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United States Oil ETF Message Board

  • dabrogg dabrogg Jan 29, 2013 6:47 PM Flag

    Peak Oil - Fact - Fiction and Fossil Faries

    How many times have you heard the Fossil Fairy spin the Tale of "The Myth of Peak Oil?

    Just a few short years ago the Fossil Fairy included natural gas in that tall tale.
    But Peak Oil will simply never happen.

    Why?

    Pour a few handfuls of chopped-up corn stalks or switchgrass into a hopper. Heat rapidly. Funnel the resulting mixture through an intricate network of metal pipes and canisters.

    Out the other end – drip, drip – comes a thick brown liquid that looks an awful lot like oil.

    Called bio oil, it is not quite the same as what comes out of a well. But it is close enough that government scientists think the process, called fast pyrolysis, is a promising way for farmers to enhance energy security.

    Technology will always be able utilized various methodology to produce sufficient quantities of "OIL" to meet any future demand. This fact is something the Paranoid Peak Oil Neurotics will never be able to comprehend.

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    • To ecgberht:
      "Meanwhile I look forward to the entertainment value of watching each side continuing to try to convince themselves why the other side is wrong. It's a hoot."

      As for me, I'm not trying to convince anyone of anything. Global oil production peaking in 2005 and plateauing since then is simply a fact. If people can't understand that (and get hung up on irrelevancies like tanker demand and the amount of untapped oil in the ground) it is pointless trying to convince them that they don't even understand what they are arguing about.
      It's like trying to convince someone that 2+2=4 when they have no conception of the meaning of addition.

      If others have no interest in understanding, then that is their misfortune. I will just keep making more and more money via my MLP investments, which are again hitting new all time highs.

    • It's been done. Trouble is it has a negative EROII. When all energy costs are accounted for, you consume more energy than you produce.

      As for Peak Oil, do you know what it means? It is simply the point at which global production peaks. According to EIA that came in 2005. Only small increases in other liquids (NG liquids, biofuels, etc) have allowed production to keep up with increasing demand. Trouble is those other liquids have lower energy content than oil.

      So, do your homework, there is no debate. By definition peak oil was in 2005. Since then global production has not increased.

      • 2 Replies to lizahuang54321
      • Oil has increased so much here in merica that Suadi rabis, Iran, Iraq had to cut production so much to try to keep oil prices up, also we have a glut of oil tankers that are NOT being used since oil isnt in demand, but nice try with the BS Lisa,,,, Tanker Glut Worsening as OPEC Cuts Most Since Recession: Freight
        By Rob Sheridan & Isaac Arnsdorf - Jan 28, 2013 7:01 PM ET


        OPEC’s deepest output cut since the global recession in 2008 is creating the biggest surplus of oil tankers in the Persian Gulf in at least three years and lowering earnings for Frontline Ltd. and other ship owners.

        The Organization of Petroleum Exporting Countries reduced daily supply by almost 1 million barrels in the four months through December, equal to one fully loaded supertanker every two days, data compiled by Bloomberg show. Saudi Arabia, Iran and Iraq led the retreat, leaving 22 percent more ships than cargoes in the world’s largest oil-producing region, the most for the time of year since at least 2010, according to weekly surveys of shipbrokers and owners by Bloomberg.

        The group supplies 40 percent of the world’s oil. It had raised supply by 4.8 million barrels a day since the first quarter of 2009, diminishing a surplus of ships and lifting rates above what owners need to break even. Output is now falling as the U.S. meets the highest proportion of its own needs in two decades. Tanker earnings slid 62 percent since November and shares (FRO) of Frontline will drop 11 percent in a year, the average of 14 analyst estimates shows.

        “This cut in OPEC production highlights the slump in tanker demand and absolutely caps potential growth in earnings for owners,” said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo whose recommendations on the shares of shipping companies returned 18 percent in a year. “Owners usually count on a busy start to the year, so 2013 is already shaping up to be challenging.”
        Crude Carriers

        Daily rates for very large crude carriers dropped 53 percent to $14,090 this year, according to Clarkson Plc (CKN), the world’s biggest shipbroker. Earnings will average $19,500 in 2013, according to the median of 10 analyst estimates. They were forecasting $25,000 in October. Frontline, founded by billionaire John Fredriksen, says it needs $23,400 to break even across its fleet of 33 VLCCs.

