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Thread: Oil Prices and the Banking System....Join the Dots

  1. #16
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Very good post Morticia, It took me a while to get around to reading it fully.
    I remember reading a book in 2005/6, The End of Oil by Paul Roberts, which was deemed, when published, to be excessively pessimistic about future oil prices.
    He made a prediction of $60 a barrel as the maximum price Oil would attain over the 10 years since 2004. It was already past that by the time I read it.

    We are hamstrung in Ireland, even the ongoing situation in Libya should be deeply worrying as they account for 24% of our oil supply.
    Here is a graph of the CPI for energy products in Ireland from Jan 2000-Mar 2010.
    Are we heading for an even bigger crash..............

    Data from:
    http://www.cso.ie/statistics/prices.htm

  2. #17
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    All we're heading for in terms of oil and gas extraction is massive environmental destruction on a scale unprecedented. 'Peak oil' probably happened about five years ago and in order to extract the approx 50% of fossil fuels which remain in the earth, the oil companies are going to cause widespread pollution because what remains is no longer easily accessible. Gas fracking could come to Lough Allen in Leitrim and it's 'green box' status will be decimated.


    [ame="http://www.youtube.com/watch?v=yfOxh1o9mKw"]http://www.youtube.com/watch?v=yfOxh1o9mKw[/ame]




    [ame="http://www.youtube.com/watch?v=ZbIyR-hw7Eo"]http://www.youtube.com/watch?v=ZbIyR-hw7Eo[/ame]
    Last edited by C. Flower; 09-03-2011 at 09:09 AM.

  3. #18
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Thank you - very incisive graphs !

    I also read that interesting book.

    Quote Originally Posted by Munnkeyman View Post
    Very good post Morticia, It took me a while to get around to reading it fully.
    I remember reading a book in 2005/6, The End of Oil by Paul Roberts, which was deemed, when published, to be excessively pessimistic about future oil prices.
    He made a prediction of $60 a barrel as the maximum price Oil would attain over the 10 years since 2004. It was already past that by the time I read it.

    We are hamstrung in Ireland, even the ongoing situation in Libya should be deeply worrying as they account for 24% of our oil supply.
    Here is a graph of the CPI for energy products in Ireland from Jan 2000-Mar 2010.
    Are we heading for an even bigger crash..............

    Data from:
    http://www.cso.ie/statistics/prices.htm

  4. #19
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Whatever one thinks about nuclear fuel as an option its the only one that fits the bill in terms of technology and cost effectiveness.

    The IMF/ECB facility of 85billion euros would buy approximately 25 nuclear power stations.

    We could have had ten power stations and be selling the excess to the international grid instead of worrying about where we are going to be able to buy power in the next ten years- just on the money we've poured into dodgy banks.

    Sobering thought.
    Think National. Act Local. Oh- and superstition is just the dark matter of human history.

  5. #20
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Quote Originally Posted by Captain Con O'Sullivan View Post
    We could have had ten power stations and be selling the excess to the international grid instead of worrying about where we are going to be able to buy power in the next ten years- just on the money we've poured into dodgy banks.

    Sobering thought.
    Soon "we" won't have any power stations, they will have to be sold off to pay the ransom demanded by the dodgy bankers, but worry not, we will keep the grid as it's a "strategic" asset, very reassuring.
    Thus all which you call Sin, Destruction—in brief, Evil—that is my true element.

  6. #21
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Quote Originally Posted by Apjp View Post
    My Geography book quoted back from the oecd in 2007 ish that we have over 200 years of coal left and about 150 years of Gas-and just 50 years of oil. .
    Sadly, not quite correct, although this was believed to be the case until a few years ago.

    There is a two page Section 2 on the state of current fossil fuel reserves that I will post later, probably on the weekend, after I've updated it.

