Shorting Oil, Hedging Tesla

[justvisiting]

That's a good 2-4 years before the 50% global EV marketshare timeline. You think shrinking diesel, overall efficiency and China's domestic policy can move the market that quickly?

In my mind 2023 is more similar to what 2014/15 was for coal. Demand hadn't peaked, but reality had set in and investors flee like mad. If that happens with oil, the global economic crash to follow does the rest. Certainly the oil and gas world is leveraged far beyond coal.

I'd really like to see this thread move toward analyzing how leveraged the global fossil world is and how that will impact the oil endgame. In the US all utilities are basically piles of debt and most fossil operations seem like they're leveraged enough to bring about a massive crash beyond what we saw with housing derivatives.

We've nearly gotten to the point where shorting this can be timed with existing traditional market products, no? How do we not have a TMC Peak Oil ETF yet?

You think EVs will have a 50% market share in 2023 + 2-4 years? that is 7-9 years from now!!!! there is absolutely no way on earth that this will happen. Zero percent. If you happen to be a betting man (if this is not allowed on this site im sorry) i would like to do a little side bet with you on that.

Also how long have you been telling yourself that the oil price is artificially inflated? since 25$? 40$? 60$? And how long will you keep doing it?

 

[adiggs]

59,400 TWh – The New Language of World Energy – dollarsperbbl

This is a nice blog. A view quite similar to mine.

Thanks for that @jhm - I'm liking it too

 

[ValueAnalyst]

Trump says Saudi king agreed to raise oil production up to 2...

 

[RedOctober]

Trump says Saudi king agreed to raise oil production up to 2...

I have not paid much attention to oil prices or production since purchasing my Model S. It’s scary to think they are pumping out 11 million barrels of oil per day.

 

[ValueAnalyst]

I have not paid much attention to oil prices or production since purchasing my Model S. It’s scary to think they are pumping out 11 million barrels of oil per day.

They are playing US to get what they want, which is sanctions on Iran. They can’t produce “up to 2 million barrels a day” more than they are currently. It’s cheap talk.

Tesla is the ONLY solution to our global energy crisis. Tesla Semi and FSD can’t come quick enough.

 

[ValueAnalyst]

Global Demand was ahead by 6 after top of third, and the game looked like a blowout. As the crowds were starting to pay less and less attention to the game while enjoying their hot dogs and beers, Saudi/Trump just hit a grand slam at the bottom of third, and now we have a ballgame. Fourth inning coming up!

 

[neroden]

That's a good 2-4 years before the 50% global EV marketshare timeline. You think shrinking diesel, overall efficiency and China's domestic policy can move the market that quickly?

Yes.

Shrinking diesel: Jhm has convinced me that the displacement of commercial vehicles will go a lot faster than the displacement of personal vehicles, and that this is the main thing which puts peak oil ahead of EV adoption.

Overall efficiency: due to "chains of replacement" I expect that each EV effectively displaces a low-fuel-efficiency clunker, and I think the highest-gas-usage vehicles will get replaced first, so I think the impact on oil is somewhat front-loaded.

Also, oil continues to be squeezed out of non-transportation markets.

If that happens with oil, the global economic crash to follow does the rest. Certainly the oil and gas world is leveraged far beyond coal.

I'd really like to see this thread move toward analyzing how leveraged the global fossil world is and how that will impact the oil endgame. In the US all utilities are basically piles of debt and most fossil operations seem like they're leveraged enough to bring about a massive crash beyond what we saw with housing derivatives.

Hmmm. The fracking and oil sands companies are heavily leveraged. The IOCs and NOCs aren't, to my knowledge. Anyone want to game out the way it goes?

 

[neroden]

You think EVs will have a 50% market share in 2023 + 2-4 years? that is 7-9 years from now!!!! there is absolutely no way on earth that this will happen. Zero percent. If you happen to be a betting man (if this is not allowed on this site im sorry) i would like to do a little side bet with you on that.

The year of plug-in cars having 50% market share, worldwide, is 7 to 10 years (2025 to 2028) based on sound modeling. I'm not a betting man, but it is a 100% safe bet that plug-in vehicles will be over 50% of the new vehicle market in 2028. I'd wager on that.

