A bit of an update on the old discussion

EIA predictions on oil price

Their vertical line is 2011. Now, in 2013, the Brent price is above their blue reference line, pretty much on their upper boundary prediction in red.

So 2030 looks like the end of jet aviation for the masses as we know it ($200/barrel threshold) and perhaps the same can be said for excess car use.

ULP (real petrol not E10) averaging about $1.52 in Sydney according to Govt, and with predicted oil up around 10% over the next year a gradual increase only to around $1.70 anticipated over the period.

Sadly no great change in our favour yet :-(

Perhaps there will be for our children :-)

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Unfortunately they refuse to negotiate.

Still needs to double to match European levels and previous periods of higher petrol prices have shown that some drivers prefer to cut back on other discretionary spending (like their kids food) rather than stop feeding their vehicle

It's all pretty relative though, from only 2003 !

With bowser prices stuck well above $1 a litre across much of Australia, economists are worried motorists will respond by cutting discretionary spending, reducing economic activity and retarding growth.

Petrol normally accounts for about 5 per cent of household budgets, so fuel price rises have a big impact on consumer confidence, Mr Redican said.

The average price of petrol in Sydney yesterday was $1.037 a litre, one of the highest on record, according to price monitoring service FuelWatch.

Bowser prices reached $107.9 cents a litre in some parts of the city, while the lowest price was 89.9 cents.

http://www.smh.com.au/articles/2003/02/19/1045638360887.html

"some drivers prefer to cut back on other discretionary spending (like their kids food)"

That could help the obesity epidemic.

I don't know where these fuel prices come from but I've been using the NRMA's fuel app for a while now and it's pretty good. I need 98 RON in my car and the cheapest in the area that I travelled today was $1.57, so it looks like us poor country church mice are continuing to subsidise Sideneeee and we're just getting poorer!

I always love looking back at projections.

Let's look at AEO 2006 projections for 2016 (all in 2004 dollars), and compare them with the 2016 actuals (in bold). I've converted the 2016 dollar values in the 2016 report to 2004 dollars by assuming 28% inflation (from  the US inflation calculator, 2004 to 2016)

* gas prices will remain above historical levels. 2016 price of $ 5/1000 cubic feet, or just below $5 in the 'rapid technology' lowest-price scenario (< $2.50)

* gas production rises to a maximum projection of 23 trillion cubic feet with 'rapid technology' option (> 27)

* oil peaks in 2006 at $60/barrel, then flat at $50/barrel. Lowest price alternative future of $38 ($36 in 2016, currently about $43) 

* US oil production at 9M bbl/day (9M - they got this one right, but its been 8-9M bbl/day give or take since 1990)

So they completely misread the technology leaps in natural gas (price and volumes), and only just managed to scrape in their 'lowest price' estimate for oil.

 

This Icelandic study shows "When gasoline price increases by 10% the gasoline use per car decreases by 3.5% in the long run but if gasoline price declines by 10% the gasoline use per car increases by 1.18%

in the long run."  So we need a helluva bump in fuel prices to be really helpful to us.

Predictions are guesses and I suppose economic ones even more so.

OK, but oil was $110 a barrel for most of 2014. It's the impact of the doubling in US production using new technologies over recent years which has brought it down, plus the Saudis, with an economy that essentially does not exist without oil, pumping the stuff like there's no tomorrow (possibly true) to pick up demand unmet due to declining production due to political factors in places like Venezuela and Nigeria (and separately, almost fully exploited oilfields, more consistent with the "peak oil" hypothesis, like the North Sea, and the relatively smaller Bass Strait). 

As a result, oil prices are all over the place; hitting $140 in 2008, dipping to $40 in 2009, and then being consistently above $80 from 2010 to late 2014.

So yes they were close with the estimated price for a barrel of oil in 2016, but it was a pure fluke that got them there, due to factors that mostly could possibly not have been predicted in 2006 . And in no sense did oil prices peak in 2006.

I think we are on the same page though, these sorts of predictions have no more value than reading the entrails of some unfortunate bird.

I shall trust Duncan to review this for us in 2019 ;-)

"we're rooned!"

On another Duncan, ABC tv was reporting that Baird is likely to retain him as Roads Minister in the upcoming reshuffle on the provisio that he retires a year before the next election. So I guess that will be before March 2018.

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