Giving Crude Away

I just think the trend is like a big ship.....it turns slowly but it is turning

Or sinking.

Bingo!!!

Not $300 crude, but $7.00/gallon gas prices don't seem to have hastened that development in Europe.

Our gallons are bigger.

Our gallons? I thought you were in France.

How High Oil Prices Will Permanently Cap Economic Growth

Guess what oil prices were doing in 2008, when the world fell into the deepest recession since the 1930s? From trading around $30 a barrel in 2004, oil prices marched steadily higher before hitting a peak of $147 a barrel in the summer of 2008. Unlike past oil price shocks, this time there wasn't even a supply disruption to blame. The spigot was wide open. The problem was, we could no longer afford to buy what was flowing through it.

About six months prior to the 1970's oil shortage the US experienced I noticed the oil field pumps had all stopped, ha!

did I say 68?? last peek, 67's

did I say 67?? must have meant 65. my apologies...its a rock that's plummetting10% in a day 10%is a disaster.....who knew??

If you want to see shortages develop, keep praying for lower oil prices. Once oil fetches less than it costs to produce it, the amount produced will fall even faster. Once the amount produced falls below the amount needed to keep the refineries running 24x7, the refineries will stop refining. Once the refineries stop refining, the driving public will start crying about the days when gasoline was readily available, and the politicians will get involved and draw down the SPR (Strategic petroleum Reserves). This will give the oil companies an opportunity to raise the price to the gov't, which in turn will ripple through the entire supply chain, bringing stasis and peace amongst consumers. The same exact scene unfolds when the price becomes too high for consumption to continue, just reverse the signs on the equations.

As far as Rockwell is concerned, sooner or later they will get "the call" that goes something like this, "Mr. Rockwell, this is Mr. Big Oil; we've performed an internal audit and noticed that we spent over $(pick a number) billions with your firm over the past few decades. We've also noticed that some of your projects might have an impact on our revenues which in turn might have an impact on the amount we can spend with our contractors. Surely you wouldn't want to see that happen, would you?"

For a good primer on how economics and the "law" of supply and demand works in the real world, I suggest a re-watching of the first few seasons of the Sopranos. Similarly for a primer on the politics of power, rewatch House of Cards. There's really no difference between them and their methods, except for the suits that they wear.

sounds like you just lost some money

during our lifetimes oil has been the only game in town and many of the games you're referring about were true. a number of teams around the world are racing to make fusion a reality. Lockheed has successfully initiated a ball of plasma over 100 times and contained it briefly. they've also contained some of the leakage that has plagued researchers in the past.Lockheed claims it's capturing these particles and returning them to the reaction...thats an exciting innovation.I'm not saying Lockheed will be the 1st or the only team to be successful but they seem to be a leader and they have the funding and political clout ( not to mention its nice when your primary client is Uncle Sam)to pull it off.

Fredski, I'm not quite sure how you can surmise that I lost some money, quite the opposite.

But I am curious how these small scale reactors are going to survive the opposition from the environmentalists and NIMBY folks, unless you're proposing that the choice will ultimately be between living without oil or having nukes in every home.

I'm fully aware that we're "awash with oil", why do you think that the Keystone pipeline was killed, because it was bad for the environment, or bad for the US oil interests? Why do you think that our President is crushing coal (pun intended), because it's bad for the environment, or its continued use is bad for the oil interests? Why were trolley lines scrapped 60 years ago, because they were bad for the environment, or were they bad for Detroit and consequently the oil companies? The list is endless, but the long term strategic planning and hidden hand of the oil interests is evident (in retrospect) for many decisions.

Consider this scenario. You're "Big Oil Exploration" and you've just tapped into a field that by all traditional methods indicates that you have found the Mother Lode, more oil than has ever been pumped out of the ground by every other producer world-wide since crude was discovered, enough oil to last a thousand years or more. Are you going to announce that fact to the world? Of course not, just think of the disruption in prices if you did. What you are going to do is announce that you were successful in finding some proven incremental reserves, and watch your stock price go up. After all, there is no one entity large enough to oversee your operation, the oil just sits in the ground un-noticed or un-accounted for in all the "public" records, you simply ride the wave of world events and price accordingly.

