Monitoring Peak Oil Number 6
All liquids Production- September 2007: 85.09 millions of barrels per day
The record production of all liquids was in July of 2006 as I always repeat in these updates. If we only take into account crude and condensate (C&C), the peak production month was May of 2005.
When I wrote my last update, we were in the third quarter, when all liquids demand started to surpass all liquids supply. Now, we are entering the fourth quarter during which the gap between supply and demand is going to get worse. The demand is going to be around 87.6 mbpd (million of barrels per day). This, together with the well known geopolitical concerns (Iran, Turkey, Pakistan, etc) will make the price of oil and its derivatives highly unstable for the next months.
The record production of all liquids was in July of 2006 as I always repeat in these updates. If we only take into account crude and condensate (C&C), the peak production month was May of 2005.
When I wrote my last update, we were in the third quarter, when all liquids demand started to surpass all liquids supply. Now, we are entering the fourth quarter during which the gap between supply and demand is going to get worse. The demand is going to be around 87.6 mbpd (million of barrels per day). This, together with the well known geopolitical concerns (Iran, Turkey, Pakistan, etc) will make the price of oil and its derivatives highly unstable for the next months.
posted by Doctor Marco at 18:40
9 Comments:
So Marco,
How many shares have you bought in oil futures?
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Q:
From previous comments, you seem not to accept the Peak Oil theory.
Do you really think that I want the oil price to go higher? Of course, I cannot influence the oil market from this tiny blog that only you read.
Do you really think that speculation is the main drive of the oil price?
The oil price is not the most important issue. You have to take a look into the objective data. Reality shows that the gap between supply and demand is widening. Take a look at the IEA tables, an institution that does not endorse the Peak oil theory. The answers are there.
Marco,
I don't think that you have any nefarious motivations or desires.
I haven't looked at the data you reference, but being a "blackbelt" in lean six sigma I do know that few people use statistics properly. I also know that even when stats are used the correct way we still make many very bad assumptions about the future.
Supply and demand will balance and our societies and economies will adjust. Everyday when UI come to work (in my company van with 6 passengers) we are passed by hundreds/thousands of cars occupied by one person. There is a lot of room for adjustment in that factor alone. Then there is mass transportation. Then there is work at home.
We will adjust and be okay.
What I was saying in the prior note is if you really believe the crunch is going to happen then take advantage of it and buy commodities. That is how people get wealthy!!! This is not nefarious either...
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Q:
To be honest with you I thought about buying commodities, but I am too focused of paying debt that the thought quickly fades away. If you have the capacity, you should do it, however, with a society in disarray, you may also want to consider to invest in personal security and health.
We will eventually adjust, I agree with that. The in-between is what worries me.
I'm 52 and I'm very hesitant about high risk investments. In fact, after 30+ years of saving and investing I'm well positioned. Between now an 60 my assets will double with little or no risk and I'll be able to live very comfortably my almost any standards.
I'm pretty cavalier about health in one sense. I exercize regularly and have my whole life. Eat a healthy diet. Get plenty of rest. I happen to have good genes... result is low PSA, low BP, high HDL, low LDL, ideal HDL/LDL ration, low body fat, blah blah blah. Where I'm cavalier is in my view on "health". My grand parents live long healthy lives, but died before people started thinking "health care is a right". My dad died at a decent age (70) after refusing to be treated for cancer. From their examples I have taken the approach that you die when your time comes. I will take advantage of my health insurance if I think the afflictions I incur can be treated. If they can't be treated I will probably elect to follow the path of my predecessors.
On security, I live in a small town (8,900 peoples) 65 miles from the nearest city (Austin - barely a city). Frankly, security just isn't an issue. In fact, your security in a small town comes from knowing your neighbors - who will come to your aid - at least in Texas. Plus, my in-laws live in the middle of the Missouri Ozarks on a 400 acre working ranch - where outsiders are treated like... outsiders. Another form of security...
You hang tough. From my interactions with you on this blog you seem to be a good, smart, honest, well intended person that gives more to society than you consume.
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Q:
Things look good in your side. I am much younger and just starting to practice after long 15 years of college, medical school, residency and fellowship. My debt is large, but I am not doing bad at the rate it is decreasing. In your case, if your assets are going to double, you are right in that you do not need high-risk investments. Just make sure that your assets double in dollars of 2007. Inflation can give you surprises, I am sure you are well aware of it, but since I lived in hyperinflation from 1987-1990, I know what I am talking about.
Marco,
Good advice.
Let me share something else with you about inflation, retirement, and aging. As you get close to retirement age, 60ish lets say, some positive things happen economically:
1. you eliminate debt (my wife is 43 I'm 52 and we are down to about $40k debt - that's what's left on the house. When I'm 55 we will have zero debt. Even hyper inflation won't affect that.)
2. you have most of the "non-consumable things" you need like appliances, furniture, tools, etc.) and you pretty much just have to refresh food, clothes, etc.
3. inflation tends to hit food and clothing much less than other things - in other words - inflation is much higher on TV's and vaccuum cleaners than on the food staples. When you're my age you already have TV's and vaccuum cleaners so you are hit less by inflation.
4. You/I can always get a job again in many fields (I have experience as economist, statistician, adult education, computer programmer/analyst, process engineer (six sigma), technology researcher, project manager, strategic planner, enterprise business architect, competitive intelligence analyst, etc.)
5. My/your spouse can get a job as well, and since she is 9 years younger she'll still be considered hireable after I'm deemed to be too old - she has an MBA and experince as a project manager (multi-million projects), department manager, human resources analyst, computer programmer/analyst, and financial analyst.
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Again, things look good for you. You are right about elevated inflation rates and their effects. If you ever want me to share with you the hyperinflation experience (the one that is measured daily), I can post something related to it.
Marco,
I would like to hear about the "daily inflation" from someone who has been there first hand.
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