$75 per barrel oil

[Todd]

New record high for oil. This evenings news says the average price for gas will be over $3 by this weekend. Scares over N Korea and summer demand drove the price up today. I bet it will be another great year for all you Hearth dealers. Better stock up know.

Some good news, 1 ethenal plant near me up and running, another being built shortly. Should make the farmers happy. Lots of corn in the area.

 

[BrotherBart]

Yep, Korea wastes ten years of their GNP attacking the ocean just off-shore, no supply disruptions in sight, oil flowing freely in the Middle East and the speculators drive the price through the roof because Exxon Mobil has one cat cracker flame out in Beaumont because of heavy rain.

I hope every one of them goes bankrupt from margin calls.

 

[Sandor]

Yep, Korea wastes ten years of their GNP attacking the ocean just off-shore, no supply disruptions in sight, oil flowing freely in the Middle East and the speculators drive the price through the roof because Exxon Mobil has one cat cracker flame out in Beaumont because of heavy rain.

I hope every one of them goes bankrupt from margin calls.

No disruptions in sight?

Hurricane Threats

Iran using oil as a negotiation tool

Chavez using oil as retribution tool (to the US)

Terrorist threats to oil installations, pipelines and shipping routes.

So, until there is evidence that the world consumption of oil is starting to decrease, prices will continue to go up.

 

[BrotherBart]

That list could go on forever. Right down to "earthquake could swallow all of the oil in Saudi". The point is that actual events, production and supply play virtually no part in oil pricing these days. Actual fundementals support a price of $50 a barrel.

<ducking>

 

[Shane]

Yeah it seems as though there are alot of what if's involved in oil pricing. I'm not so sure that this year will be as good as last for sales, mainly due to the fact that people are starting to adjust to the oil prices. It will still be a good year but 3.00 per gallon just doesn't have the shock value it had last year.

 

[saichele]

It will still be a good year but 3.00 per gallon just doesn't have the shock value it had last year.

Yup. We've been happily drifting along in the $3.10/ga range for about 2 weeks without much of any of the whining that went with it last year (only time we hit $3 was the week after Katrina). It's common enough to not be noteworthy.

saw an interesting article int he newspaper yesterday comparing car and gas prices to wages, and arguing that both still relatively small compared to the 80's, 50's, or 30's. That is, the inflation-adjusted cost to the average American to drive a mile is less now than in the past.

Not sure I buy it, but it certainly doesn't seem like we're grinding the economy to a halt either.

Steve

 

[webbie]

Yep, Korea wastes ten years of their GNP attacking the ocean just off-shore, no supply disruptions in sight, oil flowing freely in the Middle East and the speculators drive the price through the roof because Exxon Mobil has one cat cracker flame out in Beaumont because of heavy rain.

I hope every one of them goes bankrupt from margin calls.

I think N. Korea got a hold of some of the old Estes Model Rockets we used to put together. Couldn't get them to land anywhere accurately either!

Considering the the USSR broke it's own back by invading Afghanistan and building too many missile, it shouldn
t be long before N. Korea self-destructs.

As far as the price of oil - please remember that adjusted for inflation it is approx the SAME as in 1980. That means NO increase due to all this news. I say $3.50-$4.00 would be just about right to get people started on conservation. Maybe I should buy some Toyota stock!

 

[RoosterBoy]

i hate to be the one to say it but in a way it's a good thing oil is going up. we should be tired of relying on the med east for it. plus it's bad for the environment. and having the prices going up makes people think of better alternatives so in a way it's bad for the people that don't make allot of money because they need the gas to get to work and feed there kids. but in another way it's good because maybe we all could be driving nice new electric cars with electric produced from wind and solar

i already stopped heating with oil and now heat 100% with wood. i am changing my old dirty burning Vermont casting to a new clean burning stove. i have changed all my lights to incandescent and plan my trips.

see how much better i am now that gas is higher ;-)

thanks
Jason

 

[Sandor]

That list could go on forever. Right down to "earthquake could swallow all of the oil in Saudi". The point is that actual events, production and supply play virtually no part in oil pricing these days. Actual fundementals support a price of $50 a barrel.

