The reason that crude oil price crashed - page 3.

NewLiberty

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Quote from: ?? on ??

The same reason it did EXACTLY six years ago.

NO, sorry, you are simply wrong about this.

It has been sort of the point of this whole thread is that this is a DIFFERENT reason than 6 years ago.
Six years ago there was a global recession from the real-estate financial theft by the banking cartels (first from each other, then from the government bailouts / taxpayers).
This time it is not because of declining usage from a global recession.
USAGE is increasing.

DEMAND at a certain price falls due to an increase in SUPPLY.
So oil gets cheaper, which stimulates even more oil USAGE.

If you look at the chart you posted. It shows the difference.
This time oil and stocks are not moving together, six years ago they did.

picolo

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Quote from: leopard2 on January 03, 2015, 08:20:20 PM

America's fracking boom is deeply unhealthy, both ecologically and economically, but has been pushed by the government and industry.

The interesting question is, does Uncle Sam have a desire to destroy Russia and trigger a large war to reset the financial bubble?

If so, they will subsidize (or give tax breaks/cheap credits) to the fracking industry to keep this going. Otherwise fracking will decrease quite a bit over the next year. It requires 80$ per barrel to keep fracking going on a free market.

But again I doubt that the oil market is free ATM because cheap oil hurts Venezuela and Russia and open warfare is not an option against those two. Sad

If the price of oil stays lower than say 70$ a barrel, most the fracking will stop but it is unlikely that the price of a barrel will not go back to 70$ then 100$ within a few years.

leopard2

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America's fracking boom is deeply unhealthy, both ecologically and economically, but has been pushed by the government and industry.

The interesting question is, does Uncle Sam have a desire to destroy Russia and trigger a large war to reset the financial bubble?

If so, they will subsidize (or give tax breaks/cheap credits) to the fracking industry to keep this going. Otherwise fracking will decrease quite a bit over the next year. It requires 80$ per barrel to keep fracking going on a free market.

But again I doubt that the oil market is free ATM because cheap oil hurts Venezuela and Russia and open warfare is not an option against those two. Sad

NewLiberty

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Quote from: picolo on January 03, 2015, 05:03:43 PM

Quote from: NewLiberty on January 03, 2015, 01:28:53 AM

Quote from: picolo on January 01, 2015, 01:35:37 PM

Quote from: BTCXE on January 01, 2015, 04:18:29 AM

Im sure some of it has to do with Saudis wanting to fuck Russia over Syria

It has to do with a weak demand and an abundant production.

Usage is increasing slower than supply is increasing.
Oil has a large markup due to scarcity created from cartelling, and that markup is contracting.

At a lower price, usage will increase more swiftly, until then we should expect the price to over-correct.

As for renewable energy being more expensive? That depends somewhat on what is included in the cost.

I agree with you on oil. As for "renewable" energy, it ends up being more costly than natural resources.

This depends on what you are measuring, how and where.
It is not the universal truth you seem to imagine it might be.
The Hoover Dam seems to have worked out pretty well, and there are many other examples.

picolo

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Quote from: NewLiberty on January 03, 2015, 01:28:53 AM

Quote from: picolo on January 01, 2015, 01:35:37 PM

Quote from: BTCXE on January 01, 2015, 04:18:29 AM

Im sure some of it has to do with Saudis wanting to fuck Russia over Syria

It has to do with a weak demand and an abundant production.

Usage is increasing slower than supply is increasing.
Oil has a large markup due to scarcity created from cartelling, and that markup is contracting.

At a lower price, usage will increase more swiftly, until then we should expect the price to over-correct.

As for renewable energy being more expensive? That depends somewhat on what is included in the cost.

I agree with you on oil. As for "renewable" energy, it ends up being more costly than natural resources.

NewLiberty

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Quote from: picolo on January 01, 2015, 01:35:37 PM

Quote from: BTCXE on January 01, 2015, 04:18:29 AM

Im sure some of it has to do with Saudis wanting to fuck Russia over Syria

It has to do with a weak demand and an abundant production.

Usage is increasing slower than supply is increasing.
Oil has a large markup due to scarcity created from cartelling, and that markup is contracting.

At a lower price, usage will increase more swiftly, until then we should expect the price to over-correct.

