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Canadian Oil Sands Per Barrel At $4.47, Now Cheaper Than 12-Pack Coke, $5.08
Canadian Oil Sands Per Barrel At $4.47, Now Cheaper Than 12-Pack Coke, $5.08
The collapse of global oil demand has impacted the price of Canadian Oil Sands to such a degree, the price of a barrel is now cheaper than a 12-pack of Coke purchased at Walmart. According to oilprice.com, the current price of a barrel of Western Canadian Select (oil sands) is $4.47 versus a 12-pack of Coke at Walmart for $5.08.
What a deal… ah? Now, let’s do a simple comparison of the ENERGY CONTENT in a barrel of Canadian Oil Sands vs. a 12-pack of Coke. A barrel of oil equivalent contains 1.4 billion calories of energy. A typical 12 oz Coke can contains 140 calories. If we multiply it by 12, we have 1,680 calories in a 12-pack of Coke.
Doing some simple math:
Barrel Of Oil Equivalent (1,400,000,000 calories) / 12-Pack Coke (1,680 calories) = 833,333.
Thus, a barrel of Canadian Oil Sands, which contains 833,333 times the energy calories than a 12-pack of Coke, is now worth $4.47 compared to $5.08 for the 12-pack of Coke. Again… what a deal, ah??
I just wanted to post this simple comparison to show how much the Global Oil Industry is being gutted. If OPEC, Russia, and the United States do not come up with “MEANINGFUL CUTS,” then we could see Western Canadian Select trading for $1 a barrel or less.
As for RESTARTING the U.S. and Global Economy after an extended shutdown, I have my doubts, as so does Gail Tverberg at her blog, OurFiniteWorld.com. Check out her most recent article; Economies won’t be able to recover after shutdowns.
COMING NEW VIDEO: I am finishing putting together the charts for my next video on why the GOLD & SILVER PRICES will explode due to the collapse of the Global Financial Ponzi Scheme.
FIRST STAGE OF OIL DEMAND DESTRUCTION: U.S. Supply Of Petroleum Products Down 7 Million Barrels Per day
FIRST STAGE OF OIL DEMAND DESTRUCTION: U.S. Supply Of Petroleum Products Down 7 Million Barrels Per day
The U.S. is only in the FIRST STAGE of the country’s oil demand destruction. Since the nationwide shutdown announced by the U.S. Government in mid-March, domestic oil demand has fallen more than 7 million barrels per day. In just the past three weeks, the total U.S. petroleum products supplied to the market fell by 33%.
However, I don’t believe we have seen the low yet in U.S. total oil demand. According to the EIA – U.S. Energy Information Agency, total petroleum products supplied to the market on April 3rd were 14.4 million barrels per day (mbd) compared to 21.5 mbd for March 13th.
FIRST STAGE: Oil Demand Destruction To Peak Within 3-4 weeks
Over the next 3-4 weeks, I see the total U.S. petroleum products supplied to the market falling to the 12 mbd level (or even lower). With 96% of U.S. airline passenger traffic now lost and a 65-75% reduction of domestic vehicle traffic, the data released for April 3rd still haven’t factored in all the demand destruction.
For example, U.S. gasoline supplied to the market is down 48% while Jet fuel is off 56%. When U.S. gasoline supplies fall by 60-75% and Jet fuel down by 80%, then we will likely reach a bottom. However, this doesn’t include other petroleum products such as Propane/Propylene (1.1 mbd) and other oils (3.7 mbd):
As we can see, gasoline supplies fell the most in volume, followed by jet fuel. If we just focus on U.S. gasoline, diesel, and jet fuel, the total products supplied fell 5.8 mbd, or 38%. Diesel supplies are holding up rather well due to the critical transportation via semi-tractors, rail, and ship… all which use diesel fuels.
…click on the above link to read the rest of the article…
PERU EXTENDS LOCK-DOWN ALONG WITH MEXICO: An Estimated 40% Of Global Silver Mine Supply Now Offline
PERU EXTENDS LOCK-DOWN ALONG WITH MEXICO: An Estimated 40% Of Global Silver Mine Supply Now Offline
Now that the Peruvian Government announced an extension of the country’s state of emergency until April 26th, the world’s first and second-largest silver producers have taken 40% of global silver mine supply offline for a month. Actually, Peru first announced its national quarantine on March 15th. So, the country’s mines will be shut down for more than a month when the state of emergency is projected to end on April 26th. But, will it?
