what's new, eh? ... .Peak Oil Depletion Tracking of Projections for Regular Conventional Oil ... Colin Campbell drawn from Retirement for 2010 update Quarterly Production for the Top 7 Nations World Production Records ~ 2010 setting new Annual Record ~ new Quarterly Record set in Q1 ~ Monthly Record poised for January the Gas Pump ~ USA Gasoline Price Components & Crack Spread ~ New Car Sales poised to Collapse in Q1 upon $3.42/gallon ($92/barrel) Barrel Meter Compared to Recognized Long-Term Crude Oil Price Forecasts ~ EIA raises 2035 target to $224/barrel  Barrel Meter ~ $92/barrel Oil ($3.42/gal pump) in 2011Q1 Could Decimate USA New Car Sales (again) ~ View our 1-yr, 5-yr, 10-Yr & 25-Yr Price Targets June Update of our Peak Oil Depletion Scenarios Presentation:  19-Model Tier-1 Avg indicates Peak Oil Target is 94-mbd in 2024 June Update of Freddy Hutter's Peak Scenario 2200 Model:  Catastrophic Supply Decline Starts in 2051  (Peak: 102-mbd in 2030)

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what's new, eh? ... .Climate change , Economics & Politics econ Canadian Recession Meter infers 7.8% GDP in Q2, but StatCan says May was only 4% econ USA Recession Meter infers -2.4% GDP by October (Q3) & Double-Dip econ ~ Monthly update of TrendLines Realty Bubble Monitor:  Australia $150,000, UK £88,000, Canada $80,000 & USA $6,000 poli    MP Riding Projection for the 2012 Canadian Federal Election poli Seat Projection for August 2010 Australian  Election econ Global Scene:  Q2 GDP is 3.5% ~ Trade up 18% from 2009 low ~ no G20 nations in Recession econ USA Debt Meter ~ National Debt to inspire Bond Vigilante Crisis in 2019 econ USA REAL Unemployment Rate stubbornly slides to 16.5% in June from 17.4% high in October

Scroll down for this month'sTrendLines charts ~ click graph for more background or topic venue
click chart for 60-yr graph, expanded discussion & more Canadian, USA & Int'l macro economics...	July 30th ~ Economic data released by StatCan today reveals Canada enjoyed a 4.0% Real GDP annualized growth rate in the 90-days ending May, down from 6.2% in January, 5.9% in March (Q1) & 4.8% in April.  The May figure is far below the comparable 7.5% figure inferred by the TrendLines Recession Meter and its analysis of leading indicator data.  Our forward looking Index projects an even higher growth rate of 7.8% in June (Q2). StatCan's pessimism continues a divergence between the two metrics that commenced in March.  TrendLines has been projecting a downturn since December, but the StatCan version seem to us slightly premature.  We expect some upward revisions to bring GDP more in line with our interpretation of recent economic activity. By measure of our economic activity Index, it would appear on first glance Canada's $62 billion Economic Action Plan, proposed in January 2009, should have been pared by half.  On the other hand, with the Unemployment Rate stubbornly at 7.9% (after a high of 8.7%), the excess stimulus is a welcome aid in getting the Rate back to the pre-Recession low of 5.3% in 2007.  In the absence of Inflation, Bank of Canada has been tolerant of this quest for full employment.  Pleasantly surprising tax revenues and royalties resulted in the annual Federal Gov't Deficit being $47 billion ... $7 billion less than forecast. The projected drop in growth rate to 2.3% GDP, as early as September, is mostly attributable to consequences of a probable American  double-dip.  Resumption of 2.7% rate norms could take 'til 2012Q2.  Contributing factors taking a toll on vulnerable sectors will include higher petroleum costs, a near-par Canadian Dollar, waning Keynesian spending & an imminent $80,000 correction to residential real estate prices.  If long-term American business cycle trends hold to form, both economies should trough again in 2017Q3.  Whether this shall be a soft or hard landing will depend on Bank of Canada's monetary policy manoeuvres in tandem with fiscal policy actions at the federal & provincial level. In a final look back at the downturn event, revised StatCan GDP data confirms the full economic contraction was 11 months (~ 4 quarters) in length, with an avg GDP decline of -4.2%.  Its cycle was over in August 2009.  By NBER definitions, the Technical Recession started in October 2008, quickly escalated to a Severe Recession in November, and plunged to its eventual -7.9% trough in February before coming to an end in March 2009.
