It keeps getting funnier...
Apocalypse Soon?
- Thread starter Futilitist
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It keeps getting funnier...
Hello.
I made a fun new graph for everyone:
Above is a graph of the weekly Brent oil price with the Etp Maximum Price Curve approximated by a line. The line is not drawn through shapes. It is derived from the Etp model. The oil price should generally not exceed this line. The purple line at the bottom seems to be the leading edge of influence on the oil price by the Etp Maximum Price Line. The price of oil has no good reason to go below this line. These two lines should represent the upper and lower boundaries of the oil price going forward. If the price of oil ever exceeds the Etp Maximum Price Line for any significant period of time, it will eventually crash rapidly below the line, just like it did the last time.
The other lines are my attempt to forecast the weekly price action. They form a rising wedge (similar to the larger wedge shown in the Futilitist Collapse Challenge). These kinds of price movement patterns are very common. It is interesting to note that the margins of the wedge intersect the Etp Maximum Price Line. That is because the oil price is "aiming" at it while rising as fast as it can.
The Etp Maximum Price Line is the best price that producers can hope for. But an oil price near this line makes oil unprofitable for consumers to use, since the line represents the maximum economic return on a barrel of oil. As the oil price rises closer to the Etp Maximum Price Line, I expect the wedge pattern to break down, and the oil price should slump somewhat.
Anyway, just some food for thought, if anyone is hungry.
---Futilitist
I made a fun new graph for everyone:
Above is a graph of the weekly Brent oil price with the Etp Maximum Price Curve approximated by a line. The line is not drawn through shapes. It is derived from the Etp model. The oil price should generally not exceed this line. The purple line at the bottom seems to be the leading edge of influence on the oil price by the Etp Maximum Price Line. The price of oil has no good reason to go below this line. These two lines should represent the upper and lower boundaries of the oil price going forward. If the price of oil ever exceeds the Etp Maximum Price Line for any significant period of time, it will eventually crash rapidly below the line, just like it did the last time.
The other lines are my attempt to forecast the weekly price action. They form a rising wedge (similar to the larger wedge shown in the Futilitist Collapse Challenge). These kinds of price movement patterns are very common. It is interesting to note that the margins of the wedge intersect the Etp Maximum Price Line. That is because the oil price is "aiming" at it while rising as fast as it can.
The Etp Maximum Price Line is the best price that producers can hope for. But an oil price near this line makes oil unprofitable for consumers to use, since the line represents the maximum economic return on a barrel of oil. As the oil price rises closer to the Etp Maximum Price Line, I expect the wedge pattern to break down, and the oil price should slump somewhat.
Anyway, just some food for thought, if anyone is hungry.
---Futilitist
I think we should legalize pot and make use of marijuana crops for a renewable bio fuel.
Also helping to counteract oxygen depletion from burning it to oxygen creation from growing crops.
Also helping to counteract oxygen depletion from burning it to oxygen creation from growing crops.
OK. So if the price exceeds that line, then the ETP model has failed. A solid prediction! We will see.
Correct. There are other factors; see if you can find them. (Hint - I listed them above.)
In part, yes.
So you are saying that sometimes attempts to manipulate markets fail miserably? Exactly!
-Rising efficiency standards for transportation
-Effectiveness in drilling unconventional oil
-Increase in oil supply from the Middle East (The Saudis are planning to pump at near-record highs this April, per their oil minister)
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Kondratieff
Registered Member
Futilist, I think that the maximum affordable price for this year is 75 $, so you should move the upper line above the current level. The year starts with 78$ and ends with 63 $ (the average would be 70$ and not 75$, so I don't think it is accurate).
For me it's very interesting to watch how the situation evolves. I cannot be sure about the ETP model accuracy and I remain somewhat skeptic, but I am assuming that this model will be proven right or wrong in the next two years. If fracking and other unconventional oil is phased out and prices don't rebound, I'll be very worried and I will asume that the model is right.
However, right now the demand is increasing. That means that there is a lot of appetite for oil, ... or at least, there is a lot of appetite for CHEAP oil. I would expect a jump in oil prices as we are approaching the summer months. Let's see how it plays out, but I'm not ruling out any scenario.