According to the Reuters article, Peru’s Vizcarra extends state of emergency to April 26th; thecountry will remain on lockdown for an additional two weeks:
Including Mexico’s state of emergency issued on April 2nd to last until the end of the month, the total estimated silver production lost from these two countries could be 28 million oz (Moz). That is 40% of global mine supply. But, what if additional mines have been shut down in other countries?
As I stated in previous articles and my Youtube video updates, we could see between 100-150 Moz of global silver mine supply lost this year. However, if we just consider the estimated 28 Moz of silver production lost from Mexico and Peru, that would equal 28,000 of the 1,000 oz wholesale silver bars.
With the continued surge in demand for silver bullion pushing availability of products back weeks and for months, it has also impacted the 1,000 oz wholesale silver bar market. How will the reduction of 28,000 wholesale 1,000 oz silver bars impact the market in the next few months?? Good question.
…click on the above link to read the rest of the article…
U.S. Gasoline Product Supplied Falls Off A Cliff
U.S. Gasoline Product Supplied Falls Off A Cliff
In just two short weeks, U.S. gasoline product supplied to the market fell 32%. The last time weekly gasoline supplies were at this level was more than 30 years ago. Unfortunately, the continued lockdown of a large part of the country will negatively impact the gasoline supply market for the next several months.
When the EIA, U.S. Energy Information Agency releases its weekly supply data over the next few weeks, I believe the motor gasoline supplied to the market will decline significantly. According to the EIA, finished motor gasoline product supplies fell to 6.6 million barrels per day (mbd) on March 27th versus 9.7 mbd reported on March 13th:
As we can see in the chart above, finished motor gasoline product supplies fell off a cliff during the week of March 27th. Typically, U.S. gasoline demand rises toward the end of March and early April. The average gasoline product supplied for the past three years during this week was 9.3 mbd.
Regardless, I wouldn’t be surprised to see U.S. gasoline product supplies to fall to 5 mbd or lower in the next 2-4 weeks. The BIG PROBLEM for the U.S. Refining Industry is that domestic demand for gasoline and jet fuel have fallen drastically while diesel consumption remains relatively strong. Why? The Trucking, Rail, and Shipping Industries that use diesel are still keeping quite busy.
So, over the next few months, gasoline and jet fuel inventories will continue to increase while diesel stocks are drawn down. This is due to the limited amount of diesel that can be refined from a barrel of oil. Here is a breakdown of the different petroleum products from a typical barrel of oil:
…click on the above link to read the rest of the article…
GLOBAL SILVER SUPPLY COLLAPSE ON ITS WAY: Mexico mining suspension to hit silver supply
GLOBAL SILVER SUPPLY COLLAPSE ON ITS WAY: Mexico mining suspension to hit silver supply
Due to Mexico’s Ministry of Health issuing an Executive Order for the immediate suspension of non-essential activities until April 30th, the mining industry in the country has now come to an abrupt halt. The mining industry was hoping for an exemption to the Executive Order, but was not granted one. So, companies are now suspending production and putting their mines on care and maintenance.
According to the article on the Mining Journal website, Mexico mining suspension to hit silver supply:
Under the government decree, non-essential activities are to be suspended immediately until April 30.
The decision is expected to have a significant impact on the supply of silver at a time when demand for silver coins is high. Mexico is the world’s largest silver producer at some 23% of world production and produced more than 200 million ounces in 2019, up from 196.6 million ounces in 2018.
With Mexico shutting down its mines, including the continued closure of Peru’s Mining Industry announced on March 15th, nearly 40% of global silver production is offline. Peru’s government stated that the national quarantine would last 15 days. However, we have passed that point, and there is no announcement of a return back to work.
Here are the top ten silver producing countries in the world in 2018:
In 2018, Mexico and Peru accounted for 342 million oz of silver production. If mines in Mexico and Peru remain shut down for a month, that will cut silver production by 28 million oz. So, each month that Mexico and Peru are offline, would reduce silver mine supply by 28 million oz. However, I believe we are going to see more countries shut down their mines for an extended period as the global contagion continues to spread.
…click on the above link to read the rest of the article…
U.S. Silver Eagle Sales Surge Past 5 Million In March: Availability At Low Prices… CHECK HERE
U.S. Silver Eagle Sales Surge Past 5 Million In March: Availability At Low Prices… CHECK HERE
With the U.S. Mint now temporarily suspended, it will become even more difficult to acquire Silver Eagles. According to James Anderson at SilverDoctors, the U.S. Mint shut down its West Point Facility due to an officer testing positive for the virus. The U.S. Mint West Point facility will remain closed for two weeks until further notice.
