Psychological manipulation of oil prices.

To me, it seems very apparent that various writers are consciously making blatant efforts to constantly boost oil price increase expectation. It seems quite unprofessional. I am wondering why editors do not discourage some of the wild claims. Am I wrong? Fortunately, it seems that other writers soon follow with more realistic forecasts. Is anyone else disturbed by this? 

Actually, the same tactic seems to be used by advocates of solar plants and wind turbine farms. They have a more religious zeal to their unfounded claims though. It reminds me of the Tesla fanatics who cannot logically show how individuals or society will actually benefit from buying their cars. 

My bias is clearly toward natural gas powered vehicles with special emphasis on trucks, ships, locomotives, etc. 

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18 minutes ago, ronwagn said:

To me, it seems very apparent that various writers are consciously making blatant efforts to constantly boost oil price increase expectation. It seems quite unprofessional. I am wondering why editors do not discourage some of the wild claims. Am I wrong? Fortunately, it seems that other writers soon follow with more realistic forecasts. Is anyone else disturbed by this? 

You are not the only person wondering about the pro-triple-digit-oil cheerleaders.

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1 hour ago, ronwagn said:

To me, it seems very apparent that various writers are consciously making blatant efforts to constantly boost oil price increase expectation. It seems quite unprofessional. I am wondering why editors do not discourage some of the wild claims. Am I wrong? Fortunately, it seems that other writers soon follow with more realistic forecasts. Is anyone else disturbed by this? 

Actually, the same tactic seems to be used by advocates of solar plants and wind turbine farms. They have a more religious zeal to their unfounded claims though. It reminds me of the Tesla fanatics who cannot logically show how individuals or society will actually benefit from buying their cars. 

My bias is clearly toward natural gas powered vehicles with special emphasis on trucks, ships, locomotives, etc. 

Valid observation, Ronald. In addition, there other factors contribute to the high price cheerleading. 1) bias from vested interest or investment, 2) follow the crowd and media hype, always in the direction of recent moves and 3) repeating what most others are saying so as to appear smart.

There is still room for sound analysis, but it will not be widely accepted.

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My favorite stories run like this "Analyst X says he expected oil prices to hit $1,000 before year's end seeing no adverse effect on demand. Analyst X is a famous oil bull." Anything for clicks.

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Even mainstream media these days has turned into what most closely resembles a boiler room. It's all about headlines and driving traffic to the site for advertising--nothing more. But sadly it works, so we have only ourselves ('we the people') to blame. 

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What FACTS concerning imbalance between supply and demand in the oil market do you have to support your claim of bias on analysts who are bullish? Perhaps the ones who are bearish are biased?  Your claim overall is vague and seems to be based on "feelings." What is your supply/demand argument showing global oil supply growth is exceeding global oil demand growth (which has been soaring in the last 10 years and will be almost 100 million barrels per day this year), that would justify lower prices? I would be interested in hearing specifics about the global market.

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Heyyy Tom Kirkman and William Edwards. Cool to see both of you have migrated here from OilPro. Cheers

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6 hours ago, New York Investing meetup said:

What FACTS concerning imbalance between supply and demand in the oil market do you have to support your claim of bias on analysts who are bullish? Perhaps the ones who are bearish are biased?  Your claim overall is vague and seems to be based on "feelings." What is your supply/demand argument showing global oil supply growth is exceeding global oil demand growth (which has been soaring in the last 10 years and will be almost 100 million barrels per day this year), that would justify lower prices? I would be interested in hearing specifics about the global market.

This is valid.

Its supply vs demand. Right now we're looking at a really tight market, and that is a fact. 

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18 hours ago, ronwagn said:

To me, it seems very apparent that various writers are consciously making blatant efforts to constantly boost oil price increase expectation. It seems quite unprofessional. I am wondering why editors do not discourage some of the wild claims. Am I wrong? Fortunately, it seems that other writers soon follow with more realistic forecasts. Is anyone else disturbed by this? 

Actually, the same tactic seems to be used by advocates of solar plants and wind turbine farms. They have a more religious zeal to their unfounded claims though. It reminds me of the Tesla fanatics who cannot logically show how individuals or society will actually benefit from buying their cars. 

My bias is clearly toward natural gas powered vehicles with special emphasis on trucks, ships, locomotives, etc. 

