Will this evidently useless worthless black stuff one day soon be free?
Will peak oil be proven to be just a hoot?
Will all oil producing countries go up in flames?
Will GM reintroduce the Hummer? Maybe even bigger ones?
Will all solar and wind companies go away?
Will a bottle of water be more expensive than a gallon of gas?
Because at this rate, oil indeed is heading to zero. Soon, OPEC will have to pay folks to take oil off their hands.
I said in June 2008 that the oil bubble would blow, and the crash would be 'spectacular'. But man, even I didn't see this level of destruction. This is, frankly, simply shocking.
Maybe we are indeed heading back to our caves. At least that's what oil is telling us.
Posts
66 comments:
The global economy will reignite, money will fall from heaven. All the Chinese and Mexicans will buy cars on their 5 I mean 2 dollers a day and fill em up. Oh yeah all the soccer moms will fill up their suv's with housing ponzi cash. Orrrrrrrr not.
Yes Sir..
next stop $10 a barrel 100%
Please don't watch this "realtor of stars" video while eating, and please have a trash can handy next to you:
www.youtube.com/watch?v=GFxnTehraIo
My favorite quote ever on this site taken from last spring, "oil to the moon! It's different this time!"
Suckers, there's a lot of unstable peeps in your club lately keefer; quite scary actually. We are not eurotrash. We will make it and not even lose idol or the biggest loser. Europe may burn, but we will just suffer quietly. Very entertaining site keefer, puts a smile on my face. Sometimes, I even try and take it serious.............. Nah!
Okay, a post like this really makes me think a bottom may be near. Even at 25% unemployment, %75 of us will still be DRIVING OUR CARS to work (and Wal-Mart), except for the few freaks who ride their bikes (i'm one of them). China and India, while not growing gangbusters, will certainly be adding drivers as well.
The more expensive supplies and exploration projects will get cut back. I heard Venezuela's cost of production is $45/bl. We will experience a supply crunch about the time we get a turnaround in the economy (maybe), and oil will swing madly the other direction, and it'll be deja vu all over again.
I saw a guy riding a bike in the road last week on my commute and thought, "WTF? Is this Iran?"
Keefer said:
“I said in June 2008 that the oil bubble would blow, and the crash would be 'spectacular'. But man, even I didn't see this level of destruction. This is, frankly, simply shocking.”
“I said”
I said
*
“even I”
even I
“This is, frankly, simply shocking.”
*
Well, NOT Really.
In your heart you always knew that ‘Innovation’
Would win over ‘ignorant sheiks’ that got lucky with greasy real-estate underneath their dusty calloused toes.
No one has a right to claim a piece of our Milky-way until the ancient Hebrews have a sound and tranquil home.
No one..
No one..
No one..
Well there is always someone with a lot of money banking and gambling on you - on your propensity to do certain things.
So, if you keep doing them, someone is profitting.
If you change drastically it throws them all off.
I love looking every day and seeing oil get pounded. I like knowing that all those oil freak dictators are crapping in their shorts. But what is starting to piss me off is the fact that gas is climbing back up. Can someone explain this to me? It was around $1.50/gallon here in California when Oil was hovering @ around 38...39 bucks a barrel. It jumped back above 2 bucks even though oil continues its slide. Don't get me wrong, I like it a lot better than the 4.75 I was paying over summer, but why is gas climbing as oil is getting hammered?
If gasoline fall under a buck, then Ford can make a come back with their new F150.
The 2010 Harley Davidson F150 has a 6.2 L V8 engine.
Maybe Ford will get smart and put in the eco-boost engine with the twin turbo and direct inject sooner rather then later.
http://news.smartdownloads.net/Auto/6_2L_Boss_V8_found_under
_hood_of_2010_Ford_F_150_
Harley_Davidson-6649319.html
Install those cheap Chinese Manufacture Brembo brake on the 2010 Harley Davidson at a faction of the price while Brembo is going through hard time.
http://www.marketwire.com/press-release/Brembo-668674.html
http://www.autoblog.com/2009/02
/16/braking-news-brembo-
to-temporarily-lay-off-1-800/
Big Brother is watching you!
Camera and Microphone in Magnavox Digital Conversion Box
$0? lol.
