Politics

[Doug Hamilton]

The chart is from EIA, US Energy Information Administration site. I guess it being a government site it is not that accurate?

Killing the Canadian pipeline (which has nothing to do with oil production) or banning new drilling would not immediately cut production by half in a week by the way.

Now, I'll give you that Biden administration has been hostile to the oil industry. The effects of his policies, if not reversed, will be years down the line, not immediate. As pointed out earlier we are producing more oil now than when Biden took over.

Even by the chart you provided, the US is not producing more oil now than when Biden took over.

 

[375 Ruger Fan]

No one is going to sell anything for less than what they think they will be paying in the future.

Guess you haven't heard about the futures market

Contango is a futures market occurrence marked by futures contract prices rising above spot prices. It means that traders and investors anticipate an increase in prices in the coming months. The opposite of contango is backwardation, when futures prices are lower than spot prices.

 

[steve white]

As it happens I'll be in Fort Worth for all of June and July. Perhaps we can meet for a beer and you can try and educate me on the benefits of trucks. It's certainly one American obsession that continues to baffle me!

Well for sure you can't get a truly small truck anymore, and I miss those....

 

[steve white]

Another point on driving habits is distance. In Europe you travel very short distances and have very well developed mass transit. Your mass transit is simply not possible in NA outside of heavily populated urban centers.

On an anecdotal note, I drive pretty extensively in Europe. It seems to me that your traffic is just as heavy, or possibly heavier than anything in the USA. It’s not that Europeans are not driving.

If they are not driving long distances in all those diesel cars, why aren't their particulate filters all clogging up incessantly. I would need more than just city driving to keep them clear.

 

[WAB]

If they are not driving long distances in all those diesel cars, why aren't their particulate filters all clogging up incessantly. I would need more than just city driving to keep them clear.

Good question. The EMA was evaluating 3 different trap technologies when we were in the ULSD negotiations. The technology they selected did not need ULSD but we got it anyway. I believe that Europe went with one of the alternate technologies, which may answer your question.

 

[steve white]

Thank you, I appreciate you taking the time to explain this. I got it now.

Well, you were easy to please....I on the other hand would like to know how the prices turned on a dime. And yes, Trump DID have a magic wand, it would seem. Price of gas THE DAY he left office--$1.87--my brother had the foresight to post about it. Soon after it doubled at the pump, which is the location I care about.

 

[Doug Hamilton]

With all respect, but that is baloney.

And with all respect, you live in Brussels and have no clue about it.

 

[Doug Hamilton]

You are terribly misinformed about some subjects. I don’t give a sh..t about Brandon but we are at our highest historical levels as far as oil production.

That is not actually true. The highest production level was in late 2020.

 

[Altitude sickness]

Action Bob, we could build many reservoirs in the south east of the country to capture rain and storm water then pipe it west

We in the Great Lakes region are fortunate that Canada owns half the water in the Great Lakes. And we have a formal agreement on how that water is used.
or you can bet we would be piping that west.

 

[shootist~]

Not that many years ago, when you could still drink beer while driving as it was really necessary in the summers in Texas to keep a cold beer between your leg to keep your boys cool in the summer, the empties were thrown back into the bed of the truck. Of course it’s still done, it’s just not legal anymore. And that’s why pickups are so popular in Texas.

I remember those days.
And just about everyone had a 357 under the seat (and drove friendly).

 

[Tanks]

That is not actually true. The highest production level was in late 2020.

Actually, 2020 was less than 2019.

 

[fourfive8]

So I suppose the more domestic oil that is produced, the higher the price should be? Hah! Also, unless I’m mistaken, the futures market is a purely speculative function and can drive short term prices. Long term… nope! One of the ways the socialist-anarchist Soros makes pazillions… he foments/creates anarchy then buys-sells short or long.

All this discussion hasn’t even included Brandon’s energy/economic train wreck of draining the oil reserve, to de-spike the cost of gasoline to buy Dem votes. Now what??? How does the idiot in chief (aka BHO 3.0) plan to refill the reserve? When the cost to do so goes up. The mentality is… just win the next election and worry about how to deal with it later by issuing more promises (lies) like “just wait a liiiittttle longer for green energy to catch up”, One of the biggest lies!

 

[WAB]

Early in my career I was responsible for buying crude for Canada’s largest refinery. My boss and mentor eventually led Chevron’s crude supply and trading. When buying VLCC’s and ULCC’s of crude you fix price on five days during the 40 day voyage. His simple rule demonstrates the fickleness of the market:

- never fix price on a Monday,
- never fix price on a Friday,
- never fix price during the week of an OPEC meeting,
- get lucky!

Many of you are probably too young to remember the US sailor who vaporized an Iranian fast attack boat with a deck gun. Crude prices went through the roof. I scheduled the final pricing day on a VLCC of Arab Light the day before, thus obeying the rule, get lucky! That decision literally saved us millions on that cargo.

 

[Doubleplay]

My F-150 has 14,000 pounds towing capacity and gets better mileage than my wife’s Lexus.

Towing capacity is a marketing number, what matters is payload.