It's an unfortunate truth about today's media - but I would also be wary of sites that censor the more outrageous claims because it is that form of subtle censorship that is much harder to detect. When I read a piece on $30 oil and then a piece on $300 oil I can work my way through the facts and arguments to establish what I consider to be a reasoned position.

Like all news nowadays, the readers have to distill the facts from the hype, editors have a degree of responsibility but I think their responsibility should air much more to the side of letting all views be heard than to tailoring narratives to their subjective view of 'reasonable'.

Then again.... $300? There's got to be a nice middle ground between 'reasonable' and 'sane'. 

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4 minutes ago, J Owens said:

It's an unfortunate truth about today's media - but I would also be wary of sites that censor the more outrageous claims because it is that form of subtle censorship that is much harder to detect. When I read a piece on $30 oil and then a piece on $300 oil I can work my way through the facts and arguments to establish what I consider to be a reasoned position.

Like all news nowadays, the readers have to distill the facts from the hype, editors have a degree of responsibility but I think their responsibility should air much more to the side of letting all views be heard than to tailoring narratives to their subjective view of 'reasonable'.

Then again.... $300? There's got to be a nice middle ground between 'reasonable' and 'sane'. 

Censorship is ok in some cases - isn't it partially the media's responsibility to deal with absurd statements and blatant market manipulation? There are plenty of stories that say oil is going to $300....from people who benefit from oil going to $300....but where are the stories about oil going to $1? In the next 50 years, which is more likely? 

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I think the oil bears are on the wrong track.  The USA imports 10 million barrels of oil a day.  There is huge and growing demand for oil and supplies are limited creating higher prices.  Even if one dismisses all of the fundamental arguments it is difficult to look at the technicals and make a bear case.  The Mexican Basket and all indexes are trading at multi-year highs breaking out every week.  Oil is heading to 100 and that's why I am like oil stocks like SSOF and WFT.

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3 hours ago, Eric Staib said:

Heyyy Tom Kirkman and William Edwards. Cool to see both of you have migrated here from OilPro. Cheers

Hiya Eric, great to bump into you online again : )   How have you been since the days of Oilpro?  Hope you are enjoying the adrenaline of this new oil bull stampede.

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21 hours ago, ronwagn said:

To me, it seems very apparent that various writers are consciously making blatant efforts to constantly boost oil price increase expectation. It seems quite unprofessional. I am wondering why editors do not discourage some of the wild claims. Am I wrong? Fortunately, it seems that other writers soon follow with more realistic forecasts. Is anyone else disturbed by this? 

Actually, the same tactic seems to be used by advocates of solar plants and wind turbine farms. They have a more religious zeal to their unfounded claims though. It reminds me of the Tesla fanatics who cannot logically show how individuals or society will actually benefit from buying their cars. 

My bias is clearly toward natural gas powered vehicles with special emphasis on trucks, ships, locomotives, etc. 

2

Could you be specific on the articles that "are consciously making blatant efforts to constantly boost oil price increase expectation." Please? Some of the articles on OilPrice, as well as other sources, do appear to be pushing for higher oil prices, but depending on the source from which it is read, who knows, perhaps the facts support such a case. Here are a few articles you may be referring to:

https://oilprice.com/Energy/Crude-Oil/Is-70-Oil-Enough-For-Shale-Drillers.html- "The WTI Midland differential to Brent settled at -$17.69/b on May 3, which represents a widening of $9.76/b since April 2,” the EIA said." Clearly that would reduce future investment as the investors now find they are losing money. 

http://blogs.platts.com/2017/10/02/permian-pipelines-production-growth/- An explanation for why shale drillers have to discoun their Permian oil,

Permian additional pipeline capacity

 

https://oilprice.com/Energy/Energy-General/The-Regulations-That-Could-Push-Oil-Up-To-90.html- "The IEA says that by 2020, demand for gasoil will shoot up to 1.74 million barrels per day (mb/d), an increase of over 1 mb/d relative to 2018. That will displace the heavy fuel oil that is currently widespread. The IEA says that high-sulfur fuel oil demand will crater from 3.2 mb/d in 2019 to just 1.3 mb/d in 2020." Thus light oil's demand will shoot up, along with prices as most oil in the US is of a light blend.

Your thoughts, ronwagn?

