Solarbird 
do doot do doot doot
Jigme Datse@moira Um... Fuck... Let me go back and look at that to confirm it's not being deceptive... Oh it is. But still an overnight increase of 15% is fucky enough... For something as long established as that certainly.
@JigmeDatse Deceptive?
Oh, you mean zero-based Y-axis graph. I understand that argument but it doesn't apply everywhere all the time. Oil has what amounts to a profitability floor around $60/barrel, under which you start seeing large-scale production cuts. (This is something you'd know if you watch the market much, but wouldn't otherwise. See also XKCD 2501.) So printing all the way down to zero obscures data by squashing detail rather than enhansing it by providing context which, in this case, it honestly wouldn't.
(Yes, in earlier inflation eras the profitability floor was lower. That's a "technically true but irrelevant to the current economic window" fact, however.)
@moira Deceptive, not so much as it may have sounded. I'm aware that if that was plotted with a zero-y axis it would just look like a blip. But as it is plotted it looks like a doubling of the price, instead of a 15% increase of the price.
Deceptive as, "It doesn't mean what it looks like it means at first glance". It's a massive change of price, but not the apparent doubling.
Deceptive as, "It doesn't mean what it looks like it means at first glance". It's a massive change of price, but not the apparent doubling.
@JigmeDatse It's a doubling of the price _within the profitability range_, which - again, if you understand the market - is the relevant measure of geopolitical risk as priced in oil, the relevant commodity in this illegal war.
_If you know the market_, what you see on first glance _is_ correct.
@moira Fair. I rarely understand these sorts of things about economics. I don't understand why "our" (parents) financial advisor thinks that crypto is viable.
@JigmeDatse Lemmie try to explain.
If oil goes meaningfully under $60 and somehow nothing else is changing (note: impossible) and _stays_ there despite production cuts, _oil stops being produced_. That's it for oil.
Again, that can't happen. They'd cut production, then costs, etc etc etc. More expensive modalities (shale) would shut down, low-cost sites would continue to produce.
But _if it did_, then fairly shortly thereafter, there wouldn't _be_ an oil market. Not as we understand it now. It would be completely different and substantially smaller. Old numbers would no longer apply.
(if it drops below, I dunno, $45ish? $35? There wouldn't be _any_ oil market.)
This is what they're trying to avoid through fascism, btw. Exactly this.
@JigmeDatse So in oversimplified broad terms, "sustained under $60" is the same as "zero" because "the oil market" - and oil - would stop being a thing.
(Note $60 isn't a magic number it's an approximation there's probably some padding etc etc etc.)
Does that make more sense?
John TimaeusLast time I had conversation around this with Frank was right before covid. He'd just come back from a meeting with the guys that run Texas oil production.
The general rule of thumb then was:
$60 - quit exploring
$55 - stop all capex projects
$50 - shutdown the slow wells
$45 - stop production
Given overall cost increases in the last five years, I suspect it's safe to add $5 to each of those limits.
@johntimaeus @JigmeDatse I would say $5 at a minimum. If I had to pick between $5 and $10, I'd pick $10.
(Which means I think it rounds up to $10.) (Plus I'm throwing in competition from solar which is happening no matter how much those fascists want to stop it, because China is oil poor.)
@johntimaeus @JigmeDatse (Also I don't know if you're up on battery technology but vehicle batteries just got solved in a way that fucking ends gasoline. Gas and diesel vehicles have about two years left, tops.)