Analyst Makes Bombshell Prediction Of $50 Oil, More Production Than Possibly Know What To Do With

Business Insider ^ | December 1, 2012 | Joe Weisenthal

[2ndDivisionVet]

For the US economy, this would be a 'Black Swan' of a totally different variety.

In Bank of America/Merrill Lynch's 2013 Energy Outlook, analyst Sabine Schels and colleagues make a shocking prediction about the possible path of West Texas Intermediate oil.

Surging US shale oil output creates risk of $50 WTI North America’s energy supplies are surging while the rest of the world continues to fight for scarce molecules of oil and gas. On our estimates, onshore US crude oil output now vastly exceeds previous growth rates in liquids and nat gas, particularly in Lower 48 states. With profitability for US domestic oil producers very high and no change in sight to US rules preventing crude oil exports, we expect WTI prices to continue to lag international prices. Indeed, we see a risk of WTI temporarily falling to $50/bbl over the next 24 months to force a slowdown in supply growth or a change in crude oil export rules.

A key point that Schels & Co. make is that the crude oil market could come to resemble the Natural Gas market. In the natural gas market, the US has natural gas coming out of its ears, as it just has way more supply coming out of the ground than it could possibly use or export. So while prices remain decent throughout much of the world, domestic natural gas prices have collapsed...

[ecomcon]

That’s funny.

How the mighty have fallen. Aeroback with a 305. And a 4 cylinder 442! Sigh.

[Eric in the Ozarks]

My folks and I sailed into Oakland after overseas duty back in 1961. California looked damned good to me.

[jboot]

Even if it happens gas prices will remain high. Too many oxes would be gored by lower prices, not the least of which being Dear Leader. Market manipulation is the name of the game. $3+ per gallon is the New Normal.

[thackney]

Please, if you are going to picture the 442, use a decent year.

Mine was black with gold pin-striping. Sadly, not the 442 option, but I totaled it anyways using only a rocket 350 engine.

[NVDave]

Because natural gas is a “fluffy” fuel unless you liquify it. Compressed natural gas tanks in a car won’t get you more than, oh, 150 miles of range - if that.

LNG infrastructure would be expensive and “lossy” (you lose gas as the liquid heats up and converts to a gas) and the tanks have to be built to keep the gas in a super-cooled state. Compressed natural gas tanks need to be built to withstand impacts in crashes, because the compressed gas (even if not flammable) would cause quite an enhancement to a crash if the tank vented explosively - not from the gas burning, but from the sheer force of becoming explosively de-compressed.

Here’s a rule of thumb: Ever been in a shop with a 80 to 120 gallon air compressor? Ever wonder how big a bang that tank would make if it exploded at 175PSI?

It would be about the force of .75 to 1.0 sticks of dynamite.

Now think about the force of a CNG tank rupturing at thousands of PSI...

[Candor7]

Obama will find a way to f*ck it up somehow, never fear.>>>>>>>>>>>>>>>>>>

Few people know how true your words are and how it will be done.

The EPA now operates on executive orders from POSHITUS
and Obama is quite ready to destroy andy initiative inside the USA that will reduce the price of oil, and he has likely guaranteed this activity to the Saudis.

The only way West Texas oil will ever impact the market is to go to war and shoot at EPA enforcers.Will that happen?
Who knows?

[Jack Hammer]

To cadge a phrase from the ancient Left, “You don’t need a weatherman to know which way the wind blows.”

Obama is set on destruction of the United States; his method will reveal itself in time, but the result is a foregone conclusion.

[Candor7]

Remember what a real president is like and remember conservatism. We need rid of the RINOs, they have failed yet dop not want to accept the failure to win the presidency. They own it, now we get rid of them all.

Just listen to this:

http://www.youtube.com/watchv=Ryv7PzyCmVA&feature=player_embedded

[Jack Hammer]

“Remember what a real president is like and remember conservatism.”

Yes, by all means, hang in there and fight the good fight.

I’m afraid i’m getting a little too old for that sort of thing, and this election may have been my last.

Possibly, and with a little luck, I’ll live to see the next president - a conservative - inaugurated, but I’m not making any plans.

You kids do what needs to be done - it’s your world now.

[Resolute Conservative]

Maybe the technology would allow for wildcatters again and the John Q Public could drill his own well and sell it.

[Candor7]

Don’t worry Jack. It will be turned around.

[Average Al]

Interesting info. I imagine fuel injection versus carburetors may make it more difficult as well.

[American in Israel]

Actually fuel injection is not a problem for a gas conversion. The gas conversion can be easily done with a fuel injector into the throttle body controlled by a "mega squirt" programmable fuel injector system. With a fuel injector system, some of the parts you need to use are already there like the mass flow sensor. Mega Squirt

[Mr. Jeeves]

The EPA will “Kill Colorado” long before oil ever approaches $50/barrel. The Agenda will not be sidetracked.

[Lakeshark]

Here's how they're going to screw up our first genuine shot at energy independence:

Once the greens demagogue the issue of fracking, the EPA will shut it down.

[Average Al]

I would love to convert my cars over to use natural gas. Particulary since it is much cleaner and I wouldn’t have
the concerns about using corrosive ethanol in my engines.

[Zhang Fei]

However - after a number of ‘genius’ individuals blew up entire city blocks trying to rig up home filling stations and a number of cars were involved in incidents that killed everyone in a 100’ radius because of tank ruptures and improper maintenance, it was filed away as a bad idea for the vehicle population as a whole.

Do you remember where you read these articles? My impression is that most natural gas related accidents come from crashing into natural gas pipelines. To my knowledge, Mexico's CNG conversions are completely unregulated, and I've never heard of spectacular accidents.

[The Cajun]

Always thought the first 4 in 442 stood for 400ci.
I stand corrected.
Do know at the end of production they were up to the 455ci.
They were pretty hot, but GTO looks and sales kind of did them in.

[Jack Hammer]

Yes, it’ll be turned around eventually, and thank you for striking a positive note.

For everything there is a season; however, I doubt very much I’ll be here to see it.

In the interim, I’m a little tired of - and sore from - being ‘turned around’ by the president.

[Terry Mross]

If oil drops that low it won’t be profitable to extract it from shale.