Oil/Gold Prices Will Go Up This Week!

[Smurf1976]

Re: Oil....Gold prices Will Go Up This Week!

Thanks for the info Han.

Ethanol can be used as a complete replacement for diesel IMO. I don't know what the numbers would look like though. New engines would be needed for tractors and trucks but given the amount of compression you can apply to ethanol the torque output should be sufficient to power a truck easily. That said, with new engines designed for ethanol the lifespan of a massive low revving high-torque engine shouldn't be much different.

The problem is one of scale.

If you look at a human body then the food you eat (according to a doctor I asked a while ago) is about 10 (megajoules) each day give or take a bit depending on size, gender, occupation etc.

Now, if people ran on petrol then we would each need about 100 litres per year to supply this energy. So, all the food we eat in a year supplies enough energy to fill the tank of a six cylinder car one and a half times each YEAR. Enough to drive a Falcon about 700km or about one fortnight's typical use.

So, we double the food production and use that to run our cars for 2 weeks a year. Of course, converting that food to ethanol would lose some of this energy and then there's all the (oil) energy that goes into growing and transporting the food. And natural gas to produce the nitrogen fertilizers etc.

And then we need fuel for buses, trucks, aeroplanes...

It makes good sense to make ethanol from agricultural and forestry wastes. Very good sense indeed. But we're just not going to be able to make anywhere near enough to use it as a mass replacement for petrol.

 

[Hanrahan]

Re: Oil....Gold prices Will Go Up This Week!

**** I have not read any books on Macro-Economics since I was at uni....

In which case we probably have a differing definition of macro-economics. I use the term loosly to describe current affairs and how it would affect world markets (not c/a and what Brittney named her new baby). I then look for companies in the hopeful sectors. This has served me well for a few years and I have had some wins on gold, silver, oil and uranium. For everything there is a season, you've just gotta read to know the season. The calendar doesn't work.

And I share your opinion of ABARE and most private thinktanks as well. That's odd because I have great respect for some individual thinkers. Who do you trust? Problems, problems.

 

[Smurf1976]

Re: Oil....Gold prices Will Go Up This Week!

Back to the scientific aspects of oil...

There's no need to worry about the end of the world when we use the last drop. The world will NOT run out of oil within the lifetime of any of us or our children. What we are facing is not enough oil to carry on busines as usual. A devastating blow indeed, but not a situation of no oil at all.

Why?

Oil fields don't stop flowing like petrol stops flowing from a car's tank when it's empty. They slowly lose output more like a torch battery going flat. For example, Bass Strait production peaked in 1985 and is now down over 60% from that peak. But it is still flowing, just not as quickly, and it will still be flowing in another decade but it will be slower than it is now.

Why?

Two reasons. When an oil field is first developed each well will flow at full rate because it's new. But there aren't many wells producing yet. So production rises as more wells and infrastrucure is brought online.

But then the older wells start to produce less oil. Production is still rising due to the new wells, but it takes more and more new production to offset the declines from the older wells. A point comes where the diminishing number of new wells coming online (because the discovery and development job is nearing completion) can no longer offset the declines and production starts to fall. And it keeps falling despite a few new wells coming onstream and the occasional new discovery (like the new projects in Bass Strait or the Cooper Basin). The occasional step forward followed by another two steps back.

In additon to the differing number of wells in production, the wells themselves lose flow rate over time as pressures reduce. To some extent technology has helped, but overall in a field you still slowly lose production capacity just like the torch bulb slowly fades out.

The exception to this is when fields are massively flooded with water to maintain pressure (and therefore production). Saudi Arabia is best known for doing this on a very large scale despite it being publicly documented by Saudi Aramco over 2 decades ago that these high production rates risked permanent field damage. (So don't be surprised to see a surprise "reason" why Saudi Arabia cuts oil exports sometime in the next few years - it'll probably be presented as a political matter rather than a geological one). With horizontal maximum contact wells and a steadily rising water level (since the oil floats on water) the production carries on with little above ground evidence as to the situation.

