Fuel price 'to da moon'

Discussion in 'Current Affairs' started by Ag bullet, Nov 19, 2019.

  1. Ag bullet

    Ag bullet Well-Known Member

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    I notice today that MSM is pumping the notion that fuel prices could jump higher by up to 50¢/L in the coming days, with most articles 'urging motorists' to fuel up now.
    Nowhere have I seen a reason given for the price increase.

    What say you? Is there just cause for the 'coming price hike' or is it some sort of population 'price increase desensitization' where refiners, wholesalers and retailers are testing the waters as to how much they can increase their price gouging?

    Maybe I'm just too cynical...
     
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  2. Court Jester

    Court Jester Well-Known Member Silver Stacker

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    ooo has dropped by 1.6% today
     
  3. SilverDJ

    SilverDJ Well-Known Member

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    I'm still losing on OOO :(
     
  4. Oddjob

    Oddjob Well-Known Member Silver Stacker

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    And there I was reading just yesterday about a potential global oil glut ahead in 2020 which should translate into lower pump prices.

    "Fake news".............or just someone flying a kite?

    https://oilprice.com/Energy/Energy-General/All-Eyes-On-OPEC-As-Another-Oil-Glut-Looms.html#

    All Eyes On OPEC As Another Oil Glut Looms
    By Nick Cunningham - Nov 17, 2019, 6:00 PM CST
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    OPEC+ is facing a steep challenge as it prepares to gather in Vienna next month.

    Global oil supply could continue to rise at a rapid pace in 2020, surpassing the increase in demand. According to new figures from the International Energy Agency (IEA), non-OPEC supply could expand by a staggering 2.3 million barrels per day (mb/d), nearly double the expected increase in demand at 1.2 mb/d.

    That forecast doesn’t just depend on substantial growth from U.S. shale (although it does), but also on expected increases from Brazil, Norway and Guyana.

    The surge in output complicates OPEC+’s task as Vienna approaches. The production cuts are currently set to expire at the end of March 2020, but the group is widely expected to extend that agreement through the end of the year.

    “The hefty supply cushion that is likely to build up during the first half of next year will offer cold comfort to OPEC+ ministers gathering in Vienna at the start of next month,” the IEA said. “However, a continuously well-supplied market will lend support to a fragile global economy.”

    The supply overhang creates problems for OPEC+. “The OPEC+ countries face a major challenge in 2020 as demand for their crude is expected to fall sharply,” the IEA said. “During the first half of 2020, the call on OPEC crude falls to 28.2 mb/d versus 30.2 mb/d in 4Q19.” In other words, the expected surge in supply from the U.S., Guyana, Brazil and Norway could force OPEC+ to back out more production.

    “This highlights the need for another cut in output,” Commerzbank said in a note.

    But the forecast has some issues with it. The IEA acknowledges the headwinds facing U.S. shale drillers. “Capital discipline and investor apathy is restricting investment,” the agency said. Oilfield services companies are warning about a slowdown. Individual shale companies are also admitting that they will rein in growth prospects. At the same time, the oil majors are aggressively expanding drilling.

    All told, the IEA still sees U.S. supply growing at 1.2 mb/d in 2020, a figure that is unchanged from last month’s report, despite the wave of third quarter earnings reports that offered some evidence of a slowdown.

    It is worth noting that the IEA is arguably at the optimistic end of a lot of U.S. shale forecasts these days. For instance, Goldman Sachs lowered its supply forecast for 2020 from U.S. shale to just 600,000 bpd.

    IHS Markit goes further, predicting a more dramatic slowdown. The firm sees U.S. supply growth of just 440,000 bpd in 2020, a rather stark divergence from the IEA figures. U.S. shale is “slowing down fast,” IHS Markit said in a report earlier this month. In 2021, it sees shale “flattening out.”

    “Going from nearly 2 million barrels per day annual growth in 2018, an all-time global record, to essentially no growth by 2021 makes it pretty clear that this is a new era of moderation for shale producers,” Raoul LeBlanc, vice president for North American uncoventionals, IHS Markit, said in a statement. “This is a dramatic shift after several years where annual growth of more than one million barrels per day was the norm.”

    On the demand side of the equation, the IEA trimmed its forecast slightly to 0.985 mb/d, down from 1 mb/d previously. The agency sees that figure rebounding to 1.2 mb/d next year.

    “Recent data point to a significant slowdown in world industrial production growth since the end of 2018. The IMF attributes this slowdown to a sharp drop in car production and sales, weak business confidence and slowing Chinese demand,” the IEA said.

    Needless to say, the outcome of the U.S.-China trade war has a great deal of influence on demand. The IEA said that oil demand would be 400,000 bpd higher in 2020 if tariffs were removed. But the general assumption is that most of the tariffs will remain, notwithstanding the pending “partial deal” that could suspend or delay some levies.

