[OreoCookie]

It's a very-short-term dent (coming from the speculative component of the oil market) and will not change one bit at the pumps.

[besson3c]

So what exactly is the explanation for the drop in the price of oil? What is the precise relationship?

[stupendousman]

Read this thread.

Speculators try and predict the future. The future as it was had OPEC controlling every bit of increase of production, if it even chose to increase production. That's bad news for the supply, but good news to OPEC. OPEC doesn't want anyone competing with it.

Once the US makes it clear that they'll be competing, the price will go down. The current decrease is likely a "blip", and we'll have to do more in order to get it to go down more. George Bush making it known that he's throwing down the gauntlet on more drilling makes the speculators think twice.

http://kudlow.nationalreview.com/pos...ZmNDVmMjA0ZWY=

[Uncle Doof]

Oil drop (speculation by Uncle Doof):

I'd be looking at the markets going bear a few days back. Markets go bear = dollar worth less = less national debt = less debt to palm off onto OPEC = lower price.

[OreoCookie]

Originally Posted by stupendousman 

Read this thread.

I have.
Speculative investments in oil determine mostly smaller fluctuations, but the big decisions are made by OPEC. We are also sure that demand for oil will rise over the next few decades and these simple truths set natural limitations to speculation for the long-term development of the oil price.

Originally Posted by stupendousman 

Speculators try and predict the future. The future as it was had OPEC controlling every bit of increase of production, if it even chose to increase production. That's bad news for the supply, but good news to OPEC. OPEC doesn't want anyone competing with it.

Of course they don't anyone competing with them, that's why they are a cartel!

Originally Posted by stupendousman 

Once the US makes it clear that they'll be competing, the price will go down.

The US can't compete with OPEC. OPEC has the West (and Japan) by its balls, we're dependent on them. That's why we accept their oil cartel in the first place -- not because we want to, but because we have to. The US cannot be self-reliant when it comes to oil even if you drill for the comparatively small amount in Alaska. It's eyewash, it sounds good if you pretend you can do something about OPEC and high oil prices -- when you actually can't.

[OreoCookie]

Originally Posted by Uncle Doof 

I'd be looking at the markets going bear a few days back. Markets go bear = dollar worth less = less national debt = less debt to palm off onto OPEC = lower price.

How does the lower value of the dollar lead to less (US) national debt? (Because you measure it in Royal pounds instead of dollars?)

[Uncle Doof]

Originally Posted by OreoCookie 

How does the lower value of the dollar lead to less (US) national debt?

I didn't say it leads to less national debt. I said it's equal to less national debt.

If you owe me $100 this time last year, and that $100 will buy 10 oz of (say) gold, you owe me 10 oz of gold.

- then we devalue, ignoring fluctuations in tangible price -

If you owe me $100 today, and that $100 will buy 5 oz of (say) gold, you owe me 5 oz of gold. Less debt, as long as the debt is denominated in dollars (which it is).

Or something like that.

[OreoCookie]

Originally Posted by Uncle Doof 

If you owe me $100 this time last year, and that $100 will buy 10 oz of (say) gold, you owe me 10 oz of gold.

- then we devalue, ignoring fluctuations in tangible price -

If you owe me $100 today, and that $100 will buy 5 oz of (say) gold, you owe me 5 oz of gold.

I still don't see the point: it doesn't mean I have less debt (I always owe you $100 and not 5 or 10 ounces of gold), but it means I can buy less gold for the same amount I owe you.

Originally Posted by Uncle Doof 

Less debt, as long as the debt is denominated in dollars (which it is).

Debt of what? You have lost me here, what debt are you referring to and if it is not valued in dollars, what currency is it valued in alternatively?

In any case, I think the weak dollar adds to the oil problem, because pretty much all oil trade is done in US dollar (I think Iran allows you to buy oil with Euros, too). So the rise in oil prices is actually less steep in the Euro zone than for Americans, for example (the US dollar has lost about 30 % in value compared to the Euro within the last 12 months alone).