The United States is the third largest producer of oil in the world.
http://www.youtube.com/watch?v=T7vGDwGLU7s
a reasonable explanation for the rise and fall of the price of oil. Its a lot more likely to go back up, rather than go to zero.
Wait for a trigger. And Oil will rise back up above 100$ a barrel.
I believe the trigger would be riots in the streets of Saudi Arabia, or israel's bombing of Iran. That one trigger will stop the oil flow and bring back the surge on oil prices...
RE: biking to work
More power to them.
"Even at 25% unemployment, %75 of us will still be DRIVING OUR CARS to work"
But will they be car pooling? or taking a bus? or switching to scooters and motorcycles?
How many trucks on the road when nobody is buying stuff anymore? how many ships in the sea transporting stuff between countries will there be?
If people start living in multiunit apartments, will heating oil use go down? Will they move to apartments closer to where they work and therefore drive less? (Easier to do when only one person in the household is working)
Don't underestimate the tendency for everything to go down in price during a deflationary depression.
MUST READ—DO NOT BE MISLEAD.
The posted chart is not of the price of oil, but rather of the ipath OIL etf.
The ipath OIL etf is not a reflection of the price of oil. The etf OIL is getting killed by Contango. Here is how this particular oil etf works:
-At any given time there are multiple prices for oil since it is traded in futures contracts. So when cnbc says oil is at $36, they are talking about the current month contract. But at that same time, there is a March contract at $41, an April contract at $46, a May contract at $51, and so on.
-The ipath OIL etf buys the immediate forward looking contract, so if you are in January they buy the Feb contract. Then during Feb they sell that contract and by March.
-What has been happening month after month recently is that the next months contract is trading at say $45 when ipath buys the contract, and then when they enter that month the price falls to $33-38. Repeat this each month and you have a recipe for a $0 value etf.
-So currently the OIL etf has gone below $15 per share, at a time when oil is still around $35/barrel at current months pricing. Look back 4 weeks and see that the OIL etf was at $26 while oil during that month was at $35 and even higher per barrel.
So do not confuse the OIL etf as a direct correlation to Oil prices. This etf could actually go bankrupt. They have huge fees, and if the trend continues they indeed could be on their way to $0.
So Keith, you need to re-title this blog entry properly that the OIL etf might go to zero; not oil. It is inappropriate to suggest that oil could go that low and back it up with misleading information as you have here.
Nice recap Dr.
Yes, OIL (the etf) is different than Brent North Sea. And there are a bunch of funny etf's out there - like the SKF - that don't perform as you would expect due to how they are set up.
But my point is this - oil prices (not the etf) are trending to zero. Zero. Not that they'll ever get there, but the chart is unreal. From "oh dear god we're running out of oil" to a gallon of oil being cheaper than a gallon of oil being cheaper than a gallon of water.
The hedge funds had their fun. And then they imploded, along with the price of everything.
Think about if oil was still at $140, and you think the depression is bad now? Cheap oil is a massive stimulus - even more than what just came out of Congress. And that's why I think the depression talk is overblown. The 90% that still have jobs and flat incomes are paying much less for things than they were 6 months ago. they're saving it and not spending it, but eventually cheap oil will lead us into a recovery.
Eventually.
And then, oil to the moon. And the recovery stalls.
> Will all solar and wind companies go away?
Might as well for all the effeciency they produce. But with sucking on the gov tit, that seems unlikely. Since it's pc hype and a boondoggle.
For the love of God Keith, what has you so brainwashed that you won't even discuss nuclear? Yes, Homer Simpson did work at three mile island, but they've got that shit fixed now.
Keith,
Just how is cheap oil going to stop the looming commercial real estate crash?
Ashes, ashes
We all fall down.
I love nuclear. Especially if we're going to go with electric cars, we need a hundred new nuke plants.
Just look at France - 80% of their electricity comes from nuclear power.
It's the future. It doesn't contribute to global warming. And it replaces coal, which is significantly more harmful.
Figure out the waste. Go nuke.
Crude oil is refined and used as a base ingredient in almost everything we make and use. Your clothes, your tires, plastic, insecticides, etc. I don't know how much of a barrel of oil actually goes for use as a direct energy source such as diesel, gasoline, jet fuel. Even lithium/ion batteries used petroleum-based components. I actually believe that oil prices will stabilize this year around $30 and slowly increase at the end of this year and next year.