click chart for 40-yr graph, expanded discussion & more macro economic charts...	July 30th ~ Economic data released by BEA today reveals the USA enjoyed a 2.4% Real GDP growth rate in Q2, down from 3.7% in Q1 & 5.0% in 2009Q4.  The 2010Q2 figure is slightly below the 3.2% figure for the TrendLines Recession Meter which monitors 139 indicators related to the Fed's Coincident & National Activity indices.  Looking forward, the Index projects short-term deterioration on journey to an ultimate -2.4% double-dip trough in September.  The prospect of a secondary downturn, related to rapidly increasing petroleum costs, is consistent with our early alerts way back in Dec/2009. Today's release also includes BEA's annual revisions affecting GDP going back to 2007Q1.  The mostly downward revisions (as much as 1.5%) have noticeably merged the chart's GDP to be more in line with our Index reflection of economic activity. Should long-term trends prevail, the current business cycle should peak @ 4% in 2013Q2 and wind down in 2017Q3.  The path to getting there is rather murky at this time.  Animal Spirits suggest GDP will be positive for the next twelve months.  Conversely, our Barrel Meter & Gas Pump projections infer the economy is on the verge of a double-dip that will trough in September.  This is an uncharacteristic dire outlook for us, and relates to the economy being at risk of an imminent  collapse of New car & Light Truck Sales. It all stems from the inability of Congress & the President to address runaway structural Deficits and the resultant mounting Federal Debt.  This has not gone unnoticed by foreign investors, and debasement of the USDollar commenced in January 2002.  Feeling the pinch, petroleum exporters began to factor this component into their crude pricing starting in 2004.  As illustrated in our Barrel Meter chart, crude costs rise as the Dollar devalues, and this is a trend that will continue 'til oil hits $123/barrel in 2011Q4 should the US Gov't continue its fiscal mismanagement. With rising crude comes increases in the gasoline and diesel prices, to the extent where pump price is on a trajectory approaching the same Gasoline/GDP ratio that decimated New Car Sales in 1980, 1990 & 2007.  The threshold, rising with nominal GDP. was $3.19/gallon gasoline ($86/barrel) in the last breach event.  The ratio could again be signalled in January upon $3.42/gal gasoline ($92 oil).  Other vulnerable sectors will shortly be exposing the havoc of rising energy costs. In summary and using recent revised BEA & Federal Reserve data, the present downturn escalated to a Severe Recession in May 2008, after entering a Technical Recession in December 2007 (we say January!).  The TrendLines Recession Meter Index set a record low of -6.8% in January 2009, obliterating the -4.8% marker of January 1975.  It is apparent that the NBER defined Recession was over in July 2009, whilst the stubborn economic contraction did not end until December 2009.  Today's BEA numbers confirm the high water mark for nominal GDP in 2008Q3 was finally surpassed in Q2.
click chart for more...	Regular Conventional Oil Scenarios Campbell drawn from Retirement for 2010 update July 29 2010 ~ There have been only 4 modellers worldwide that study Regular Conventional Oil ... the light sweet crude:  Albert Bartlett (USA), Colin Campbell (Ireland), M King Hubbert (USA) & TrendLines' own Freddy Hutter (Yukon Canada). Jean Laherrère & Colin Campbell have been the sector's most stalwart peak oil study practitioners.  Both have openly shared their annual analysis with fellow modellers for two decades.  This month Colin came out of retirement with a surprise update.  Campbell's 2010 Depletion Model still assumes RCO's dramatic 2.5% production decline rate will continue unabated 'til 2030, but it increases RCO resource by 63-gb to 1,963-Gb. This is a career high estimate for the DM. Conversely, the Hutter Peak Scenario 2200 (the only other active model) projects a softer 1.5% avg annual decline rate to 2030, with a resource of 2,064-Gb.  While Campbell forecasts the annual flow rate deteriorates to 35-mbd (down 1) by 2030, Hutter takes the position 47mbd (down 8) is more probable.  On the longer term, whereas Campbell predicts the annual Decline rate will soften after 2030, and even more post-2050, Hutter sees major resource constraint culminating in an R/P 9 (10% decline) environment in 2051.  Prior to that, Hutter forecasts a secondary peak to 55-mbd while RCO reserves are used to replenish waning arctic & deep-sea extraction from 2030-2050. The basis for the Hutter Peak Scenario 2200 interpretation lies in its analysis that the four-year extraction decline was actually a masking of reality by ever increasing surplus capacity ... mostly by OPEC members.  2010 will be the watershed year in determining which premise is correct.  If Campbell's hypothesis of continued aggressive decline of 2.5% is in play, RCO should be only 60.2-mbd this year.  OTOH, if RCO stays above that threshold, then the Hutter position may be superior.  And by extension, the scenario with the correct interpretation will likely be rewarded with the more accurate All Liquids projection as well.  Thus far in 2010, year-to-date figures indicate there has been a pause in the decline ... 62.3-mbd.
