Quote from: RE on Today at 12:13 PMQuote from: TDoS on Today at 11:24 AMAs far as "predicting" anything, if he drew the lines with post 2015 data and then stated his conclusion, that isn't a prediction. It is an observation, coupled in this case with a bad conclusion, drawn from historical data. If he used this chart pre-2015 to predict the drop in oil prices, that would be different.
No, this is just a recent chart, he started producing them back in around 2011-12 as I recall. They all came before the price collapse. I find it remarkable you managed to miss them and him, since I regularly cross posted his blogs and did numerous podcasts with him. Here's one with me, Steve and Ugo.
The website url rings a bell, but the name didn't register. I don't recall any of his work independently, or from that website. I tended to hunt far bigger game, in different venues.
Quote from: REAs to his current price point of $125 on production, that has changed, you'd have to ask him why. I suspect it's a price point for new discoveries, not an average for all production. $60 on consumption is different as well now, used to be $80 as I recall. Credit situation has worsened, obviously.
RE
The mechanisms of how credit works within the overall scheme of capital investment isn't something normally or directly incorported within the economic modeling of resource development itself, but might have a place within a financial overlay dictating the price that E&Ps see and by extension affect the go/no-go decisions.
Straight up changing price delta models are difficult enough, second or third order assumptions of how the maneuvering of capital takes place behind the scenes isn't something I've ever seen integrated in any believable way to deliver a long price to the resource cost side. I have no doubt it can be done with the necessary resources and personnel, but I've never seen it. And if it lacks a stochastic component I wouldn't believe it by default, no one who knows anything about this type of high quality macro-economic modeling can believable do it without including the uncertainties involved.