<ducking>

I could not disagree more. Oil should be 100 bucks a barrel.

Increasing demand against flat output spells trouble. There is no swing producer any longer. There are no super giant oil fields left to be discovered. The UK and Mexico will go from net exporters to net importers very quickly.

There is so much evidence that the future for oil, against demand, looks bleak.

Guess I'm reading the same crap the oil traders are. They placed their bets and put their money where their mouth is, or where their research led them.

 

[Todd]

It will still be a good year but 3.00 per gallon just doesn't have the shock value it had last year.

Yup. We've been happily drifting along in the $3.10/ga range for about 2 weeks without much of any of the whining that went with it last year (only time we hit $3 was the week after Katrina). It's common enough to not be noteworthy.

saw an interesting article int he newspaper yesterday comparing car and gas prices to wages, and arguing that both still relatively small compared to the 80's, 50's, or 30's. That is, the inflation-adjusted cost to the average American to drive a mile is less now than in the past.

Not sure I buy it, but it certainly doesn't seem like we're grinding the economy to a halt either.

Steve

I've heard that argument to, and think it's a crock! Did they mention anything in that article about peoples wages adjusting to the inflation? Cost of living increases are way behind inflation. Everything has gone up except wages!

 

[spot]

The cord of wood in my backyard cost me nothing.
The next cord will cost me nothing.
In 5 years, that cord will cost me nothing.

I know the guy that cuts it.
I know the guy that splits it.
I know the guy that stacks it.

He is the same guy that paints my house, fixes my plumbing, shovels my snow and takes my dog for a walk.

I have done all I can to save fuel, and save energy in general. Big Oil will charge whatever they want and we will have no choice but to pay it. Until oil supplies simply run out - or another, better fuel source comes along, I will do all I can to limit my consumption of their ever-more-expensive product.

 

[BrotherBart]

This is directed to
BrotherBart

If there were no supply threats and production at the current rate were assured, do you believe that that should equate with a stable or lowering price?

If so, do you deny that there is a constant upward demand pressure on oil? This is so not only because there are more people every day, but also because there are 2 billion Indians and Chinese who want to live like us. Wouldn't that alone drive up price?

No question about it. Demand pressure and cost of production will drive wellhead prices upward. At a point where production approaches the limits of ability. But speculation has taken any reality out of the relationship of supply and pricing in the hydrocarbon marketplace. Supply/demand and delivery system capability supports a price of around fifty bucks a barrel. Might happen/could happen/Quigi Board investing support the other twenty-five bucks a barrel.

 

[begreen]

Spiked over $75 again this morning.

If demand was based on status quo then perhaps we'd stay at about $50/barrel. But it's not. China and India's growing demand can't be underestimated. Demand from China alone is projected to rise to 2000 million tons by 2020, 14 years time, (around 40 million barrels a day). Now add just a doubling of India's oil requirement from similar current demand levels, over the same period. This equates to 15 years of demand rising at 10%. Now add that China is considering creating a strategic reserve equivalent to ours and the numbers grow much faster. And remember that North Sea, Mexican and Saudi fields are in decline.

Looked at this way, it seems apparent that we've seen the last of cheap oil. Add any natural or man-made catastrophe that affects the oil supply or refining and I think we will continue to see spikes much higher.

 

[webbie]

Spiked over $75 again this morning.

Supply and demand....and also hard to get genies back in the bottle.

Once the "market" has proven that Americans will pay $3 or $4 for a gallon of gas (and be glad to have it!), then that can tend to set the price. I was just looking at the price of Aluminum today - About 1.20 a LB wholesale - up from 60 cents about 4 years ago. Many other metals are the same or worse...copper, nickel, chromium, etc.

Yes, China and India and everywhere else factor in, but also consider your own business. If I am a carpenter or consultant and get someone to pay me $100 an hour, then it would take a strong market force to make me work for $25 again.

That all said, oil is a crap shoot. In 1980 you could have heard the exact same arguments about oil prices that you hear today, but in 1986 we were payin .69 a gallon for gas! So no one really knows.