click chart for the USA New Homes graph, further Bubble discussion ... and more macro economic charts	July 28th 2010 monthly update ~ Realty Bubble Monitor    Overpricing of Avg Home in June 2010: $   Bubble Today Bubble @ Peak $150,000 Australia 47% $155k & 56% (2007) £ 88,000 UK 112% £ 108 & 146% (2007) $80,000 Canada 31% $78k & 30% (2010) $ 6,000 USA 3% $77k & 35% (2005) July 28th ~ TrendLines Research first drew attention to the topic of Housing Bubbles in Canada in 1989.  Although that particular Bubble was only $53k, it was actually a more severe event as the average price of the time was an unprecedented 55% above the Home Price / Family Income ratio trend ... almost double the current episode of 31%.  Families were paying an astonishing 4.2 x's their Income. .  It took ten long years for housing to find new highs. Then in May 2008, we published guidance that the correction of the USA Housing Bubble would neither be as drastic as forecasts painted by self-appointed pundits, nor would it be as soft as the media voices openly rationalizing the USA housing market was not in a bubble,  Our scenarios predicted the collapse would only be as severe as needed to return the USA's median Existing & New Home Prices to their Price/2-earner Family Income ratio trend lines. Shortly thereafter (2008/11/18), McDoomer Nouriel Roubini was predicting a 40% collapse in housing prices and that 1,400 banks would "go bust in 2009".  Well, he was out by 1,260 on the latter call, and to date, existing home prices have declined only 28%.  A growingly tabloid-style mainstream media seems obsessed with extreme positions.
	July 28th ~ In a grudge match that's lasted 25 years, Russia has regained the lead as World's top All Liquids producer.  It is improbable Russia's 1987 annual/quarterly/monthly records of 11.5-mbd will ever be surpassed. Russia is steady @ 10.4-mbd, while Saudi Arabia sits at an OPEC quota restricted 9.6-mbd.  In 3rd place, the USA is stable @ 8.3-mbd, Following are China (4.0), Iran (3.7), Canada (3.2) & Mexico (3.0-mbd). TrendLines Research's All Liquids Underlying Decline Rates Observed in 2010:  Worldwide 2.9%, Saudi Arabia 2.7% & USA 2.5%   click chart for more of our Monthly Report venue charts ...
	July 27th ~ The pace of flow rates to July 13th indicates a new global Annual Supply record of 85.6-mbd is being set in 2010. A new global Quarterly Supply record of 86.0-mbd was set in 2010Q1.  July 2008 continues its distinction for the all time global Monthly Supply record:  86.7-mbd, 0.7-mbd above today's monthly pace of 86.0-mbd.  Projection of year-to-date flows infers the next new monthly record will be set in January 2011. The Quarterly record for Demand of 86.9-mbd was set in 2007Q4 (with difference of 1.7-mbd drawn from inventories).  The High Demand Month was February 2008's 88.0-mbd, but consumption fell to 82.2-mbd by January 2009 amidst the depth of the world Recession. TrendLines Research's global All Liquids Underlying Decline Rates Observed:  2010 - 2.9%;  1970-2009 Avg - 2.7%   click for more charts...