However, the U.S Mint updated its Silver Eagle sales on the last day of the month to show a total of 5.5 million sold. Since my previous update, the U.S. Mint sold another 650,000 Silver Eagles, for a total of 5,482,500.
The last time the U.S. Mint sold Silver Eagles to this level in March was back in 2014, when 5,354,000 coins were sold. With the premiums on Silver Eagles exploding, investors are now quoted delivery times of 3-4+ weeks or months.
I spoke with Dan at Cloud Hard Assets today, and I was shocked to find out that the quoted time for 1,000 oz wholesale silver bars was 4-6 weeks!!!! Can you believe that?? When the silver price crashed in 2008, investors were buying 1,000 oz bars and turning them into small coins and bars. However, that option is much more difficult because the availability of 1,000 wholesale silver bars is similar to RETAIL BULLION… LOL.
I was also surprised to hear that Cloud Hard Assets was only charging $6.50 over spot to purchase Silver Eagles. I have been making comparisons of some of the well-known online precious metals dealers Silver Eagles BUY & SELL prices, and have now included the price from CLOUD HARD ASSETS which I sponsor on this website:
…click on the above link to read the rest of the article…
THE ENERGY DISASTER KICKING INTO FULL GEAR: World Is Totally Unprepared For What’s Ahead
THE ENERGY DISASTER KICKING INTO FULL GEAR: World Is Totally Unprepared For What’s Ahead
There’s more evidence finally surfacing in the media of the dire energy predicament the world is now facing. The negative ramifications of peak oil and the falling EROI were going to hit the world economy within the next 2-5 years, but the global contagion has sped up the process considerably. Unfortunately, the world will never return back to the energy consumption and GDP growth experienced in 2019. I believe the peak of unconventional oil production has finally arrived… FOREVER.
Here are a few highlights describing the ongoing ENERGY DISASTER taking place
U.S. Bakken Oil Production Peaked Oct 2019 While Setting A New Record In Wastewater Production
According to Shaleprofile.com, the Bakken’s production peaked in October 2019 at 1,506,358 barrels per day (bd) and fell to 1,462,025 bd in December. When the data comes out for Mar-Apr-May, I believe that Bakken’s oil production will begin to drop off considerably.
Furthermore, even without the global virus destroying oil demand, the Bakken was going to peak shortly due to a key indicator… a tremendous increase in the amount of associated wastewater production. Surging wastewater production is a bad sign signaling reservoir depletion. Using the data from the North Dakota Department of Mineral Resources, the Bakken is now producing nearly 1.5 barrels of wastewater for each barrel of oil:
In January 2016, the Bakken was producing 115% more wastewater than oil, but that has surged to 149% during January 2020. While oil production increased by 8.2 million barrels (per month) since January 2016, wastewater surged by an additional 23.2 million barrels (per month).
The Death of the Bakken has finally arrived. Due to the collapse in U.S. oil consumption, I see a huge decline in Bakken oil production over the next three quarters.
…click on the above link to read the rest of the article…
MARKET MAYHEM: Silver Eagle Sales Surge While U.S. Shale Energy Stocks Get Crushed
MARKET MAYHEM: Silver Eagle Sales Surge While U.S. Shale Energy Stocks Get Crushed
Black Monday hit Wall Street in a BIG BLOODY WAY today. With oil being the main driver of the economy, U.S shale stocks lost nearly half of their value… IN ONE SINGLE DAY. That’s correct, the average decline from eight of the top U.S. shale companies saw their stock prices decimated by 48%. While the energy stocks lost almost 50% of their value today, the precious metals held up rather nicely.
Gold closed up about 0.4%, while silver declined 1.9%. Of course, not all precious metals investors are happy with the silver price action. I see some people complaining that silver is selling off with the markets, and it isn’t a good investment. I wouldn’t be so pessimistic on silver because it takes time for the fundamentals to kick in.
