HOW does the GOLDWAVE look in the SHORT TERM - week - 10 days ? does your program do short term?
bustedbuttons
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Saudi's pull at barrel out of the ground for ~$8
Offshore ~ $55-$65
Canadian Oil Sands !~ $60 - $70
Traditional Well (fracking ) ~$45
MystryBox
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Google oil EROI. Oil price goes to zero as it becomes uneconomical to pull out of the ground. The limiting factor is not price/demand, it's energy required to extract. Once it takes more than a barrel of oil to extract and bring a barrel of oil to the market, oil is done. Oil won't be available because those that extract it will need to produce or buy more energy to bring it to market than the oil has in it.
StewLoo
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@MystryBox, we are no where near that point, and ironically if we do move in that direction it would first drive up the price of oil significantly. Not sure what your point is anyway
MystryBox
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@StewLoo, we could be closer to that point than you might think given that some of the largest oil companies aren't transparent and don't share their EROI values. Given that the largest (Saudi Arabia's oil co) recently tried to go public, it makes you wonder WHY. Why were they selling the business to the public if it was running so well?
And no I'm not convinced prices would rise again before it happens. We're in an unprecedented oil demand contraction. Planes, cars and everything else that runs on oil is basically not moving. The final effect of this (hopefully temporary) disruption is not known. But certainly the oil market is being hugely impacted. This might be the shock that pushes EROI values low enough there is no recovery.
As for my point, I'm suggesting that I wouldn't chase oil prices that are falling. It's possible (though unlikely) that they won't come back up.
@MystryBox, not there yet IMO, I agree with StewLoo. You need to consider what is going to power the world's energy demands into the future? Nuclear...not anytime soon, wind...unreliable and not yet largely deployed, solar...same as wind... Other potential sources like hydrogen...no infrastructure in place yet... demand is lowered right now due to many factors, but it will not stay down indefinitely; computers, server farms, etc. all require power...even an interim remote lifestyle demands energy. RE: Saudi IPO, they had planned to do this for years but missed the energy cycle peak and then decided to put it off a couple years hoping for higher prices...they bet on this down cycle in energy being over when they IPO'd and they didn't account for such a long term downtrend. I also think your Oil Sands B/E is either an old statistic or skewed slightly... what is your source?
First it's irrelevant if other energy sources are not yet developed enough to replace oil. When it takes more energy to extract a barrel of oil than exists in a barrel of oil (plus a margin), oil is done--period. It doesn't matter how much oil still exists, or how much people will be willing to pay for it--it won't be available because it won't be viable to extract at any price. Oil's EROI has been dropping for decades despite better technologies and many alternative energy sources have a much higher EROI than oil already. I'm not claiming oil is not viable due to EROI, I don't think we're there yet. But when it happens oil will respond in ways very few people understand. Price will go to zero, not infinity. And maybe a global oil demand collapse will be enough to damage the oil industry enough to make EROI an issue.
Second, you're assuming there will be significant energy demands into the future. The situation right now is demand is dead. Inventories of gas and oil are at record highs. They are running out of places to store the stuff. Maybe that changes when the virus situation clears up, but it's not certain when that will be and it's not certain exactly how well global demand will come back when it does. We might be headed into a protracted demand decline.
Bottom line I'm not predicting oil drops further, I'm just saying I wouldn't touch oil with a 10 foot pole right now. It's good to watch because it's an indicator of global industrial activity, but what it's telling us right now is that global industry is dead.
MystryBox
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@faronf, I didn't say anything about oil sands, so not sure what you're talking about there.
MystryBox
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@faronf, I bought natural gas on its way down years ago. It never came back. Oil is now catching down to natural gas. This time I'm happy to watch it fall.