John_Taverner wrote on Feb 12
th, 2016 at 11:13am:
Most of these effects have a lot of latency associated with them, and the markets are becoming proportionally less free (thinking of emerging markets) . I don't think it's as rigid a correspondence as you might think.
For example, Oil Production has physical limits. This over-production can only go on for so long.
http://oilprice.com/Energy/Crude-Oil/Oil-Tankers-Are-Filling-Up-As-Global-Storag... Quote:Oil Tankers Are Filling Up As Global Storage Space Runs Low
By James Stafford
Posted on Thu, 12 November 2015 21:36 | 0
The rebound in oil prices is still not here, and new data suggests that it will take some more time before the markets start to balance out.
Global supplies are still too large to justify a significant rally in oil prices. The latest indicator that the glut of oil has yet to ease comes from the FT, which concludes that there is 100 million barrels of oil sitting in oil tankers. Oil has piled up in tankers that are floating at sea, as onshore storage space begins to dwindle.
The level of crude oil stashed at sea is nearly double what it was earlier in 2015. “Onshore storage is not quite full but it is at historically high levels globally,” David Wech of JBC Energy told the FT. “As we move closer to capacity that is creating more infrastructure hiccups and delays in the oil market, leading to more oil being backed out on to the water.”
Well, with the issues at now at hand, timing is certainly very difficult!
That said, I would suggest that Oil is certainly not the only major Economic driver, which is turning negative, But it will be more than just a "little problem", all by itself.
You see, Supply is not the sole problem, there is also A Declining Demand, which is being driven by a Declining Global Population Growth. AND, the major Supply driver, being due to US Shale Oil, is now in Decline, due to "ongoing Production issues", Demand Decline & pure Financial issues, which make Shale look very shaky, for future Bank funding!
My expectation is that Global Energy Demand will Decline further, as Global Population Growth continues to Decline and will at some point it will actually go negative, which is pretty much set in concrete & that will continue, probably until the end of this century.
So, at some point, probably before the end of this year, Oil will probably slip under $20 a barrel, as the Global Economy slips into GFC2, which will be reflected in losses on Global Share markets of between 50-90%.
That will obviously put a further & substantial dent in Oil Prices, But with little, to no ammunition left, Central Banks & most governments will struggle to find any real fixes, particularly given that existing levels of Debt are already thru the roof & most countries already have extremely low or negative interest rates.
Anyway, I think that CB's & Governments have already delayed as long as they can, so we will soon enough find out , what awaits!
Forum
Pages: 
For the Record (Read 198001 times)