For example, the U.S. Mint sold another 670,000 Silver Eagles over the past three days since it published its last update showing 675,000 sold. So, the total as of March 9th is 1,345,000 Silver Eagles sold versus 650,000 for February:
It’s been quite a long time since the U.S. Mint sold 1.3 million Silver Eagles in the first week in a month. Thus, this provides an indicator that precious metals investors are concerned with the Global Contagion and are once again buying Silver Eagles in larger volumes. While this increased buying won’t impact the silver price currently, it shows us that investors have ramped up physical silver bullion purchases to protect wealth during a time of extreme market mayhem. And I believe, the worst is yet to come.
Shale Oil & Gas Stocks Destroyed On Bloody Monday
…click on the above link to read the rest of the article…
U.S. Mint Silver Eagle Sales Surge First Three Days In March Due To Global Contagion
U.S. Mint Silver Eagle Sales Surge First Three Days In March Due To Global Contagion
When investors become increasingly concerned about the financial system, they rush into physical precious metals. And, this is precisely what we see taking place at the U.S. Mint as sales of Silver Eagles surged in the first three days of March versus the entire month of February. The U.S. Mint hasn’t seen this type of buying for several years.
For the past three years, annual Silver Eagle sales fell below 20 million, reaching a low in 2019. However, that may all change this year as the global contagion spreads, motivating investors to shed paper assets and move into physical precious metals. For sure, investors should be worried when the Fed starts to do “LIQUIDITY BOMBS” via its Repo Operations as stated by Sven Heinrich, the Northman Trader:
While the Primary Dealers submitted requests for $111.478 billion this morning, the Fed accepted $100 billion. Add that to the single-day Repo of another $100 billion yesterday, which I wrote about in my article; FED REPO INJECTIONS HIT RECORD LEVEL: Global Contagion Negatively Impacting Financial Markets. The Fed Repo Operations yesterday purchased $100 billion (overnight) and a $20 billion (two-week period) for a total of $120 billion.
On top of the record Fed Repo Operations, then there was the “EMERGENCY” 50 basis point rate cut yesterday that should have pushed the markets up considerably. However, the Dow Jones Index fell nearly 800 points by the end of trading… a very bad sign indeed. While the Dow has recovered this morning, I believe this is only a temporary situation as the global contagion continues to spread negatively impacting the world’s supply chain. Let’s face it; the worst is yet to come.
…click on the above link to read the rest of the article…
Demand For Physical Precious Metals Surge Due To Fears About Disruptions In The Global Supply Chain
Demand For Physical Precious Metals Surge Due To Fears About Disruptions In The Global Supply Chain
According to a precious metals dealer I spoke with, the world out on the street is that demand for gold and silver has recently surged due to investor concerns about a disruption to the Global Supply Chain. We are already seeing a massive slowdown in China’s oil demand as official reports show a 20% reduction in oil consumption.
However, I believe China’s oil demand is much lower than the 20% figure reported by Bloomberg and reposted by Gulfnews.com on Feb. 3rd:
According to the article, China’s total oil demand is approximately 14 million barrels per day (mbd). The IEA, International Energy Agency, in their January 2020 OMR Report reported that China’s total oil demand would reach 14,046,000 mbd in 2020. Using the IEA’s data, here is China’s total oil consumption from 2017-2019, including the forecast for 2020, and the significant drop in demand in February:
The Bloomberg article stated that China’s total oil demand was down approximately 3 mbd by early February. Again, the article was published on Feb. 2nd. For China to cut 20% of its oil consumption… THAT’S A BIG DEAL. But, I think it’s much worse than that. According to the next two charts, one is taken from a new article on Gail Tverberg’s Ourfiniteworld.com website, and the other is from Capital Economics.
The first chart from CapitalEconomics.com shows a huge reduction in China’s Daily Passenger Traffic, including road, railway, freight, and ship:
The RED ARROW indicates when Bloomberg reported the 3 mbd decline in China’s total oil demand. Who knows at what date Bloomberg used to base their figure on 3 mbd drop in oil consumption, but this chart shows that total China daily traffic is down about 80% since January if we go by the right-hand scale. Thus, this chart reveals that China’s daily traffic flow has been down approximately 80% for more than two weeks.
…click on the above link to read the rest of the article…
RED WARNING LIGHT: The World Is Rapidly Burning Through Its Conventional Oil Reserves
RED WARNING LIGHT: The World Is Rapidly Burning Through Its Conventional Oil Reserves
While Americans continue to enjoy the convenience provided by the just-in-time inventory supply-chain Leech and Spend Suburban Economy, the rate we are consuming the high-quality conventional oil reserves should scare the hell out of people. But, it doesn’t. Why? Because, virtually no one sees it or has a clue. Unfortunately, 99.5+% of Americans believe in “Energy Magic” or the Energy Tooth Fairy.