We've had 138 nuc plants running for the past 40 years. I don't think they're having any trouble managing the waste. Let's find out how they're handling this situation.
By the way, the waste is a solid, despite it being a liquid on The Simpsons.
With all the exploration and production projects being canceled worldwide because of the price crash, you'll see severe - and I mean SEVERE - supply problems as early as 2010. Combine that with the fact that oil is priced in what will be declining US dollars, and...
wait for it...
Oil to the moon.
Up then down the up again.
Buying oil seems a no-brainer, which of course makes me worried since those never turn out how I expect...
If oil doesn't rebound then one of two things happened:
* The US dollar stays strong - seems unlikely.
* The world economy implodes so badly that oil demand drops significantly - in this case it doesn't matter what you invested in, if it wasn't food and guns you lose.
If the price of oil is tanking, why is the pump price still up???
I DON'T GET IT.
But Keith, aren't nuke plants dangerous? What about Three Mile Island??? What about the China Syndrome? Those reactor cores are scary stuff. If they blow we are truly toast.
I KNEW that digital box crap was all a government plot to monitor the people.
I KNEW IT! I KNEW IT!
1. Oil flows through the Strait of Hormuz account for roughly 40 percent of all globally traded oil supply, according to the U.S. Energy Information Administration http://tinyurl.com/aptqhy
2. Israel bombs Iran. Not if, but when.
3. Iran blocks the Strait with mines and other means.
4. Oil to $200+ so fast heads spin.
I am waiting for there to be a push to bailout a collapsed Exon ... imagine that ... and just in case you think that is crazy ... We subsidize argiculture. We are bailing out banks and car makers and people who build our homes. We subsidize health care.
I think we might ought to switch from Black Swan to Black Sun for our metaphore.
DP
What goes up, must go down? Pump and dump Ponzi bubble world? Regulations, maybe?
The fact that most people in the USA want a big car, a big house, big boobs and big everything, should re-assure everyone that oil will be on the up-swing any day now. Since Obama has vowed to bail-out 9 million home (owners) serfs and put another 4 million back-to work (McD's), I guess things are looking up, ha, ha.
Here are a few Einstein qoutes the S & S folks should enjoy:
The true value of a human being is determined primarily by the measure and the sense in which he has attained liberation from the self.
I am absolutely convinced that no wealth in the world can help humanity forward, even in the hands of the most devoted worker in this cause. The example of great and pure individuals is the only thing that can lead us to noble thoughts and deeds. Money only appeals to selfishness and irresistibly invites abuse.
Can anyone imagine Moses, Jesus, or Ghandi armed with the money bags of Carnegie?
The majority of the stupid is invincible and guaranteed for all time. The terror of their tyranny, however is alleviated by their lack of consistency.
Keith said: "but eventually cheap oil will lead us into a recovery."
Beg to differ here! Cheap oil is only a gauge of economic activity. If it's down, that means the economy is in a slump. If it goes up, it either means the economy is moving again or inflation is going north. They don't call it the black gold for nothing. Just take a look at the charts; you will see that gold and oil prices usually pair together, except in instances where the price of either gold or oil is artificially manipulated.
The current price of oil is where it should have been last year. The reasons why it went up to $140 Pb are mainly:
1. Good old speculation
2. The Bush Admin's belief that to salvage the economy from total collapse, they needed Gas prices at a certain level to make up for part of the weakening tax revenue and help fight deflation without heavy FED intervention. Also, remember that 6 or 7 out of the top ten corporations in the world are oil companies--besides Wal Mart,they are the healthiest ones left in the market today, thanks to hefty earnings from the oil price hike of most of 2008.
Can you imagine what would have happened to world markets if those 7 corporations went bust or were limping and in need of a bailout, like the Big Three or the US and European Banks? Think about it!
Oil will never go to zero$. At $20 PB, it begins to shut out most oil producers from the market, including the US, which means fewer barrels produced and much higher prices, which in turn will allow the resumption of production at a larger scale, and even the oil sands of Alberta may begin to thrive and join the cartel. This way, the cycle keeps going up and down, and oil prices will keep moving within a bracket of $20 PB and $150, or even $200+.
