February 2016

February 2016

Global crude oil usage has risen from 61.2 million barrels per day (mbpd) in 1994 to 79.5 mbpd in 2015. An average increase of 1.4% per year for 2 decades. In the last 10 years, however, the rate is only +0.7%. Both oil production and consumption are leveling off.

American crude oil production declined to a low of about 5.0 mbpd in the period 2006-2008. It began to increase rapidly in 2009 until the price-collapse in 2015. If the increases in American production are not included in the global totals beginning in 2006, then global production has only increased to 75.1 mbpd in 2015 or a paltry +0.34% per year since 2007.

American oil consumption is basically flat, recovering very slowly to its pre-recession, 2008 levels. Globally consumption is flat or declining slightly because of efficiencies and conservation measures brought on by high prices.

Chinese consumption-growth has probably slowed. This along with the sudden, unexpected rise in American production are the main drivers of the over-supply and glut on the market and the price collapse.

OPEC is powerless over the market. They have no control. Nobody does.

Peak-oil happened. Deal with it. The cheap oil is running out. This is the price volatility that follows.

“Everything is possible in theory. It was possible a year ago, a month ago. Nothing new has happened. This frenzy is idiotic. It stems from the fact that people can’t read.” -Mikhail Leontyev, Rosneft

GOLDMAN SACHS: Don’t believe the hype — oil is staying below $40

Syrian Civil War: Could Turkey be Gambling on an Invasion?
PATRICK COCKBURN • JANUARY 30, 2016

If there is no Turkish intervention on a significant scale then Assad and his allies are winning, because the enhanced Russian, Iranian and Lebanese Hezbollah intervention has tipped the balance in their favour. The troika of regional Sunni states – Saudi Arabia, Qatar and Turkey – have failed, so far, to overthrow Assad through backing the Syrian armed opposition.

Their enthusiasm for doing so is under strain. Saudi Arabia has a mercurial leadership, is enmeshed in a war in Yemen, and the price of oil may stay at $30 a barrel. Qatar’s actions in Syria are even more incalculable. “We can never figure out Qatar’s policies,” said one Gulf observer in frustration. A more caustic commentator, in Washington, adds that “Qatari foreign policy is a vanity project”, comparing it to Qatar’s desire to buy landmark buildings abroad or host the football World Cup at home.

31-syria-graphic

There’s a big sign that we ‘could enter recession in the second half of this year’

“Historically, the average and median lead times between the peak in profit margins and the onset of recession have been eight and nine quarters, respectively,” wrote LaVorgna in a note to clients Thursday. “This would imply that the economy could enter recession in the second half of this year.”

“Margins always peak ahead of recession,” he added. “Indeed, there has not been one business cycle in the post-WWII era in which this has not been the case.”

Profit margins peaked during the third quarter of 2014, and have been steadily declining since, which LaVorgna suggests is a red flag.

CREDIT SUISSE CEO: ‘The doomsday scenarios are not justified’ (be very afraid)

Goldman Sachs CEO Lloyd Blankfein on Wednesday told CNBC that S&P 500 stocks are showing an unusual reaction to macro events like plummeting oil prices.

“I don’t really know why S&Ps would have that reaction to the underlying cause,” Blankfein said.

And Morgan Stanley CEO James Gorman last month said he was having just as much trouble making sense of the markets, citing their “emotional state.”

“It’s not obvious to me exactly what the connection is — absent oil of course,” Gorman said, calling oil a “wild card.”

It’s all taking a toll on bank stocks. But Thiam said things would return to normal with time — and with more positive results out of China.

“The doomsday scenarios are not justified,” he said. “There is an over-emphasis on the oil sector.”

73 Replies to “February 2016”

  1. not sure if the GS suits understand the implications of what they’re predicting, but if so, they are basically saying the future us and global economic conditions will remain so poor that demand will not be there for scarce oil when it arrives sometime later this year.

    price will be some product or sum of decreasing demand and supply. we could ride down the production/supply backside of Hubbert’s global peak at constant low oil price until we hit bottom at a new medieval world with far fewer people/consumers.

  2. yeah, i thought that article was kind of silly, clueless. industrialism in any form relies on oil. if the system doesn’t allow for the production of its’ primary driver, then that system is toast. in our current state, production relies on $. a state change, not of the political variety, remains a very distinct possibility, in my mind anyway.

  3. not sure why doom’s posted article relied on photos of se asia, almost exclusively. they’ve (the authors) never been on a nyc subway during rush hour?