    Turning back to Vienna, OPEC+ faces a tough choice as it prepares to meet. If the IEA is correct and global supply growth is expected to surge next year, the group risks a price crash if it doesn’t cut deeper. However, the ministers can probably take comfort in the fact that U.S. shale is slowing down dramatically and a growing number of analysts think the IEA is overestimating shale’s resilience.

    By Nick Cunningham of Oilprice.com
     
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  5. Court Jester

    Court Jester Well-Known Member Silver Stacker

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    should have bought into FOOD
     
  6. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    Oil glut ending soon? Getting interesting in my opinion.

    Look at the following 3 news, try connecting the dots?

    1). https://www.cnbc.com/2019/12/06/sau...nce-abdulaziz-defends-us-shale-producers.html - Saudi defends Shale producers.

    2). https://edition.cnn.com/2019/12/06/investing/opec-production-cuts/index.html - OPEC and Russia agrees to jointly cut production.

    3). https://www.aljazeera.com/news/2019...r-held-iranian-scientist-191207110248789.html - Iran releases American "spy".

    Gold (and silver) needs the inflation!!

    EV, solar and alternative energy are already booming without expensive oil, imagine what will happen if oil rises?

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    Last edited: Dec 8, 2019 at 5:53 AM
  7. 66rounds

    66rounds Well-Known Member Silver Stacker

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    Saudi needs ARAMCO IPO but US doesn't want to lose shale producers. So they announce cuts to production that are still above their current output levels. What a farce.
     
  8. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    It maybe a farce for now, but it is a reminder that even the Saudis cannot tolerate low oil price for too long. Remember how the price of oil is depressed to "break" the soviet union? Today, the dynamics has changed. The soviet union no longer exists and Russia is no longer the enemy of the Saudi royal family. So who are they trying to break?

    Iran? Iran is nothing but a proxy of a greater power play. The best they can do is to send toy planes while elsewhere, a new aircraft carrier is launched every 2 years. What's the point of breaking a proxy?

    Another argument is low oil prices can stop renewables and shale but this didn't happen.

    However, I still stand by my belief that in the long run, oil will be replaced by alternatives.
     
  9. 66rounds

    66rounds Well-Known Member Silver Stacker

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    The goal is to not break anything except the Petrodollar system. If you crush interest in the USD through tariff wars and trading restrictions, then send fuel to the moon, every nation on earth will begin to look for sensible alternatives. This is how they will bring in their gold backed Cryptos as part of the IMF's SDR basket of currencies.
     
  10. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    This might be possible but I don't think anyone believes the Petrodollar system will exist in 30 years since petrol won't be needed by then. They are planning beyond the demise of petroleum.
     
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  11. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

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    We'll never fully be off petrol. It works too well and too widely used.
    There might be more ev cars in the future but it wont take over by any means, for generations at least.
     
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  12. SilverDJ

    SilverDJ Well-Known Member

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    Yep, won't happen for several generations.
    Battery tech is really starting to push the limits of practical energy density, and it will never be a thing in plane travel for basic physics reasons.
    Batteries are going to be a useful thing for cars, no doubt, but unlikely so with trucks. Again, for reasons of basic physics.
    So when you have a trucks and planes still needing fossil fuel, it ain't going anywhere.
     
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  13. Skyrocket

    Skyrocket Well-Known Member Silver Stacker

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    Yep, all the powerful oil company will see to that!
     
  14. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    Yes I agree but I’m not saying people will stop using petrol in 30 years. People are still using camels, donkeys and horses for traveling today when cars and motorbikes have been invented more than 150 years ago. Likewise there are still a billion people using kerosene lamps for lighting.

    But for us investors we can’t wait till the day when usage stops totally to decide when to cash out. It will take several generations as you mention.

    Likewise, the Saudis can’t wait for petrol to become redundant before restructuring their economy or embrace the green economy. They need to do this right now with the petroldollars they get from selling oil. Low oil prices won’t fund their restructure so prices has to rise moving forward.

    As for planes, it’s already possible with fuel cell although petroleum is still cheaper. For land travel, fuel cell is already cheaper than petrol, travels triple the distance of battery equivalent, and they are using it for commercial buses and trucks.
     
    Last edited: Dec 9, 2019 at 2:24 AM
  15. Court Jester

    Court Jester Well-Known Member Silver Stacker

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    Your aware that there are cheaper better alternatives to silver for solar panels yeah
     
  16. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

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    Theres hardly any silver in them anyway. It's worth the cost when you compare the alternatives.
    For a $300 panel even an oz of silver isnt a big deal in price.
     
  17. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    I think it’s less than an oz, probably only half an ounce or less, $8 at today’s price.

    Less is actually better, the reason why palladium is going up like crazy is because there is only a couple grams in a catalytic converter, $300 worth vs $20k for the whole car.
     
    Last edited: Dec 10, 2019 at 3:56 AM
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