Happy Talk Like a Pirate Day! Appropriately enough, my car Pearl, short for The Black Pearl, Jack Sparrow's ship, passed 48,000 miles on Monday, September 16. That means it's time for a combined energy and driving update along with a celebration of the fake holiday. I'll begin with three videos from CNBC about the effects of an attack on an Aramco oil facility that took out 5% of the world's oil supply above the jump followed by the driving update and a song for Talk Like A Pirate Day below the jump.
The first video from Monday is Oil prices soar after attack on Saudi Arabia oil facilities.
Drone strikes attacked an oil processing facility at Abqaiq and the nearby Khurais oil field on Saturday, knocking out 5.7 million barrels of daily crude production — or 50% of the kingdom's oil output. CNBC's Hadley Gamble reports from Riyadh.I commented about this attack in response to A View from the Brink at Kunstler's blog.
I was reminded of what you said in "The End of Suburbia" about "all it takes is 50 pounds of plastic explosive and a camel to take out a pipeline." This is very similar, although it was some cheap drones and a facility more sophisticated than a mere pipeline. Still, the concept applies.On that note, the next video CNBC uploaded on the story was Expect oil prices to go even higher, says Again Capital's John Kilduff.
All this takes place as the United States is fixing to tip into recession anyway, something the yield curve, "the chart that predicts recessions" is already telling us. A good old-fashioned oil price shock would do the trick.
Amy Jaffe, Council on Foreign Relations, and John Kilduff, Again Capital, join "The Exchange" to discuss the price of oil soaring following attacks on Saudi oil facilities.In addition to a yield curve inversion, which has already happened, a large prolonged oil price spike is one of the phenomena I told my readers to watch out for in The tax bill and the U.S. economy in 2018 and beyond almost two years ago: "The second is a rapid rise in oil prices, which has occurred either slightly in advance or concurrently with every recession since 1973." Whether this price spike is big enough or will last long enough remains to be seen, but if so, that's another recession warning.
I concluded my comment at Kunstler's blog by noting the latest bad news for brick-and-mortar stores: "Meanwhile, the Retail Apocalypse rolls on, as GameStop announced it was losing money and closing stores." It turned out that Tuesday's video on the story bore directly on the Retail Apocalypse, as CNBC uploaded Amazon is the biggest loser from higher oil prices: Smead Capital's Bill Smead.
Bill Smead of Smead Capital Management, joins 'The Exchange' to discuss the momentum vs. value stocks and who stands to lose the most from higher oil prices.While I'm sure higher oil prices passed on as higher delivery costs will hurt Amazon's profitability, I don't think it will hurt the company enough to slow down the effect of online retail on their brick-and-mortar competitors, who also have to pay for increased transportation and delivery charges.
Follow over the jump for the driving update and a celebration of Talk Like A Pirate Day.
As wrote above, Pearl's odometer passed 48,000 miles on Monday, September 16, the same day the first two videos were uploaded. My Prius named after a pirate ship rolled over 47,000 miles on July 13, 2019. That interval spanned 65 days, which means I averaged 15.38 miles per day, 469.23 miles per standard month, 5,615.38 miles per year. While that is more than the 14.71 miles per day, 445.43 miles per standard month, and 5367.65 miles per year I drove Pearl between March 7, 2019 and July 13, 2019, it's less than the 23.26 miles per day, 709.3 miles per standard month, and 8,488.4 miles per year I drove Pearl during the comparable period last year and still less than the 15.15 miles per day, 462.12 miles per standard month, and 5530.3 miles per year I drove her between May and July 2018. It's also less than 6,000 miles per year, which itself is less than the goal I set two years ago of 6,500 miles per year.
As a final check, Pearl's odometer registered 42,000 miles on August 29, 2018. That is a span of 383 days, so I drove an average of 15.67 miles per day, 477.81 miles per month, and 5718.02 miles over the past year. That's also less than the average of 6066.48 miles per year I drove two months ago. As I wrote during the previous driving update, "It looks like I'm doing well in reducing my driving and keeping it down." I'm not sure I will be as successful when I pass 49,000 miles in about two months.
After all that, it's time for a song. Here's Pirates of the Caribbean song Yo Ho (A Pirate's Life for Me) Sing Along.
Yo ho, yo ho, a pirate's life for me.That's one way to talk like a pirate.
We pillage, we plunder, we rifle and loot.
Drink up me 'earties, yo ho.
We kidnap and ravage and don't give a hoot.
Drink up me 'earties, yo ho.
Yo ho, yo ho, a pirate's life for me.
We extort and pilfer, we filch and sack.
Drink up me 'earties, yo ho.
Maraud and embezzle and even highjack.
Drink up me 'earties, yo ho.
Yo ho, yo ho, a pirate's life for me.
We kindle and char and enflame and ignite.
Drink up me 'earties, yo ho.
We burn up the city, we're really a fright.
Drink up me 'earties, yo ho.
We're rascals and scoundrels, we're villains and knaves.
Drink up me 'earties, yo ho.
We're devils and black sheep, we're really bad eggs.
Drink up me 'earties, yo ho.
Yo ho, you ho, a pirate's life for me.
We're beggars and blighters and ne'er do-well cads,
Drink up me 'earties, yo ho.
Aye, but we're loved by our mommies and dads,
Drink up me 'earties, yo ho!
