[RE]

I was laid off for a year during low prices. I didn't do any of the things you have speculated on.

Of course you didn't.  World class experts like yourself can shift gears, take a desk job, lecture at a college for a year, take a sabbatical and cruise the Grand Canyon on your Harley with your genius kids before sending them off to college, the world is your oyster!  You really should give the  poor despondent CEO a call and tell him how this is probably the greatest thing to ever happen to him, he can be just like you and be a big success in any career at all!  Your greatness and resilence knows no bounds!  Yellowstone could blow and you would forge a new career as a volcanic ash salesman. 

Really, is there any topic you can't turn into an opportunity to brag about how great you are?

You are back in the cooler for violating the no bragging rule.

RE

[RE]

Currently at $68.  I wonder who still makes a profit when the price drops into the $50s?

https://oilprice.com/Latest-Energy-News/World-News/WTI-Breaks-Below-70-as-Demand-Concerns-Drive-Bearish-Sentiment.html

WTI Breaks Below $70 as Demand Concerns Drive Bearish Sentiment

RE

[K-Dog]

Currently at $68.  I wonder who still makes a profit when the price drops into the $50s?

https://oilprice.com/Latest-Energy-News/World-News/WTI-Breaks-Below-70-as-Demand-Concerns-Drive-Bearish-Sentiment.html

WTI Breaks Below $70 as Demand Concerns Drive Bearish Sentiment

RE

Socialization for the rich.  Taxes will subsidize the extraction of every last drop.  The crisis of 2008 showed what the FSOA is willing to do to keep the gravy train of our elite going.  As long as there are proles too stupid to wonder about the big picture, and rich narcissists to exploit them.  The game goes on.

Global fossil fuel subsidies on the rise despite calls for phase-out

It is capitalism and die.  The decision has been made.  Fundamental changes that could save the day will not be made.

[RE]

Old newz.

https://www.dw.com/en/what-is-peak-oil-and-when-will-we-reach-it/a-70645124

What is 'peak oil' and when will we reach it?

RE

[K-Dog]

Old newz.

https://www.dw.com/en/what-is-peak-oil-and-when-will-we-reach-it/a-70645124

What is 'peak oil' and when will we reach it?

RE

A collection of opinions without science of any kind.  Feel good propaganda.

Renewables are not replacing fossil fuels, all you have to do to blow these dumfucks away is cite this.


Atmospheric CO2

October 2024     422.38 ppm
October 2023     418.82 ppm

Annual change:     +0.85%

Fossil fuel use is accelerating.  This article is propaganda to put the sheep asleep.

[RE]

Renewables are not replacing fossil fuels...

Fossil fuel use is accelerating.  This article is propaganda to put the sheep asleep.

Indeed.  The collective Energy Jones of the Post-Industrial AI Dependent Techno-Futuristic Billionaire Wet Dream* society is so insatiable in its demands for ever more gigajoules of energy it requires not only every drop of oil that can be fracked out of rock but also paving over entire ecosystems with PV panels and wind turbine arrays turning flocks of geese into airborne sushi.  The idea that there really are limits to energy consumption on a finite planet still is not grasped by the smartest guys in the room as they lead the sheeple on the yellow brick road to inevitable collapse and Everlasting Doomnation*.

Each day now as we move forward, there's some location where the city looks like it just had a fly-by Close Encounter of the Third Kind.

It won't be long before were all Cubans.

*- I'm claiming Coinage on these phrases.  You heard 'em here first. 

RE

[RE]

Not many frackers making a profit at those prices.

https://www.investing.com/news/commodities-news/brent-to-average-65-wti-to-average-61-in-2025-bofa-3742319

Brent to average $65, WTI to average $61 in 2025: BofA

RE

[K-Dog]

Not many frackers making a profit at those prices.

https://www.investing.com/news/commodities-news/brent-to-average-65-wti-to-average-61-in-2025-bofa-3742319

Brent to average $65, WTI to average $61 in 2025: BofA

RE

I won't call the article interesting, that is too generous. To me it is a large mathematical equation put into words.  It this happens, that happens and so on.  No real info.

[TDoS]

Not many frackers making a profit at those prices.

https://www.investing.com/news/commodities-news/brent-to-average-65-wti-to-average-61-in-2025-bofa-3742319

Brent to average $65, WTI to average $61 in 2025: BofA

RE

+6 years, about to be +7 years past peak oil....and DAMN are low prices not part of the Happy McPeakster program!!

