Skip to comments.Analyst Makes Bombshell Prediction Of $50 Oil, More Production Than Possibly Know What To Do With
Posted on 12/04/2012 12:02:23 AM PST by 2ndDivisionVet
For the US economy, this would be a 'Black Swan' of a totally different variety.
In Bank of America/Merrill Lynch's 2013 Energy Outlook, analyst Sabine Schels and colleagues make a shocking prediction about the possible path of West Texas Intermediate oil.
Surging US shale oil output creates risk of $50 WTI North Americas energy supplies are surging while the rest of the world continues to fight for scarce molecules of oil and gas. On our estimates, onshore US crude oil output now vastly exceeds previous growth rates in liquids and nat gas, particularly in Lower 48 states. With profitability for US domestic oil producers very high and no change in sight to US rules preventing crude oil exports, we expect WTI prices to continue to lag international prices. Indeed, we see a risk of WTI temporarily falling to $50/bbl over the next 24 months to force a slowdown in supply growth or a change in crude oil export rules.
A key point that Schels & Co. make is that the crude oil market could come to resemble the Natural Gas market. In the natural gas market, the US has natural gas coming out of its ears, as it just has way more supply coming out of the ground than it could possibly use or export. So while prices remain decent throughout much of the world, domestic natural gas prices have collapsed...
(Excerpt) Read more at businessinsider.com ...
It may be geography-dependent, but here in NE ohio, there are plenty of fleet vehicles and busses running on LNG (Liquified Natural Gas). For obvious reasons, the local NG utility has a bunch.
The big problem, as I understand it is the L in LNG. NG is methane, and holding enough to provide any reasonable range requires that it be liquified, which requires high pressures to do so and a suitable pressure vessel to carry it around. Once that’s in place, the conversion is pretty trivial, except for the cost of satisfying the EPA trolls.
Liquifying NG also requires a fair amount of energy to run the compressors.
It’s definitely do-able if there was some external factor driving a large scale conversion, but there’s a good reason liquid transportation fuels dominate the market.
LNG is not pressurized, it is cooled down to -260°F.
The pressurized systems, often 3,000~3,600 psi are CNG, compressed natural gas. It has more volume requirement but does not require cryogenics.
If oil went down to $50/barrel, the msm would shout that it’s all due to Obama’s wonderful leadership.
I remember $.13/9 gasoline.
My ‘66 Chevy 396/425 motor got eight miles to the gallon.
In 66 in So. California gas was 26.9.
When I was paying 13.9 was in 1954!
Might get to $50/bbl, but there will be $50/bbl taxes on it.
The ironic thing is that cheap energy may be the only way to salvage the situation -- assuming Obama wants it salvaged in the first place (which, as you point out, there is ample evidence that he doesn't want to).
How the mighty have fallen. Aeroback with a 305. And a 4 cylinder 442! Sigh.
My folks and I sailed into Oakland after overseas duty back in 1961. California looked damned good to me.
Even if it happens gas prices will remain high. Too many oxes would be gored by lower prices, not the least of which being Dear Leader. Market manipulation is the name of the game. $3+ per gallon is the New Normal.
Mine was black with gold pin-striping. Sadly, not the 442 option, but I totaled it anyways using only a rocket 350 engine.
Because natural gas is a “fluffy” fuel unless you liquify it. Compressed natural gas tanks in a car won’t get you more than, oh, 150 miles of range - if that.
LNG infrastructure would be expensive and “lossy” (you lose gas as the liquid heats up and converts to a gas) and the tanks have to be built to keep the gas in a super-cooled state. Compressed natural gas tanks need to be built to withstand impacts in crashes, because the compressed gas (even if not flammable) would cause quite an enhancement to a crash if the tank vented explosively - not from the gas burning, but from the sheer force of becoming explosively de-compressed.
Here’s a rule of thumb: Ever been in a shop with a 80 to 120 gallon air compressor? Ever wonder how big a bang that tank would make if it exploded at 175PSI?
It would be about the force of .75 to 1.0 sticks of dynamite.
Now think about the force of a CNG tank rupturing at thousands of PSI...
Obama will find a way to f*ck it up somehow, never fear.>>>>>>>>>>>>>>>>>>
Few people know how true your words are and how it will be done.
The EPA now operates on executive orders from POSHITUS
and Obama is quite ready to destroy andy initiative inside the USA that will reduce the price of oil, and he has likely guaranteed this activity to the Saudis.
The only way West Texas oil will ever impact the market is to go to war and shoot at EPA enforcers.Will that happen?
To cadge a phrase from the ancient Left, “You don’t need a weatherman to know which way the wind blows.”
Obama is set on destruction of the United States; his method will reveal itself in time, but the result is a foregone conclusion.
Remember what a real president is like and remember conservatism. We need rid of the RINOs, they have failed yet dop not want to accept the failure to win the presidency. They own it, now we get rid of them all.
Just listen to this:
“Remember what a real president is like and remember conservatism.”
Yes, by all means, hang in there and fight the good fight.
I’m afraid i’m getting a little too old for that sort of thing, and this election may have been my last.
Possibly, and with a little luck, I’ll live to see the next president - a conservative - inaugurated, but I’m not making any plans.
You kids do what needs to be done - it’s your world now.
Maybe the technology would allow for wildcatters again and the John Q Public could drill his own well and sell it.
Don’t worry Jack. It will be turned around.
Interesting info. I imagine fuel injection versus carburetors may make it more difficult as well.
The EPA will “Kill Colorado” long before oil ever approaches $50/barrel. The Agenda will not be sidetracked.
Once the greens demagogue the issue of fracking, the EPA will shut it down.
Do you remember where you read these articles? My impression is that most natural gas related accidents come from crashing into natural gas pipelines. To my knowledge, Mexico's CNG conversions are completely unregulated, and I've never heard of spectacular accidents.
Yes, it’ll be turned around eventually, and thank you for striking a positive note.
For everything there is a season; however, I doubt very much I’ll be here to see it.
In the interim, I’m a little tired of - and sore from - being ‘turned around’ by the president.
If oil drops that low it won’t be profitable to extract it from shale.
Matt Damon won’t care, of course, he’s a major star and he’ll still have enough gelt to buy the limo, fuel it (whatever the price of gas), and have a chauffeur drive him around.
Life becomes a little more problematic for us peons.
Neither does he care that his so called documentary about the evils of fracking is supported financially by the Saudis and will benefit them greatly if he can convince enough suckers to put pressure on to stop fracking from being used.
Like most actors, he wants to make up for his overwhelming fortune gotten by pretending to be someone else, so he picks a "cause" that makes him feel good.
This documentary of his is demonstrably false, much like Michael Moore's agitprop, and it will be used to try to destroy the industry that could, if left alone, bring the US to energy independence.
Looks like you might be riight about he first 4 standing for 400 cid. Take a look at this ad back from 1965. Looks like I stand corrected.