakening oil price appears quite straightforward. Production of expensive shale oil in the USA has boosted production by 4 million barrels per day in 4 years. Natural declines in other areas like the North Sea have been arrested and will be reversed in the years ahead as a number of large new projects come on stream. OPEC has made no move to reduce production to make way for additional US oil and the price has given way to the economic reality of supply exceeding demand driving prices down."
Dana Blankenhorn think's it all politics: "the oil glut isn't being caused by real over-supply. It's politics. The over-supply is being manufactured by the Sauds of Arabia, who want lower prices to force Iran out of Iraq. It's approved of by the White House, which sees lower prices forcing a re-evaluation by Putin over Ukraine.
There's a second glut to consider. The glut of money. Such gluts are self-correcting. Money is lost and goes away. In this case the news is good. Most of the money is being lost by hedge funds, who were heavily leveraged to higher oil prices. They're dumping ballast to stay aloft. Some are going to crash. It's going to be fun to watch."
The Nattering One muses... Four reasons why oil prices are dropping: Lower demand, higher supply, a rising dollar and a shakeout in market speculators. If the dollar were going down, we would be seeing higher oil prices and gas at the pump. In any case, the Saudi's are maintaining their production levels, not dropping them (to create a false supply problem).
Six year's ago, we substantiated the manipulation of crude oil prices through massively leveraged futures markets. As during the illusory peak in 2008, some futures were leveraged up to 92X actual physical production.
It's past this bogeyman's bedtime as we put him under when we disproved the industry funded "Peak Oil" canard some years back. I can hear the doubting Thomase's & Hubbert's Dupe's whining now, so go here , here , here and here to read all the facts.
Here's an entertaining video regarding gasoline prices and the Fed.
From the 1980 film The Formula with Marlon Brando playing the oil company CEO:
Arthur Clements: [proposing that Titan Oil can raise their gasoline prices] The people will accept the 12 cents now because we can blame it on the Arabs!
Adam Steiffel, Chairman Titan Oil: Ah, Arthur, you're missing the point: We *are* the Arabs.
That said... six years later, after reading the above affirmations, I can say with a big grin, if you still believe in Peak Oil, which is a theory that cannot be proved, you might as well believe in the Easter Bunny, the Tooth Fairy and Santa Claus. Now go talk to the Arabs about it. Below Brando explains the American Dream. And if you what a really good laugh, click here.
Global production is rising steadily, and has been doing so since the illusory 2008 peak caused by the financial crash. Global oil production continues to grow reaching a recent peak of 93.4 million barrels per day in June 2014 confounding any notion of a pending peak in global production.
The explanation of weakening oil price appears quite straightforward. Production of expensive shale oil in the USA has boosted production by 4 million barrels per day in 4 years. Natural declines in other areas like the North Sea have been arrested and will be reversed in the years ahead as a number of large new projects come on stream. OPEC has made no move to reduce production to make way for additional US oil and the price has given way to the economic reality of supply exceeding demand driving prices down."
Dana Blankenhorn think's it all politics: "the oil glut isn't being caused by real over-supply. It's politics. The over-supply is being manufactured by the Sauds of Arabia, who want lower prices to force Iran out of Iraq. It's approved of by the White House, which sees lower prices forcing a re-evaluation by Putin over Ukraine.
There's a second glut to consider. The glut of money. Such gluts are self-correcting. Money is lost and goes away. In this case the news is good. Most of the money is being lost by hedge funds, who were heavily leveraged to higher oil prices. They're dumping ballast to stay aloft. Some are going to crash. It's going to be fun to watch."
The Nattering One muses... Four reasons why oil prices are dropping: Lower demand, higher supply, a rising dollar and a shakeout in market speculators. If the dollar were going down, we would be seeing higher oil prices and gas at the pump. In any case, the Saudi's are maintaining their production levels, not dropping them (to create a false supply problem).
Six year's ago, we substantiated the manipulation of crude oil prices through massively leveraged futures markets. As during the illusory peak in 2008, some futures were leveraged up to 92X actual physical production.
It's past this bogeyman's bedtime as we put him under when we disproved the industry funded "Peak Oil" canard some years back. I can hear the doubting Thomase's & Hubbert's Dupe's whining now, so go here , here , here and here to read all the facts.
Here's an entertaining video regarding gasoline prices and the Fed.
From the 1980 film The Formula with Marlon Brando playing the oil company CEO:
Arthur Clements: [proposing that Titan Oil can raise their gasoline prices] The people will accept the 12 cents now because we can blame it on the Arabs!
Adam Steiffel, Chairman Titan Oil: Ah, Arthur, you're missing the point: We *are* the Arabs.
That said... six years later, after reading the above affirmations, I can say with a big grin, if you still believe in Peak Oil, which is a theory that cannot be proved, you might as well believe in the Easter Bunny, the Tooth Fairy and Santa Claus. Now go talk to the Arabs about it. Below Brando explains the American Dream. And if you what a really good laugh, click here.
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