But those kinds of prices will likely bring about lower drilling activity, lower US production...and we'll all get to revel in another US peak oil!

Good thing all us geriatrics probably don't need to worry about it much, having lived through all the other peak oils it is just a bit difficult to get excited about yet another one. 

[RE]

Well, that's a good deal higher than the BoA estimate.  Who is closer to the mark?  $74.53 for Brent according to the Reuters pol of expert analysts or the BoA analyst's price of $65 for Brent?  That's nearly a $10 difference. WTI @ $70.69 or $61?  Since we have our own world class expert, finally here's something we can hear a worthwhile opinion from him about. 

A difference this big obviously has a huge impact on how many holes will get drilled and how much money the banksters will dish out.  If BoA thinks the price is gonna be $65, they're not gonna float loans to anyone who needs $75 to make money.  This indicates that the Reuters experts are the SUITS sitting on the driller's side of the loan officer's table and the BoA expert sits next to the loan officer on his side of the table. The expert the driller's hired has to convinmce the loan officer that the expert they hired is wrong. lol.

Or more likely, they don't even bother going to BoA for a loan, because BoA has telegraphed to everyone what price they will loan money for, so if you can't come in with oil at that price, don't bother coming in for a tet a tet.

In any event, at least we can leave the Peak Oil question behind at last, although I'm sure the term will still pop up from time to time.

https://oilprice.com/Latest-Energy-News/World-News/Analysts-Cut-2025-Oil-Price-Forecasts-Again.html

Analysts Cut 2025 Oil Price Forecasts Again

RE

[TDoS]

If BoA thinks the price is gonna be $65, they're not gonna float loans to anyone who needs $75 to make money.  This indicates that the Reuters experts are the SUITS sitting on the driller's side of the loan officer's table and the BoA expert sits next to the loan officer on his side of the table. The expert the driller's hired has to convinmce the loan officer that the expert they hired is wrong. lol.

Only lol to those who have never played the game perhaps. Both sides pay well, but obviously those with a widely known reputation and past performance to back it up tend to be taken more seriously than Joe Expert. Because not all suits are created equal.   

[RE]

So who's expert do you think is closer to the target?  You're supposed to be the best suit at the table according to you.  Inquiring minds want to know.   If you don't answer or equivocate, you get cooler time.  What good is having an expert here if we don't get expert opinions?

RE

[TDoS]

You're supposed to be the best suit at the table according to you.

I am not a suit. Money handlers, insurance salesmen, bankers and financiers, lawyers. Never done any of that in life.

Inquiring minds want to know.  If you don't answer or equivocate, you get cooler time.

But of course.

So..here we go.

The standard 6 variable model used to do this type of projecting involves 7 main components, requiring they are ranked in order from most important in terms of overall uncertainty for a given scenario to least. Each of the 7 are then assigned a weighting range, the sum of which on any iteration must equal 1.0. This means that in any given run, by the time the probabilities are calculated from most to least uncertain, if that number exceeds 1.0 on any given run, the remaining 1 or 2 might be entirely eliminated from the calculations.

Brent prices in US$ and all underlying variables examine data from both prior model runs and now historical results and project from them forward. One of the most important of the 7 inputs is the squared deviation from the past 12 model runs compared to what is now history...when running the current month and moving forward in time. High detail information like country level production is grouped into logical regions in order to improve overall run times of the simulation. Some parts of the model are data, some are derived more from a delphi approach, for example expectations of world oil balances in terms of production based on data and expectations of demand based on historical patterns which result in forward looking world storage balance changes. Changing storage balances act as a overall gauge of the supply/demand balance. Stated OPEC guidance is within the model, as are what is called "unstated" guidance which is designed to match actions as oposed to just words. Exogenous events can work their way into now and future casting as well using similar modifcations to the appropriate category among the 7. The weighting and order for the 7 can be adjusted as necessary. Expected forward year oil intensity of national economies is a relatively new addition with the growing offset of energy once hydrocarbon based now something else (renewables, substitution of non-hydrocabon based fuels, etc etc).

