.

[Gerry Maddoux + 3,627]

39 minutes ago, Dan Warnick said:

Okay, but now figure the opposite scenario, if Trump wins, which is most likely because I said so. 

Ah!

Well, then it gets really interesting. Trump pushes KSA into the Israeli chicken coop: the Mother Hen watching over all the Palestinian oil states. For 75 years the U.S. has been the guarantor of protection for the KSA. Not because of love but for the promise of oil. It's that simple. At long last, after having to turn a blind eye to their crudity and depravity, the U.S. can say, either do this or we leave you to the vultures, who would like nothing better than to tear you apart. 

At that point we're talking about a troika: Israel, U.S., KSA (and other Arab states). This side will square off, at some point, against China-Iran. The price of oil sneaks up to $80 so the oil-producing states can make their nut. There it stays as EV's and the renewables come blasting their way in. 

By 2030, EV's will be 50%. Solar/wind/H2/nuclear will be 50%. Most super-majors will be aggressively pursuing renewables. The German car-makers will be floundering. New brands like Tesla, Lucid, NIO, and others we haven't heard of will be making their mark.

Like BLA said, this time it's different.  

[Gerry Maddoux + 3,627]

7 minutes ago, BLA said:

Obama was against oil during his campaign to win votes.  Changed tune once elected.  Same with Hillary. I suspect same with Joe.

No.

You can't have it both ways. 

You said this time it's different.

And it is.

Biden promised the very people who hold his puppet strings that he would ban fracking on government lands if he got elected. Those people are nasty. They are AOC and her pals, Bernie Sanders. Elizabeth Warren. 

Biden isn't acting very competent. He is a Trojan Horse. He has to do what he said he'd do. Otherwise his very own people cut him loose and let their VP run things. How would they do that? By impeachment, or better yet, by invoking 25:VI----the ability for the full cabinet and the VP to sign he's incompetent and remove him from office. Think he might fold under that kind of pressure?

Yeah, this time it's different. VERY damn different!

[BLA + 1,666]

1 hour ago, Gerry Maddoux said:

^

Well, a Biden win is going to be cause for a lot of glee for OPEC, because with the loss of our 5 mbo/d from the Delaware Basin, they can once again manipulate the market the same way they've done it for the last 3/4 of a century. 

I mean, this is not a maybe anything. If Joe Biden wins, the AOC Squad will hold him to his campaign pledge to "ban fracking on governmental lands," which in NM would just destroy the economics. The very sweetest spot of the Delaware are on governmental land. 

Give it some leeway. Say it will only knock 4 mbo/d off U.S. oil production. That's still massive. 

Even without a Biden win, we're looking down the barrel of a substantial oil shortage in 2022. Couldn't LNG fill that void? No, of course not. Not without shale oil drilling, because that's where the pop-off gas comes from. The pure dry gas basins contribute a pittance compared to the NG coming out of the Permian Basin as giveaway gas. 

(Attribution: An article to this point was penned by a good writer on OP.com. It was on my mind but then I read the article. I should have pointed this out first and foremost.)

With a BIden win. . . . . 

New Mexico's loss . . . . . 

Is North Dakota's win .  .  .  .  

Who are you voting for ?   😉

[BLA + 1,666]

17 minutes ago, Gerry Maddoux said:

No.

You can't have it both ways. 

You said this time it's different.

And it is.

Biden promised the very people who hold his puppet strings that he would ban fracking on government lands if he got elected. Those people are nasty. They are AOC and her pals, Bernie Sanders. Elizabeth Warren. 

Biden isn't acting very competent. He is a Trojan Horse. He has to do what he said he'd do. Otherwise his very own people cut him loose and let their VP run things. How would they do that? By impeachment, or better yet, by invoking 25:VI----the ability for the full cabinet and the VP to sign he's incompetent and remove him from office. Think he might fold under that kind of pressure?

Yeah, this time it's different. VERY damn different!

I agree this time it's different for reasons I gave. None having to do with Politicians. 