As for renewable energy being more expensive? That depends somewhat on what is included in the cost.

screwUdriver

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Quote from: botany on January 01, 2015, 02:42:03 AM

Quote from: grendel25 on December 30, 2014, 09:46:30 PM

I saw a few folks mention alternative energy sources in the discussion but I think this is really a stronger and valid point that deserves more elaboration. "The reason that crude oil price crashed" is obviously the result of OPEC reactions to excess supply, demand and resultant lowered price. However, I really 'wish' that it were for better reasons such as greater availability of renewable energy.

When home solar panels are made for the lay person to install at a low enough price and at high enough efficiency to work even during low light periods then there could be even more electric vehicles and even less demand on fossil fuels.

Lower crude prices are probably bad for renewable sources of energy.
Now they will be seen as uncompetitive and the required investments in renewable technology won't be made.

Renewable energy has always been uncompetitive with other energy sources (oil included) as they are very expensive to make.

I would say that a better argument would be that cars like the tesla will be even less competitive in terms of cost to use due to lower oil (and as a result gas) prices

picolo

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Quote from: BTCXE on January 01, 2015, 04:18:29 AM

Im sure some of it has to do with Saudis wanting to fuck Russia over Syria

It has to do with a weak demand and an abundant production.

BTCXE

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Im sure some of it has to do with Saudis wanting to fuck Russia over Syria

botany

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Quote from: grendel25 on December 30, 2014, 09:46:30 PM

I saw a few folks mention alternative energy sources in the discussion but I think this is really a stronger and valid point that deserves more elaboration. "The reason that crude oil price crashed" is obviously the result of OPEC reactions to excess supply, demand and resultant lowered price. However, I really 'wish' that it were for better reasons such as greater availability of renewable energy.

When home solar panels are made for the lay person to install at a low enough price and at high enough efficiency to work even during low light periods then there could be even more electric vehicles and even less demand on fossil fuels.

Lower crude prices are probably bad for renewable sources of energy.
Now they will be seen as uncompetitive and the required investments in renewable technology won't be made.

grendel25

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I saw a few folks mention alternative energy sources in the discussion but I think this is really a stronger and valid point that deserves more elaboration. "The reason that crude oil price crashed" is obviously the result of OPEC reactions to excess supply, demand and resultant lowered price. However, I really 'wish' that it were for better reasons such as greater availability of renewable energy.

When home solar panels are made for the lay person to install at a low enough price and at high enough efficiency to work even during low light periods then there could be even more electric vehicles and even less demand on fossil fuels.

Window2Wall

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Quote from: cameronpalte on December 30, 2014, 02:49:58 PM

The actual reason why oil prices came down was because of a sharp increase in production by the United States and the North Sea operators which resulted in an oversupply for the market decreasing the price - it's all supply and demand.

OPEC does like the lower prices for now however, (which is why it hasn't cut production yet), because many of the new projects in the US and the North Sea are unprofitable at below $65/barrel so OPEC is hoping that the lower oil price will help drive these projects out of business (a basic monopoly tactic here), which will allow OPEC to control most of the world's oil supply once again.

The high oil prices that we have seen much of the last decade have already caused too much investment into these kinds of projects for them to be completely abandoned. Even if the projects were to be temporarily shut down they could easily resume drilling for oil with much less effort then it cost to build the projects

cameronpalte

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The actual reason why oil prices came down was because of a sharp increase in production by the United States and the North Sea operators which resulted in an oversupply for the market decreasing the price - it's all supply and demand.

OPEC does like the lower prices for now however, (which is why it hasn't cut production yet), because many of the new projects in the US and the North Sea are unprofitable at below $65/barrel so OPEC is hoping that the lower oil price will help drive these projects out of business (a basic monopoly tactic here), which will allow OPEC to control most of the world's oil supply once again.

jaysabi

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Quote from: peonminer on December 28, 2014, 06:13:58 PM

Someone's cold heart... somewhere.... melted a tiny bit for this deflation to occur.

Your personal message has malformed binary. You have five digits at the end that don't create anything. Are they extra, or did you run out of space?

peonminer

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Someone's cold heart... somewhere.... melted a tiny bit for this deflation to occur.