 

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Example 1. Will $100 Oil Kill the U.S. Economy?  https://oilprice.com/Energy/Energy-General/Will-100-Oil-Kill-The-US-Economy.html 

Headline starts with a freaky question that seems to go against any logic short of war. The second part creates fear that the U.S. economy will possibly fail due to high oil prices. 

After alarming the average reader he ends his story with a statement that $100 oil is still a long way off. I call this click bait and see little value in the story. 

 

 

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What facts do I have to question further increase in oil prices?

1. Hydrofracking and horizontal drilling technology is now proven technology and it will eventually be used worldwide by any corporation or nation that can profit from it. The technology is being continuously improved and robotics will further decrease cost of operations. 

2.  Natural gas will eventually break through the inertia of oil habituation and be used for trucking, locomotives, ships, and alll large vehicles. The higher gasoline and diesel prices go, the sooner it will happen.

3. Ethanol is an attractive option when gasoline prices are higher than ethanol. Ethanol is currently $1.46 wholesale bulk purchase.

National Average Price Between 
January 1 and January 31, 2018
Fuel Price
Biodiesel (B20) $2.84/gallon
Biodiesel (B99-B100) $3.48/gallon
Electricity $0.12/kWh
Ethanol (E85) $2.06/gallon
Natural Gas (CNG) $2.17/GGE
Liquefied Natural Gas $2.66/DGE
Propane $2.83/gallon
Gasoline $2.50/gallon
Diesel $2.96/gallon

 

 

Source: Alternative Fuel Price Report, January 2018(PDF) and U.S. Energy Information Administration

 

4. Electric vehicles will be using electricity primarily produced from natural gas.

 

5. The Trump administration is not likely to go along with further subsidies of solar and wind. They are dependent on subsidies and political backing. 

 

6. Oil and natural gas pipelines are now getting through bureaucratic barriers much more easily, aside from in Canada. 

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On 5/21/2018 at 3:33 PM, Eric Staib said:

Heyyy Tom Kirkman and William Edwards. Cool to see both of you have migrated here from OilPro. Cheers

Thanks, Eric.

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On 5/22/2018 at 1:03 AM, ronwagn said:

Example 1. Will $100 Oil Kill the U.S. Economy?  https://oilprice.com/Energy/Energy-General/Will-100-Oil-Kill-The-US-Economy.html 

Headline starts with a freaky question that seems to go against any logic short of war. The second part creates fear that the U.S. economy will possibly fail due to high oil prices. 

After alarming the average reader he ends his story with a statement that $100 oil is still a long way off. I call this click bait and see little value in the story. 

 

 

 

Even looking at the "Most Popular" section right here, the $100 oil bull stories are getting the most attention. Now we have this article right here titled "Permian Growth Is Reaching Its Limits." (https://oilprice.com/Energy/Energy-General/Permian-Growth-Is-Reaching-Its-Limits.html) It may still take some time for it to show up in the production data, but a few months to where a slowdown in Permian production growth is likely since the growth done by wells (and please correct me if I'm wrong) were drilled months in advance before the sudden discounting of Midland oil.

 image.png.688b916933d76c9a90e70e88177eba49.png

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Natural gas is so cheap that producers would love to flare more of it even though it is a valuable natural resource! There is no excuse to flare much natural gas since it can be captured onsite and used to run equipment or be filtered and stored for sale as CNG or LNG. It can be trucked and /or shipped on trains. If you want to be in the oil business you should be forced to avoid excess flaring. 

One of my goals, for the last eight years, has been to publicize the benefits of using natural gas over more expensive and dirtier gasoline and diesel. The potential benefits are very great economically and environmentally. 

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1 hour ago, Eric C. Alldritt said:

 

Even looking at the "Most Popular" section right here, the $100 oil bull stories are getting the most attention. Now we have this article right here titled "Permian Growth Is Reaching Its Limits." (https://oilprice.com/Energy/Energy-General/Permian-Growth-Is-Reaching-Its-Limits.html) It may still take some time for it to show up in the production data, but a few months to where a slowdown in Permian production growth is likely since the growth done by wells (and please correct me if I'm wrong) were drilled months in advance before the sudden discounting of Midland oil.

 image.png.688b916933d76c9a90e70e88177eba49.png

There are a lot of credible reports that point towards issues coming in the Permian. 