Best Regards,
For me it's very interesting to watch how the situation evolves. I cannot be sure about the ETP model accuracy and I remain somewhat skeptic, but I am assuming that this model will be proven right or wrong in the next two years. If fracking and other unconventional oil is phased out and prices don't rebound, I'll be very worried and I will asume that the model is right.
However, right now the demand is increasing. That means that there is a lot of appetite for oil, ... or at least, there is a lot of appetite for CHEAP oil. I would expect a jump in oil prices as we are approaching the summer months. Let's see how it plays out, but I'm not ruling out any scenario.
Best Regards,
Hi billvon.
Why are you creating a rhetorical loop? You do this crap all the time.
I just asked you:
If what you claim were really true, Brent oil would be $126.88 per barrel right now. Why isn't it?
So, you just repeated what you said before, whilst pretending I hadn't already answered this on the last page. That is a really cheap trick.
Like I said the last time:
1) Oil prices are low now, but they dropped very rapidly. It would be silly to suggest that slowly rising fuel efficiency standards caused the very rapid drop.
2) Oil supply has not increased from the Middle East. It has remained basically flat.
3) That leaves "effectiveness in drilling unconventional oil".
This is basically true, but by using the word "effectiveness" here, you are kind of implying that you mean frackers have become more efficient. Of course they have, but not nearly enough. You are, though, absolutely correct about rapidly rising unconventional oil production eventually leading to the drastic price plunge.
The frackers weren't all that "effective" at doing anything good. All they did was produce a whole lot of oil very expensive oil, which caused the massive glut we are currently experiencing. Plus, FED policy held oil affordability higher for longer than it could have remained otherwise. Without Operation twist and QE3, the oil price would have started falling in 2012, and kept falling to somewhere around today's current price. By the time the oil price did begin to drop from over 100 dollars per barrel, the economic value of a barrel of oil had already fallen to about 100 dollars per barrel, the economic value of a barrel of oil had already fallen to about 87 per barrel! That is why the price dropped so rapidly.
And, to answer Russ Watters' ridiculously repetitive question, if the Saudis had tried to control world oil prices by pulling back their own oil production, they would have lost even more revenue and market share than they were already losing at the time. The US frackers obviously started the price war. Saudi Arabia's only choices were to commit economic suicide or join the price war. The oil price plunge was clearly not the Saudi's fault. Saying it was the Saudi's fault over and over is just US propaganda to justify a real war in the near future.
---Futilitist
Why are you creating a rhetorical loop? You do this crap all the time.
I just asked you:
If what you claim were really true, Brent oil would be $126.88 per barrel right now. Why isn't it?
So, you just repeated what you said before, whilst pretending I hadn't already answered this on the last page.
That is a really cheap trick. Like I said the last time:
1) Oil prices are low now, but they dropped very rapidly. It would be silly to suggest that slowly rising fuel efficiency standards caused the very rapid drop.
2) Oil supply has not increased from the Middle East. It has remained basically flat.
3) That leaves "effectiveness in drilling unconventional oil".
This is basically true, but by using the word "effectiveness" here, you are kind of implying that you mean frackers have become more efficient. Of course they have, but not nearly enough. You are, though, absolutely correct about rapidly rising unconventional oil production eventually leading to the drastic price plunge.
The frackers weren't all that "effective" at doing anything good. All they did was produce a whole lot of oil very expensive oil, which caused the massive glut we are currently experiencing. Plus, FED policy held oil affordability higher for longer than it could have remained otherwise. Without Operation twist and QE3, the oil price would have started falling in 2012, and kept falling to somewhere around today's current price. By the time the oil price did begin to drop from over 100 dollars per barrel, the economic value of a barrel of oil had already fallen to about 100 dollars per barrel, the economic value of a barrel of oil had already fallen to about 87 per barrel! That is why the price dropped so rapidly.
And, to answer Russ Watters' ridiculously repetitive question, if the Saudis had tried to control world oil prices by pulling back their own oil production, they would have lost even more revenue and market share than they were already losing at the time. The US frackers obviously started the price war. Saudi Arabia's only choices were to commit economic suicide or join the price war. The oil price plunge was clearly not the Saudi's fault. Saying it was the Saudi's fault over and over is just US propaganda to justify a real war in the near future.