It's just like how a hot water cylinder works - hot water floats on cold (really, it does, cold goes in the bottom and pushes hot out the top. The hot is floating on top of the cold with only a small "mixing layer"). So you stand in the shower blissfully unaware that over the course of a minute or so you are about to run out of hot water.

It's the same with water flooded oil fields. It all carries on flat out until the wells start flowing water and it's game over. Now, if there are a few thousand wells drilled into a reservoir (as there are in some of the Saudi fields) then they wont all die at once. But from a big picture perspective they will die pretty darn quick...

But it's not just individual fields that are a problem. It's happened to whole countries where production rises, peakes and then relentlessly falls. Even the USA with literally half a MILLION producing wells and the best technology couldn't beat it. The oil price spikes of the 1970's led to more drilling and LESS production. Nature just doesn't respond to what happens with prices!

The real concern now is about a global peak. Worldwide light oil production seems to have peaked with declines in recent years. Non-OPEC production was wobbly BEFORE Katrina. Even OPEC was flat out and production actually went down a bit due to trouble in Iraq and Nigeria. Sure, there's more heavy oil but increasingly that's not enough to offset the declines of light and medium grades and refineries generally can't process it anyway.

But why can't we just pump harder? It's not that simple unfortunately. Overproduce an oil field and PERMANENT DAMAGE occurs and the end result is a lot of oil that can never be recovered. There is some evidence that the Saudi's are on the edge of doing this at present.

Go to McDonalds or similar and get yourself a "thick shake". Now, try and drink it through the straw as quickly as you could drink Coke. Can't be done because it's just far too thick - it takes most people a few minutes to suck this up the straw whereas they could drink the Coke pretty fast.

Oil is much the same. There's a limit to how fast it comes out and the heavy, thick oil that we are relying on more (now that worldwide production of light oil is falling) is even harder to get out quickly. It's like comparing cream through a straw to trying to suck peanut butter through a straw... A lot of effort for relatively little and most refineries can't process heavy oil anyway.

So what's it all mean?

Practically every oil field in the world was producing flat out BEFORE Katrina. And that was barely adequate. Now with some US production wiped out (some of the major platforms have been wrecked) the worldwide oil production has fallen.

Whilst there is still oil to be developed and more to be found, the scale is a problem. There just isn't enough new capacity coming onstream to offset the declines elsewhere as fields deplete (known as natural decline) and also to meet rising demand. Crunch time has come and the world just doesn't have a backup plan.

Build nuclear, solar, whatever. But what do we do about the next decade (at least) while it's being built? Demand is soaring and production is struggling to stay flat and will in due course start to fall. The inescapable conclusion is that there's a shortfall in supplies which means problems for the economy since it's not merely a question of price but rather it's a question of actually cutting demand.

Long term, yes, there are things that can be done. Cars with scaled-up mobile phone batteries would do away with the need for petrol provided that we have electricity (which can be produced from coal, renewables, nuclear etc). So there is hope. But they're just not going to be on the roads on a mass scale this week or even next year. The problem is one of timing between when oil becomes scarce and alternatives become practical. That's my focus here - that gap which realistically is likely to be a couple of decades or so.

And on top of all this there's issues with Iran etc. OPEC production has actually fallen a bit lately...

But what about gas? Ultimately it goes the same way. Discovery peaked in the 1970's and about half the reserves are in Russia and Iran so it's geographically concentrated just like oil which means geopolitical strife... And the UK and US are already running out of gas (production falling, demand rising just like with oil).

Realistically, gas offers the best near term replacement for oil. But unfortunatly everyone seems to think it's best used in power stations (which could easily use coal, nuclear etc) which could well leave us all rather short (to say the least) on transport fuel.

This is a highly complex topic not easily explained. Hopefully I've shed a bit of light on it here although I'm very aware that I've barely scratched the surface.