One thing for sure - prices have gone up way ahead of wages. The house I bought in 1978 is worth 5X as much today (without improvements) and the demo subaru I purchased for $3000 would be at least 15K. It is interesting to watch society adjust - here's a typical example. It was written in stone that your house or rent payment should be no more than one weeks pay each month. Make $250 a week? That is what you should spend on housing. But over the years, they have raised it to 40% of your monthly income - I've even heard 50%. That means 11-12 days of work instead of 5....but there are always new buyers coming along, so they don't know about the former recomendation...and the financial community is not about to tell them.

Point is, we can only look back and at the present...and hazard a guess at what's coming.

 

[webbie]

Disagree Meister.

We can make a very educated guess at what's coming.

My guess, which you may or may not considered educated, is that 3$ gas will be looked back upon a few years from now as an absolute bargain.

Every man must make his own choices. I am always the ant and the "we can only hazard a guess" grasshoppers who play all summer always end up at my door looking for me to bail them out when what I view as the inevitable comes to pass.

Every man and woman - I guess!

You must be an extremely wealthy man, with your ability to see the future. Even a slight edge could make you millions in options, stocks and other "bets". It would be like counting cards - you can't lose....

I'm c'mon to your door for free firewood, free food and perhaps a dollar handout when the oil runs out!

 

[Sandor]

I don't think you need to be a fortune teller to see what the future oil market looks like.

Simply read the oil production reports from major producing countries.

Mexico and the U.K. will go from exporters to importers shortly.

 

[DaveM195352]

oh..those good old days.....

 

[PAcountryboy]

Being new here, I clicked on this post without looking at the date (thinking it was a recent post) and thought someone was out of their mind for thinking oil was going to be $75/barrel again.

Just two years ago, $75/barrel was outrageous, and today we would love to see that again. Just TWO years.

 

[smokinj]

PRICE* CHANGE % CHANGE TIME
Nymex Crude Future 112.02 -2.99 -2.60 10:38
Dated Brent Spot 108.56 -3.35 -2.99 11:09
WTI Cushing Spot 113.50 -1.51 -1.31 09:06



todays price! 75.00 looks real SWEEET

 

[webbie]

Wasn't too long ago either that we didn't read about our soliders dying every day.....
a lot of things have changed since Y2K.

 

[Red Sun]

OPEC's revenue is on course to be higher than U.S. income-tax receipts. The cartel's revenue could reach $1.17T this year.

 

[metpound]

I am sure Obama will fix it all.

 

[webbie]

I am sure Obama will fix it all.

As a very smart person once told me "the little green men from outer space ain't gonna come and clean up our messes".....

Another time when the culprit is in the mirror. We are on the verge of some great technology which will ease the energy situation in the future - it will come, but the question for US is whether we help it come quicker, or simply keep sucking oil and adding to debt....making it harder for our children and future generations.

A 10, 20 and even 30 year plan would be nice. Doesn't matter who is Prez if we don't become involved. The (often selfish) business lobbies will win every time if the people don't demand change.

As usual, I hold out little hope because it is easier to play video games and watch sports on TV than to become involved.

 

[begreen]

Deifying the presidency is not going to be a solution, nor help us out of this issue. Time to think more locally and concentrate on local and house and senate representatives. The presidential race is important, but largely a media circus event now. The broadcasting companies benefit the most from these elections cycles. Time to tell them they are irrelevant and ignore them.

 

[jpl1nh]

I am sure Obama will fix it all.

As a very smart person once told me "the little green men from outer space ain't gonna come and clean up our messes".....

Another time when the culprit is in the mirror. We are on the verge of some great technology which will ease the energy situation in the future - it will come, but the question for US is whether we help it come quicker, or simply keep sucking oil and adding to debt....making it harder for our children and future generations.

A 10, 20 and even 30 year plan would be nice. Doesn't matter who is Prez if we don't become involved. The (often selfish) business lobbies will win every time if the people don't demand change.

As usual, I hold out little hope because it is easier to play video games and watch sports on TV than to become involved.

Aside from burning wood, voting is a good place to start and not much harder than video games or watching TV. I tend to think there are differences between what the candidates will do, not just in the presidential elections but at all levels. You can learn about your choices on the very computer you're reading this thread on and it's at least 50% as much fun.