---Futilitist
Stop it, billvon. That is not what I said and you know it. In the very same post I also said:
"These two lines should represent the upper and lower boundaries of the oil price going forward. If the price of oil ever exceeds the Etp Maximum Price Line for any significant period of time, it will eventually crash rapidly below the line, just like it did the last time."
I guess you must have missed that part, huh? You either have reading comprehension problems or else you are just a troll.
---Futilitist
For those three reasons.
Rising fuel efficiency standards are causing SOME of the drop, by reducing demand.
It is increasing, and indeed Saudi Arabia is nearing record production levels. You may call that "basically flat" - that's fine. The "basically flat" increase has been another factor causing SOME of the drop.
Cool. This explains SOME of the drop due to increased supply.
So we have three factors, each of which would result in a flattening or very small drop in price. Taken together, they have caused a significant drop in price. Reduced demand, increased supply -> lower prices. Econ 101.
It is unfortunate that rather than replying intelligently, you have a need to resort to personal attacks. It reveals your lack of confidence in your predictions (which is no surprise, given that they have history of failure.)
Kondratieff
Registered Member
While I enjoy the debate over here, I also believe we should tone it down.
It certainly doesn't help to introduce a topic and present it as it were the absolute truth and if you don't agree with the model you're an ignorant.
I think we can propose ourselves to continue this debate without resorting to name-calling and doing it in a civilized manner.
Best Regards,
It certainly doesn't help to introduce a topic and present it as it were the absolute truth and if you don't agree with the model you're an ignorant.
I think we can propose ourselves to continue this debate without resorting to name-calling and doing it in a civilized manner.
Best Regards,
Hi Kondratieff.
Welcome to Sciforums. Your comment calls to mind the expression: "When in Rome, do as the Romans do".
I certainly agree we should tone it down. I have repeatedly suggested so.
Hey, I just thought of a cool experiment for you to try:
We both agree that the current oil price is not high enough to cover the full cost of production, including investment in future production, right?
So, I will lay back for a while and let you make that argument with Russ Watters, Billy T, billvon, origin, and Beer w/Straw, etc. My hypothesis is that your frustration with the name calling, cheap debate tricks, and general lack of substance will eventually lead you to do some combination of the following:
1) You will begin mirroring the name calling.
2) You will "arrogantly" claim you have sufficiently addressed the point.
3) You will give up.
--------
To all: I am taking a little break now. I'll be back soon. In the meantime, please address all of your comments to Kondratieff.
Thanks for taking over the thread for a while, Kondratieff. Enjoy the experiment.
---Futilitist
Welcome to Sciforums. Your comment calls to mind the expression: "When in Rome, do as the Romans do".
This implies that you debate this stuff somewhere else where better manners are the general rule. Where?
I certainly agree we should tone it down. I have repeatedly suggested so.
That is how I am being unfairly characterized by the many name-calling folks who disagree with me. This characterization isn't true at all. Please review the thread to understand this. I am somewhat shocked that you would make such a comment toward me.
Good luck with that one. This place is a madhouse.
Hey, I just thought of a cool experiment for you to try:
We both agree that the current oil price is not high enough to cover the full cost of production, including investment in future production, right?
So, I will lay back for a while and let you make that argument with Russ Watters, Billy T, billvon, origin, and Beer w/Straw, etc. My hypothesis is that your frustration with the name calling, cheap debate tricks, and general lack of substance will eventually lead you to do some combination of the following:
1) You will begin mirroring the name calling.
2) You will "arrogantly" claim you have sufficiently addressed the point.
3) You will give up.
--------
To all: I am taking a little break now. I'll be back soon. In the meantime, please address all of your comments to Kondratieff.
Thanks for taking over the thread for a while, Kondratieff. Enjoy the experiment.
