A Return To Higher Oil Prices: It’s Complicated–CFA Society Buffalo; Buffalo NY–26 April 2016

Posted in Audio/Video & Articles, Presentations, Presentations & Publications on April 26, 2016

Buffalo CFA Presentation 26 APR 2016


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  1. Energy Is The Economy: The Context for The Oil-Price Collapse

    People think that the economy runs on money but it runs on
    energy –Nate Hagens.

    Today, oil and gas prices & the economy must be viewed
    through the debt lens.

    The end of cheap oil and natural gas in the early 2000s led to
    financial dislocations and ultimately, the Financial Collapse of
    2008.
    Some thoughts:I think you are weighting the end of cheap fossil energy too heavily as the cause of the financial collapse of 2008. The financialization of the previous 10 years, the housing bubble, the tech bubble and all the malinvestment preceding the jump in oil prices IMO were probably bigger factors.
    The plethora of statistics about so called break even prices in the literature and media is of course confusing. Who to believe. I certainly believe that independent analysts such as yourself are more trustworthy but it all comes down to methodology which is rarely stated and elucidated. And are we talking about just crude , C&C, all unconventional or what? And how long can companies exist selling at just break even levels. At some point do they revert to being non profit entities? Why bother? At some point would they not just cash out or change their business model? It seems that we are in a permanent rut. High oil prices kill economies. Low oil prices kill companies and country economys heavily reliant upon export. It would seem to me that we have hit a point of diminishing returns with no endpoint and as we all circle the drain.
    Nate Hagens is stating the obvious of course but he should have said that the economy runs on CHEAP energy.
    Thank you for providing a heavily data driven presentation even if you left out your conclusions and your opinions. You leave those to your readers and participants and unless I am misreading the data, the trend seems grim, the trajectory negative.