click chart for more...	Can UK Coalition Agreement Raise the Bar in Canada? July 26 2010:  The spirit of cooperation and conciliation resulting in a marvellous Coalition Agreement in the days after the UK Election certainly throws down the gauntlet to Canadian politicians.  The Agreement offers guidance on a myriad of platform issues to be dealt with over the next five years, and awards several Cabinet posts (incl Deputy PM) to the Liberal-Democrats by the Conservatives. Facing its first crisis, a potential currency devaluation engineered by bond vigilantes due to a monumental deficits and national debt, the two parties agreed to an austerity budget chopping program spending by 25%.  Only the solidarity of their political union enabled these bold measures.  Many jurisdictions are besieged with partisanship to the degree that situations have become so adversarial as to make their legislation process dysfunctional.  The UK model illustrates 2 plus 2 can equal 5.  The quest for power was secondary. Meanwhile, PM Harper will continue to get great news on the economic front.  We're predicting StatCan will this week announce May GDP of 7.5% ... a growth rate not seen since 2002.  Next week should see further decline in the Unemployment Rate.  On the horizon, the winding down of fiscal stimulus and a probable double-dip in the USA could dampen GDP to the 2.3% vicinity by October.  Despite short, medium & long term problems in the USA, Canada's GDP should return to the 2.7% mean by 2012Q2. The TrendLines Research composite Riding Projection has been Canada's most accurate forecast tool, measured over the last four Federal/Ontario elections.  Each month, its chart depicts the average of currently available seat projections from across Canada.  One of the models included is our own conversion, which on its own was the most accurate in the 2008 Autumn Election.  This model indicates PM Harper would have started a hypothetical July 3rd Election Campaign with a lead in 132 Ridings, followed by:  95 Liberals, 32 NDP, 48 BQ & 1 Indep't. When our own numbers are blended with the other available models for a broader analysis, the findings are as featured in our headline chart above.  Today's presentation is based on the conversion of 5 national polls conducted May30-July3 2010 by 6 active projection models.  It reveals that the governing Conservative Party would have commenced an early July Election Campaign with a lead in 131 Seats ... down 5 from thirty days prior.  The Liberal Party would start with 87 Members (same).  The Bloc & NDP would have started a late Spring campaign with 52 & 37 Ridings respectively.  For the second consecutive month, these are the first results since December 2008, where our long term momentum indicator is favouring the Tories (rather than the Grits) to top the standings right up to expiry of the current Parliament in October 2012 ... leading in 109 Ridings upon the dropping of that writ.
	July 25th 2010:  It's the first week of the snap writ and the first seat projection is in.  Julia Gillard's Labour Party leads Tony Abbott's Liberal-National Coalition by 88-59, with 3 Indies making up the rest.  The election will be Aug 21st.   click chart for more...
Global GDP:  Year 2010 4.2% (pending)     Year 2009 -0.6%     Year 2008 3.0%     Year 2007 5.2%   G-20 Nations in Technical or Severe Recession & Global GDP: 2010Q3 2010Q2 2010Q1 2009Q4 2009Q3 2009Q2 2009Q1 2008Q4 2008Q3 2008Q2 2008Q1 2007Q4 3.9% p 3.5% 5.1% 5.4% 5.1% 4.2% -6.0% -6.0% -0.2% 1.9% 3.9% 5.3% nil nil nil Russia 3% of Global GDP UK Turkey Russia 8% of Global GDP     UK     Russia  Italy Canada SouthAfrica Turkey 27% of Global GDP USA    Japan Germany UK     Russia France Brazil   Italy Canada Turkey Mexico SouthAfrica 53% of Global GDP   USA   Japan   Germany UK     Russia France Brazil   Italy Canada Turkey Mexico SouthAfrica 53% of Global GDP USA Japan Germany UK France   Italy Mexico   43% of Global GDP USA Japan Germany France Italy   38% of Global GDP  USA   21% of Global GDP USA   21% of Global GDP   And Not in Recession in 2010Q2:  USA, China, Japan, India, Germany, UK, Russia, France, Brazil, Italy, Mexico, Canada, South Korea, Turkey, Indonesia, Australia, Saudi Arabia, Argentina & South Africa (in order of GDP & comprising 77% of worldwide GDP;  excludes 20th membership, courtesy to EU) Remaining 160 nations comprise only 23% of worldwide GDP	July 22nd ~ 2010Q2 global GDP is on 3.5% pace, down slightly from 5.1% in Q1, and a major recovery from the -6.0% of 2009Q1.  