---Futilitist
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Well fair enough, but that wasn't your claim. You claimed he predicted the 2014 oil price drop, but that isn't discussed in the post. Do you have a reference for his prediction? A successful prediction is great/impressive, but a claim of a succesful prediction with no reference to the actual prediction isn't worth anything. However, using that blog and the "triangle of doom" terminology, I did find this a year later:
http://www.economic-undertow.com/2013/08/11/triangle-of-mood/
Neither of those two scenarios bear any significant resemblance to what happened. The key problem with them is that both of them involve oil shortages and what we are seeing is a low price because of an oil glut. Additionally, he predicted the problem would be consumer-driven, with an economic collapse causing an inability of customers to afford 100 dollar oil, similar to what happened in 2008. But that's not what is happening today.
Now, what I am starting to suspect here is that there are a bunch of different crackpots reading from the same playbook. I don't know who originated the "triangle of doom", but it looks very similar to what Futilitist got from a different source.
That still doesn't answer the question and if anything disconnects the prediction even further from reality: The Great Recession has been over for four years. There is nothing I can see that would be driving our ability to afford oil down and your answer doesn't provide a mechanism. If anything, you are suggesting a drop in demand - which is probably true due to efficiency increases - which would be part of the reason for the low oil prices and oil surplus. None of this implies any affordability problems.
That graph is cost per well, not cost per barrel, so it isn't worth much. The article linked from it though says the minimum cost per barrel to comfortably exploit tight oil is 85 dollars a barrel. It's a little higher than other data I've seen, but ok, fine -- there is nothing "unafordable" about that.
So, none of this really addresses my questions. It doesn't clarify anything about what should cause an "affordability" problem.
The basic economic principle of supply and demand tells us that if the current low price causes production to drop, then the price will rise again and as a result production will rise again. There are no problems inherrent in that as long as the cost stays below perhaps 120/ barrel and based on your own sources it sounds like it should be possible to keep it there between 80 and 100 for long time....except for when Saudia Arabia plays games with it.
Based on what, exactly? You still haven't really said what you think makes oil less affordable today. Are the world economies not just as strong or stronger than they were before the 2008-9 recession?
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What you are neglecting here is that fact that oil is a commodity and in addition to supply and demand, there is an element of speculation in the price. When Saudia Arabia didn't cut production in response to increasing North American supply and decreasing demand from improved fuel economy, it was a surprise and it spooked the speculators. That's what caused the rapid drop instead of a more gradual drop over the past few years. Similarly, the high price of oil in the late 2000s was based in part on Peak Oil speculation. People didn't yet recognize that fracking would prevent the possibility of supply constraints for decades to come, so they were betting that oil would keep getting more expensive and drove the price up.
That isn't true -- or, at least, has never been true before. I'm sure this will go over your head, but oil is highly elastic which means a small change in supply causes a big change in price. That's why the Saudis have been comfortable for decades with limiting supply to keep the price high. What has changed is that the Saudi's no longer have as much power to do that as they used to because of North American fracking.
The Saudis could have chosen to be happy with 80% of their previous oil income for 80% of their previous production instead of half of their previous income for 100% of their previous production. Oil is a finite resource, so every barrel needs to be sold at as high a prices as possible to make the most profit. Saudia Arabia is destroying their future earnings potential by waging this war. They are selling more oil for less money than they need to.
If US frackers started any war (and since they don't belong to a cartel and aren't owned by a country, they really can't), it would be a production war, not a price war.
You reaaaaaaaaaaaaaaaaaaalllllllllllllllllyyyyyyyyyyyyyyyy need to learn how suply and demand works. The price isn't just set by what the buyers are willing to pay, it is set by a virtual negotiation between the buyers and the sellers. If the sellers are willing to sell at a lower price, then the buyers get to buy at a lower price than the maximum they can afford. This is simple stuff.
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Me too:
I am quite certain a majority will agree that my graph is more fun than yours.
Since you don't have access to the ETP equation, we all know that's just bullshit.
Hey Russ,
"The notion of balance in nature is an integral part of traditional western cosmology. But science has found no such balance. According to the Second Law of Thermodynamics, energy flows from areas of greater concentration to areas of lesser concentration, and local processes run down. Living organisms may accumulate energy temporarily but in the fullness of time entropy prevails. While the tissue of life that coats the planet Earth has been storing up energy for over three billion years, it cannot do so indefinitely. Sooner or later, energy that accumulates must be released. This is the bioenergetic context in which Homo sapiens evolved, and it accounts for both the wild growth of human population and its imminent collapse."
