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Petróleo Brasileiro S.A. - Petrobras Message Board

  • docjoe999 docjoe999 Dec 12, 2012 1:24 PM Flag

    Oil report shows the real economy at work

    I have been busy at work and have not had much time to post. Not that much has changed. The world still believes that you can print money to pay down your debts, and somehow because it is the bankers led by Uncle Ben and his masters of the universe it will work out.

    Can you imagine this conversation? You give me a prime cut of meat for $50. I hand you back a piece of paper with the word $50 on it. You scream that I have ripped you off. I then say, "No, I didn't write the word $50 on that piece of paper, my Uncle Ben did." How do you feel? If you trade in today's market, you feel pretty good.

    I sent out word that I was interested in a security guard position and was flooded with requests, and the same happened with receptionists where I was paying $10 an hour. In the financial world and on the cable news networks, we are in a recovery, but in real life, people are struggling.

    The weekly oil numbers are now out:

    And it is more of the same: U.S. oil production is up 15% from the same 4 week period last year, imports are down 12% year over year. But to me, the real economy can be summed up in demand: distillate down 4.4%, gasoline usage is down 3.3%. Those are recession numbers. Period. But GDP is growing... right? How is that possible?

    Still, unemployment is down, so we MUST have millions of these newly employed workers riding their bicycles to work. Well, either that or the Department of Labor (AKA the ministry of propaganda) is lying. THAT would never happen, would it?

    There still is optimism though that I can't explain. The rectal exams from the TSA and Border Patrol have cooled off. The War on Terror is in remission. Even Mexico, where bodies were piling up like cigarette butts around the White House, has mellowed. Juarez, the murder capital of North America, was tranquil.

    I had to fly to El Paso on business and invited one of my secretaries along because she needed dental work. The root canal there was $210 versus $1000 in the U.S. She was scared crossing the border, but she then started beaming, "People are friendly here, and Juarez is... nice."

    That is the perfect word for today's economy: nice. So turn off Kyle Bass and his numbers based commentary on the coming debt tsunami. How is Japan going to pay for its debt? How is Japan defaulting on its debt going to effect the world? Eh, who cares? Pop an Inbev Bud Light, prop your feet up on the desk, and watch some football. Uncle Ben is in charge, and it is so... nice.

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    • Sounds like you're still a bit confused about what should be included as oil Doc.

      " U.S. oil production is up 15% from the same 4 week period last year"

      If you scroll down on that table in your link you'll see this in the EIA's numbers for oil production:

      " Includes lease condensate."

      But that's a trivial matter, at least your not including NGL's and ethanol like you've done

      Here you were comparing PBR to the US in an earlier post:

      "The 2 million BPD increase is by 2020. In comparison, The U.S. has raised production by
      nearly that amount in the last two years."

      The US is nowhere near having increased oil production by 2 mmbd over 2 years, not even

      In terms of oil production, the US is well past halfway it's quick growth rate it will get from shale and equating NGL's as the same as oil when they are mostly useless as a transportation fuel (and sell for maybe half the price of oil on avg) is silly---this we've
      been through before.

      A little history of 'real' oil production in the US for perspective:

      In 1970, US oil production peaked at just under 10.5 mmbd and by 1976 it dropped to ~8

      Then Prudhoe Bay saved the day for about 10 years allowing production to rise to almost 9 mmbd for a short while and by 1986 production started falling again..

      More recently and within the last 3 years as of Sept, the numbers show US output was ~5.6 mmbd with most recent output reaching a high of just under 6.5 mmbd for a gain of ~1.4 mmbd over 3 years so I' not sure how you saw (in an earlier post) a gain of 2 mmbd over two years.

      (I suspect you included ethanol and NGL's )

      Not sure how well these numbers from the past 4 years will align and post but these
      are the most recent numbers from the EIA in mmbd for each month as of Sept.

