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Oil soars 6 percent as OPEC reaches deal to limit output in November

reuters.com

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Re: Oil soars 6 percent as OPEC reaches deal to limit output in November

#41

Post by Neeek »

vkou wrote: post #33
danmaz74 wrote: post #30

Earlier quoted context omitted.

> Renewables can only make electricity If renewable energy becomes abundant/cheap enough, you can convert electricity into hydrogen or other high energy density chemicals.

Hydrogen is a nightmare to work with, and store. Other high energy-density chemicals tend to be complex hydrocarbons... So you're still burning oil - it just happens to be made from coal, or algae slush, or whatnot.

Algae slush is carbon coming from our current system, our current atmosphere, it is renewable. Fossil fuel is releasing carbon from and external source (external on a human timescale at least). It will be essential in creating a renewable replacement for oil.

Burning hydrocarbons is not the issue. Burning hydrocarbons that were extracted from the atmosphere millions of years ago, is.

Re: Oil soars 6 percent as OPEC reaches deal to limit output in November

#42

Post by spsgtn »

eatmyshorts wrote: post #36
jorblumesea wrote: post #17

Is it possible that oil prices will never be that high again due to renewables? Part of me feels like the games OPEC members are playing will be to their long term detriment. Renewable cost is only going down year after year, really the oil states have a limited time to extract as much money as possible before alt energy kicks into high gear. By the time they're done fighting with each other it may be too late to get…

There are a couple of dynamics at play. In the long term (10+ year range), I believe you are correct, that renewables will begin to have a significant effect on oil prices as natural gas power plants are shut down and replaced with solar and wind (oil is used primarily for transportation, not energy production; natural gas is replacing coal as the primary fossil fuel used for generating electricity as natural gas pri…

Energy markets are a bit complicated. Wind energy has a localized value that depends on local supply and demand supported by the associated transmission line. In any case, the price of any energy resource is based on what technology is "on the margin", i.e. what is the cheapest form of energy available at a specific time to satisfy demand. It turns out that US natural gas prices are driving all the renewable energy economics due to their current historically low price. Arguably, oil prices have less of an influence on renewables than the cost of natural gas.

Re: Oil soars 6 percent as OPEC reaches deal to limit output in November

#43

Post by blahi »

botty_throwaway wrote: post #34
blahi wrote: post #28

Earlier quoted context omitted.

Why would insurance companies do this? They stand to lose a TON by autonomous vehicles. Estimates are in the 60 to 80% of the market to go away.

Risk versus technological change is a dynamical system, yet many of the sky-is-falling estimates for the insurance industry myopically forecast assuming an invariant risk set-point. For an alternate perspective of a potential (lucrative) future for insurance, see my post here: https://news.ycombinator.com/item?id=12245312

I see but what happens if the parameters of the transportation systems are regulated?

Re: Oil soars 6 percent as OPEC reaches deal to limit output in November

#44

Post by ArkyBeagle »

danmaz74 wrote: post #30
_FKS_ wrote: post #19

Earlier quoted context omitted.

Renewables depend on oil. You can't make renewables with renewables energy, because their overall EROI is insufficient to both maintain the current standard of life, and make them. The other issue is mobility, oil has the best volume/energy content ratio of all energy sources we know (except uranium). Renewables can only make electricity and you need about 10x the same battery volume (and weight) to move a vehicle, c…

> Renewables can only make electricity If renewable energy becomes abundant/cheap enough, you can convert electricity into hydrogen or other high energy density chemicals.

If I had to insure transportation of a gas for energy storage, I'd make it methane. LNG is pretty safe. But right now, there's plenty of natural gas around.

Re: Oil soars 6 percent as OPEC reaches deal to limit output in November

#45

Post by ArkyBeagle »

joezydeco wrote: post #13

The US producers have promised they would turn fracking back on if oil crossed above the mid-40s. Canada will also be back online as the wildfires have burned out. http://www.cnbc.com/2016/02/29/us-shales-message-for-opec-ab...

I have seen (unsupported) estimates for the quantity of zero-coupon debt that's most likely just evaporated since 2014 in the Eagle Ford shale alone run in the low trillions - maybe one, two or four or something.