But Politicians aren't different. They're still all whores. (95%)

Politicians never lie or break campaign promises .  .  .  NOT.

That's why I no longer vote . . . . It only encourages them. 

Edited September 25, 2020 by BLA

[BLA + 1,666]

19 hours ago, Gerry Maddoux said:

^

 

Even without a Biden win, we're looking down the barrel of a substantial oil shortage in 2022. Couldn't LNG fill that void? No, of course not. Not without shale oil drilling, because that's where the pop-off gas comes from. The pure dry gas basins contribute a pittance compared to the NG coming out of the Permian Basin as giveaway gas. 

You make a good point.

I disagree with a "substantial shortage"

I could see periods of "markets tightening" during the interim, before EVs take off in the second half of this decade.

It's all about the timing.  New additional oil production  and uptake of EVs for reasons mentioned above. Mideast instability could have major implications for oil prices , but how does one calculate for that ?

Long-term Nuclear Fusion is the winner.  Some say 15 years . I think could be 30 years before implementations.  

Edited September 26, 2020 by BLA

[Gerry Maddoux + 3,627]

1 hour ago, BLA said:

I could see periods of "markets tightening" during the interim, before EVs take off the second half of this decade.

How much tightening depends on who wins. Green growth does too.

Right now, a substantial amount of rare earth elements and lithium, as well as battery innovation and growth, come from China. 

No matter how you slice it, President Xi knew about the contagion of this virus for a good two weeks without warning the rest of the world. 

Trump gets reelected, China will pay a mighty toll--and part of that will be felt in the green energy section.

Biden gets elected, we'll have cozy relations with China and renewables growth will accelerate like never before. 

Coin toss. 

[Dan Warnick + 6,100]

5 minutes ago, Gerry Maddoux said:

How much tightening depends on who wins. Green growth does too.

Right now, a substantial amount of rare earth elements and lithium, as well as battery innovation and growth, come from China. 

No matter how you slice it, President Xi knew about the contagion of this virus for a good two weeks without warning the rest of the world. 

Trump gets reelected, China will pay a mighty toll--and part of that will be felt in the green energy section.

Biden gets elected, we'll have cozy relations with China and renewables growth will accelerate like never before. 

Coin toss. 

Go Trump!

[footeab@yahoo.com + 2,190]

On 9/24/2020 at 4:36 PM, BLA said:

Conoco said oil demand will get back to 100 mm bbl/day by end of 2021 and grow from there.

Notice the only ones projecting these numbers are Oil Companies, OPEC Oil States and Investment Banks that want their business.  

Do these players have a plan "B" for when they come to realize they are wrong ?

Well, Since 1990, every single year, oil consumption has grown by half a million barrels per year.  Was a small blip in 2008...  Covid will put another blip in there, but that is ALL it will be, a blip. 

Is world population growing or shrinking?  Growing Yes. 

Does MOST of the world NOT drive currently?  Yes. 

Do they want to drive?  Yes. 

Does most of the world want to use plastics/glues/paint etc?  Yes. 

To displace 500,000 barrels of oil a day, how many EV's per year EXTRA do you have to produce to keep DEMAND flat? 

EDIT Math fart... used 20 gallons gas/barrel when a barrel is 42 and you get approx ~50 gallons of gas/barrel...

Gee, simple math time: 30mpg, average driver drives 30miles per day... 1 car 1 gallon per day in rough terms.  500,000 x ~50 gallons gas/barrel = 25 MILLION EV's need to be produced in year one, 50Million EV's produced in year 2... etc Million in year 3....

There is no way in this world EV's, especially in developing world who do not have electricity in all their homes of sufficient capacity will go EV.  Who is the biggest user of Oil going forward?  Developing world.  Its not the USA, Europe who are driving the oil market with their steady or declining populations.

Edited September 26, 2020 by footeab@yahoo.com

[Ward Smith + 6,615]

6 hours ago, Dan Warnick said:

Your scenarios and technological advances would and probably do work for Gold (as an example) too.  Yet Gold gets driven up and down for the same reasons I mentioned in my other comment.