Day in and day, the American population has approximately 60 billion energy slaves working for them. That figure is based upon the data provided by Jean-Marc Jancovici during his presentation to the OECD back in September 2019. Jean-Marc says each human, on average, has about 200 energy slaves working for them. I just multiplied 300 million Americans by 200 energy slaves to equal 60 billion energy slaves. Easy-Peasy.
Due to the complex layers of technology and our vast supply chain system, Americans totally dismiss energy altogether except when they have to pay a BILL FOR IT. Americans are only concerned about the cost or the energy bill they have to pay. Never is the sustainable supply or quality of energy considered on the internet, the press, or on TV.
So, the blind continue to lead the blind.
However, the amount of conventional oil reserves that we are burning through is quite alarming. According to data from Rystad Energy, the EIA – Energy Information Agency, and info from Labyrinth Consulting Services, the following chart shows how much conventional oil the world discovers each year versus total consumption (production):
The white part of the bar represents global conventional oil discoveries for that year compared to an average of 23.5 billion barrels consumed. The 23.5 billion barrel in annual conventional oil consumption (production) is based on the following chart showing approximately 65 million barrels per day of this source since 2013.
…click on the above link to read the rest of the article…
The Coming Exponential Silver Price Movement
The Coming Exponential Silver Price Movement
As the global highly-leveraged debt-based financial system comes under serious stress, investors are going to finally realize that the silver market is very tiny and extremely undervalued. This is when we will likely see the exponential silver price movement. And, it’s not a matter of “IF,” but rather a case of “WHEN.”
While most precious metals analysts focus on the systemic risks in the financial system to own Silver, I believe the real problem has to do with the HUGE ISSUES we are now facing with ENERGY. In my newest video, The Coming Exponential Silver Price Movement, I discuss the two reasons why I believe we are going to BIG MOVE in the silver price.
In the video, I show why the huge U.S. Total Debt to GDP of 346% is unsustainable due to the coming collapse of the U.S. Shale Oil Industry. Without oil production growth, there is no GDP growth. And, when there is no GDP growth, then the entire highly-leveraged debt-based financial system starts to disintegrate.
When Americans are faced with the task of “Protecting Wealth,” they will find out that “PAPER” or “DIGITS” will not make the CUT. Why? Paper money and Digits are based on future energy production. Thus, they are ENERGY IOU’s. However, Silver is money or wealth because it is a store of Energy Equivalent Value.
Also, in the video, I discuss some updated charts on U.S. Physical Silver Investment from 2010-2018 (Source: Metals Focus Silver Investment Report for the Silver Institute– OCT 2019):
…click on the above link to read the rest of the article…
U.S. Top Shale Oil Fields Decline 10 Times Faster Than Global Oil Industry
U.S. Top Shale Oil Fields Decline 10 Times Faster Than Global Oil Industry
The Global Economy is heading for serious trouble when the disintegration of the U.S. Shale Oil Industry begins, likely within the next few years. With Global GDP growth based on world oil production growth, the main driver has been the U.S. shale oil industry. This is terrible news because the top U.S. shale oil fields are declining ten times the rate as are the world’s mature oil fields.
According to the IEA, the International Energy Agency’s 2018 Executive Summary:
Natural production declines are slowing, but more investment will be needed. Each year the world needs to replace 3 mb/d of supply lost from mature fields while also meeting robust demand growth.
I have seen higher estimates of 4-4.5 million barrels per day of annual production declines from the world’s mature oil fields. Either way, annual oil production declines from the world’s mature oil fields is a tenth of the rate from the top four U.S. shale oil fields.
If we look at the data taken from Shaleprofile.com, the top 4 U.S. shale oil fields (Permian, Bakken, Eagle Ford & Niobrara), 2018 production reached 6.6 (mbd) million barrels per day by December and then declined to 3.7 mbd by October 2019:
The top 4 U.S. shale oil fields experienced a 44% decline rate from Dec 2018 to Oct 2019… and this isn’t for the entire year. It will take another month or so before Shaleprofile.com releases the total production figures up until December 2019. Thus, the total-year decline rate may be closer to 46-48%.
If we assume a conservative 45% decline rate from these top U.S. shale oil fields and compare it to the average decline rate from the world’s mature fields, here is the result:
…click on the above link to read the rest of the article…