In short, don't panic. There will be SOME oil for a long time yet. But not much more than we have now and in due course much less. There are still tar sands, natural bitumen etc. But they don't come on the scale of the cheap, easily flowing light and medium grade oil that is becomming increasingly scarce.

With China and others wanting an increasing share of a shrinking pie it's unlikely to be cheap (or easy) to obtain oil. So plan accordingly.

 

[GreatPig]

Re: Oil....Gold prices Will Go Up This Week!

For some really scary theories about what could happen, and some strong arguments with lots of references, read Matt Savinar's book "The Oil Age is Over".

It's available here and used to be downloadable for free, but I notice it now costs US$11.95.

There's no pussy-footing around in that book. It opens like this:

Dear Reader,

Civilization as we know it is coming to an end soon.

Then a bit later:

In short, the end of cheap oil means the end of everything you have grown accustomed to, all aspects of industrial civilization, and quite possibly humanity itself. This is known as the post-oil “die-off.”

4. What did you mean by “die-off”?

Exactly what it sounds like. It is estimated the world’s population will contract to less than 500 million within the next 50-100 years as a result of oil depletion (current world population: 6.4 billion).

5. Are you serious? That’s 90 percent of our current population. How could that many people perish? Where does that estimate come from?

That estimate comes from biologists who have studied what happens to every species when it overshoots its resource base. When given access to an abundance of food (energy) all species follow the same pattern: a rapid population increase (“overshoot”) followed by an even more rapid population decrease characterized by violence, war, and cannibalism.

So that "bright" future ahead might just be the flash of nuclear explosions.

Cheers,
GP

 

[wayneL]

Re: Oil....Gold prices Will Go Up This Week!

From: http://urbansurvival.com/week.htm

==========================================================
Urgent Update: Oil Industry Bracing Again

We won't reveal our sources on this, but we have just received an email from a source within the Gulf of Mexico Oil Industry that you need to be aware of:

Planning evac for the eastern Gulf tomorrow……just thought I’d give you a heads-up. That means production shut-ins start tomorrow evening if the storm stays heading westward, and even more evac next day if it strengthens. This means gas will be running back up once again this week. Your readers ought to gas up while it’s cheap if they see the storm getting stronger and heading into the Gulf of Mexico.

If it goes where they show on the predictive model, it will be tearing through the edge of the OCS (outer continental shelf), which is where all the deepwater stuff is, and the northern side (strongest) will impact the fixed platforms across the entire Gulf. If it makes landfall in Texas, it will be going through the part of the Gulf where natural gas production is more prevalent than oil. This may impact the winter fuel costs, especially if we lose any of these platforms.

It all depends on how strong it gets, and with Houston temps scheduled for the upper nineties this week, it could get a lot stronger than they predict. Remember, their predictive model has a big basis in history, but with the climate changing, the model could easily be wrong in a body as shallow as the Gulf of Mexico. Shallow water tends to be warmer, right?

 

[mime]

Re: Oil....Gold prices Will Go Up This Week!

Hate to get personal but you probably failed in logic too.

Seriously, If you do not believe what we say, when we are quoting highly intelligent people, experienced in the industry, then quote opposing evidence and sources. I could flood this thread with "black" data but you wouldn't read it. If you are interested you will search on "King Hubberd", "Peak Oil" and "matt Simmons". If you are not leave the debate to the adults.

<edited>. I said it was my opinion and you publicly flame me. I have read the peak oil stuff and I don't agree with the writer on the site that the world is doomed no matter what. I read around half of smurfs post and agree with him that we will not be able to produce enough oil for world demand. It will cause an economic slowdown but not the end of the world, we will be able to use alternate fuel sources or make our machines more efficient.

Don’t be a sheep and believe everything you read. From memory the site was selling their research and other crap they came up with. They want to make money off panic and hysteria.