[Uncle Doof]

Originally Posted by OreoCookie 

I still don't see the point: it doesn't mean I have less debt (I always owe you $100 and not 5 or 10 ounces of gold), but it means I can buy less gold for the same amount I owe you.

You're confusing "dollars" with proper measures of worth.

[OreoCookie]

You haven't answered my question.

[Uncle Doof]

If you can't be bothered to read my post on the previous page (and your last post indicates that you haven't), then you're not ready for the answer.

[OreoCookie]

I have. But since you didn't separate this sentence by a paragraph from your example, I thought you were referring to it (where you were talking about dollars and gold) instead of your post on page 4.

You were claiming that since oil is paid in US dollars and you have to buy US debt. But that doesn't mean the US has less debt, even though other countries can buy more debt for less these days

In any case, `weaker dollar = less debt' still doesn't make sense … the US' national debt will still be there, it's just not sold to other countries anymore. Besides, wouldn't switching to Euros as base currency for oil sales have the same effect?

[Uncle Doof]

Dollars aren't money. They bits of paper with promises on them.

Lend me $100. I'll be buying 10 oz gold with that, which you can have as security.
<later>. Oh dear, inflation seems to have brought about a situation whereby the dollar has devalued and $100 will buy only five oz of gold. <sells half the gold for $100>. There ya go, there's your $100. Nice doing business with you.

Of course, this is massively simplified.

[tie]

OreoCookie, I am not sure if you are just quibbling with Uncle Doof on technicalities, or if you actually disagree with him. Broadly, he is basically right. Think of it this way: Inflation is good for borrowers (at least unexpected inflation is good), because the real value of their debt is reduced. Unanticipated inflation is bad for lenders. In this case, the US is the borrower and China and other countries are lenders.

Right now, we just had 1% inflation in a single month, 5% inflation over the last year, and 9% wholesale price inflation over the last year. Ideally, we'd have a metric that expresses this inflation as "effective tax increases" of the Bush administration due to its stupid spending and economic policies. (Except this being a tax on wealth, not income, that's hard to do.) That would better clarify the difference between Republican and Democratic tax policies. If your government spends the money, you are going to end up paying for it, whether or not they increase taxes.

[OreoCookie]

Only with Doofy's last post did I understand what he meant to say.

Yes, you're right that the devaluation of the dollar diminishes the value of US debt if valued in another currency.

But there is a significant downside to this as well: in the past, the dollars that oil exporting countries have taken in have been re-invested in the US in one form or another. It has kept a lot of dollars in the circulation and these investments have generated income in the US.

So I don't think this is a net positive effect.

[stupendousman]

Here's what we've been hearing from OPEC and certain posters here on MacNN:

"There's nothing we can do about gas prices, it's a hopeless cause - they will be high and even higher FOREVER. Not even increased production in 10 years will help us!!!"

Here's what I said:

If we reduce demand a little and have the US government show that they are serious about changing the laws to allow increased US drilling to compete for any added market production, that alone will reduce the price due to speculators backing down and OPEC increasing production themselves.

WHAT HAPPENED?

Demand decreased (due to prices), OPEC increased production, Bush overturned the executive order preventing offshore drilling and prices have dropped dramatically. The price of gas is about 20¢ cheaper just in the short time since Bush rescinded the order and now analysts are predicting about a 50 cent decrease in the price of gas by the end of summer INSTEAD of the continued increases we were assured just weeks before

http://cbs2chicago.com/local/gas.pri....2.778351.html

Now, I'm not saying that alone will keep the prices down forever (we need to further decrease demand via alternatives, and actually drill more), but where are the folks who insisted that I didn't know what I was talking about and needed an economics education, now?

[OldManMac]

So you're saying that since Bush rescinded the order, prices have dropped because we now have more oil? Anyone who thinks we will have cheap oil in the future, and that this drop is anything more than temporary, is delusional. ANWR is a drop in the bucket, and it's almost a decade away until we see any of it, by which time the demand will go up even more than it is already. Prices have dropped 20 cents, and the return of cheap oil is here.