    There is probably more gas and coal than there is oil, though

  7. #22
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Quote Originally Posted by ModestMouse View Post
    Perhaps you should wake up and realise that without a viable alternative energy source oil is all we have. Personally I wouldn't be praying for peak oil, as you appear to be, until we have the alternatives properly in place.
    That, MM, was PRECISELY the point of the initial post. We're all being told to lose sleep over global warming when in fact, it is the loss of oil as a fuel source that will kill us all. Peak oil has already happened, I'm only praying that they can keep the decline in reserves to a minimum (hopefully by exploiting new sources, energy conservation and innovation re renewables), such that we can restructure away from oil before it runs out.

    Otherwise, we're all doomed. I'm afraid I'm not losing sleep over climate change (mostly because I don't think there's enough oil, coal and gas left to fry us). They've been lying about the extent of remaining reserves for decades. We're 10 years ahead of official reserve figures.

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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Offer solutions
    my blog - Clearing Clutter – the ramblings of an environmental activist http://theresaleaf.wordpress.com/

  9. #24
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Here's a graph of the Irish Consumer Energy Price Indices(2005 = 100%) with the monthly average prices for WTI Crude Oil prices (Secondary Y-Axis). The March 2011 Oil price is a spot price on short term futures.
    I have also included a linear and exponential regression for the crude oil prices as a marker for the price over the next five years (barring any other massive jumps in volatility.)
    Data sourced from NYMEX and the CSO.

    It would have to be expected that the increase in the price of oil will no longer follow a linear pattern, as supply stagnates with demand increasing in developing countries.
    $210USD would have to be considered as an extreme and worst case scenario for 2016, personally I would expect it to be in the $145-$155 range.




  10. #25
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Lovely graph, Munnkeyman, but I don't think we can actually extrapolate like that (probably better than anything else, but..). The price will continually increase while people are prepared to pay the higher prices. But that will drain financial reserves and may be debt/speculation driven. Sooner or later, too-high prices will cause collapses a la Lehmans as consumers default on debts en masse. At that point, oil prices will plunge as demand dips below supply for a while. Further declines in supply, or the economy's attempts to revive will send the price back on its upward trajectory again. To be repeated ad nauseam ad infinitum until our demand for oil is vastly reduced, either by technological advance.... or the Horsemen of the Apocalypse. My own feeling is that we are not in control of a vastly complex and fragile financial system that is utterly inadequate to the needs of a contracting economic system. It appears that the numpties at the top have NO solutions, either. Mine would be some system of massive debt forgiveness, in line with predictions of contraction. For example, if Couple X's mortgage was 400K and their wages have dropped by 1/3, then their debts should be repriced at 267K, etc. But I don't see anyone with the grey matter to implement anything of this ilk.

    My advice would be to re-establish contact with the Almighty, or ask the aliens to let us in on how they power their saucers. Otherwise, riotous anarchy looms. People won't take falling living standards lying down, and they'll find others to blame. The banks or their government, when in fact the root cause is 50% geological. (Not that I absolve the others of all blame.....they really had a responsibility to see this coming.....'Tis like depending on the potato monoculture, just before the Famine).

  11. #26
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Quote Originally Posted by morticia View Post
    Lovely graph, Munnkeyman, but I don't think we can actually extrapolate like that (probably better than anything else, but..). The price will continually increase while people are prepared to pay the higher prices. But that will drain financial reserves and may be debt/speculation driven. Sooner or later, too-high prices will cause collapses a la Lehmans as consumers default on debts en masse. At that point, oil prices will plunge as demand dips below supply for a while. Further declines in supply, or the economy's attempts to revive will send the price back on its upward trajectory again. To be repeated ad nauseam ad infinitum until our demand for oil is vastly reduced, either by technological advance.... or the Horsemen of the Apocalypse. My own feeling is that we are not in control of a vastly complex and fragile financial system that is utterly inadequate to the needs of a contracting economic system. It appears that the numpties at the top have NO solutions, either. Mine would be some system of massive debt forgiveness, in line with predictions of contraction. For example, if Couple X's mortgage was 400K and their wages have dropped by 1/3, then their debts should be repriced at 267K, etc. But I don't see anyone with the grey matter to implement anything of this ilk.