Unfortunately there is no transparency when it comes to amount of oil truly available, and it's that lack of transparency that lets the producers and speculators set its price; the economic/consumer laws of supply and demand are simply a tool for explaining to the academics, politicians, and the consumers what has already happened. If the current price is below your expectations and/or you don't need the revenue right now, you simply announce that you're shutting down your operations until the price rises above some artificial/arbitrary price point.

I respect your knowledge and contributions to our little forum. I've been heavily involved in day trading for years. I love a spirited debate on investing but I come to this forum primarily for the science and technology. I'll pass on my investors standpoint. I see a revolution taking place that rivals the days when "city folks" began seeing more and more cars taking up space on city streets and one of the micro arguments of the was, "will horses EVER be supplanted with cars."some could envision what was to come while others stood fast claiming this change was only a fad, and things would revert back....."because they always have." I know gas stations wont get plowed under overnight, we'll be still seeing them for many years but I think they too will evolve and include charging space for their expanding base of electrified vehicles.

to be clear, I do NOT see any type of reactor in peoples homes at anytime in the future as a norm.I see utilities with gas turbines being retrofitted to accept a fusion reactor to supply their boilers with heat and their rather ample gas lines taken offline. IF fusion is harnessed in this way electricity will be cheap and plentiful and things that have emissions( like smokestacks and tailpipes) will be headed the way of the dinosaurs in my lifetime.

There are changes to the 'Mom and Pop' gas station numbers. Here in Australia with about a million new car sales per year, in my neighbourhood 3 out of 4 gas stations have disappeared, with some converted into residential mid density housing.

Other local factors impacting on the decreasing number of gas stations are more efficient vehicles, an electric commuter train system carrying today the estimated usage of 2025, one house in 10 with solar on the roof and 2 million bike sales per year. Big oil might have a plan but the old 'secret strategies' such as the Catholic Church's silence of the 1950's on issues of sex, power scandals and child molesting, might be wearing a bit thin.

So looking forward, I suggest we (a) enjoy the lower fuel prices while they last, (b) get your car serviced paid for by the savings in your pocket which directly benefits the garage mechanic, and (c) keep an eye out for other energy saving measures,
so you have 'insurance' if/when the crude price goes up (again).

Fredski, I believe you meant steam, not gas, turbines being supplied by a boiler heated by fusion. Sure, why not, it's just the evolution of our current fission plants. However the problem word "nuclear" will remain a hot button for environmentalists for generations to come.

I have a challenge for a good researcher such as yourself. Simply document the entire volume of crude oil that has been pumped out of the ground from all sources worldwide since 1859 when the first commercial well (the Drake Well) was drilled in PA, only sources deemed to provide historically reliable data should be used. Bonus points if you can state which body of water would hold all of that oil if it were sealed and pumped dry then filled with the oil. The answer will shock you.

Lake Erie.

gas turbine?? where did that come from?? duh

re: SPR. the amount it holds based on prior imports of crude. as more crude is available, less gets imported and the SPR isn't relivant anymore.thanks to fracking and "drill baby drill", the US is awash in oil from within our shores.http://americasmarkets.usatoday.com/2014/11/28/plunging-oil-prices-lift-airline-shares-tank-energy-plays/

• Quick clarification:
  
• US Gallon = 3.785 litres
• Imp Gallon = 4.546 litres (20% more)
  
As for barrels .... how long is a piece of string. Oil has 1 scale & other fluids another.

Falling prices

Combined with the collapsing oil prices, iron ore prices and coal revenues are both at 5 year lows and/or have new importing taxes imposed (eg China and new taxes on imported coal). And then there are the many government imposts and royalties that were calculated on the higher price revenues. Our local state government based their revenues on iron ore prices around US$120/tonne .... and today it is around $70/tonne. These governments with their snouts in the trough are suffering.

Another part of the overall fallout, is the massive drop of Russian iron ore sales to China. Could that be another 'home goal' for Putin?

Meanwhile, Australia's 2 big iron ore miners BHP Billiton and Rio Tinto are ramping up production levels to record highs .... a bit like what OPEC are doing with oil exports to the world.