 

[Doug Hamilton]

Actually, 2020 was less than 2019.

You had complete faith in the chart you provided, but now you don't?

 

[Tanks]

You had complete faith in the chart you provided, but now you don't?

Chart is correct. Average and total for the year is less in 2020 than 2019 if you drill down. Main reason was Covid and work at home policies that reduced demand. Still, it did not get cut by half when Biden took over.

I don't care for Biden and his policies. That being said, he does enough harm for most to realize without resorting to exaggerating facts.

Oil prices have impact beyond what you see at the pump. I know people in TX with oil leases that will not produce if barrel of oil is less than $70 due to cost etc.. Farmers I know in SD start making money if the price of oil goes up beyond a certain point as they sell more crops for ethanol production. So, for some high oil prices are a good thing.

 

[VertigoBE]

And with all respect, you live in Brussels and have no clue about it.

Hmm...
I was contemplating if I should respond to such a superficial remark. But here goes, for what its worth.

I cannot give full credentials, as I cannot have a direct link between my activities on this site, my passion of hunting and my corporate world job. For the past 15 years I have been working in the Energy industry for a global gas and power producer. During the last 10 years, I have been informing Fortune 500 companies on energy markets, building risk management strategies, advising on hedging, structured products, long term price fixations, etc. on both power, gas, certificate, (fin) oil&coal products, for a multitude of European markets. I have been reasonably successful in this, helping companies beat average market levels. Part of being able to understand European gas markets, is having a very precise understanding of global oil market dynamics, such as US production levels.

In this context I have spoken in front of +500 large audiences to clarify the minutiae of some obscure market mechanism, or shared my own insights (sometimes against other analists) on what path I would follow through the market. There are multiple video's floating around of me, explaining the simplest market influencing topics, for sharing with the less knowledgeable B2B crowd. (I was mainly focusing on the "Giant" industrial segment). Currently I'm in charge of the origination (sales) of power and gas supply contracts (but also H2/ammonia, biomethane and biomass) to the whole of Germany. We are talking contracts with a yearly value between 50MEUR and 1BEUR.

So yes, I pretend to have a clue about oil production figures from the last 2 decades. And actually my original comment was superfluous, as you have already been proven multiple times wrong by @Tanks ' graph and others. It would perhaps do you some good, to travel and exchange with others a bit more.

 

[bowjijohn]

Hmm...
I was contemplating if I should respond to such a superficial remark. But here goes, for what its worth.

I cannot give full credentials, as I cannot have a direct link between my activities on this site, my passion of hunting and my corporate world job. For the past 15 years I have been working in the Energy industry for a global gas and power producer. During the last 10 years, I have been informing Fortune 500 companies on energy markets, building risk management strategies, advising on hedging, structured products, long term price fixations, etc. on both power, gas, certificate, (fin) oil&coal products, for a multitude of European markets. I have been reasonably successful in this, helping companies beat average market levels. Part of being able to understand European gas markets, is having a very precise understanding of global oil market dynamics, such as US production levels.

In this context I have spoken in front of +500 large audiences to clarify the minutiae of some obscure market mechanism, or shared my own insights (sometimes against other analists) on what path I would follow through the market. There are multiple video's floating around of me, explaining the simplest market influencing topics, for sharing with the less knowledgeable B2B crowd. (I was mainly focusing on the "Giant" industrial segment). Currently I'm in charge of the origination (sales) of power and gas supply contracts (but also H2/ammonia, biomethane and biomass) to the whole of Germany. We are talking contracts with a yearly value between 50MEUR and 1BEUR.

So yes, I pretend to have a clue about oil production figures from the last 2 decades. And actually my original comment was superfluous, as you have already been proven multiple times wrong by @Tanks ' graph and others. It would perhaps do you some good, to travel and exchange with others a bit more.

Brilliant

J

 

[VertigoBE]

Also, unless I’m mistaken, the futures market is a purely speculative function and can drive short term prices. Long term… nope! One of the ways the socialist-anarchist Soros makes pazillions… he foments/creates anarchy then buys-sells short or long.

I do not understand this point. The whole reason of the existence of futures markets is specifically to drive long term investments and bring price stability. "Because the farmer was able to sell 50% of his expected production for next year on the futures market, he was able to purchase today an additional tractor to increase his production levels even more. Also, he would not be exposed to the pure luck of pricing conditions of next year alone".

 

[ActionBob]

Have you ever worked in any kind of sales? It does not matter if a supply is good today. If there is a perception that the supply is being pinched the price goes up immediately. Doesn't much matter what they have been paying or what the product is. No one is going to sell anything for less than what they think they will be paying in the future.

I remember this well when Trump tweeted that he was thinking about putting Tarriffs on steel. I needed to purchase several semi loads of re-bar to pour a couple miles of feed alleys and cattle aprons at our Kansas heifer replacement raising facility. The price basically doubled that day.... Even though no tarriffs had been placed yet and certainly the cost of the product in inventory had not changed. However everyone was convinced it was going up, so it did.

Markets are largely the collective opinion of what something is worth by everyone involved. And near term at least, often are not dependent upon cost of production. For commodities anyway.