Itll be interesting to see how it develops. 

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On 5/23/2018 at 9:39 PM, ronwagn said:

 

One of my goals, for the last eight years, has been to publicize the benefits of using natural gas over more expensive and dirtier gasoline and diesel. The potential benefits are very great economically and environmentally. 

Ron, what seems to be endemic in the oil patch is the refusal to consider that clever scientists/engineers and even cleverer entrepreneurs will rapidly develop alternatives to oil consumption as prices rise.  Specifically, in transport you are fond of CNC, in some measure due to there being lots of the stuff out there.  Yet CNC and LNG require new infrastructure.  The other alternative is that that gas can also be converted into Methanol right out there in the oil patch and shipped out by tankcar unit train.  Methanol is a liquid at typical operating temperatures, albeit volatile; it still remains a drop-in fuel.  You use the same tanks, the same pumps all the rest.  You are going to have a shortfall in energy density but you will have that with any substitute for oil. 

I just don't see using LNG/CNC for locomotives; you are going to get into storage problems for the amount of fuel needed to complete a typical train run between refueling stations. Already those big 4,500 hp locomotives consume the real estate under the frame rails with giant tanks,  specifically for range issues.  Also as a gas or cold liquid you have these explosive issues in the event of a wreck. That industry is more likely to go dual-power and go to pantagraph take-off from electrified main lines before it goes to a volatile fuel.  To illustrate, at one time the New Haven Railroad had mainline engines set up to pull power either from the generator or from a third-rail shoe, so that it could operate inside the tunnels in New York. Would you run a CNC locomotive through the tunnel into Grand Central Station, with 40,000 commuters milling about?  But you might do it with methanol.

Methanol will most likely start as a direct replacement for ship bunker C. Since methanol is easily made from Natural Gas, with a well understood technology,you don't need to scramble for pipeline capacity if you do the reformation right in the field, then ship it out as a stable liquid. And over the longer haul, both methanol and ethanol are likely to be manufactured from bio-material such as switchgrass, once the cellulostics aspects are figured out  (and you can bet they will). All of these alternatives will continue to maintain downward price pressure on oil, long-term. 

Although methanol will be a good marine fuel, the short-haul marine industry (i.e. local ferries) is going electric.  These guys do not do anything so crude as attaching power cables to the shore; they recharge by bringing a big plate say 6 feet x 6 feet, and 6 inches thick, up close to but not touching the hull of the ship. Inside that plate is a giant coil.  Inside the ship hull there is another giant coil.  The recharge occurs when current is passed through the shore coil, and is picked up by the ship coil,much like the coils inside a transformer. 

Other big users,i.e. municipal transit systems, will go to a combination of capacitor banks and the lowly flywheel, nice cheap systems for storing and transmitting power.  With that, you need zero liquid or gaseous fuel, and if the power is from hydro, you are completely outside the loop of fossil fuels.  That technology is well developed, and as oil prices rise, will be adopted.

All these technologies and substitutes will continue to act as a lid on rising oil prices.  If a number of them are advanced simultaneously, then you will see oil tank, possibly all the way down towards $22.  Cheers.

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In reply to Jan van Eck: I appreciate your understanding of the fact that there are other options to our vehicle fuel market. I have heard from several advocates of methanol but have not seen any real acceptance aside from racing fuel. LNG, CNG, and propane have had a lot of acceptance worldwide. Please see: https://en.wikipedia.org/wiki/Natural_gas_vehicle

Natural Gas Vehicles https://docs.google.com/document/d/1kM7_6rwI5iG7s1EF1RNuVmFHEGFbteRsPjjzzxx5UTA/edit                   The Natural Gas Revolution https://docs.google.com/document/d/19Yf0MWpo91vrlu-mmJtjB1ERukjJo5W41oi4RZVQBug/edit         Part Eleven of Natural Gas Stories https://docs.google.com/document/d/1_QZTgxCECgIj7EItX9P6Q2J4BjsSt_nPyrDG1zAl4b0/edit

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On 5/21/2018 at 7:17 PM, Tom Kirkman said:

Hiya Eric, great to bump into you online again : )   How have you been since the days of Oilpro?  Hope you are enjoying the adrenaline of this new oil bull stampede.

Hehe, it feels good to have an actual career back in the action again instead of clocking in and out at retail. Cheers!

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