Meanwhile: http://fortune.com/2015/12/10/oil-zombies-debt/

One thing to consider ( although it's pretty different ) - the 1980s oil crash was in around 1983; the S&L bailout (FIRREA) was in 1989. Six years' latency.

Re: Oil soars 6 percent as OPEC reaches deal to limit output in November

#46

Post by akhatri_aus »

chollida1 wrote: post #5

The game theory on this is awesome. You've got OPEC a collection of countries that don't all like each other, trying to agree to lower their individual production knowing that they can't trust each other. At the same time this exact group of countries are running deficits and any cut's they make will increase those deficits in the short term. Keep in mind these are countries who can't be described as stable. In many…

The most optimum thing (or one of the optimums) is for them to do, Game Theory wise, is to announce a deal and cheat unofficially! The only way to check this is to see their shipment numbers on the importing side, after the fact.

They've cheated before..

The benefits come from the market expectation of lower output, immediately gaining higher revenue.

Re: Oil soars 6 percent as OPEC reaches deal to limit output in November

#47

Post by drcross »

botty_throwaway wrote: post #34
blahi wrote: post #28

Earlier quoted context omitted.

Why would insurance companies do this? They stand to lose a TON by autonomous vehicles. Estimates are in the 60 to 80% of the market to go away.

Risk versus technological change is a dynamical system, yet many of the sky-is-falling estimates for the insurance industry myopically forecast assuming an invariant risk set-point. For an alternate perspective of a potential (lucrative) future for insurance, see my post here: https://news.ycombinator.com/item?id=12245312

I disagree with you, OP mentions 60% reduction in the civilian insurance market and there's studies to back that up- http://www.insurancejournal.com/news/national/2015/10/23/385...

Any large scale car accidents will be re-simulated, analysed and scoured until they are fixed, the general public will not permit them to persist. This means a complete collapse of the entire industry except for enterprise scale underwriting of the car manufacturers which they may already have for recalls.

Re: Oil soars 6 percent as OPEC reaches deal to limit output in November

#48

Post by Fjolsvith »

CyberDildonics wrote: post #14
chollida1 wrote: post #5

The game theory on this is awesome. You've got OPEC a collection of countries that don't all like each other, trying to agree to lower their individual production knowing that they can't trust each other. At the same time this exact group of countries are running deficits and any cut's they make will increase those deficits in the short term. Keep in mind these are countries who can't be described as stable. In many…

Putting these countries in difficult situations is why the deal with Iran was so valuable.

Could you elaborate?

Re: Oil soars 6 percent as OPEC reaches deal to limit output in November

#49

Post by Fjolsvith »

maxander wrote: post #8
jseliger wrote: post #2

Possible corollary: "Tesla stock rises in response." We may be heading towards a world of permanently low oil prices, as rising prices will cause more people to switch to electrics or plug-in hybrids. Car buyers exhibit amazingly lemming-like behavior, switching to more fuel-efficient cars as prices rise and switching away from those fuel-efficient cars as prices fall. That process is likely to become more pronounced…

What kinds of car people use is irrelevant as long as the power grid is predominantly powered by fossil fuels. The number to watch is percentage of "green" power generation, which changes far too slowly to respond to market lurches like this.

But when Tesla sells you a BEV, the solar roof array and household battery, and allows you to go "off-grid" with that car, the kind of car you use is relevant.

Re: Oil soars 6 percent as OPEC reaches deal to limit output in November

#50

Post by Fjolsvith »

yessql wrote: post #11
jseliger wrote: post #2

Possible corollary: "Tesla stock rises in response." We may be heading towards a world of permanently low oil prices, as rising prices will cause more people to switch to electrics or plug-in hybrids. Car buyers exhibit amazingly lemming-like behavior, switching to more fuel-efficient cars as prices rise and switching away from those fuel-efficient cars as prices fall. That process is likely to become more pronounced…

Yes, we saw people switch to more efficient transport in the US at $4/gallon. I think this is the long term ceiling, where people will switch to at least a plugin hybrid and cover 90% of their driving on electricity.

I wonder if this amount is tied to the cost of a gallon of milk in the consumer's mind?
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