Brent Crude at $84 per barrel and might reach $100+ per barrel

China’s top state refiner, Sinopec Corp, halved loading of Iranian crude oil in September.

Brent Crude is at $84 per barrel and could go to $100+ per barrel.

Various analysis indicate that oil prices will not go that high. There is also a lot of analysis and claims that prices will go over $100+ per barrel.

Saudi Arabia should add 550,000 additional barrels per day (bpd) onto the market over the next couple of months.

On November 5, 2018, the US sanctions on Iran will come into full effect. Energy market analysts expect this will cause a reduction of oil availability by 500,000 bpd to 2 million bpd.

66 thoughts on “Brent Crude at $84 per barrel and might reach $100+ per barrel”

  1. No. He presents that as a scenario option Alberta could pursue. But he doesn’t believe it is likely for them to do so.

    Reply
  2. No. He presents that as a scenario option Alberta could pursue. But he doesn’t believe it is likely for them to do so.

    Reply
  3. Doesn’t Peter Zeihan think that Albert might leave Canada over that pipe line? Hello 51st State? Remember, Canada is a CONFEDERATION and their federal government is relatively weak.

    Reply
  4. Doesn’t Peter Zeihan think that Albert might leave Canada over that pipe line? Hello 51st State? Remember Canada is a CONFEDERATION and their federal government is relatively weak.

    Reply
  5. Taxation of Alberta keeps the remainder of Canada afloat. This export issue will be sorted out, or Ontario and Quebec will go under financially. Provinces in Canada can secede. Virtually all the heavy oil produced by Canada is exported to the mid-west and southern coastal U.S. refinery. Canadian oil represents mid-forty percentage-wise of all oil imports to the U.S. as a consequence of the decline of availability the Venezuelan heavy, which those refineries were designed to process. Currently transportation bottlenecks allow a $20 discount as referenced to WTI as of August 2018.

    Reply
  6. Taxation of Alberta keeps the remainder of Canada afloat. This export issue will be sorted out or Ontario and Quebec will go under financially. Provinces in Canada can secede. Virtually all the heavy oil produced by Canada is exported to the mid-west and southern coastal U.S. refinery. Canadian oil represents mid-forty percentage-wise of all oil imports to the U.S. as a consequence of the decline of availability the Venezuelan heavy which those refineries were designed to process. Currently transportation bottlenecks allow a $20 discount as referenced to WTI as of August 2018.

    Reply
  7. $100/bbl has no short term significant impact on the economy. Obviously end user costs will increase (gasoline, plastic etc). so the question is the timeframe of such price levels. A $50/bbl increase is about $360bn of additional refining costs annually to be converted into end user product costs. But it’s like a guns versus butter argument. A household will spend more on gas than, say, movie tickets (or other substitution, like food). The average household spends about 3% of pre-tax income on gas. Spending 6% is a factor. But the GDP doesn’t care if the money is spent on digging holes, filling a car, or buying Iphones. The US is structurally now (for 30 years) a credit-based economy. We spend way more than we earn. This almost destroyed the country in 2008. Higher energy costs would need to be so high as to offset the ability to draw credit. I just can’t imagine any scenario like that other than a complete collapse of the oil extraction industry. But if that happened I think there are other things to worry about than the price of crude.

    Reply
  8. $100/bbl has no short term significant impact on the economy. Obviously end user costs will increase (gasoline plastic etc). so the question is the timeframe of such price levels. A $50/bbl increase is about $360bn of additional refining costs annually to be converted into end user product costs. But it’s like a guns versus butter argument. A household will spend more on gas than say movie tickets (or other substitution like food). The average household spends about 3{22800fc54956079738b58e74e4dcd846757aa319aad70fcf90c97a58f3119a12} of pre-tax income on gas. Spending 6{22800fc54956079738b58e74e4dcd846757aa319aad70fcf90c97a58f3119a12} is a factor. But the GDP doesn’t care if the money is spent on digging holes filling a car or buying Iphones. The US is structurally now (for 30 years) a credit-based economy. We spend way more than we earn. This almost destroyed the country in 2008. Higher energy costs would need to be so high as to offset the ability to draw credit. I just can’t imagine any scenario like that other than a complete collapse of the oil extraction industry. But if that happened I think there are other things to worry about than the price of crude.

    Reply
  9. No, oil prices and recession correlation is a myth. The ONLY time oil prices “caused” a recession was the 73 embargo which was both an instant price shock, but MORE importantly, supply issue. E.g., the 2008 recession was unrelated to crude peaking at close to $100.

    Reply
  10. No oil prices and recession correlation is a myth. The ONLY time oil prices caused”” a recession was the 73 embargo which was both an instant price shock”” but MORE importantly supply issue. E.g.”” the 2008 recession was unrelated to crude peaking at close to $100.”””