So what is the way forward? Maybe the solution is yet another consumer driven fix .... welcome back the 2+ ton yank tank with gas consumption rates in the low teens? (Import from Cuba?) And even the Chinese could help out by exporting gas guzzlers to North America. The Chinese are banning cars with poor fuel economies in their Phase 4 regulations ... so the fleet average is to be 47 miles / US gallon .... saving around 348 million barrels of oil / year based on current vehicle growth stats.

Assumed that the units are reconciled.

Countries Gasoline Prices Including Taxes - US Energy ...

Gas Prices At The Pump: Europeans Pay Almost Twice As ...

I think Darwin nailed the way forward.

The weak will die and the strong will live............as it should be. Survival of the fittest.

Or is it survival of the most well armed, thuggish street slugs? I liked it better when we had civilization, and I thought that is what we mostly fought wars for was to prevent thugs from being the only ones that survive.

"So what is the way forward? Maybe the solution is yet another consumer driven fix .... welcome back the 2+ ton yank tank with gas consumption rates in the low teens? "

Actually when looked at in terms of their fuel consumption Vs the mass and sheer lack of aerodynamics that were in play with those vehicles many had superior fuel/engine efficiency numbers to many of today's modern vehicles.

I understand your view but I don't agree.all the pieces aren't there yet but a shift in trend to electric is well underway.we'll still need crude for many years for all its other uses like plastics and chemicals but as a fuel its too dirty to you if a viable alternative exists.fusion isnt here just yet but if harnessed a dramatic shift will quickly occur.

if your 401K is rich with drillers and other exploration stocks you might want to rethink that

I am hoping for fusion,but that is long ways off,and something will happen to thwart

the progress before it comes to fruition,I think.

The next revolution in electric will probably come from China.

The need is greatest there.They are already using battery powered bicycles powered

by Li/Ion power tool batteries.

They simply pack a few spare batteries,and plug in a fully charged spare

when needed,then recharge at home or work.

I think the future of fusion lies in harvesting Helium3 from the lunar soil and rocks.

It is plentiful on the moon, but very rare on Earth due to our magnetic shielding and

atmosphere.

H3 is much more efficient than hydrogen for fusion,and is worth much more than

gold,which may make lunar mining profitable and feasible.

Like the gold rush in California,and Alaska,there will soon be a rush to the moon for H3.

why go to the moon, just make it here from ocean water

the Lockheed concept, it is useful to know how fusion works and how methods for controlling the reaction have a fundamental impact on both the amount of energy produced and the scale of the reactor. Fusion fuel, made up of hydrogen isotopes deuterium and tritium, starts as a gas injected into an evacuated containment vessel. Energy is added, usually by radio-frequency heating, and the gas breaks into ions and electrons, forming plasma.

The superhot plasma is controlled by strong magnetic fields that prevent it from touching the sides of the vessel and, if the confinement is sufficiently constrained, the ions overcome their mutual repulsion, collide and fuse. The process creates helium-4

lockheed estimates that less than 25 kg (55 lb.) of fuel would be required to run an entire year of operations. The fuel itself is also plentiful. Deuterium is produced from sea water and is therefore considered unlimited, while tritium is "bred" from lithium. "We already mine enough lithium to supply a worldwide fleet of reactors, so with tritium you never have too much built up, and that's what keeps it safe. Tritium would be a health risk if there were enough released, but it is safe enough in small quantities. You don't need very much to run a reactor because it is a million times more powerful than a chemical reaction

Tritium not the same as Helium3.

Helium3 is very rare on Earth.

Helium3 fusion produces far less wasteful and damaging (to containment vessel)

neutron emissions and produces more energy.

http://www.targetofopportunity.com/catching_wild_pigs.htm

Just maybe when the ISIS crisis is resolved, you will see the end of any cheap oil.

http://www.forbes.com/sites/fidelity/2014/10/14/isis-iraq-and-oil-prices-what-investors-should-know/

You may hope not to see $100/Barrel but I do believe and as the article points out, higher prices will return. OPEC required a controlled market. They are in a crunch because of the development of oil and gas in USA and Canada. But also because they have to compete with a black market run by Islam militants. They can charge low prices because they have no investment in the development or maintenance of the oil well.

