In my estimate (an that of others who take a system dynamics approach)
there are at least a half dozen feedback loops operating to create short
to medium volatility in $/barrel oil price while we are at the top of the
global production curve. Variables driving positive feedbacks include
dollar currency value, export nation conservation (what we in the core of
the empire arrogantly call "hoarding" ), export nation economic growth
(using more oil), sanctions and energy sabotage and privateering and war
in export nations (Nigeria, Venezuela, Iraq, Iran, and Saudi Arabia to
date), emerging economy growth (China, India) in the short run,
increasing cost of oil production, and of course declining global
production ability. Variables driving negative feedbacks include a
shrinking buyer market as oil becomes unaffordable to less prosperous
nations/populations, and significant energy conservation in high use
import nations. In my view these feedbacks along with historical
contingencies (Gulf hurricanes, etc.) could easily provoke changes of a
dollar or more either way in US gas pump prices over a six month period.
Living under the media censorship bubble regarding oil and most other
knowledge of importance to their lives, most US consumers will interpret
these short run changes as permanent trends, and react in typical
counterintuitive fashion.
Probably the EIA predictions take account of some of these. A feedback
dominance over time approach to the problem shows that it is practically
impossible to predict short to medium run volatility in oil price, or in
any variable in such a complex system. The important point is that this
volatility is irrelevant if the long run trend is clear, as is the case
with oil price.
Karl North
Northland Sheep Dairy, Freetown, New York USA
www.geocities.com/northsheep/
"Mother Nature never farms without animals" - Albert Howard
"Pueblo que canta no morira" - Cuban saying
On Mon, 5 May 2008 11:27:03 -0400 "Anthony Ingraham"
<[EMAIL PROTECTED]> writes:
> > [Original Message]
> > > Subject: Oil and gasoline facts, figures, and graphs
> >
> > Hi Tony,
> >
> > For the numeracy freaks out there, there's lots of interesting
> > numerical data and graphs in this recent document:
> >
> >
>
http://www.energytomorrow.org/energy_issues/truth_about_oil_gasoline_prim
er.
> pdf
> >
> > The EIA price projections on page 6 are footnoted with a statement
>
> > that "some easing of the oil market by 2009 is expected due to
> > increased production outside of OPEC and planned additions to OPEC
>
> > capacity." Their prediction is that WTI crude will drop back to
> > $92.50 next year. Sceptics in the audience will wonder whether and
> to
> > what extent the folks at EIA have taken into account the ongoing
> > trend of a robust increase in demand and whether it might
> overwhelm
> > any increase in extraction capacity. I've polled friends here
> about
> > whether they might have some ideas about this.
> >
> > For some time now I've been curious to what extent the recent rise
> in
> > oil price, commonly stated in $/bbl, is attributable to the
> weakening
> > of the dollar compared to other currencies, in addition to
> > fundamental factors of supply and demand. Finally I have found
> charts
> > (see page 8 of the report) that show the
> > recent historical trend of oil price in dollars vs euros and yen.
>
> > When expressed in euros or yen, the price of crude is still rising
>
> > fast, but at only about 70% of the rate of the price increase in
> dollars.
> >
> > Piper
>
>
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