    Reply
  11. Even Vitol has pulled back lifting crude from Iran. I mean seriously, Vitol. If they can’t, no one can. It’s easy to find the “pistachio” tankers (lol Scaryjello). European refineries are owned by the brokers or the likes of Exxon/Total. ALL of the major refineries in Europe are either US or (due to having US operations) European and have pulled out already of accepting Iranian crude. USD hegemony has that effect. The so-called SPV thingy is fiction. No oil company in their right mind with ops in Europe is going to risk being sanctioned. China has also closed the door. It really is over for Iran. Their current account will go deeply negative really fast as imports are essential (ie food). Euroweenies are impotent.

    Reply
  12. Even Vitol has pulled back lifting crude from Iran. I mean seriously Vitol. If they can’t no one can. It’s easy to find the pistachio”” tankers (lol Scaryjello). European refineries are owned by the brokers or the likes of Exxon/Total. ALL of the major refineries in Europe are either US or (due to having US operations) European and have pulled out already of accepting Iranian crude. USD hegemony has that effect. The so-called SPV thingy is fiction. No oil company in their right mind with ops in Europe is going to risk being sanctioned. China has also closed the door. It really is over for Iran. Their current account will go deeply negative really fast as imports are essential (ie food). Euroweenies are impotent.”””

    Reply
  13. Taxation of Alberta keeps the remainder of Canada afloat. This export issue will be sorted out, or Ontario and Quebec will go under financially. Provinces in Canada can secede.

    Virtually all the heavy oil produced by Canada is exported to the mid-west and southern coastal U.S. refinery. Canadian oil represents mid-forty percentage-wise of all oil imports to the U.S. as a consequence of the decline of availability the Venezuelan heavy, which those refineries were designed to process. Currently transportation bottlenecks allow a $20 discount as referenced to WTI as of August 2018.

    Reply
  14. $100/bbl has no short term significant impact on the economy. Obviously end user costs will increase (gasoline, plastic etc). so the question is the timeframe of such price levels. A $50/bbl increase is about $360bn of additional refining costs annually to be converted into end user product costs. But it’s like a guns versus butter argument. A household will spend more on gas than, say, movie tickets (or other substitution, like food). The average household spends about 3% of pre-tax income on gas. Spending 6% is a factor. But the GDP doesn’t care if the money is spent on digging holes, filling a car, or buying Iphones.

    The US is structurally now (for 30 years) a credit-based economy. We spend way more than we earn. This almost destroyed the country in 2008. Higher energy costs would need to be so high as to offset the ability to draw credit. I just can’t imagine any scenario like that other than a complete collapse of the oil extraction industry. But if that happened I think there are other things to worry about than the price of crude.

    Reply
  15. No, oil prices and recession correlation is a myth. The ONLY time oil prices “caused” a recession was the 73 embargo which was both an instant price shock, but MORE importantly, supply issue. E.g., the 2008 recession was unrelated to crude peaking at close to $100.

    Reply
  16. Even Vitol has pulled back lifting crude from Iran. I mean seriously, Vitol. If they can’t, no one can. It’s easy to find the “pistachio” tankers (lol Scaryjello). European refineries are owned by the brokers or the likes of Exxon/Total. ALL of the major refineries in Europe are either US or (due to having US operations) European and have pulled out already of accepting Iranian crude. USD hegemony has that effect.

    The so-called SPV thingy is fiction. No oil company in their right mind with ops in Europe is going to risk being sanctioned. China has also closed the door. It really is over for Iran. Their current account will go deeply negative really fast as imports are essential (ie food). Euroweenies are impotent.

    Reply
  17. Not really. Net import is 2.2 million barrels but getting there. For context, we produce 11 million barrels a day. If we get to 13.2, and consumption remains constant, we would be at break even.

    Reply
  18. Not really. Net import is 2.2 million barrels but getting there. For context we produce 11 million barrels a day. If we get to 13.2 and consumption remains constant we would be at break even.

    Reply
  19. That was when we were importing most of it, we are producing a lot ourselves now. Hard to say how much of a difference that will make. It could curb domestic consumption, accelerating the point at which there is no net oil importation. Also, the dollar is not worth what it used to be. I think you need to look at the cost of oil in real dollars. Auto efficiency is up, at least for cars. Trucks are another story. They have not improved much in decades. Makers have learned to game the EPA tests, but the real fuel mileage is close to the same as it was 20 years ago. Americans and Canadians have been buying these guzzlers like mad. How will it all play out? Who can say? I don’t think you can just point to $100/barrel and say recession…too much is different. I do think we need to get more freight moved by rail, that is far more efficient than the semis, saving fuel for other uses. But what we really need to do is get people to stop commuting using pickup trucks. Just 55 million of those use more fuel than 183 million cars, 8 million motorcycles, all the buses and trains, boats and ships combined. Short term they need to ban pickups for commuting. Long term, they need to get them using natural gas and require regenerative breaking, and crush the old inefficient ones. We would easily be a major net oil exporter if we did this.