  4. “have you ever been that close to such a caldera? if caldera is the right word. i don’t think it is.”

    several times on Kilauea’s Pu’u O’o Vent. it wasn’t as full or gassy as the one shown here. that one is very dangerous, BTW. actually, they all are, because conditions can change quickly, e.g., earthquake, the ledge breaks away, a big splash of magma comes your way.

    the correct term for that place is volcanic vent. a caldera is usually much larger and is a collapse feature.

  5. i thought this was kind of funny. what’s happening, in my mind anyway, is that the rest of the world is “paying” the usa, lending it money, hoarding dollars, etc., to act as the world’s police force force. something like that.

  6. they work so hard to keep hygenic, backyard farm, and recycle. really too bad they let TEPCO fuck the northern half of Honshu and threaten Tokyo to this day with nuclear radiation. they have a sleeping dragon there that will require constant attention for the next several decades, at least. i don’t think they’ll be able to contain it, going forward. lotta cancer coming there.

  7. if you want to be asian, pick korean, they’re safer. luck of their stable geology.

    you take some risk even visiting northern honshu, japan these days.

  8. always a great show. this one is on Kyushu across a narrow bay from Kagoshima city. yup, stayed there and toured the volcano back in 1993.

  9. yeah, i still think the japs are way cooler than the koreans. the coolest people on earth are the germans. they’re fucking everything by letting all those refugees in, and joining the eu in the first place.

  10. as one of the world’s foremost idlers, i have often encountered this unfortunate and misguided attitude.

    “It is an unfortunate reality for innate idlers that our modern world requires one to hold a job to maintain a sustainable existence. Idling, I find, if immensely underrated, even vilified by some who see inactivity as the gateway for the Evil One.”
    ― J. Maarten Troost, The Sex Lives of Cannibals: Adrift in the Equatorial Pacific

  11. nice computer graphic, dave. it sucked to be anywhere near vesuvius that day.

    but hey, they preserved that city for all to see later. very highly recommended to visit.

  12. yeah, his main concern was maintaining access to the oil fields, both in eastern europe and northern africa, so he could keep his own shit running. i guess.

  13. so it looks like my oldest will go to grad school at columbia. if so, when times get rough, maybe you could take him in on the farm in virginia. he’s a hard worker, so you will benefit. no one will give a shit about the chemistry of astrobiology in the future, but i can’t say that to him. make him a good farmer.

  14. “chemistry of astrobiology”? is that for real? like organic molecules on asteroids and fucking mars, and shit like that? if you’re not pulling my leg, you do need to have a talk with that boy.

  15. really, he should take up art history, or english lit, or something like that. that’s where the bitches are…he could learn to recite chaucer, in the original middle english. which may be a lot handier than knowing about molecules on mars. ( i still think you’re fucking with me.)

  16. i’m not kidding. doesn’t seem too practical, does it? maybe he’ll end up making some improvement to the manufacture of gunpowder, or something else important like that. make oil out of garbage.

    he’s got a steady GF. he’s not your classic nerd.

  17. you could say that nate made a lot of $$$ on wall street, got tired of being unhappy, realized that money cannot buy happiness, and returned home to his immediate family in mudhole, wisconsin, where he lives A SIMPLER LIFE, but not one completely disconnected from BAU, and is a happier person.

    he owns two cars and a horse.

    he talks about TSHTF in twenty (20) moron years. that would be 2036. only insects will be living in mudhole by that time.

  18. orlov is pissed at me and will not publish my comments on his blog anymoron. i’m a bit sad about this “JR” treatment.

    I asked a simple question: “how can I listen to his latest interview without having to register on the audio host site and then have them sending me spam for the next few years?”

  19. yeah, i guess the only reason i say nate’s a dick is that he seems to think is fucking slide shows can change something or maybe “save” something. something like that. as if there’s something to “save”. really, he’s no more a dick than anyone else….

  20. yeah, i don’t even try to comment anywhere but here and sometimes on facebook. the only blogger i read with any regularity is jhk, for the entertainment value.

  21. see? i told you that people were fed up with the bought-and-paid-for candidates and that outsiders like Trump and Sanders would get the votes. i’m sure they’ll be the respective party candidates going forward. in fact, Trump will have a harder time winning against Sanders than Hillary, but i predict Trump will prevail in the fall.

    Trump is the Andrew Jackson of our time. he is scary popular.

    i’m saving my presidential vote for Bernie.