Just read their opinions but don’t necessarily believe them.

 

[Hanrahan]

Re: Oil....Gold prices Will Go Up This Week!

Don’t be a sheep and believe everything you read. From memory the site was selling their research and other crap they came up with. They want to make money off panic and hysteria.

Just read their opinions but don’t necessarily believe them.

OK, Now we're even LOL And I apologise for the "flame". I did not intend it so and have already given reasons for the post.

But you miss my point. A simple "I think" with no supporting evidence is not so impressive. If there is evidence you believe worthy of consideration then post it for all to see.

I downloaded and read Matt Savinar's book "The Oil Age is Over" mentioned above and it scared me. I accept the general facts given but not necessarily his conclusions but that doesn't matter because it is out of my control. There is logic in concerning oneself with that which can be effected, so even that very human emotion of denial is both understandable and desirable.( for sanity reasons; we are nothing without our minds)

 

[Kauri]

Re: Oil....Gold prices Will Go Up This Week!

From: http://urbansurvival.com/week.htm

==========================================================
Urgent Update: Oil Industry Bracing Again

We won't reveal our sources on this, but we have just received an email from a source within the Gulf of Mexico Oil Industry that you need to be aware of:


Updated images at.. http://www.ssd.noaa.gov/PS/TROP/DATA/RT/GMEX/IR4/20.jpg

 

[Epsilon]

Re: Oil....Gold prices Will Go Up This Week!

The storm is still way out......It has not even YET "transformed" into a hurricane let alone going directly towards Texas.....Hopefully it wan't happen.
Rita is still an ..unpedictable "maniacly" behaving hydro-lass.....
We will not know until atleast Wednsday.......

 

[mime]

Re: Oil....Gold prices Will Go Up This Week!

Wow oil spiked $4.3 a barrel. What does the future hold?

 

[markrmau]

Re: Oil....Gold prices Will Go Up This Week!

Oil COULD be about to have a nasty head and shoulders formation. Just have to wait until we see what rita does.

Note, nymex crude is opening early - 7am sunday US time I think.

 

[wayneL]

Re: Oil....Gold prices Will Go Up This Week!

A bit of light relief....not that far off topic :

Recently during one of his many trips, President Bush encountered a man with
long hair, wearing a white robe, and sandals, holding a staff.

President Bush went up to the man and said," Aren't you Moses?" The man
never answered but just kept staring straight ahead.

Again the President said, "Moses!" in a loud voice.

The man just kept staring ahead, never answering the President.

Bush pulled a Secret Service agent aside and pointing to the robed man asked
him, "Doesn't that man look like Moses to you?"

The Secret Service agent agreed.

"Well," said the President,"Every time I say his name he just keeps staring
straight ahead and refuses to speak. Watch!" Again the President yelled,"
Moses!"and again the man stared ahead and didn't answer.

The Secret Service agent went up to the man in the white robe and whispered,
"You look just like Moses. Are you Moses?"

The man leaned over and whispered back ... "Yes, I am Moses.

However, the last time I talked to a bush I spent 40 years wandering in the desert, and ended up leading my people to the only place in the whole middle east where there is no oil."

 

[wayneL]

Re: Oil....Gold prices Will Go Up This Week!

Oil COULD be about to have a nasty head and shoulders formation. Just have to wait until we see what rita does.

I was thinking possible H & S coming since the low on the 12th.

However Unleaded Gas is a different story, as it's refinery capacity that is potentially more impacted by Rita.

Natural gas is an even bigger story, they are apparently closing down gas wells(?) in anticipation of damage. of tranportation facilities

Oct UG & NG :

 

[wayneL]

Re: Oil....Gold prices Will Go Up This Week!

A good site to track the storm....down to a strong cat 3 as of the moment.

http://wwwa.accuweather.com/maps-sa...ler=1&zipcode=&site=SE&fday=1&type=ei&large=1

 

[Epsilon]

Re: Oil....Gold prices Will Go Up This Week!