My friend was the CEO of a major gold company. He told me that all the gold produced in the entire world in a good year amounts to less than 1/4 of 1% of the global supply. Therefore increases in production don't move the needle an inch. 

[footeab@yahoo.com + 2,190]

57 minutes ago, Ward Smith said:

My friend was the CEO of a major gold company. He told me that all the gold produced in the entire world in a good year amounts to less than 1/4 of 1% of the global supply. Therefore increases in production don't move the needle an inch. 

~200,000 tons above ground  https://www.gold.org/about-gold/gold-supply/gold-mining/how-much-gold

Mined: 3400tons https://www.mining.com/web/top-10-gold-producing-countries/

So, ~1.75% was mined in 2019. 

[BLA + 1,666]

On 9/25/2020 at 3:32 PM, Rob Kramer said:

Then Iran and Venezuela probably get some heat for oil trades. Demand crawls back and production stabilizes at best . Still leading to a shortage . Then a recovery in production end 2023 11.5 b/d ish is all I can see. Probably help the Americas recession recovery.  That's my idea of the future anyway.

Stabilizes at best = 9.8Mb/d 2021. 

The hammer behind Trump's Iran and Venezuela sanctions is the threat to financial institutions that facilitate their oil transactions.  That limits their ability to deal with only Russia and China.  India was big customer until sanctions.  

China announced a $25 Billion deal with Iran.  Seems desperate on Iran's part.  A desperate regime survival deal.  I don't see the Iranian people accepting being a Chinese vassal state in the long-term.  

Granted, if BIden elected it will be Happy Days in Iran.  Hunter and Chi's Hienz (Senator Kerry's stepson) will probably get a seats on the board of the Iranian NOC. 

 

Edited September 27, 2020 by BLA

[BLA + 1,666]

13 hours ago, footeab@yahoo.com said:

Well, Since 1990, every single year, oil consumption has grown by half a million barrels per year.  Was a small blip in 2008...  Covid will put another blip in there, but that is ALL it will be, a blip. 

Is world population growing or shrinking?  Growing Yes. 

Does MOST of the world NOT drive currently?  Yes. 

Do they want to drive?  Yes. 

Does most of the world want to use plastics/glues/paint etc?  Yes. 

To displace 500,000 barrels of oil a day, how many EV's per year EXTRA do you have to produce to keep DEMAND flat? 

EDIT Math fart... used 20 gallons gas/barrel when a barrel is 42 and you get approx ~50 gallons of gas/barrel...

Gee, simple math time: 30mpg, average driver drives 30miles per day... 1 car 1 gallon per day in rough terms.  500,000 x ~50 gallons gas/barrel = 25 MILLION EV's need to be produced in year one, 50Million EV's produced in year 2... etc Million in year 3....

There is no way in this world EV's, especially in developing world who do not have electricity in all their homes of sufficient capacity will go EV.  Who is the biggest user of Oil going forward?  Developing world.  Its not the USA, Europe who are driving the oil market with their steady or declining populations.

You get 19 gallons of gasoline per bbl.  Not 50.

[Ward Smith + 6,615]

12 hours ago, footeab@yahoo.com said:

~200,000 tons above ground  https://www.gold.org/about-gold/gold-supply/gold-mining/how-much-gold

Mined: 3400tons https://www.mining.com/web/top-10-gold-producing-countries/

So, ~1.75% was mined in 2019. 

Admittedly he told me that decades ago. But even if your numbers are correct now, how much difference can 1.75% make to the price? Can the flea on the tail wag the dog? 

[Dan Warnick + 6,100]

14 hours ago, Ward Smith said:

My friend was the CEO of a major gold company. He told me that all the gold produced in the entire world in a good year amounts to less than 1/4 of 1% of the global supply. Therefore increases in production don't move the needle an inch. 

Exactly.  

But my point was more about how you could know how much gold was extracted from a mine, you could know how much is stored, you could know how much is in transit, and you can even know that all of the gold you extract will be purchased, i.e. in your example you can even know that you will in all likelihood sell all you extract, it's a seller's market.  But you cannot know if the price of Gold will maintain, rise or fall in market price.