Your thrifty driving record makes me feel more ashamed of how much mileage I put on my vehicles both times I spent a year attending nursing school. When I was getting my LPN certificate, I hustled my Fiero (one of the good ones with a V-6, not the four-bangers that were notorious for catching fire) 56 miles EACH WAY between my first Xwife's house in the swamps outside Arcadia, Fla. over to the community college in Avon Park. Ten years later, when I upgraded my nursing level to RN at the behest of Wife#2 (so I'd be earning a high enough salary for us to afford a house when we relocated to San Francisco) it was 57 miles each way in my 4-cylinder Ford Ranger pickup between the community college in Bradenton, Fla. and my nice little suburban home in Port Charlotte.
ReplyDeleteIf there is divine punishment for burning petrol, I will deserve it for all those 100-mile-plus days behind the wheel. Not to mention all the times I drove various things across vast swathes of America, and the (cumulative) three times I have flown around the globe... I'm thrifty now, and my consciousness is raised, but I'm like a (climate) murderer who has vowed not to kill again, while leaving a trail of (carbon) corpses behind him.
Good onya for living and driving right. You'd be one of the people whose lifestyle could be unaffected if you bought an all-electric car.
Thank you, but even though I'm doing the right thing now, I used to be much worse. From 2000 to 2005, I drove 40,000 miles per year, then drove 48,000 miles in 2006, a story I told six years ago. I'm making up for being a bad boy with my driving, but at least I drove cars making 40 and 32 miles per gallon, which probably had better mileage than your pickup.
DeleteBut more to the point of your post, it's amazing that there has NOT been a worldwide price freakout about the Houthi(?) Iranian(?) attack on Abqaiq. Imagine if that had happened during the oil price run-up in 2008. It would have gone over US $200 a barrel, not $147. But now, after a one-day minor panic, it's crickets.
ReplyDeleteMaybe JHK will theorise on that lack of action in his Friday post (although that seems to be the day when he unleashes his grumpy old white man grievances). I see three possible reasons why no panic.
One is that there's so much extra capacity in world oil output due to U.S. shale production and demand destruction (coz the world's getting thrifty with hydrocarbons) that a 5% reduction is not a big deal. JHK points out that there have been no major new oil fields discovered since the North Sea, but fracked oil is the techno-equivalent of a new giant reserve. At great cost to the environment and finance, to be sure, but it's one of those things that techno-utopians dream of.
Then there's the double-reverse conspiracy theory angle that the attacks were not as damaging as the Saudis said. They could be faking that they were hurt BAD, so as to prove they are strong enough to recover. Looking at those damage photos, there ARE some blackened zones and nicely-punched holes in tanks, but it's not like hundreds of hectares of industrial areas were laid waste. I've also seen speculation that Aramco has bought supplies from Iran to cover its shortfall.
The third, and most plausible to me, is that the LACK of a price spike is due to market manipulation. Everything is manipulated these days, if you look at what's gone on with LIBOR, prices for mortgage-backed securities, the gold market... I suppose you could say that ANY price which humans set is manipulated, because it ultimately boils down to people saying "I think this should cost THAT much." Prices are not like rainfall or the temperature of the air, which are moved by forces beyond man's control. It becomes manipulation when there's an agreement amongst enough powerful price-setting players to make things go in a direction that the laws of supply and demand (which themselves are not Newtonian laws of physics) would not otherwise indicate.
How weird is it, though, if conspirators are rigging things to keep the oil price DOWN? They're not lining their filthy pockets; they're forgoing ripoffs so that the public does not panic and The System does not crash. What noble self-sacrificers the conmen are! /s/
You were right, JHK made a grumpy old man post that Friday. In fact, I expect he'll be making a lot of them as long as impeaching Trump is on the agenda. He gets to play contrarian on his blog and I'll play contrarian to him.
DeleteAs for the price spike dying out, that's already happened for WTI; the price is back to where it was a week before the attack. For Brent, it's still above any time before the attack.
Why? Well, Trump has not attacked Iran, so that particular fear of the traders hasn't materialized. In fact, I think they're more afraid of the economy slowing down than war.
I'm probably belabouring the point, because you're more focussed on movies than military madness. (Which is a good way to avoid going mad from all the murdermania that's out there.) But if you want to get some good (and seemingly not mere blindly opinionated) angles on the Abqacattack, this article from the Asia Times has perspectives I haven't seen in the mainstream. I forget who's behind Asia Times, and I can't be bothered to look because I'm tired. But it's not as much of a front as the ChiCom South China Morning Post (which occasionally has good articles, just not the propagandistic ones it prints about China.)
ReplyDeleteTakeaway points: Houthis CAN make and direct accurate long-range drones/missiles. If the attack came from Iran, (which I now think it probably DIDN'T) that would show the U.S. military in the Persian Gulf isn't worth squat, because it didn't detect a swarm of deadly drones. Also, every American military site (including the ships at sea) is vulnerable to being drone-struck if the Iranians get pissed-off or provoked into retaliating. Be afwaid -- be vewwwwwwy afwaid.
Finally, this episode shows that any target, anywhere in the world, could be farked by drones. If a mob like the Houthis, who don't even have a functioning country, can whip up stuff like this (with the help of some sophisticated state-actor friends) then who's to say the Liberation Army of Freedonia won't be able to devastate the Power Tower of the Grand Duchy of Fenwick? This could change the course of war the way guns that fired bullets made armoured knights obsolete. The democratisation of devastation! It might, just might, be enough to make venal militaristic rulers consider peace.
Aaaah, who am I kidding? They'll want to keep on warring until the last drops of OUR blood.
Asia Times is based in Hong Kong with offices in Bangkok and New Delhi, so it's not going to toe the line of the PRC.
DeleteAs for drones in the hands of non-state actors, the reaction might be the same as the Samurai banning guns in late feudal Japan. They didn't want a peasant with a musket downing a noble, so guns were banned.