Prices are the changing variable to reach a required equilibrium point on each iteration. Iteration results in terms of price required to balance all weighting and other conditions results in a single output, 5000 iteration is usually reasonable for the resulting distribution to stabilize.

These are the monthly expectations of price and probability for 2025.



If you look carefully, of note is that the thin white line across the middle (or close to it) of the box part of the plot is a median, and the eye should be able to pick up naturally that more than 50% of the date tends to reside on the lower side of the medium Brent price for any month. Downside risk is more apparent over the coming year than upside. 5% of the data is above and below the visible data, but 90% of all prices lay between the maxima and minima vertical lines. Also of note is the tendency for late next summer after demand tends to slacken as it does seasonally, prices do not look to recover to the same levels as they are expected to enter 2025. Because all the fractiles of these probability constructs are known, they can be compared directly at each 1$ point, and the odds then calculated as to the over/under at any point in time between months if there was an interest.

The question you asked wasn't about sochastic model results for 12 months in 2025, but what is the average price for the entire year. To plenty of people this is a single number. A single number for those who can't handle sharp objects is pretty standard. I'm betting that folks don't show you what is being provided here because I know I am not the only one doing it. But we all dumb it down to single numbers for internet denizens, newspapers, 2nd grade readers and suits and whatnot.

In order to create a reasonable annual average from 12 distinct distributions of probability, you use all 12 monthly distributions to create a single annual average, and just run 5000 iterations to populate another distribution for the annual answer. And then you present that distribution as the answer for annual oil price....while keeping the proper uncertainty contained within all of the 12 months.

So my answer for the most likely price of oil (in this case a mean) in 2025 based on all the individual months and their accompanying uncertainty is $65.83, give or take. Using that as a reference point on the graph you can then eyeball for yourself the accompanying range and probability of 90% of most outcomes for 2025. Only a 3% chance of the price being more than $70, but it does exist.

[K-Dog]

What are the variables and how do they relate to each other.  Can you write the relationship as an equation?

[TDoS]

What are the variables and how do they relate to each other.  Can you write the relationship as an equation?

A) Indeed. The Word document of documentation has 127 pages. 42374 words. Pages 94 to 127 are a detail of the more important variables. The file management of outputs chapter is about 6 pages long. All variables are not contained in that document, but more the concepts of their use. 

B) To which relationship do you refer? Because when it comes to the producing nations of the world, grouped into regions with assumptions of correlation, across the required product streams, demand/price relationships in the sectors, forward looking assumptions in changing variables with different rates of change, using various statistic techniques to create the best fit probability density functions to most of these moving parts, and so on and so forth. So...which relationship do you have in mind? But generally, no, equations are not utilized for relationships....probability density functions are.

As there are often no analytic solutions to the multiplication/division/addition/subtraction of disparate probability functions, a simulator is the only way to put them together to form a master output distribution of price from all of these underlying uncertainties, relationships and correlations.

As just one simple example, if you take two distributions, 1) a shifted, truncated lognormal of oilfield occurrence probability of field sizes classes and 2) a trianglular distribution of potential number of fields remaining generated from another process, you can't analytically solve for 3) the mean expected field size distribution of the resulting multiplicative combination of the two. 

Probability work is just so cool, but once the engineers bump into the non analytic nature of some of these types of statistics issues, they just want to spit. You can't blame them, they are designed for precision. Amusingly, even though they themselves are tied up in the certainty, they can't avoid the uncertainty and are absolutely affected by it.

Have you ever heard of the asymmetrical stop-loss function?

True story. Being introduced around the office one day back when I started, the boss introduced me to the engineering group. The head cock of the walk was detailing how his refinery calculations had turned out to be within 0.2253546% of optimal, and the others were going around the room introducing what they did and doing the standard chest puffery of engineering precision and accomplishment, and then, me being the new guy, they offered the expected..."so...what do YOU do...?" and then 6 pairs of eyes are all just daring you to be a bigger stud then them.

I glanced around, couldn't resist the urge I display so often online and said..."well....I'm a DAMN good guesser". There were 3 snickers, fury from the eyes of Mr Cock of the walk, and the guy beside me burst out laughing. He then said...you guessed it...."well....isn't that why when we draw up the perfect bridge design  to hold the designed weight....WE DOUBLE EVERYTHING when we're done!"

The asymmetrical stop loss function.

True story.