[Ward Smith + 6,615]

3 hours ago, Dan Warnick said:

Exactly.  

But my point was more about how you could know how much gold was extracted from a mine, you could know how much is stored, you could know how much is in transit, and you can even know that all of the gold you extract will be purchased, i.e. in your example you can even know that you will in all likelihood sell all you extract, it's a seller's market.  But you cannot know if the price of Gold will maintain, rise or fall in market price.

I guess my point was that production is such a low percentage versus what's in storage that it can't change much. But virtually all extraction industries are price takers not price makers. At least oil gets (mostly) consumed versus hoarded for gold. 

[footeab@yahoo.com + 2,190]

7 hours ago, BLA said:

You get 19 gallons of gasoline per bbl.  Not 50.

I know you are an economist/trader, but damn, I would have thought you knew when you were reading a representative number.  By percentage if one barrel of oil represented ALL usage of oil products, then from that singular barrel of oil, one would pour off 19 gallons from 42 to represent all gasoline usage.  But percentages of representative product are yikes dude...  One barrel of very light sweet crude is nearly 100% gasoline AKA Naptha cut percentage.  Slightly heavier crude and one gets more than 100% gasoline from a barrel of oil as it cracks down into a more product volume due to change in density. Now if you have heavier oil, then make more diesel from it instead of cracking and leftovers make gasoline, and the left over crude bits get transformed into many industrial products, oils, lipstick...

[footeab@yahoo.com + 2,190]

7 hours ago, Ward Smith said:

Admittedly he told me that decades ago. But even if your numbers are correct now, how much difference can 1.75% make to the price? Can the flea on the tail wag the dog? 

"AH", but dreaming of living in gold palaces is so much fun with other peoples money!

[Rob Kramer + 696]

56 minutes ago, footeab@yahoo.com said:

I know you are an economist/trader, but damn, I would have thought you knew when you were reading a representative number.  By percentage if one barrel of oil represented ALL usage of oil products, then from that singular barrel of oil, one would pour off 19 gallons from 42 to represent all gasoline usage.  But percentages of representative product are yikes dude...  One barrel of very light sweet crude is nearly 100% gasoline AKA Naptha cut percentage.  Slightly heavier crude and one gets more than 100% gasoline from a barrel of oil as it cracks down into a more product volume due to change in density. Now if you have heavier oil, then make more diesel from it instead of cracking and leftovers make gasoline, and the left over crude bits get transformed into many industrial products, oils, lipstick...

The rest of the barrel turns into the interior of the EV lol. Nothing like killing demand by creating demand!

[BLA + 1,666]

2 hours ago, footeab@yahoo.com said:

I know you are an economist/trader, but damn, I would have thought you knew when you were reading a representative number.  By percentage if one barrel of oil represented ALL usage of oil products, then from that singular barrel of oil, one would pour off 19 gallons from 42 to represent all gasoline usage.  But percentages of representative product are yikes dude...  One barrel of very light sweet crude is nearly 100% gasoline AKA Naptha cut percentage.  Slightly heavier crude and one gets more than 100% gasoline from a barrel of oil as it cracks down into a more product volume due to change in density. Now if you have heavier oil, then make more diesel from it instead of cracking and leftovers make gasoline, and the left over crude bits get transformed into many industrial products, oils, lipstick...

19 gallons gasoline , 11 gallons distillate. Throw in a couple of buckets of lube from the dregs. 

He said 50 gallons of gasoline. 

I don't consider naphtha crude oil.  Naphtha/condensate may be used for diluent.  The petrochemical guys love the Naphtha and Natural Gas Liquids (NGL) 

Edited September 27, 2020 by BLA

[Wombat + 1,028]

On 9/25/2020 at 10:27 AM, Gerry Maddoux said:

Malek is a very serious fellow who does nothing but look at this sort of thing. He has a point: major companies are discarding projects, slowing down, changing course. Total and BP are moving toward renewables projects very rapidly. Chevron is idling. Exxon has pumped the brakes on Guyana. Suriname needs some time. All work in Namibia is going to take a while. And that's it for new finds. 