Wayne.....
How about latinizing your signature:
" I think, therefore I am".......To something like.....DUM SPIRO SPERO (While I breathe I hope)...OR , better still,.......DUM VIVIMUS VIVAMUS ((While we live let us live.....In free translation: Let us enjoy life!). The latter one was the motto of the Epicureans (of-course......)......
Cheers!!!!! Glorious day in Perth today!!!!!

 

[AnUbIs]

Re: Oil....Gold prices Will Go Up This Week!

In some way I’m glad petrol is coming to an end, now maybe we’ll develop different fuels so we don’t have to keep filling the pockets of the people who hate us!!! Maybe we can sell our fuel to them for top dollar!

 

[Smurf1976]

Re: Oil....Gold prices Will Go Up This Week!

I was thinking possible H & S coming since the low on the 12th.

However Unleaded Gas is a different story, as it's refinery capacity that is potentially more impacted by Rita.

Natural gas is an even bigger story, they are apparently closing down gas wells(?) in anticipation of damage. of tranportation facilities

Totally agreed. Even though crude oil production has been cut due to these storms, refinery throughput has been cut even more so there is now a surplus of crude even if there is a shortage of refined products. The world just can't process the entire crude production with the refinery problems.

Natural gas is a HUGE problem. The US is post-peak gas producer to start with. Demand is up and Canada also can't supply any more than it already does. Indeed they to have the problem of resource depletion.

Any physical shortage of natural gas will tend to affect the diesel, jet fuel / kerosene, LPG and fuel oil markets also since these are the most readily usable substitutes, particularly for power generation. Petrol becomes affected indirectly as refineries shift to maximise mid distillate production.

I do, however, get the impression from a growing number of anecdotal reports that demand, an quite possibly the global economy, has already gone over a tipping point during the past few weeks. Demand for refined products seems to be slipping quite seriously in some instances and they all seem to come back to reduced consumer spending / tight finances rather than the use of alternatives.

 

[wayneL]

Re: Oil....Gold prices Will Go Up This Week!

Wayne.....
How about latinizing your signature:
" I think, therefore I am".......To something like.....DUM SPIRO SPERO (While I breathe I hope)...OR , better still,.......DUM VIVIMUS VIVAMUS ((While we live let us live.....In free translation: Let us enjoy life!). The latter one was the motto of the Epicureans (of-course......)......
Cheers!!!!! Glorious day in Perth today!!!!!

Indeed a perfect day

It is true that Quidquid latine dictum sit, altum viditur (Whatever is said in Latin sounds profound).

My signature in latin is actually Cogito ergo sum. Another variation is Cogito ergo doleo (I think, therefore I am depressed. haha)

I've always thought that the use of obscure latin phrases without the translation rather pretentious, may as well use the english.

However I'm not averse to the well known phrases in common usage, such as ad hoc, ipso facto, ad infinitum, quid pro quo, cui bono etc

But, Denuone latine loquebar? Me ineptum. Interdum modo elabitur. (Was I speaking Latin again? Silly me. Sometimes it just sort of slips out.)



Cheers

PS. Dum vivimus vivamus I like that one. The epicureans (largely misunderstood by todays society) had a good thing going. The movement should be resurrected IMO.

 

[Epsilon]

Re: Oil....Gold prices Will Go Up This Week!

Glad to hear you like the Epicurean philosophers(y) thinking and way of life....
Do you speak any Greek by the way?
Have you ever had coffee at Kostas in James street, Northbridge?
Another brilliant day in Perth today......We are going to Frementle for lunch!
Cheers)

 

[brerwallabi]

Re: Oil....Gold prices Will Go Up This Week!

Gold stocks might offer some gains in the morning if current movements overseas of the Dow being even further down and gold being currently up by $2.60US.
Off to bed yawn so hopeully I can have a good day trading tomorrow.(very carefully though)