 

[Unpilot]

Yes.

Shrinking diesel: Jhm has convinced me that the displacement of commercial vehicles will go a lot faster than the displacement of personal vehicles, and that this is the main thing which puts peak oil ahead of EV adoption.

Overall efficiency: due to "chains of replacement" I expect that each EV effectively displaces a low-fuel-efficiency clunker, and I think the highest-gas-usage vehicles will get replaced first, so I think the impact on oil is somewhat front-loaded.

Also, oil continues to be squeezed out of non-transportation markets.


Hmmm. The fracking and oil sands companies are heavily leveraged. The IOCs and NOCs aren't, to my knowledge. Anyone want to game out the way it goes?

This does present a pretty big challenge to the economy. It is built to a large degree on oil. To transition out with the softest landing possible would take a forward thinking leadership.

Last time I looked we lacked that.

 

[bpjod]

This does present a pretty big challenge to the economy. It is built to a large degree on oil. To transition out with the softest landing possible would take a forward thinking leadership.

Last time I looked we lacked that.

How can I rate a post as funny and sad at the same time?

 

[neroden]

This does present a pretty big challenge to the economy. It is built to a large degree on oil. To transition out with the softest landing possible would take a forward thinking leadership.

Last time I looked we lacked that.

No argument there. Since oil is essentially only used for transportation, the decline of oil won't really affect most of the economy directly. The main effect will be that it will smash the wealth of those who have *invested* in oil. I'm really not sure where all these investors are. The divestment movement has had some effect... but I expect the fall of oil will take down a bunch of banks and a bunch of pension funds. What effect will that have?

 

[Unpilot]

The few people that have saved any money for retirement (really a sad,sad number) will feel it as I am sure many tracking funds are heavily invested in the oil biz.

 

[Unpilot]

Not to derail this thread too much....but...the number of obese people that smoke and have little or no money saved for retirement who voted in a person who is actively doing the bidding of the National Review is ....well it makes me think we are living in the matrix.

Sorry for the run on sentence there.

 

[RobStark]

who voted in a person who is actively doing the bidding of the National Review is ....well it makes me think we are living in the matrix.

National Review advocates orthodox economics.

Not trade wars, coal subsidies or much of the Trump intervention in the Economy.

You won't find a bigger supporter of NAFTA than National Review. NR also ran a piece supporting Tesla in its fight with franchised dealership associations.

 

[Unpilot]

I stand corrected.

 

[Unpilot]

But in my defense any mast head that has Glenn Beck on it is suspect.

 

[RobStark]

But in my defense any mast head that has Glenn Beck on it is suspect.

Glenn Beck is no longer with National Review.

That guy is as fickle as Donald Trump.

 

[justvisiting]

The year of plug-in cars having 50% market share, worldwide, is 7 to 10 years (2025 to 2028) based on sound modeling. I'm not a betting man, but it is a 100% safe bet that plug-in vehicles will be over 50% of the new vehicle market in 2028. I'd wager on that.

Okay, i understood your post as 50% EV market share. If you include Plug ins, the goal becomes a lot more realistic, but i still believe it will be a success if it reaches half of that. But thats something only time will tell.

For the general situation in regards to Oil: I also think that the Saudis are just reassuring Trump to go hard on Iran, i dont believe they can add more than 1kk b/d sustainably. Iran is around 2kk b/d i think, so if the US really tries to force everyone to boycott iranian oil, it could result in a loss of 1,5kk b/d. Combined with larger and larger losses from Venezuela, nearly no growth from Brasil, and difficult situations in Angola, Nigeria and especially Lybia, i dont see supply growing at all. Therefore it wont need much demand growth to create a serious deficit, sending oil prices even higher than they are now. And there are no big new projects coming online in the next years. Great times if you have invested in Oil!

 

[TheTalkingMule]

China will buy all the oil Iran has to offer and then some.

 

[RobStark]

China will buy all the oil Iran has to offer and then some.

Oil Bulls Beware Because China’s Almost Done Amassing Crude

2 years ago it was estimated China's Strategic Petroleum Reserve was 80% full.

With ~100M B of capacity left.

There is only so much it can buy from Iran without lowering purchasing from somewhere else.