Oil's drop future demand getting clearer


This is meant as a big heads up.

Markets when they work have some ideas on future demand.

The headline reads about the US economy hitting a seventy year old milestone of under 3% unemployment at the end of the Korean Conflict. The result was a recession.

If there is any follow through to oil falling, still of course an unknown, the future demand might be at issue.

I’m not a huge fan of getting business news from yahoo or other media that is more general vs a source like Marketwatch where the market and economy is all they write about. Thanks for the article, I read it…doc


It depends on what the article specifically is saying. If it fits my world view or corrects my world view it is important to me. But it must add to the economic input of this board for me to add it here.

I keep seeing that the oil company earnings will be down for the next three years, but in light of what is going on in the world - it doesn’t add up for me. I am expecting the price of crude to climb back up especially in light of recent events…doc

Israel, US point to Iran after drone strikes Israeli-controlled tanker off Oman’s coast | Fox News

The higher central banks raise rates the lower nominal prices for commodities will go. Because appreciating currencies buy more.

Crude oil and oil company earnings may climb in the short term, but in the long term oil company earnings will be down as we inch toward peak oil demand worldwide. I have a bet with albaby that peak demand will occur in 2025.

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I’ll take that bet and give you better odds.

There many be peak production, but that is a different thing. My thesis is that mankind will be using oil until every drop of it is extracted from every corner of the world, and when it is we will find ways to manufacture it artificially, as Germany did in World War II.

As it becomes more scarce the price will rise, and oil companies will be in an even better position to profit from it, even on lower volumes.


That has nothing to do with peak oil demand (or peak oil consumption) which I predict will occur in 2025. After 2025, oil demand (consumption) will be on negative slope forever.

IMO your thesis will never happen because it will be too expensive to extract much of the world’s crude oil. Crude oil will be replaced with green liquid and gaseous fuels that will be cheaper to produce than extracting the hard to get crude oil.

Ok - me being the dummy that I am…

My car just had an oil change with 100% synthetic lubricant. It’s more expensive, but lasts twice as long in my Toyota Avalon (per Toyota specs).

What’s to stop some smart engineers to figure out how to create synthetic gasoline?

What’s the barrier here?


Cost. The Germans used synthetic fuel in WWII so the process is well understood. But you still need a carbon input (The Germans used coal). Presumably, you would use petroleum as a carbon input…so you might as well just use petroleum as gasoline.


Nothing in particular, but I suspect it will be synthesized from coal. We have lots of it and the know-how has been around for a long time. Just a matter of cost.



I’m sure they will. During World War II Germany produced millions of gallons of diesel fuel and gasoline from coal, which they had plenty of. The problem is that the process was vastly inefficient, requiring a ton of coal to make two barrels of fuel. Along the way you use some of that fuel to mine the coal, then to crack it, then to recombine it, then to distill it, and by the time it’s all over it’s hugely expensive.

The military probably doesn’t care about that during wartime, but there’s also a gigantic CO2 problem at each of those steps, so environmentally it’s a non-starter, at least so far.

(My next door neighbor was a researcher at Oak Ridge Labs, trying to create fuel from seaweed and other biomass. Had some success, but the process was still economically uncompetitive with traditional fuel sources. Someday, maybe…)


Here in CA, we’re getting more renewable diesel. That uses waste cooking oils and animal fats to produce a fuel that is chemically the same as petroleum diesel. It meets the same ASTM standard as petroleum diesel.

It’s not biodiesel, which has a different standard.

I don’t know all of the economics going on behind that fuel, but as a consumer it sells for about the same price as petro diesel. Well within the station to station differences in prices.


Thanks for this info! I looked up renewable diesel fuel and this article has a nice intro that defines all three types of diesel - fossil, biodiesel and renewable.

From the article, renewable is primarily made up of “nonpetroleum renewable resources such as natural fats, vegetable oils, and greases.”

Now that scientists have been able to grow cell structures in lab environments (like body parts and stuff) I wonder if natural fats can also be created in a lab environment that then can be used to create more renewable fuel?

Trying to put one and one together to get three :wink:

Plenty of really low grade coal. I suspect results with better grade coal would be better. That being said, I remember a coal-to-liquids project coming across my desk at the pump seal company. It used the Lurgi process, same process the Germans used. Of course, nothing came of it, as OPEC always kept the price of crude below where any synthetic process would be cost effective.


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