  22. when i was 20, i nearly died in an industrial accident. that really changed my perspectives. instead of going to grad school at Stanford, i went to U. Hawaii. when i was younger, i surfed big waves, drove fast sports cars, smoked, drank and did a few drugs in moderation. i had more than a few GFs. my only regret is not having had moron GFs, but i did find that the lifestyle was hard on my science career.

    anyway, no regrets, you (and only you) make your reputation in the field, it’s not the quality of your advisors or the amount of ivy on the campus building walls.

  23. pretty much every guy out there, except maybe some rock star/rich celebrity/professional athlete types, lives and dies with sexual frustration. i’d say.

    i’m 60 and still chasing pussy. how stupid is that? it don’t get easier either.

  24. AMAZING SIMPLE HOME REMEDIES

    1. IF YOU’RE CHOKING ON AN ICE CUBE, SIMPLY POUR A CUP OF BOILING WATER DOWN YOUR THROAT. PRESTO! THE BLOCKAGE WILL INSTANTLY REMOVE ITSELF.

    2. AVOID CUTTING YOURSELF WHEN SLICING VEGETABLES BY GETTING SOMEONE ELSE TO HOLD THE VEGETABLES WHILE YOU CHOP.

    3. AVOID ARGUMENTS WITH THE FEMALES ABOUT LIFTING THE TOILET SEAT BY USING THE SINK.

    4. FOR HIGH BLOOD PRESSURE SUFFERERS ~ SIMPLY CUT YOURSELF AND BLEED FOR A FEW MINUTES, THUS REDUCING THE PRESSURE ON YOUR VEINS. REMEMBER TO USE A TIMER.

    5. A MOUSE TRAP PLACED ON TOP OF YOUR ALARM CLOCK WILL PREVENT YOU FROM ROLLING OVER AND GOING BACK TO SLEEP AFTER YOU HIT THE SNOOZE BUTTON.

    6. IF YOU HAVE A BAD COUGH, TAKE A LARGE DOSE OF LAXATIVES. THEN YOU’LL BE AFRAID TO COUGH.

    7. YOU ONLY NEED TWO TOOLS IN LIFE – WD-40 AND DUCT TAPE. IF IT DOESN’T MOVE AND SHOULD, USE THE WD-40. IF IT SHOULDN’T MOVE AND DOES, USE THE DUCT TAPE.

    8. REMEMBER – EVERYONE SEEMS NORMAL UNTIL YOU GET TO KNOW THEM.

    9. IF YOU CAN’T FIX IT WITH A HAMMER, YOU’VE GOT AN ELECTRICAL PROBLEM.

    DAILY THOUGHT:
    SOME PEOPLE ARE LIKE SLINKIES – NOT REALLY GOOD FOR ANYTHING BUT THEY BRING A SMILE TO YOUR FACE WHEN PUSHED DOWN THE STAIRS. (or skip a step and then try to recover–see above video.)

  25. it almost seems like it’s photochopped. amazing that the effect of that landslide and depressurization eruption was so underestimated by professional geologists and emergency crew (park rangers, state EM, etc.). a lot of them paid for that with their lives.

    slowly at first, then all at once…

  26. because of St. Helens, the USGS did not send a single person to a volcanic prediction workshop on Galeras in Colombia in 1993. during that workshop, the “A team” who volunteered to sample the summit were decimated by a brief summit eruption. i was there, but we chose the “B team” that looked at landslide deposits on the slopes that fateful day. it was far safer, but we spent the next two weeks sampling the summit, after it was cleared.

  27. i believe that’s the body of a young girl that has never seriously worked out or done anything too ahletic. she was literally born to develop that way. no fad diets, either.

    i was three when that picture was taken. she could have been my babysitter. then she got discovered. damn.

  28. well, like i always say, you have 2 choices: stay where you are and die when the system crashes, or move to the country, buy some land, practice sustainable living and die when the system crashes.

  29. moron fan mail for our hero, JHK:

    Fast Eddy says:
    February 16, 2016 at 8:39 pm

    Kunstler is a bitter, racist old man…. he writes as if there was another choice here… he is befuddled by the fact that america has degenerated into a society of facebooking tatooed slobs and unemployed minorities….

    He is angry with these people ….. resentful….

    What did he think was going to happen as BAU wound down? We’d all be dressed in brooks brothers casual attire pecking away in back yard gardens making tools by hand?

    He’s lost the plot…. in fact he may as well step in front of a bus if what he sees now is getting him down — because this is as good as it gets….

  30. One of the nearest suburban areas to here has a business called “Tatts on – Tatts off”
    Smart monkeys.

  31. that was an inteesting bipedal fail. note the manuever included a one-footed spin. once she did that, it was like someone pulled her leg out, and down she went. bravo, indeed.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s