      2009 5,141 5,241 5,217 5,285 5,382

      5,276 5,399 5,374 *5,560 5,517 5,386


      2010 5,399 5,546 5,513 5,377

      5,398 5,384 5,313 5,445 5,608 5,596

      5,558 5,614

      2011 5,501 5,415 5,585 5,539 5,600

      5,567 5,420 5,640 5,586 5,877 6,006


      2012 6,132 6,210 6,269 6,257 6,272

      6,203 6,336 6,242 *6,468

      So the past year has shown growth , no question, but it includes a much higher level of condensates in the mix and and when comparing to say 2 or 3 years ago , the growth rate doesn't look nearly as impressive.

      But this is history-- Going forward is the question and I stand by my earlier predictions that we've seen the best growth already from the shales and the rate of growth from the Bakken will soon slow dramatically and peak within the next 2-3 years with the rest of the shales
      (including the Bakken) collectively peaking within about 5 years if not sooner.

      So I suspect that unlike you and many others on this board , there's no way that I see the
      US ever hitting its all-time previous highs in oil output of 10.5 mmbd and I state that for the record.

      Bottom line, peak oil production should be as real a concern now as ever and once the price gets high enough, it will force substitution, innovation and conservation but it won't be easy if we see too much govt intervention.

      Or especially if govt goes along with the climate change activists who want to take coal off the table as an energy source. (anyone think that's feasible? lol)

      And if central bankers continue to impoverish everyone by continually bailing out the TBTF banks (that deserve to fail) and debase our purchasing power such that the inflationary effects on costs to develop new production simply makes it unaffordable for all but the most affluent.

      (then there's the prospect of carbon taxes to pay for more expensive energy alternatives that will further impoverish consumers)

      I also believe and expect we will see rationing before that happens and most in govt (and central banking especially) would welcome the additional power that this would confer.

      And once govt implements such a rationing policy (combined with price controls) , the free market will abandon ship and stop further development because of poor economics so the need for even further rationing will be needed as supply continues to fall.

      • 1 Reply to winsabokk
      • Wins, the latest EIA report showed 6.8 mbpd of production. Take that and your 5.1 mbpd number from 2009, and you have nearly 2 million bpd. Compare 6.8 mbpd to average December production in 2008, and you get a 2 million bpd increase.

        So, yeah, I should have said U.S. production is up nearly 2 million bpd over 4 years not two, but the point is Brazil and PBR's projected goals pale in comparison to what the U.S. is doing and has done.

        And that 6.8 million bpd compares to 5.8 million bpd of production last year.

        " Going forward is the question and I stand by my earlier predictions that we've seen the best growth already from the shales and the rate of growth from the Bakken will soon slow dramatically."

        And NO ONE in the oil industry agrees with you. You are mentally masturbating again.

        "Bottom line, peak oil production should be as real a concern now as ever."

        We should worry about oil peaking when production levels are up one million bpd over the last year? Maybe we should worry about space monkeys too!

    • Glad to see you back Doc. I was just about to crawl out of the wood works see if you were still out there. I am to the point that I don't care. Whatever happens to US we completely deserve it. America isn't the land of opportunity anymore - it is the land of guaranteed standard of living. At this point I'd rather have everybody's taxes go up. It sickens me that the population just wants to pass the bill along to 2% of the people. What ever happened to the equality that liberals preach? We are all in this together? Yet when the bill for their socialist policies comes due it's "make somebody else pay".

      You know what #$%$ me off. All of this extreme fear of recession. If we don't do X then we might have... god forbid ... a RECESSION! Recessions are natural. They historically happen about every 3 or 4 years. They clean out the system of excesses and make us stronger over the long term for it. If we don't clean out the excesses and inefficiencies then it will lead to bigger problems later on.

      Most people in my age bracket have no clue about what is going on. I don't care anymore. I just want to be able to make my money off other's stupidity. If they want to watch the Kardashians then fine. I feel no sympathy for them.

    • Hello doc

      I'm not a huge D. Gartman fan, but I listen to what he says anyway. I think he could be right about oil.

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