Demand

Economist Foresees “Quick Decline” in US Oil Production

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By David Middleton – Re-Blogged From WUWT

U.S. Oil Production Is Headed For A Quick Decline

By Philip Verleger – Mar 11, 2019

The most recent forecasts published by the US Energy Information Administration show US oil production increasing steadily. The February Short-Term Energy Outlook sees the output from US wells rising from 11.9 million barrels per day at the end of 2018 to 13.5 million barrels per day by the end of 2020. Most other forecasters agree.

Thus, it may come as a surprise to learn that production at the end of 2020 may have actually decreased from December’s 11.9 million barrels per day level to between 11.3 and 11.5 million barrels per day. This lower figure represents the production level that should be expected given the financial activity of the independent firms behind the shale output surge.
The coming decline will occur mostly in the areas that have produced the most growth over the last five years: the Bakken, Eagle Ford, Haynesville, Julesburg, and Permian basins. The production drop will occur because the firms operating there have been forced by monetary constraints to cut back on drilling. The recent reduction in debt and equity issuance by these firms assure the output decline.

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The Relevance Of Hayek’s Triangle Today

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By Alasdair Macleod – Re-Blogged From Gold Money

Most of us are aware of the inflationary pressures in the major economies, which so far are proving somewhat latent in the non-financial sector. But some central banks are on the alert as well, notably the Federal Reserve Board, which has taken the lead in trying to normalise interest rates. Others, such as the European Central Bank, the Bank of Japan and the Bank of England are yet to be convinced that price inflation is a potential problem.

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Caterpillar’s Dilemma

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By Thomson Reuters – Re-Blogged From Newsmax

Orders for the mining machines and construction bulldozers made at this sprawling Caterpillar Inc. factory in central Illinois have jumped, in general, three-fold over the past year.

But meeting that boom in demand at the world’s largest heavy equipment manufacturer is a challenge, in part because of Caterpillar (CAT) suppliers like Steve Kirsh.

Image: Caterpillar's Dilemma: Keeping Up With Surge in Demand During Boom

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Markets Unprepared For $80 Oil Shock

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By James Puplava – Re-Blogged From http://www.Silver-Phoenix500.com

The summer driving season is just around the corner and this year motorists are facing steeper prices for fuel, up from an average of $2.19 a gallon in 2016 to $2.87 today. By this summer, analysts are projecting gas prices to top $3 a gallon on average for the first time in 10 years.

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The Coming Silver Supply Crunch Is Worse Than You Know

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By Jeff Clark – Re-Blogged From http://www.Silver-Phoenix500.com

For data wonks like me, the annual Yearbooks from various gold and silver consultancies make for fun reading. You can always find little gems about what’s going on in the markets, and sometimes you can spot changes in trends early on. Seeing a compelling chart, especially one that’s not been widely reported, is almost as exciting as seeing my wife in a short skirt on date night.

Well, I’ve got a series of charts for you that point to a silver trend that is so entrenched in its development, so inevitable in its outcome, so inescapable in its consequences that it comes as close as one can get to a guarantee. And once fully underway, it will have major implications for the silver price, along with the availability of investment metal.

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The Only Commodity Supply-Demand Indicator That Matters

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By Steve Saville – Re-Blogged From http://www.Silver-Phoenix500.com

For an industrial commodity with a liquid futures market, the “term structure” of the futures market is the most useful — perhaps even the only useful — indicator of whether physical supply is tight, abundant or somewhere in between.

The term structure of a commodity futures market is the prices of futures contracts for the commodity over all available expiration months. It can be displayed as a chart, with price along the vertical axis and the expiration months along the horizontal axis. Here are examples for oil and copper.

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Oil Price Prospects

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cropped-bob-shapiro.jpg   By Bob Shapiro

Crude oil prices have fallen from $100+ two years ago to around $37 today, after going under $30 briefly last month. Not surprisingly, there are differing views on the direction of prices going forward.

Lets look at where we are now.

The Shale Boom has catapulted the US to the top world producer spot, surpassing Saudi Arabia. This has greatly reduced US imports of oil and is a major contributor to the price break we’ve seen. As an aside, the US Balance of Payments has been much reduced by US Shale Oil production, even though the Deficit once again is running at over $500 Billion a year.

But, there are other factors greatly affecting the supply-demand balance for oil.

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