    Reply
  20. That was when we were importing most of it we are producing a lot ourselves now. Hard to say how much of a difference that will make. It could curb domestic consumption accelerating the point at which there is no net oil importation. Also the dollar is not worth what it used to be. I think you need to look at the cost of oil in real dollars. Auto efficiency is up at least for cars. Trucks are another story. They have not improved much in decades. Makers have learned to game the EPA tests but the real fuel mileage is close to the same as it was 20 years ago. Americans and Canadians have been buying these guzzlers like mad.How will it all play out? Who can say? I don’t think you can just point to $100/barrel and say recession…too much is different.I do think we need to get more freight moved by rail that is far more efficient than the semis saving fuel for other uses. But what we really need to do is get people to stop commuting using pickup trucks. Just 55 million of those use more fuel than 183 million cars 8 million motorcycles all the buses and trains boats and ships combined.Short term they need to ban pickups for commuting. Long term they need to get them using natural gas and require regenerative breaking and crush the old inefficient ones.We would easily be a major net oil exporter if we did this.

    Reply
  21. …oil over $100 a barrel means recession for the US.” Why? We make more than enough oil now. Almost a net exporter, even.

    Reply
  22. …oil over $100 a barrel means recession for the US.””Why? We make more than enough oil now. Almost a net exporter”””” even.”””

    Reply
  23. Where will Alberta ship that oil? W/o a trans-Canadian oil pipeline terminating at oil shipping terminals in BC, they can only sell it via one way: Through the US. 99% of Canadian oil is sold to the US because of that — even Prime Minister Justin Castro’s Cuckold Child quotes that figure.

    Reply
  24. Where will Alberta ship that oil?W/o a trans-Canadian oil pipeline terminating at oil shipping terminals in BC they can only sell it via one way: Through the US. 99{22800fc54956079738b58e74e4dcd846757aa319aad70fcf90c97a58f3119a12} of Canadian oil is sold to the US because of that — even Prime Minister Justin Castro’s Cuckold Child quotes that figure.

    Reply
  25. On November 5, 2018, the US sanctions on Iran will come into full effect. Energy market analysts expect this will cause a reduction of oil availability by 500,000 bpd to 2 million bpd.” There are noises that the Eurotraitors are trying to set things up to get around the sanctions. But we will see it in the oil shipping out, if they do. I mean, what else is there to buy from Iran? Then we can trace it back to the european companies receiving it, and from there identify the banks that they use to brutally, and catastrophically, cut them off from SWIFT. Not to mention put all those employees involved on the US travel ban and even indict them in the US and hold extradition hearings. So, I think that the Euroweenies don’t have the balls in reality and the rumors are just that for their politicians to spread around to prove their Hate Trump! bonafides for the mobs, instead. …but we shall see.

    Reply
  26. On November 52018 the US sanctions on Iran will come into full effect. Energy market analysts expect this will cause a reduction of oil availability by 500″000 bpd to 2 million bpd.””There are noises that the Eurotraitors are trying to set things up to get around the sanctions. But we will see it in the oil shipping out”” if they do. I mean what else is there to buy from Iran? Then we can trace it back to the european companies receiving it and from there identify the banks that they use to brutally and catastrophically cut them off from SWIFT. Not to mention put all those employees involved on the US travel ban and even indict them in the US and hold extradition hearings.So I think that the Euroweenies don’t have the balls in reality and the rumors are just that for their politicians to spread around to prove their Hate Trump! bonafides for the mobs”” instead….but we shall see.”””

    Reply
  27. Short term you can get a bounce to $100/barrel. Long term $100/barrel will increase supply and decrease demand. It would be hard to keep oil at $100/barrel for more than a year.

    Reply
  28. Short term you can get a bounce to $100/barrel. Long term $100/barrel will increase supply and decrease demand. It would be hard to keep oil at $100/barrel for more than a year.

    Reply
  29. The petroleum industry on the North American continent will respond to the trend. Alberta will ship oil at a more favorable price. Tight-oil will lock-in financing with an up-trending market. Production will increase. The worldwide consumption of oil will decrease as economies stall.

    Reply
  30. The petroleum industry on the North American continent will respond to the trend. Alberta will ship oil at a more favorable price. Tight-oil will lock-in financing with an up-trending market. Production will increase. The worldwide consumption of oil will decrease as economies stall.