When you really consider that the CAPEX on new finds is at $1T deficit, along with the idea of emerging countries trying to go renewables, you can actually go along with Malek's projection, providing you've had a drink or two. 

Imagine the world starting back up again. There's pent-up demand for travel, production, manufacturing. The number of countries that can remotely consider the concept of going full renewables by 2035 is ridiculously small. The number of states in the U.S. that are situated to go renewables is even small. California is the leader only because of Tesla. Texas is much better situated to go renewables and is at a good percentage already. Not only that but it's built on a stable part of the country--the craton--while Ca is built on seismically active parts that came in from the ocean and were sutured together by collision, prone to quake and also burn. 

Anyway, I indeed believe that there will be a substantial crude oil shortage, probably sometime about 2022. I know of some pretty savvy operators who are shooting for that date. Who really believes that the world is going to be stable? For 75 years the U.S. has protected a very primitive, greedy, careless KSA--because we needed the oil. We don't now. They were never fun to be around so what's the point in taking their insults, turning a blind eye to their dismemberments, offering any protection whatsoever. The Emirates saw the writing on the scrolls and signed on with Israel. If the Saudis knew what was good for them they'd do the same thing. Sides are being chosen: China-Iran, for example.

Mr. McKenzie can tell us the number of acres of wind and solar that Ca will need to go renewables. My bet is 5M acres. Multiply that around the world--must be a billion acres. Imagine where all that material is going to come from. Lithium is readily available as a carbonate (spoduline) but getting to it requires a heavy duty mining operation. Harvesting lithium-rich brine is slow. So far, cobalt and nickel are needed. To multiply this nascent industry by a magnitude necessary to get to even 50% renewable energy/EV transport would require trillions of dollars. What about India--poor but wise, populated with 1.5 B people? Take a lot of emerging countries. When lithium doubles in price, and cobalt and nickel and cadmium triple and then become scarce, tell me just how rapidly this new green deal is going to take over. 

My point: don't count old Malek out.

That is precisely why Nuclear is so important in the scheme of things!

[Wombat + 1,028]

On 9/25/2020 at 2:07 PM, Dan Clemmensen said:

I have zero understanding of how and why money value fluctuates. I used to think I understood certain basic principles, Including the idea that a massive increase in the money supply causes inflation and can lead to hyperinflation. the value of money appears to me to be a shared fantasy. If the world's currency traders come believe that there are far too many US dollars floating around, the value of the dollar will decrease relative to the value of other currencies.

On the contrary Dan, you have mastered the subject! The word "Credit" derives from "Credibility" ie: does a lender believe a borrower can repay? Once that belief disappears, that is when the s*** hits the fan. That is precisely the risk that Biden (or AOC et al), pose to the US economy IMHO. I should point out, Russia is already demanding that China pay for their oil in Euro's. That might be just the thin end of the wedge.

[Dan Clemmensen + 1,011]

5 minutes ago, Wombat said:

On the contrary Dan, you have mastered the subject! The word "Credit" derives from "Credibility" ie: does a lender believe a borrower can repay? Once that belief disappears, that is when the s*** hits the fan. That is precisely the risk that Biden (or AOC et al), pose to the US economy IMHO. I should point out, Russia is already demanding that China pay for their oil in Euro's. That might be just the thin end of the wedge.

I have a different perspective. President Trump and his administration no longer have any credibility anywhere in the world, except for his base in the white, non-college-educated portion of the US electorate. He has destroyed the credibility that the US government used to have basically everywhere. Probably, the largest current problem is the administratio's inept response to Covid-19, which has left us with the highest death rate relative to population of any major country. But this is only the latest problem. Caving in to Putin and continual musical chairs in all of the policy-making positions in the government are others. It is this destruction of our credibility that will lead to the crash, which President Trump and his followers will then blame on his defeat in the election. Mr Biden's policies are not AOC's policies or Senator Sanders' policies. Mr. Biden is a moderate Democrat. If President Trump is re-elected or otherwise stays in office, the rest of the world will give up on us and the dollar will crash. If Mr. Biden takes office, we might have a chance, but it may be too late to salvage our credibility.