Did u tools see idol last night.Dam that new judje is a hottie.I pleasured myself to her listening to paulas album straight up now!
why is gas going up?I feel raped again.Gas was at 1.50 now 2.35 as crude has went nowhere.
where are the anti bailout class action lawsuits...
http://www.law.com/jsp/article.jsp?id=1202427798427
...... i c...
Can someone explain where higher demand for oil may be coming from?
Every single indicator points to continuing lower demand.
Everything that uses Fossil fuel is either becoming more efficient or replaced by alternative energy.
From smaller cars to hybrids, from geo thermal heating to super efficient boilers.
There is not a single country in this planet that has built a fossil fuel based power generator in the past ten years or that are planning one for the future.
On top of that, we have a declining global economy and huge stockpiles.
Fundamentals point to a serious downturn in oil prices
News from Illinois. Here we go, they're going for the guns...I don't know if it has passed yet.
Short Description: FIREARM OWNERS ID-INSURANCE
House Sponsors
Rep. Kenneth Dunkin
Statutes Amended In Order of Appearance
430 ILCS 65/4.5 new
430 ILCS 65/8 from Ch. 38, par. 83-8
Synopsis As Introduced
Amends the Firearm Owners Identification Card Act. Provides that any person who owns a firearm in this State shall maintain a policy of liability insurance in the amount of at least $1,000,000 specifically covering any damages resulting from negligent or willful acts involving the use of such firearm while it is owned by such person.
Provides that a person shall be deemed the owner of a firearm after the firearm is lost or stolen until such loss or theft is reported to the police department or sheriff of the jurisdiction in which the owner resides. Provides that the Department of State Police shall revoke and seize a Firearm Owner's Identification Card previously issued under this Act if the Department finds that the person to whom such card was issued possesses or acquires a firearm and does not submit evidence to the Department of State Police that he or she has been issued in his or her name a liability insurance policy in the amount of at least $1,000,000 specifically covering any damages resulting from negligent or willful acts involving the use of such firearm while it is owned by such person. Effective January 1, 2010.
Keith, I’m kind of surprised that you have not put together the correlation between that nasty housing/construction sprawl and the run-up in the price of oil. It takes oil to operate saw mills, it takes oil to fuel those fleets of contractor’s trucks, it takes oil to make asphalt shingles for all of those rooftops, it takes oil to create all those McHouses and strip malls, it takes oil to pave all of those new streets that lead us to all of those glorious McSubdivisions full of McHouses and all of the strip malls full of Taco Bells and dentist offices, dude. They go hand in glove, bro… you didn’t see anybody out with hand saws and mule teams during all of this construction did you?
Smug Bastard
No job. No drive.
Smug - go read my June 2008 post on the collapse to come (linked in this post)
There was no increased demand - it was purely a speculative bubble. And then when the hedge funds collapsed, oil collapsed with them.
There was no peak oil. There was no runaway demand. It was a mirage.
Now, on the downside, you have real falling demand, AND the complete elimination of speculation.
I found some info on why prices of oil have collapsed, and what will its effect be on the economy...
Economic Impact of Cheap Oil
I love looking every day and seeing oil get pounded. I like knowing that all those oil freak dictators are crapping in their shorts. But what is starting to piss me off is the fact that gas is climbing back up. Can someone explain this to me? It was around $1.50/gallon here in California when Oil was hovering @ around 38...39 bucks a barrel. It jumped back above 2 bucks even though oil continues its slide. Don't get me wrong, I like it a lot better than the 4.75 I was paying over summer, but why is gas climbing as oil is getting hammered?
THEY SAY ITS DO TO THE REFINERY PROCESS!! Go figure...
Any suggestions for oil etf investments?
We're in such a sh*t stew, oil is on the way out, and we have no *affordable clean fuel* alternative in place, along with no infrastructure (The "Big 3" are on the way out regardless of how many duckets are thrown at them).
Here's another audio clip of what's to come - reality news:
http://snipurl.com/c4t4s
Too good. From today's market ticker.
President Obama:
"This is the beginning of the end".
That's what he said when he was signing the "stimulus" bill.
He may wind up meaning the beginning of the end of his Presidency, or worse, the beginning of the end of The United States under a Representative Republican government.
Obama is going to what we have feared here for years. Can we get back on topic of housing for a sec?
lap dog said...