If you want to see how the world markets Really operates,read Vulure's picnic,by Gregg Palast.

An eye opener.!

forget 68, real time quote....$64.71

I played golf with a guy today who told me that Middle East oil producers were planning to drop the price to below $60.00 USD and drive all the frackers out of business.

Then, they could set the price as high as it was five years ago.

Who knows?

thats somewhat possible in the short term. many fracking operations are financed with loans that are serviced as they operate. so if the Saudis really cranked it up and held production for a few months many fracking operations couldn't make their payments if they don't have a market to sell into. I highly doubt you'd see it but it is a possible strategy to preserve market share

Well, I don't know.

With the IS stealing and selling bootleg oil on the black market, and all the other players hurting for $ (like Russia, the other idiot on the block) it seems unlikely.

Regardless of all that, poor slobs like me who have kids to haul and jobs to go to will still pay whatever the price at the pump is.

Work is the curse of the drinking class.

Or for once, it might backfire, and help "us". Demand for fuels will increase, and keep the price steady enough that good plays will stay in production, others will go on hold. But the other plus is that Russia and IS suffer more, and so does Iran. I think the Saudis actually do want to help, as they believe this to actually slow down the instability in the region. Same with Bahrain, and other OPEC producers other than Venezuela.

Reading your byline as a good answer

History often repeats itself. Back in the early 80's the big alternate source to mideast crude was oil shale and tar sands, there were massive projects underway by the major producers to extract the available oil. Totally unexpectedly, since oil prices were at a peak, Exxon and others announced that they were abandoning the projects.

They made the announcement on a Sunday night and didn't even tell their contractors that they were going to do this, the E&C company that I worked for had spent 18 months hiring thousands of engineers and designers just for that project, 90% were let go within 2 weeks.

They had a pretty good crystal ball. It didn't take long for our "friends" in the royal families to drop the price over the next few years, just take a look at this chart to see the price action. You can imagine what happened to the smaller producers who all went bankrupt as they continued to pour money into projects that were never going to pay off when their cost to produce was above the market price.

Fracking and solar are next, it's too bad because they're both great sources of non-oil energy.

In a parallel universe, iron ore spot pricing is heading in the same direction as oil.
Both drops are having an impact on Australian miners, stock exchange bank listings and government coffers. The big miners, BHP Billiton and Rio Tinto are ramping up production ... "giving iron ore away".

"A steep slide in resources stocks has dragged the Australian share market lower, with iron ore prices hitting a fresh five-and-a-half year low.

The benchmark Chinese spot price fell 4 per cent yesterday to $US72.10 per tonne.

Analysts are now doubting whether the typical end of year seasonal restocking and rebound in prices will take place.

If it does not, the outlook for Australia's iron ore sector next near - especially the smaller miners - is grim indeed." ABC News

I just took a quick look, pretty dire the Chinese just cant suck up all commodities like they once did.

I heard today, the oil companies are "stacking" rigs in West Texas, and that means lay-offs.

I hear WTI set a 5 year low today @ around $60

The newest producing fields are in east Texas

Are you just going to sleep in this car going down the road? Never stop and fill up? Have the flux capacitor recycle all wastes? A hydrogen future is all ours for the taking right now! New ammonia production method uses less electrical energy than it produces, and will make a fuel to blend with gasoline or diesel. Not only that, the new engine can burn it straight out, with practicably no emission, certainly zero carbon emission. No oil used either, not even for lubrication.

The current thing with the price of crude oil is that the Saudis are try to help us suppress ISIS, and this can also hold down the lid on countries like Iran that want nothing more than to set the world on fire.

The Saudi's are going to run out of oil.

That's what we should be worrying about.

Oil has enabled the royal family to become almost criminally narcissistic. When the oil is gone, we've got an even better bankrolled ISIS on our hands.

These people will not simply relinquish power when the oil dries up...nor will they be willing to go back to herding camels for a living.

The Saudi's will be willing to fund whatever war is necessary to preserve their lifestyle.

Those of us who are interested in some of the forces behind oil pricing may find this article interesting.