NewLiberty

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Quote from: smooth on December 28, 2014, 06:01:30 PM

Quote from: NewLiberty on December 28, 2014, 05:31:58 PM

Quote from: smooth on December 28, 2014, 04:20:53 PM

Quote from: NewLiberty on December 28, 2014, 08:56:48 AM

Quote from: scarsbergholden on December 28, 2014, 12:26:02 AM

A significant increase in the use of nuclear power in Japan (and more importantly elsewhere) will likely lead to long term lower oil prices. It remains that nuclear energy is much safer and much cleaner then other types of energy (including 'green' energy like solar and wind)

Because windmills also sometimes create superfund radioactive sites where human life is impossible for generations?

They don't but they produce a tiny amount of usable energy, so you need a LOT of windmills, solar panels, etc., and this leads to other safety issues. More mundane industrial accidents perhaps (falls, car/truck accidents, electrocution, factory accidents, etc.), but if you are that person, you are just as injured or dead.

If you measure safety in the economically reasonable way, not as an absolute but with risks in the numerator and output in the denominator, then even nuclear fission looks pretty damn good compared to everything else (or another way to say that is that nuclear is still bad but everything else is worse to much worse).

Acknowledging that correctly estimating the tail risks in the numerator is difficult, but we do the best we can.

I remain skeptical, or else they would be insurable.
As it stands, only nation-states can build them. Industry at best can do management contracts, with government backing (insured by all taxpayers).

Cleaner than coal on a per joule basis? Granted. Cleaner than windmills? I doubt this. Even if you are considering the dead birds.

I didn't say cleaner than windmills, though that might also be true for the same reasons (I haven't seen the numbers), I said safer.

Here's one fairly recent ranking.

http://www.forbes.com/sites/jamesconca/2012/06/10/energys-deathprint-a-price-always-paid/

mortality rate

Wind: 150
Nuclear: 90

Wind is actually in second place and fairly close, so its entirely possible this ordering is wrong (likewise with solar). But what is more important is the comparison of nuclear to the scale baseload sources that realistically substitute for it (not just coal). Those differences are orders of magnitude.

Thanks for the link.
scarsbergholden's claim was cleaner and safer.
I suspect when you count the folks "relocated" from the areas, and later effects, the numbers might be different.
Worse for coal though. Lung cancer is the highest rising mortality in China. We'd have to use the female rate and discount the males there though because >50% are smokers and <2% of women.

smooth

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Quote from: NewLiberty on December 28, 2014, 05:31:58 PM

Quote from: smooth on December 28, 2014, 04:20:53 PM

Quote from: NewLiberty on December 28, 2014, 08:56:48 AM

Quote from: scarsbergholden on December 28, 2014, 12:26:02 AM

A significant increase in the use of nuclear power in Japan (and more importantly elsewhere) will likely lead to long term lower oil prices. It remains that nuclear energy is much safer and much cleaner then other types of energy (including 'green' energy like solar and wind)

Because windmills also sometimes create superfund radioactive sites where human life is impossible for generations?

They don't but they produce a tiny amount of usable energy, so you need a LOT of windmills, solar panels, etc., and this leads to other safety issues. More mundane industrial accidents perhaps (falls, car/truck accidents, electrocution, factory accidents, etc.), but if you are that person, you are just as injured or dead.

If you measure safety in the economically reasonable way, not as an absolute but with risks in the numerator and output in the denominator, then even nuclear fission looks pretty damn good compared to everything else (or another way to say that is that nuclear is still bad but everything else is worse to much worse).

Acknowledging that correctly estimating the tail risks in the numerator is difficult, but we do the best we can.

I remain skeptical, or else they would be insurable.
As it stands, only nation-states can build them. Industry at best can do management contracts, with government backing (insured by all taxpayers).

Cleaner than coal on a per joule basis? Granted. Cleaner than windmills? I doubt this. Even if you are considering the dead birds.

I didn't say cleaner than windmills, though that might also be true for the same reasons (I haven't seen the numbers), I said safer.