There are no G-20 nations currently in Technical or Severe Recession.  Only Mexico had negative growth in Q1. The pre-Recession high for global trade occurred in February 2008.  After declining 20% by May 2009, it had rebounded 21% by March 2010, but was still below the 2008 record.  April 2010 world merchandise trade was down 3% from the previous month. The duration of the global Recession was 2008Q3 to 2009Q1.  Despite the mainstream media hysteria, at its worse only 12 G-20 nations (representing 53% of global GDP) were in Recession.  2009's -0.6% GDP decline was the first contraction in the last four decades. This economic episode was in part precipitated by rising energy prices that caused a collapse of USA New Car Sales in 2007Q4 when USA contract crude price broke the $86/barrel ($3.19/gallon gasoline) threshold.  On its present path, gasoline and diesel will breach that same Fuel Cost/GDP ratio in 2011Q1 @ $3.42/gal ($92/barrel).  Another Fuel Cost/GDP ratio is more ominous.  At $109/barrel, a new round of G-20 Recessions shall commence.  Our Barrel Meter suggests this will occur in 2011Q1 failing central banks' mitigation, or fiscal policy stimulation.  The rising crude prices relate mainly to USDollar debasement and failure of successive Congress and Presidential Administrations to address Structural Deficits and mounting National Debt. A long term effect of this downturn will be an acceleration in China's overtaking the USA as the largest Economy.  We determines that this event will  occur in 2051 ... a mere 40 years away.  In turn, India's demographics create the situation whereby it is poised to take the title of largest economy in 2075. click chart for more macro economics ...
click chart for discussion & more macro economic charts...	July 20th ~ Since early 2009, TrendLines Research has published alerts warning the USA is headed for an inevitable Investor rebellion.  With concern over the integrity of sovereign debt, bond vigilantes are increasingly monitoring Deficit/GDP & National Debt/GDP ratios.  It appears the current spotlight on European nations will be donned on American Treasury activities within nine short years. Due to an increasingly corrupt electoral system, members of Congress and successive Presidents appear beholden to donators to their fund raising efforts.  Add in immense lobbying activities to the fray, and we see legislation catering to the social engineering agenda of the Progressive left and providing obscene levels of subsidies to corporate sectors.  As a result, the Federal Gov't is on a path that would double today's $13-trillion National Debt by 2022, and triple it by 2029.  Already a staggering 92% of GDP, the ratio would rise to 129% & 178% respectively.  Unimpeded, the Debt will cross the 200% threshold in 2031.  Left unimpeded, the rise in Debt interest, unfunded Social Security liabilities,  Entitlements for Medicare/Medicaid and Universal Health Care would drive the National Debt to $92 trillion over the next 30 years.  This target was $55-Trillion at the end of the Bush era. On the very short term, there is definite relief.  Albeit the 2010 $1.5 trillion Budget Deficit represents a scary 10% of GDP, our analysis of CBO costing of the current Obama ten-year Budget indicates the ratio will decline to "only" 4% by 2014.  This virtually guarantees the stability of Treasury sales to both domestic & international investors over the next 12 - 36 months.  The decline mostly marks the extinguishing of fiscal stimulus, TARP & remnants of the Bush era tax cuts.  Not so pretty is the journey from 2015 onwards wherein the Deficit/GDP ratio is scheduled to rocket to a horrendous 20% by 2040. If action is not forthcoming, current CBO data indicates that left unchecked, the annual Deficit rockets to $5.8 trillion by 2040, $9 trillion by 2050 & $28 trillion by 2075.  Meanwhile, the National Debt surges to $167 trillion & $604 trillion respectively by the latter two dates. Weighing the USA's situation, TrendLines Research judges such an Investor Crisis will occur upon the National Debt reaching 115% of GDP ... likely in 2019.  That's only nine years away.  Even if the USA dodges that bullet by some fortune, a similar fate, via the Deficit Crisis, is also on the distant horizon ... when the annual Deficit again approaches 11% of GDP ... in 2025.
