Oil will crash to $10 a barrel

[SHRED]

No wonder the Koch brothers are scrambling to kill solar pv and other renewables.

Oil will crash to $10 a barrel with electric vehicle revolution, strategist says

http://www.msn.com/en-us/news/markets/oil-will-crash-to-dollar10-a-barrel-with-electric-vehicle-revolution-strategist-says/ar-AAtpSSK?ocid=st

[Not Ruth]

1. If oil is $10/barrel, more people will drive fossil fuel vehicles

Now if oil was $1000/barrel, that would move everyone to electric.

[unc70]

3. Might drive them longer, but all new cars to be electric

The lowering oil prices will tend to extend the life of gas powered cars, but the world car makers will stop making non-electric vehicles. Gradually non-electric vehicles will all but disappear from the world’s highways.

[Not Ruth]

4. I think that $10/bbl means about 70 cents a gallon at the pump

That is bigly incentive to keep driving your Edsel


"2011 - The price of oil didn't reach its spring peak of $126.64/barrel until May 2. Unusually, gas prices peaked at the same time, hitting $4.01/gallon. Gas prices stayed above $3.50/gallon all summer due to fears about refinery closures from the Mississippi River floods.


2012 - Iran threatened to close the Strait of Hormuz, through which flows 20 percent of the world's oil. Oil prices rose to their peak of $128.14/barrel on March 13. Gas peaked on April 9 at $3.997/gallon. Both returned to normal until August. Commodities traders began bidding up oil prices to $117.48 on September 14. They were hedging against the Federal Reserve's QE3 program, which they thought would lower the value of the dollar. That would force oil (which is priced in dollars) higher. Then Hurricane Isaac closed refineries, sending gas prices to $3.939 by September 17. Gas prices rose to $4.50 a gallon in California, thanks to local distribution shortages.

2013 - Oil rose swiftly to $118.90/barrel on February 8, sending gas prices to $3.85 by February 25. Prices had started rising earlier than normal, thanks to Iran's aggressive war games near the Strait of Hormuz.

2014 - Prices fell to $62/barrel by the end of the year. Gas prices fell to $2.45 a gallon. That's because the United States produced plenty of shale oil. In addition, the Organization of the Petroleum Exporting Countries didn't lower supply quotas.

2015 - Prices fell below $36/barrel in December. That drove gas prices below $2.00 a gallon."

[unc70]

5. Median age of US vehicles over 11 years

Even if all new cars were immediately electric, it would take over a decade for roughly half the vehicles to be electric. So yes, there will be incentives for a while to continue to drive your older car. But at some point, the incentives to switch will be about far more than fuel costs. Think about us going from telephone landlines to basic cellphones to smartphones; the smartphone has only been around about ten years.

The growing markets for vehicles in China, India, etc. will have fewer older vehicles relatively. Just as they have mostly skipped the investment in landlines, much of the world will skip directly to the newer technologies.

[unc70]

2. It takes only a small change in demand

A relatively small shift in demand can cause either sharp spikes in prices or major collapses. The conversion of autos to electricity will push oil demand below the tipping point fairly rapidly. Demand for oil will still be great for many years, but the price collapse will happen much sooner.