        The Hamilton, Bermuda-based company will report a net loss of $103 million for this year, widening from $87.4 million for 2012, according to the mean of 13 estimates. The analysts were predicting a 2013 loss of $67.2 million three months ago, data compiled by Bloomberg show. Shares of Frontline fell 37 percent to 19 kroner in the past year and will drop to 16.88 kroner in 12 months, according to the forecasts.
        Shipbuilding Surge

        The number of surplus tankers in the Persian Gulf climbed 7 percentage points since the start of the year and is the highest since September, according to Bloomberg’s weekly surveys of shipbrokers and owners. The number of available cargoes hasn’t exceeded shipping capacity since November 2010. The surplus is a consequence of a surge in shipbuilding that began in 2007 and 2008, when rates rose as high as $229,000, Clarkson data show.

        Strengthening demand in other regions may help ease the glut of tankers once more. China, the biggest destination for laden VLCCs, imported 8 percent more crude in December, customs data show. The nation ended seven straight quarters of slowing economic growth in the final three months of 2012 and will keep accelerating through at least the end of September, according to the mean of estimates from 32 economists compiled by Bloomberg.

        Global oil demand will advance 0.9 percent to a record 90.5 million barrels a day in 2013, the Paris-based International Energy Agency estimates. World trade will increase 3.8 percent this year, up from 2.8 percent in 2012, according to the International Monetary Fund, located in Washington.
        Record Scrapping

        Fleet growth is slowing, with outstanding orders at ship yards equal to 6.8 percent of existing capacity, from 13 percent a year ago and 47 percent in 2008, according to IHS Inc. (IHS), an Englewood, Colorado-based research company. Owners will scrap VLCCs with capacity of 2.6 million deadweight tons in 2013, about the same as last year, Clarkson estimates.

        The excess supply extends across most of the shipping industry after owners ordered too many vessels when rates surged before the global recession, the worst since World War II. The Baltic Dry Index, a measure of the cost of hauling coal and iron ore, plunged 60 percent last year and the Baltic Dirty Tanker Index, reflecting oil-shipping rates, retreated 18 percent.

        VLCCs were earning 50 percent more a year ago because of a surge in demand from countries seeking to stockpile crude as the 27-nation European Union prepared to impose sanctions on Iran over its nuclear program. Rates rose as high as $51,413 in April, and the oversupply of tankers in the Persian Gulf fell as low as 4.5 percent.
        Saudi Arabia

        Saudi Arabia, the largest crude exporter, boosted output to a record 9.9 million barrels a day in May to compensate for slumping Iranian shipments. Brent crude, Europe’s benchmark, had closed as high as $126.22 a barrel in March, 44 percent more than the five-year average. Prices fell as low as $104.76 by November and Saudi Arabia’s production was pared back to the lowest level in more than a year the following month.

        The decline is compounding weaker demand from the U.S., the largest importer, where domestic oil output is the highest since 1993 and natural-gas production the most ever, Energy Department data show. Imports averaged 8.65 million barrels a day last year, the smallest since 1999.

        Mitsui O.S.K. Lines Ltd. is the largest owner of VLCCs, with 38, according to Clarkson. The Tokyo-based company, which also operates ships carrying liquefied natural gas and dry-bulk commodities, will lose $261.5 million in its fiscal year ending in March, the mean of 13 analyst estimates shows.

        Frontline, once the biggest VLCC operator, split in two in December 2011 to avoid running out of cash amid the lowest rates since 1999. The new Frontline 2012 Ltd. is investing in ships carrying oil, liquefied petroleum gas and iron ore.

        “A cut in OPEC production normally spells fewer cargoes and lower tanker earnings,” said Dag Kilen, an analyst at Fearnley Consultants A/S, part of Norway’s second-largest shipbroker. “Fewer cargoes with the market already oversupplied with tankers will push rates down.”

 
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