~David Price*
"The situation will be especially serious for a short time because the population will keep rising due to the lags inherent in the age structure and social adjustment. Then mercifully, the population will drop sharply as the death rate is driven upward by lack of food and health services. Trapped in obsolete belief systems, Americans won't even know why their society disintegrated.
A hundred thousand years from now -- once the background radiation levels drop below lethality -- a new Homo mutilus will crawl out of the caves to elect a leader. Although we have no idea what mutilus might look like, evolutionary theory can still tell us who will win the election. He will be the best liar running on a platform to end hunger by controlling nature.
How could it be otherwise?"
~Jay Hanson*
*As quoted by me in post #1 of "Apocalypse Soon", Jan. 1, 2013
It has always been about the Second Law of Thermodynamics, Russ.
---Futilitist
"The notion of balance in nature is an integral part of traditional western cosmology. But science has found no such balance. According to the Second Law of Thermodynamics, energy flows from areas of greater concentration to areas of lesser concentration, and local processes run down. Living organisms may accumulate energy temporarily but in the fullness of time entropy prevails. While the tissue of life that coats the planet Earth has been storing up energy for over three billion years, it cannot do so indefinitely. Sooner or later, energy that accumulates must be released. This is the bioenergetic context in which Homo sapiens evolved, and it accounts for both the wild growth of human population and its imminent collapse."
~David Price*
"The situation will be especially serious for a short time because the population will keep rising due to the lags inherent in the age structure and social adjustment. Then mercifully, the population will drop sharply as the death rate is driven upward by lack of food and health services. Trapped in obsolete belief systems, Americans won't even know why their society disintegrated.
A hundred thousand years from now -- once the background radiation levels drop below lethality -- a new Homo mutilus will crawl out of the caves to elect a leader. Although we have no idea what mutilus might look like, evolutionary theory can still tell us who will win the election. He will be the best liar running on a platform to end hunger by controlling nature.
How could it be otherwise?"
~Jay Hanson*
*As quoted by me in post #1 of "Apocalypse Soon", Jan. 1, 2013
It has always been about the Second Law of Thermodynamics, Russ.
---Futilitist
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"The problems are already obvious, but people still aren't paying attention. There is provably not enough time to react to avoid disaster. The people, the governments, and the corporations aren't going to change. In other words, we are doomed, but we just aren't ready to admit it yet.
I guess my point is that the coming Apocalypse is the inevitable conclusion to the story that started 10,000 years ago when humans first began to become "civilized". We have been given plenty of warnings, we have largely ignored them, and now it is far too late to avoid a complete social collapse. The only interesting part now is watching the denial continue to the bitter end."
~Futilitist
Jan. 2, 2013, "Apocalypse Soon", page 2
I guess my point is that the coming Apocalypse is the inevitable conclusion to the story that started 10,000 years ago when humans first began to become "civilized". We have been given plenty of warnings, we have largely ignored them, and now it is far too late to avoid a complete social collapse. The only interesting part now is watching the denial continue to the bitter end."
~Futilitist
Jan. 2, 2013, "Apocalypse Soon", page 2
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"The problems are already obvious, but people still aren't paying attention. There is provably not enough time to react to avoid disaster. The people, the governments, and the corporations aren't going to change. In other words, we are doomed, but we just aren't ready to admit it yet.
I guess my point is that the coming Apocalypse is the inevitable conclusion to the story that started 10,000 years ago when humans first began to become "civilized". We have been given plenty of warnings, we have largely ignored them, and now it is far too late to avoid a complete social collapse. The only interesting part now is watching the denial continue to the bitter end."
~Futilitist, Jan. 2, 2013
Agree.
Inciting a world wide riot seems like the only recourse and it is entirely up to you now.
"Civilization must eventually collapse unless you are proposing perpetual motion (see the second law of thermodynamics, net energy, and EROEI)."
~Futilitist
Jan. 6, 2013, "Apocalypse Soon", page 4
~Futilitist
Jan. 6, 2013, "Apocalypse Soon", page 4
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Huh?
Why would I want to start a riot? What good would that do?
Are you suggesting that talking about this could start a riot?
Oh my!---Futilitist
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