Here's one fairly recent ranking.

http://www.forbes.com/sites/jamesconca/2012/06/10/energys-deathprint-a-price-always-paid/

mortality rate

Wind: 150
Nuclear: 90

Wind is actually in second place and fairly close, so its entirely possible this ordering is wrong (likewise with solar). But what is more important is the comparison of nuclear to the scale baseload sources that realistically substitute for it (not just coal). Those differences are orders of magnitude.

picolo

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Quote from: NewLiberty on December 28, 2014, 05:31:58 PM

Quote from: smooth on December 28, 2014, 04:20:53 PM

Quote from: NewLiberty on December 28, 2014, 08:56:48 AM

Quote from: scarsbergholden on December 28, 2014, 12:26:02 AM

A significant increase in the use of nuclear power in Japan (and more importantly elsewhere) will likely lead to long term lower oil prices. It remains that nuclear energy is much safer and much cleaner then other types of energy (including 'green' energy like solar and wind)

Because windmills also sometimes create superfund radioactive sites where human life is impossible for generations?

They don't but they produce a tiny amount of usable energy, so you need a LOT of windmills, solar panels, etc., and this leads to other safety issues. More mundane industrial accidents perhaps (falls, car/truck accidents, electrocution, factory accidents, etc.), but if you are that person, you are just as injured or dead.

If you measure safety in the economically reasonable way, not as an absolute but with risks in the numerator and output in the denominator, then even nuclear fission looks pretty damn good compared to everything else (or another way to say that is that nuclear is still bad but everything else is worse to much worse).

Acknowledging that correctly estimating the tail risks in the numerator is difficult, but we do the best we can.

I remain skeptical, or else they would be insurable.
As it stands, only nation-states can build them. Industry at best can do management contracts, with government backing (insured by all taxpayers).

Cleaner than coal on a per joule basis? Granted. Cleaner than windmills? I doubt this. Even if you are considering the dead birds.

Radioactivity seems very safe and clean if set up properly when windmills use a lot of resource and are not too efficient.

NewLiberty

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Quote from: smooth on December 28, 2014, 04:20:53 PM

Quote from: NewLiberty on December 28, 2014, 08:56:48 AM

Quote from: scarsbergholden on December 28, 2014, 12:26:02 AM

A significant increase in the use of nuclear power in Japan (and more importantly elsewhere) will likely lead to long term lower oil prices. It remains that nuclear energy is much safer and much cleaner then other types of energy (including 'green' energy like solar and wind)

Because windmills also sometimes create superfund radioactive sites where human life is impossible for generations?

They don't but they produce a tiny amount of usable energy, so you need a LOT of windmills, solar panels, etc., and this leads to other safety issues. More mundane industrial accidents perhaps (falls, car/truck accidents, electrocution, factory accidents, etc.), but if you are that person, you are just as injured or dead.

If you measure safety in the economically reasonable way, not as an absolute but with risks in the numerator and output in the denominator, then even nuclear fission looks pretty damn good compared to everything else (or another way to say that is that nuclear is still bad but everything else is worse to much worse).

Acknowledging that correctly estimating the tail risks in the numerator is difficult, but we do the best we can.

I remain skeptical, or else they would be insurable.
As it stands, only nation-states can build them. Industry at best can do management contracts, with government backing (insured by all taxpayers).

Cleaner than coal on a per joule basis? Granted. Cleaner than windmills? I doubt this. Even if you are considering the dead birds.

smooth

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Quote from: NewLiberty on December 28, 2014, 08:56:48 AM

Quote from: scarsbergholden on December 28, 2014, 12:26:02 AM

A significant increase in the use of nuclear power in Japan (and more importantly elsewhere) will likely lead to long term lower oil prices. It remains that nuclear energy is much safer and much cleaner then other types of energy (including 'green' energy like solar and wind)

Because windmills also sometimes create superfund radioactive sites where human life is impossible for generations?

They don't but they produce a tiny amount of usable energy, so you need a LOT of windmills, solar panels, etc., and this leads to other safety issues. More mundane industrial accidents perhaps (falls, car/truck accidents, electrocution, factory accidents, etc.), but if you are that person, you are just as injured or dead.

If you measure safety in the economically reasonable way, not as an absolute but with risks in the numerator and output in the denominator, then even nuclear fission looks pretty damn good compared to everything else (or another way to say that is that nuclear is still bad but everything else is worse to much worse).

Acknowledging that correctly estimating the tail risks in the numerator is difficult, but we do the best we can.

Topic: The reason that crude oil price crashed - page 3. (Read 12472 times)