'Too good. From today's market ticker.
President Obama:
"This is the beginning of the end".'
Indeed the beginning of the end of the horrible ‘murderous dictator run’ Petro economies.
If there is one area where a violent uprising is way past due it’s in Arabia.
Fossil fuel has destroyed the Arab and Muslim world by concentrating all of the money and power in the hands of a few evil tyrants.
The day the Arab-Street garners the courage to focus their anger and rage on their rulers is the day of real peace in the Middle East.
Keith, there was tons of increased demand... tons of it. Industry (of all sorts) is run with oil (of all sorts). To say there was not increased demand at the time of "Peak Credit" is to somehow deny the fact that the number one manufacturing industry in the U.S. during the past 15 years was McHouse construction and the number one past time in the U.S. was filling said McHouse with McStuff made in factories that are run with oil. To be sure, there was speculation especially as the crack up boom of the bubble took place, but there was also demand going through the roof for several years.
Smug
Smug - read that post. World demand was up 0.9% over the year through June 2008. Prices were up nearly 100%.
It was a speculative bubble. I remember one OPEC minister, when Congress was all crazed that they should raise production, saying hell, we'll raise it, but I've got nobody to sell it too.
Now, that said, there WILL be a problem in the near future, as new E&P comes to a halt, and world demand does pick up, possibly dramatically as cars hit China and India.
2008 was Act 1. It was interesting. But oh, wait for Act II. Man, that's gonna be sick.
http://www.census.gov/const/authnota.pdf
http://inflationdata.com/inflation/inflation_Rate/Historical_Oil_Prices_Table.asp
Ahmed, It is unfortunate that your rulers have the unconditional moral support of the Eurotrash.
"and world demand does pick up, possibly dramatically as cars hit China and India"
First of all, India doesn't have highways, hence, the most you have is a downtown Bangkok-like situation of congestion. India is no China, it's a poor country with one or two mini Silicon Valley-like metro areas.
And next, China's only now, starting to build mega-highways. All and all, for oil to get back to last year's high will be for China to replace all of the US's GDP. I'll tell you, that's 2020, not 2010.
Are you watching what is happening in China, India and and the other 3rd world slave factories. Their factories are shutting down along with their ponzi economies. Do you really think Obamma will print 6 trillion dollers to attempt to reinflate the global asset bubble so the Chinese slaves have jobs to buy cars (at 4 dollers a day). Keith no mos in the western countries for the Chinese to sell their cheap shit to. Even if they had jobs these slaves would not be buying cars at 4 dollers a day. The mamagers (slave masters are out of work as well.) People do not understand the severe damage globalism has wrought on the living standards of all countries.
Figure out the waste. Go nuke.
Have you flown over the western United States recently?? Hour upon hour of nothing. Plenty of places to SAFELY store this stuff for tens of thousands of years, but the tree hugging pussies get all irrational about it.
Driving a car in the US is as big sin as strangling Al Gore's fluffy polar cub, but Thomas Friedman and other liberal-globalist a$$holes get all wet when mentioning how China and India will be inundated with cars in the near future. Funny how that works.
They don't call it the black gold for nothing. Just take a look at the charts; you will see that gold and oil prices usually pair together, except in instances where the price of either gold or oil is artificially manipulated.
If that's true, then either gold or oil are now being manipulated, because both broke off in Nov. Gold went straight up while oil went straight down.
You know what the rumors say, that this oil drop was deliberate to bring down all oil producing nations, along with an engineered financial crisis. NWO plan all along. Don't be surprised when they bring a World Central Bank that collects carbon taxes from all the serfs. Perfect time to pass agenda.
It is amazing - black gold, priced in skyrocketing US dollars, drops to near zero
Yellow gold, priced in skyrocketing US dollars, skyrockets.
Something is really weird right now.
I think you are dead on with your comments on this topic Keith.
No need for me to post, I second your comments and will position myself accordingly.
Tom
6000 pound SUV to drop off a 90 pound 4th grader. No way could that ever last.
Oil is a very inelastic commodity. Minor displacements between supply and demand cause huge price swings. Without proper investment the natural decline rate is about 6-10% per tear. Demand dropped about 15%. Do the math, about 2 years before we will run into shortages unless demand drops even further from todays level (possible if we run into a full scale depression) . If there's anything resmebling a rebound it will be chocked off by a spike in oil prices. Unfortunately most homers on this board are not smart enough to put it together.