USA Gasoline Price/gallon Components:   July 2010 2011Q1 2011Q4 Demand Destruction Barrier $4.21 $4.29 $4.42 New Car Sales Collapse Threshold $3.35 $3.42  $3.52 Retail Pump Price $2.84 $3.42 target $4.42 target Wholesale $2.15     Taxes $ .49     Profit $ .20     Metrics:       Contract Crude $1.71     Gross Margin (Retail less Crude) $1.12     Margin (Retail less Wholesale) $ .68     Crack Spread $ .43	the TrendLines Gas Pump USA New Car Sales Poised to Collapse in Q1 upon $3.42/gallon gasoline  ($92/barrel) July 14th ~ During 2005 & 2006, gasoline touched $3/gallon and fell back.  It didn't in 2007Q4, and that helped push the American economy (already anaemic due to the Housing Bubble's assault on family disposable income) into a Technical Recession.  It is little known that this price event contributed to the collapse of USA New Car Sales (see BEA chart below) and light vehicle/parts imports from Canada. It should be of grave concern that the same Pump-Price/GDP ratio underlying that episode of consumer behaviour is being re-approached.  The failure of Congress/Obama to address America's structural deficits & mounting national debt is troubling to the global investment community (especially bond vigilantes) and is responsible for the USDollar's secular decline that commenced in May 2004.  As shown in the Barrel Meter table above, USD debasement was the largest forcing ($29) among components during the $94/barrel price spike (2005-2008).  As the Dollar falls, crude oil pricing rises. As a Pump-Price/GDP ratio, the New Car Sales Collapse Threshold rises along with GDP over time, and gasoline will attain the same danger zone @ $3.42/gallon ($92/barrel USA contract crude).  Our Barrel Meter projects this Price will be surpassed as early as 2011Q1.  Fortunately, a second Pump-Price/GDP ratio will halt the current price run @ $4.42/gal in 2011Q4.  This Demand Destruction Barrier is the same threshold that reversed the July 2008 price run @ $4.11 per gallon.  It demarks the point where substitution and conservation measures by consumers and commerce attains critical mass.  A decimation of New Car & Light Truck Sales this Winter would be a major factor in the economy's relapse into double-dip, and as such is reflected in our Recession Meter. This month's Retail Price of $2.84/gal is comprised of $2.15 Wholesale refinery product & a $ .68 Margin.  In turn, Margin is made up of $ .49 Taxes & $ .20 Profit.  One would think the retailers are getting very rich, eh.  Well, analysis reveals Margin is only up from $ .54 in January Y2k.  Taxes & Profit are up from 42 & 13 cents at that time.  In other words, nominal Profit today is virtually unchanged. The post-Y2k Crack Spread (diff betw Wholesale & Contract Crude) for Refiners can be seen ranging from $1.06 & $ .18 ($44 & $8/barrel) and is currently $ .43/gallon ($18/barrel).  When this figure drops below $ .48/gallon ($20/barrel), Refiners prefer to produce diesel and import less expensive gasoline.  This current lack of profitably is behind the recent shuttering and sell-off of facilities. click chart for more...
	July 13 2010 ~ Today's chart replaces EIA's AEO with its IEO 2010, raising the 2035 target to $224 from $204/barrel. Also revised from our April chart is Freddy Hutter's monthly update of the TrendLines Barrel Meter.  It  maintains the position the current price run will be halted at $140/barrel in 2011Q4, plunge to $43, and continue a secular price rise to an ultimate $358 in 2034.  The current price run is pushed by debasement of the USDollar and reflects investor concern over future Federal Deficit/Debt to GDP ratios.  The correction has its foundations in TrendLines confidence in its ominous Demand Destruction Barrier.  Price softness will occur during probable Recessions in 2017, 2026 & 2035.  The latter event results in a 2035 target of $319/barrel (up from $315).  Significant forcings include ever-rising Extraction Costs & the exhaustion of Surplus Capacity in 2023.  The Barrel Meter imports data on projected extraction costs, spare production capacity & business cycles from our Peak Scenario 2200 model.  A similar analysis for gasoline prices is featured via our Gas Pump presentation. For comparative purposes, all TrendLines projections are re-based to EIA's import-weighted USA Contract Price (nominal USDollars/barrel), approx 5.3% less than WTI. Its July 2008 peak of $131 was followed by a December bottom of $37/barrel. WTI has been a playground for neophyte speculation for several years and as such WTI can be 12% higher or $6% less than the USA contract price. In June the Contract Avg comprised imported prices ranging from $65/barrel for Mexico Maya Heavy to $79 for Indonesia Minas Light. click chart for more...