    My advice would be to re-establish contact with the Almighty, or ask the aliens to let us in on how they power their saucers. Otherwise, riotous anarchy looms. People won't take falling living standards lying down, and they'll find others to blame. The banks or their government, when in fact the root cause is 50% geological. (Not that I absolve the others of all blame.....they really had a responsibility to see this coming.....'Tis like depending on the potato monoculture, just before the Famine).
    Definitely Morticia, I was going attempt a Black-Scholes predictive model on oil price futures but that would have been cumbersome and would yield equally dodgy results with marginally similar confidence level.(Far too many variables)
    But the linear regression plot I'd say would definitely be along the lines of what we'll see in the next five years.
    The issue we're facing is the increase in worldwide demand will run on unabated especially in countries like China,Brazil India etc.

    I absolutely agree with the Famine analogy, we are far too reliant on Oil as our primary source of energy.
    Bring on Nuclear Energy is what I say with renewables as a secondary source, and quickly.

  12. #27
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Quote Originally Posted by Munnkeyman View Post
    The issue we're facing is the increase in worldwide demand will run on unabated especially in countries like China,Brazil India etc.

    I absolutely agree with the Famine analogy, we are far too reliant on Oil as our primary source of energy.
    Bring on Nuclear Energy is what I say with renewables as a secondary source, and quickly.
    Not necessarily. China and India both subsidize fuel to keep the populace quite. This little habit could get a tad expensive, but the minute they stop, the riots will start. Granted, the Chinese have a vast sovereign reserve. But where we had ghost estates, they have ghost cities. People are buying empty apartments for capital appreciation alone (we know where that one ends), while supplying water to the drought ridden North will costa lotto, to say the least. Finally, I'm not sure how well the Chinese banks are regulated, nor how squeaky clean they are. Recent pundits have compared them to Japan in the 1980s....we know how that ended, too. We could have the Mother of All Crashes (and civil wars), when things finally go t!ts up there (and they will). 9% growth for how many years?? we know how that one ends.. Caveat investor, I'd say. If and when that happens, we will probably have a massive crash here, but the oil price will plummet, and stay down for a while. Moreover, it would give us a chance to start making some more of the essentials closer to home (something that would use less oil, particularly for heavy goods).

    Agreed on nuclear and renewables.
    Last edited by morticia; 09-03-2011 at 08:56 PM. Reason: addition

  13. #28
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Quote Originally Posted by morticia View Post
    Sadly, not quite correct, although this was believed to be the case until a few years ago.

    There is a two page Section 2 on the state of current fossil fuel reserves that I will post later, probably on the weekend, after I've updated it.

    There is probably more gas and coal than there is oil, though
    I think it is correct. It was quoted by many people at the time too. Coal especially-250 year minimum was what the report said. problem is ye cant just get the auld steam trains out can ye?

  14. #29
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    http://www.bloomberg.com/news/2011-0...rt-of-day.html

    The price is rising and they're still gambling their money away???
    Offer solutions
    my blog - Clearing Clutter – the ramblings of an environmental activist http://theresaleaf.wordpress.com/

  15. #30
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    Default Re: Rising Oil Prices and the Banking System....Join the Dots

    Quote Originally Posted by Captain Con O'Sullivan View Post
    Whatever one thinks about nuclear fuel as an option its the only one that fits the bill in terms of technology and cost effectiveness.

    The IMF/ECB facility of 85billion euros would buy approximately 25 nuclear power stations.

    We could have had ten power stations and be selling the excess to the international grid instead of worrying about where we are going to be able to buy power in the next ten years- just on the money we've poured into dodgy banks.

    Sobering thought.
    Still want nuclear????
    Offer solutions
    my blog - Clearing Clutter – the ramblings of an environmental activist http://theresaleaf.wordpress.com/

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