Oil - A Roofing Company’s Double Burden:
However, roofing companies actually have a double burden to bear. Not only have their transport costs risen, but the cost of one of their main supplies is quickly increasing. Most Atlanta roofing companies rely on asphalt shingles to complete their work. Asphalt shingles are made up of several layers, including an inner reinforcing mat, a hard asphalt and mineral coating, a mineral granule surface, and a mineral dust coating on the back. It takes two different kinds of asphalt to create a shingle: a soft asphalt in the mat, and a harder asphalt for the outer surfaces. Since asphalt is created from crude oil, the cost of asphalt shingles is directly tied to that of oil. As oil prices rise, so must the price of asphalt shingles.
Despite rising prices, asphalt shingles are still the most commonly used in roofing today. Even as they become more expensive, they’re still a great value and tend to cost less than other options like copper or slate. They wear well and are less expensive to replace as they age. Asphalt shingles are also available in a wide range of colors, shapes and sizes to fit any home.
CHICAGO — Fewer roads will be repaved this summer, thanks to soaring prices of oil-based asphalt.
Some states, cities and counties say their road-repair budgets didn't anticipate asphalt prices that are up 25.9% from a year ago, so they're being forced to delay projects.
"We will do what patching we can, but this will truly, truly be a devastating blow to the infrastructure," says Shirlee Leighton, a county commissioner in Lake County, S.D., where a 5-mile repaving project was postponed after bids came in $79,000-$162,000 higher than the $442,000 budget.
The mix used to resurface roads consists of gravel and sand held together with a binder called liquid asphalt, which is made from crude oil. As oil prices rise, so does the cost of asphalt, says Don Wessel of Poten & Partners, a consulting firm that publishes Asphalt Weekly Monitor. "Prices are the highest I've seen in many, many, many years," he says. "The concern is that they will go up considerably."
April 19th, 2008 Heavy equipment maker Caterpillar Inc. said Friday that demand for its global mining and energy products pushed first-quarter earnings up 13 percent, far surpassing Wall Street estimates. Its stock surged.
Not even Caterpillar (nyse: CAT - news - people ), with nearly triple Komatsu's $16.1 billion revenues, can match its better-performing Japanese competitor in a market that Noji reckons is ballooning by 50% a year for his company. "Caterpillar is suffering because of being centered in the U.S.," he says. Cat's home market accounts for better than 40% of its sales, versus only a fifth in long-dormant Japan for Komatsu.
China runs their factories using coal. Do you think that the equipment used to dig that shit out of the ground runs on Twinkies, Keith? Do you think that the gigantic ships loaded down with container upon container of goods made in Asia are fueled up with Mountain Dew?
Buy a whiz-bang doo-dad from Wal-Mart and guess what? You helped support the dude making the stuff in the factory half way across the world but by default you helped, Caterpillar, a Chi-Com coal mining company, a Korean ship builder (which runs its production with fossil fuels - ever been to a ship yard and watched real people do real work?), British Petroleum, etc., etc. The demand was there. Speculators were there also (they always are in a rising market) but first, the demand was there.
Smug Bastard
$64,000 question - how many fucking shingles do you think were made and installed just in the United States during the past 15 years?
Oh, and for all of you closed minded Peak Oil - M. King Hubbert enthusiasts - the guy was a fucking Technocrat -
Hubbert was also an avid Technocrat. He co-founded Technocracy Incorporated with Howard Scott and contributed significantly to the Technocracy Study Course, the precedent document of that group which advocates a Non-market economics form of Energy Accounting,[1]as opposed to the current Price System method.[2] Hubbert was a member of the Board of Governors, and served as Secretary of education to that organisation[3]
He may have been a gifted geologist, but he would have made a rotten economist (but maybe a good socialist or communist). Reading about that movement, I couldn't help but hum that song "Crazy" under my breath - what a bunch of loons (or comrades - whichever you prefer)
Smug Bastard
Unfortunately most homers on this board are not smart enough to put it together.
February 19, 2009 3:19 AM
Hey Yoski - blow me.
Smug Bastard
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