Posted on 12/10/2014 5:06:02 AM PST by blam
Adam Rose, Reuters
December 10, 2014
Brent crude remained above $66 barrel on Wednesday, after resuming its drift downward amid a glut of oil on the market, following a short-lived reprieve the previous day when a weaker dollar had provided some support to prices.
Worries about oversupply have pushed Brent down 40% since June.
"Notwithstanding day-to-day movements, the fundamental picture hasn't really changed, and that is one of supply outstripping demand growth for most of the year," said Phin Ziebell, a senior analyst at National Australia Bank.
"It's an incessant march downwards, and it would be interesting to see where it bottoms out, but there doesn't seem to be any sign of it so far."
On Wednesday, Brent's front-month futures contract traded down 71 cents at $66.13 a barrel by 7:25 GMT (2:25 a.m. ET), after falling more than a dollar to $65.78, still above a five-year low of $65.29 touched Tuesday.
(snip)
(Excerpt) Read more at businessinsider.com ...
What is it now?
I heard it went from $4 last year to around $2.50 this year.
“Alternative energy” producers still produce exactly what they were intended to produce -
liberal self-righteousness.
“Energy” was not even a secondary consideration.
Ah... we haven’t hit the peak demand yet this season.
I’m on utility NG, so the costs are “equalized” through the year.
For quite a while while oil prices have been artificially induced I kept looking around, reading reports, and publicly questioning why oil/gas prices remained so high. As I stated previously, we are awash in oil, there is no justification for the price to be around $115 bbl.
Yes, and it is only a dream. The greenies will simply demand more taxpayer money to subsidize their self righteous efforts.
Demand would be entirely weather dependent as well.
And, of course, since Global Warming is an assumed fact,
the demand should be less every year.
a barrel of oil cost $20 in 1970, so we have a long ways to go. link here.
It cycles with weather, but not entirely weather dependent. Propane is also used in several industrial processes, making Propylene and Polypropylene for example.
In 1999, 19.6 billion gallons of propane were consumed in the U.S. as follows:
• 8 billion gallons for residential/commercial/recreational usage.
• 0.4 billion gallons for internal combustion engine usage.
• 9.8 billion gallons for chemical, industrial and utility usage.
• 1.4 billion gallons for other uses, including such agricultural applications as grain drying and flame cultivation.
Of course it is rigged to some extent. OPEC is a cartel. However, demand in China, India, Japan and Europe is down. The increase in world supply over the last few years is only coming from the US and Canada, but primarily the US.
OPEC chose not to cut production.
So, lets go back to ECON 101, supply up, demand down, results in price decrease. Commodities tend to over correct to the downside before reaching equilibrium. We will find out what oil is really worth over the next couple months.
Wherever, it bottoms out will probably be the low for the couple years. Marginal production will get cut, then the price will slowly trend up.
“Polypropylene for example”
So, my long under ware is made from Propane? Wow, learn something new every day. It guess that is why is melts when my wife puts it in the dryer, even though I keep telling her not to.
Lots of opinions out there:
http://rt.com/business/212979-opec-fails-oil-prices/
If oil producers don’t manage to curb that oversupply, the bank expects the price will slide to $50 per barrel. It will take around six months to end the 1 million barrels a day of excess oil on the market.
“We expect a pretty sharp rebound to the high $80s or even $90 in the second half of next year,” said Sabine Schels, the bank’s energy expert.
OPEC cut the forecast for how much crude oil it will need to provide in 2015 to the lowest in 12 years amid surging U.S. shale supplies and reduced estimates for global consumption.
The Organization of Petroleum Exporting Countries lowered its projection for 2015 by about 300,000 barrels a day, to 28.9 million a day. That’s about 1.15 million a day less than the group’s 12 members pumped last month, and the 30-million barrel target they reaffirmed at a meeting in Vienna on Nov. 27. The impact of this year’s 40 percent price collapse on supply and demand remains unclear, OPEC said.
I cannot believe that demand is down in China, and probably not in India. Personal automobile ownership is China is absolutely exploding.
China plays big role in oil’s slide
http://www.marketwatch.com/story/china-plays-big-role-in-oils-slide-2014-11-30
Nov 30, 2014
For one, we can expect the Chinese investment cycle to be in for a prolonged adjustment as it digests past excesses. There is widespread evidence of industrial overcapacity, and last week researchers at China’s National Development Commission became the latest to highlight this issue. In a new report, they estimated $6.8 trillion of “ineffective investment” had been wasted.
There are other signs that China’s thirst for oil is coming up against capacity constraints. After surpassing the U.S. as the biggest automobile market in the world in 2010, recent years have seen traffic jams and pollution become recurring problems. This has forced authorities to use administrative measures to rein in growth.
We should also expect China’s future demand for oil to be more price-sensitive. In the past, demand appeared inelastic as growth continued even as crude prices reached triple-digits. But this period coincided with state-funded industry being the dominant driver, whereas demand for gasoline for cars can be expected to be dependent on the income growth of the middle class.
Already China’s diminished oil appetite is showing up in various data. According to BP’s annual Statistical Review of World Energy released last June, the U.S. outpaced China’s growth in 2013 oil consumption, the first time it’s done so since 1999. The International Energy Agency has moved to lower its annual forecast for Chinese oil demand five times so far this year, last pegging growth at 2.3% for the current year.
Not surprisingly then, China’s ability to continue its historic role as a source of oil demand is increasingly in doubt. According to Platts, China’s oil import demand rose 2.9%, year-over-year, in October, yet it was down 2.5% versus September. They also described an “unprecedented development,” in which China became a net oil exporter in October, as imports dropped 22% and exports surged 30% to a record high. China could now become a net exporter of oil going forward.
My propane supplier offered a deal to lock in my propane for the winter this year at $1.75 by paying estamated usage in advance. After last year I jumped at the chance.
China and India’s economies are not growing AS FAST as they were. Who do you think buys all that junk that they produce?
Us, Japan and Europe.
liberal self-righteousness.
“Energy” was not even a secondary consideration.
Agreed.
But there is more to the "Alternative Engegy" game. The liberals had cronies lined up to get the alternative energy contracts. Even though the projects were not economical and cost the country like another tax, the projects enriched their friends.
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