click chart for more...	July/2011 - 1-yr Target for USA Contract Crude Price:  $120/Barrel July/2015 - 5-Year Target:  $69/barrel July/2020 - 10-Year Target:  $90/barrel 2035 Target (25-Yr):  $319/barrel July 12th ~ The USA Contract Crude Price averaged $70 in June, down $2 over thirty days, but still near double the $37/barrel four year low of December 2008. The decline was mainly attributable to a toning down of media hysterics & reduced speculation/hedging activity. The cost of imported oil ranged from $65/barrel for Mexico Maya Heavy to $79 for Indonesia Minas Light. Including spikes, crude oil should settle into a general trading range of $74 to $92/barrel thru the balance of Q3/Q4. The present spiking activity is completely detached from fundamentals. As seen in the chart, Prices during the last three seasons was closer to 1.9 x's fundamentals rather than the 1.4 "fair value" norm (dashed yellow line). The obscene record profits for IOCs we predicted for Q1 have been confirmed, and shortly to be announced quarterly earnings should reveal this disturbing trend continued in Q2. The fundamentals-based Crude Price (yellow line) was $41/barrel in June.  The monthly avg for the USA import-weighted contract price exceeded fundamentals by 70% .... an unduly inflated price considering this premium averaged 43% over the last five years.  The recent high for this metric was 143% in y2K, yet it was only 37% during the July 2008 price spike.  The low point for the factor was 6% (over fundamentals) upon the price collapse at year end (Dec/2008).  The current level of bullishness reflected by this metric has not been seen since late 2002. One factor for the relatively higher Price is renewed speculation/hedging activity.  A record of 307 thousand long futures contracts was set in early April, compared to 259k volume in March 2008.  A record non-commercial (long/short) contracts volume of 493k was set as well (in early June), much above the 453k level of May 2008.  The net volume (longs minus shorts) set a new record of 135k in January, substantially more than 2008's high mark of 100k.
click chart for more...	July 11th ~ Today's headline USA Unemployment Rate for June may be 9.5% (U-3), but the dire state of the economy is reflected by the REAL Unemployment Rate of 16.5%.  The latter includes discouraged/marginally attached workers and economically necessitated part-timers.  It's down from 16.6% in June and marks the lowest rate since the Recession-inspired high of 17.4% set October 2009. The post Great Depression high for this Bureau of Labour metric (U-6) was 19.3% in 1982.  The all time record of 24.9% was set in 1933.  By 1937 it had corrected to 11%, but in a 1939 premature effort to balance the Budget, suffered a relapse to 17.9%. This jobless recovery was foretold by TrendLines Research in Autumn 2008.  And it seemed the economy was over the hump when it was reported the Inventory/Sales ratio was much improved.  As some sectors move to replenish, there is a visible increase in Aggregate Weekly Hours ... then overtime ... and finally re-hiring.  The U-6 Unemployment Rate did not peak 'til 22 months after NBER-declared end of the 2001 Recession.  It never got back to the pre-contraction level of 6.8%.  Assuming this Recession ended July 2009, then U-6 topped three months afterward "this time". But just as it was thought the fiscal stimulus was ushering in a robust Recovery, December's leading indicators began to hint of relapse ... perhaps one to three years off.  By February 2010, the "downturn" was starting to look more like a double-dip.  And by March, it became apparent whatever was on the horizon wasn't a year off any longer.  The TrendLines Recession Meter gives guidance on the economy's history and path forward. Upon resumption of the business cycle and folks commence to come back into the labour market, the statistical U-3 universe will expand.  Due to the larger denominator, it is common for U-3 to temporarily mask the better times, and the Rate may in fact rise.  With that paradox, the Real Unemployment Rate (U-6) may actually start to decline first and hence reveal the first signs of better times.