[Wombat + 1,028]

54 minutes ago, Dan Clemmensen said:

I have a different perspective. President Trump and his administration no longer have any credibility anywhere in the world, except for his base in the white, non-college-educated portion of the US electorate. He has destroyed the credibility that the US government used to have basically everywhere. Probably, the largest current problem is the administratio's inept response to Covid-19, which has left us with the highest death rate relative to population of any major country. But this is only the latest problem. Caving in to Putin and continual musical chairs in all of the policy-making positions in the government are others. It is this destruction of our credibility that will lead to the crash, which President Trump and his followers will then blame on his defeat in the election. Mr Biden's policies are not AOC's policies or Senator Sanders' policies. Mr. Biden is a moderate Democrat. If President Trump is re-elected or otherwise stays in office, the rest of the world will give up on us and the dollar will crash. If Mr. Biden takes office, we might have a chance, but it may be too late to salvage our credibility.

On the contrary, the rest of the thinking planet fears a communist United States. Except for China and Russia. Sure, the rest of the Western world is fed the same left-wing syndicated news about Trump that you get, but those of us in the know are planning to dump the USD if Biden wins. Indeed, there are record short positions on it thanks to Biden leading the mainstream polls. The only thing keeping the dollar alive is the fact that the polls were incredibly wrong last time. If the Dem's $3.4trn Heroes Act passes, as well as the "Green New Deal", there will be a lot of spending and no way to pay for it. As I said, the US will lose credibility where it matters most, ie: with the international bond markets. Tax increases on corporations and wealthy individuals will only worsen things in this age of mobile capital. If you want to know what the smart money is thinking about the fate of America under Biden, look no further than Portland or New York. Think BLM/Antifa. A Biden victory will not stop them, only embolden them further. That is what is spooking international investors. Out of control lefties that may just have the numbers. You know that I would love to see the US go green a little faster, but your trade deficit has just topped $1 trillion per annum and you are screwed if oil price not reach $50 by Xmas and the Northern Hemisphere has another warm winter which would bankrupt your LNG companies as well. You need to try look through the eyes of an international investor, not those of the "sheeple"?

[Wombat + 1,028]

1 hour ago, Dan Clemmensen said:

I have a different perspective. President Trump and his administration no longer have any credibility anywhere in the world, except for his base in the white, non-college-educated portion of the US electorate. He has destroyed the credibility that the US government used to have basically everywhere. Probably, the largest current problem is the administratio's inept response to Covid-19, which has left us with the highest death rate relative to population of any major country. But this is only the latest problem. Caving in to Putin and continual musical chairs in all of the policy-making positions in the government are others. It is this destruction of our credibility that will lead to the crash, which President Trump and his followers will then blame on his defeat in the election. Mr Biden's policies are not AOC's policies or Senator Sanders' policies. Mr. Biden is a moderate Democrat. If President Trump is re-elected or otherwise stays in office, the rest of the world will give up on us and the dollar will crash. If Mr. Biden takes office, we might have a chance, but it may be too late to salvage our credibility.

By the way, I would love to know what you mean by "caving in to Putin"? Also, my understanding is that US has only 200,000 covid deaths with pop'n 320,000,000 whereas UK has 50,000 deaths with 65,000,000 pop'n? You are doing better than UK despite far fewer lockdowns?

 

[Dan Clemmensen + 1,011]

25 minutes ago, Wombat said:

Also, my understanding is that US has only 200,000 covid deaths with pop'n 320,000,000 whereas UK has 50,000 deaths with 65,000,000 pop'n? You are doing better than UK despite far fewer lockdowns?

 

Look at https://91-divoc.com/pages/covid-visualization/

You are correct, UK is at about 631/million, while US is at 620/million. But the US is increasing more rapidly and will overtake UK within about 2 weeks.