    Reply
  31. Ah, yes… high oil ≡ recession. ‘Cept this time around we have a domestic maker reverse-disincentive in play: international trade tariffs to match — or exceed — those in play in each country against American goods. It’d be hard to have a recession at this point in the definitional sense: having unemployment meteoritically rise showing businesses receding from their bullish market stance. Unemployment remains near historic lows. And moreover, for many areas of employment, there are far more jobs than qualified applicants. So, if the rise in crude does somehow precipitate a recession we have an “canary in the coal mine”: the statistics of un-filled positions. Unemployment may remain low, but the unfilled positions will “go away”. That won’t directly mean there’s a recession, but it would confirm that crude-oil trends correlate to economic effects. Just saying, GoatGuy

    Reply
  32. Ah yes… high oil ≡ recession.’Cept this time around we have a domestic maker reverse-disincentive in play: international trade tariffs to match — or exceed — those in play in each country against American goods. It’d be hard to have a recession at this point in the definitional sense: having unemployment meteoritically rise showing businesses receding from their bullish market stance. Unemployment remains near historic lows. And moreover for many areas of employment there are far more jobs than qualified applicants. So if the rise in crude does somehow precipitate a recession we have an “canary in the coal mine”: the statistics of un-filled positions. Unemployment may remain low but the unfilled positions will “go away”. That won’t directly mean there’s a recession but it would confirm that crude-oil trends correlate to economic effects. Just sayingGoatGuy”

    Reply
  33. Not really. Net import is 2.2 million barrels but getting there. For context, we produce 11 million barrels a day. If we get to 13.2, and consumption remains constant, we would be at break even.

    Reply
  34. That was when we were importing most of it, we are producing a lot ourselves now. Hard to say how much of a difference that will make. It could curb domestic consumption, accelerating the point at which there is no net oil importation. Also, the dollar is not worth what it used to be. I think you need to look at the cost of oil in real dollars. Auto efficiency is up, at least for cars. Trucks are another story. They have not improved much in decades. Makers have learned to game the EPA tests, but the real fuel mileage is close to the same as it was 20 years ago. Americans and Canadians have been buying these guzzlers like mad.

    How will it all play out? Who can say? I don’t think you can just point to $100/barrel and say recession…too much is different.

    I do think we need to get more freight moved by rail, that is far more efficient than the semis, saving fuel for other uses. But what we really need to do is get people to stop commuting using pickup trucks. Just 55 million of those use more fuel than 183 million cars, 8 million motorcycles, all the buses and trains, boats and ships combined.

    Short term they need to ban pickups for commuting. Long term, they need to get them using natural gas and require regenerative breaking, and crush the old inefficient ones.

    We would easily be a major net oil exporter if we did this.

    Reply
  35. Where will Alberta ship that oil?

    W/o a trans-Canadian oil pipeline terminating at oil shipping terminals in BC, they can only sell it via one way: Through the US. 99% of Canadian oil is sold to the US because of that — even Prime Minister Justin Castro’s Cuckold Child quotes that figure.

    Reply
  36. “On November 5, 2018, the US sanctions on Iran will come into full effect. Energy market analysts expect this will cause a reduction of oil availability by 500,000 bpd to 2 million bpd.”

    There are noises that the Eurotraitors are trying to set things up to get around the sanctions. But we will see it in the oil shipping out, if they do. I mean, what else is there to buy from Iran? Then we can trace it back to the european companies receiving it, and from there identify the banks that they use to brutally, and catastrophically, cut them off from SWIFT. Not to mention put all those employees involved on the US travel ban and even indict them in the US and hold extradition hearings.

    So, I think that the Euroweenies don’t have the balls in reality and the rumors are just that for their politicians to spread around to prove their Hate Trump! bonafides for the mobs, instead.

    …but we shall see.

    Reply
  37. Short term you can get a bounce to $100/barrel. Long term $100/barrel will increase supply and decrease demand. It would be hard to keep oil at $100/barrel for more than a year.

    Reply
  38. The petroleum industry on the North American continent will respond to the trend. Alberta will ship oil at a more favorable price. Tight-oil will lock-in financing with an up-trending market. Production will increase. The worldwide consumption of oil will decrease as economies stall.

    Reply
  39. Ah, yes… high oil ≡ recession.

    ‘Cept this time around we have a domestic maker reverse-disincentive in play: international trade tariffs to match — or exceed — those in play in each country against American goods. It’d be hard to have a recession at this point in the definitional sense: having unemployment meteoritically rise showing businesses receding from their bullish market stance.

    Unemployment remains near historic lows.

    And moreover, for many areas of employment, there are far more jobs than qualified applicants. So, if the rise in crude does somehow precipitate a recession we have an “canary in the coal mine”: the statistics of un-filled positions.

    Unemployment may remain low, but the unfilled positions will “go away”. That won’t directly mean there’s a recession, but it would confirm that crude-oil trends correlate to economic effects.

    Just saying,
    GoatGuy

    Reply

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