	Tier-1 Scenarios:  June 30th ~ This month's revision updates Tier-1 Outlooks by IEA, Peter Wells & our own Hutter Peak Scenario 2200. Based on 19-model Avg:           Peak Oil:  94-mbd in 2024           Post-Peak Production Avg Decline Rate to 2050:  0.7%/yr  ('til 2050)           The year 50% of URR/EUR has been extracted:  2032           The year flow is under today's 86-mbd:  2041           The year we virtually run out of oil (excl BTL):  2300  (less than 5mbd)           Global URR/EUR:  3,897-Gb  (1,225-Gb consumed to 2009/12/31 excl 4Gb BTL)           Global Depletion:  32% of URR  (Net Depletion Rate:  1.1%/yr)   click chart for more charts & discussion...
	PS-2200 ~ Highlights of June 29 2010 Update:               Catastrophic Decline Starts in 2051           The Peak:  102-mbd in 2030           Post-Peak Production Decline Rates:  0.6% 'til 2050, then 2.8% to 2065           Worldwide 2010 Surplus Capacity:  7.1-mbd  (exhausts in 2023)           The year flow breaches below 2010 levels:  2052           URR/EUR:  7,507-Gb  (consumed to 2009/12/31:  1229-Gb incl 4Gb BTL)           Depletion of URR:  16%      Annual Gross Depletion Rate:  0.4%  (Net:  0.5%)           The year 50% of URR consumed:  2113           The year oil (excl BTL) runs out:  2388        Underlying Decline Rate Observed YTD 2010:  2.9% (2.5-mbd) of Worldwide All Liquids click chart for more...
click chart for more...	PS-2200's 2010 Underlying Decline Rate Observed:  2.9% (2.5-mbd) of Worldwide All Liquids June 29th ~ Flow from global New Capacity in 2009 was a record 4.1-mbd.  Last year's loss from Underlying Decline Observed (UDO) was a lesser 2.2-mbd (2.6%).  Some of the difference was responsible for raising production, but most helped raise Global Surplus Capacity to 6.3-mbd by year end.  The current 7-yr trend for installed New Capacity is 3.5-mbd/yr.  Based on present URR Estimates and subject to capital availability, Industry can maintain this new installation activity level until inevitable resource constraints begin to restrict new development (dashed blue line in chart inset) after 2050. My March 2009 analysis revealed that Global UDO first became significant during the 1970 American Recession.  Chart#4 illustrates long term global annual UDO, but it is the UDRO inset (annual rates) that is most instructive.  I have found that the Underlying Decline Rate Observed exhibits a tendency to ebb and flow.  It became apparent that these cyclical (8.5-yr) crests correlate with all six USA Recessions of the past four decades.  These cycle tops appear to reflect reduced EOR activity during economic contractions, no doubt due to capital & cash flow limitations amid a reduced Demand environment. These crests (orange line) further coincide somewhat with depletion rate peaks of  the major petroleum provinces:  the Persian basin (Iraq/Iran) in 1977, USA/Russia All Liquids in 1984, the North Sea in 2001 & the present deterioration in Mexico. The highest annual surge was 6.3% of All Liquids production in 1984 in the wake of the double-dip 80's Recessions.  The recent cycle top of the 2001 Recession was followed by an UDRO trough of 1.9% in 2006, then the 3.1% high of the 2008 Recession.  The loss factor is projected to bottom @ 2.6% in 2012 before its next cycle high (3.5%) during a probable 2017 Recession.  Extrapolation of the general trend (including its 8.5 year cycles) should see UDRO rise to 4.7% by 2050. Analysis by TrendLines Research reveals that over the last 40 years, UDRO has averaged 2.7% annually.  From 1970, this necessitated the construction of 119-mbd of new facilities:  77 to address UDO & 42-mbd to raise Extraction Capacity from 51 in 1969 to 93-mbd by last December.  In short, the oil sector has been adding 3-mbd/yr ... or a new Saudi Arabia every three years for four decades!  Terminal global production decline will commence upon Annual New Capacity no longer exceeding the UDO trend line.  This intersection is set to occur in 2031.
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