[besson3c]

stupendousman: I think you should listen to more economists. Google this issue, and you'll see that most don't really know why the price dropped, and that there is no clear relationship between the two events. One may have caused the other, but there is no real guarantee that this is the case. There are a number of other variables.

[stupendousman]

Originally Posted by OldManMac 

So you're saying that since Bush rescinded the order, prices have dropped because we now have more oil?

No. We now have more supply because demand dropped. That coupled with the White House making it clear that they where going to do what they needed to in order to spur new drilling (a motivator for speculators and world markets) caused a big drop in price, just as I said it would.

Anyone who thinks we will have cheap oil in the future, and that this drop is anything more than temporary, is delusional. ANWR is a drop in the bucket, and it's almost a decade away until we see any of it, by which time the demand will go up even more than it is already. Prices have dropped 20 cents, and the return of cheap oil is here.

Thanks for not paying attention.

[stupendousman]

Originally Posted by besson3c 

stupendousman: I think you should listen to more economists. Google this issue, and you'll see that most don't really know why the price dropped, and that there is no clear relationship between the two events.

I don't need to Google it. I've already quoted at least one column from an economist who says the same things I am saying (after I said them)...and that was before the latest price drops.

Again, the problem isn't my economics. Based on my knowledge, I predicted what would happen if the set of circumstances I suggested should (and did) happen. Maybe you should be listening to economists who actually understand what is going on. As you yourself claim, most don't understand it. I told you what would happen and why it would happen and it did. I don't share their lack of understanding so it would be kind of dumb for me to look to people who don't know what is going on for the answers.

[CreepDogg]

Could it be because, oh, I don't know, demand dropped? There's now a short-term excess supply.

Oil tumbles $4 on slumping demand

I'd be careful with your pronouncements. You have no evidence, other than anecdotal, of correlation. And correlation does not prove causation.

Anyone with half a brain knows Bush's pronouncement is nothing more than symbolic. Not one additional drill has dropped in the ground at this point, so there's zero net effect on true supply. Thus, no correlation with the current price. Speculation, including that based on idle threats, may exaggerate the effects of supply and demand, but it does not override them.

[stupendousman]

Originally Posted by CreepDogg 

Could it be because, oh, I don't know, demand dropped? There's now a short-term excess supply.

Demand has dropped slightly, yes (and it will likely stay at that point until prices go down dramatically). I pointed that out and said that was needed as part of the equation. Demand was going down prior to Bush dropping the restrictions on drilling and there was no significant drop in price though. It wasn't until after the restrictions were dropped that the price started to sink. I believe both had an effect on prices though. Without the decrease in demand, I don't think that the action by the President would have had as much impact.

Oil tumbles $4 on slumping demand

I'd be careful with your pronouncements. You have no evidence, other than anecdotal, of correlation. And correlation does not prove causation.

I don't disagree. It's impossible to prove what caused the market to act the way it did. We can only speculate based on the facts, and the facts are as I stated.

Anyone with half a brain knows Bush's pronouncement is nothing more than symbolic. Not one additional drill has dropped in the ground at this point, so there's zero net effect on true supply.

Again, you're basing your estimation on the false idea that "true supply" is the only determining factor on price. It's not. Traders discount the future. If they see a future where there is only one competitor for increase in production, they see monopoly powers at work and they know that means higher prices. It's just as much psychology as it is a pure numbers game. Often times you've got people gambling and going with their "gut". This is exactly how markets get a "bubble" and how in the 90's tech companies that were really worth nothing on paper could raise millions with IPO's only later to go down the drain. Often times it's not about true worth, supply or market forces. I (and others) believe that's what is happening now. Current events provides circumstantial evidence that this is true.

Thus, no correlation with the current price. Speculation, including that based on idle threats, may exaggerate the effects of supply and demand, but it does not override them.

I said that there needs to be three things to bring prices down, none requiring huge changes to the actual numbers involved;

• Decreased demand (which high prices will do on it's own)

• A willingness by OPEC to show that they would increase production (which they did, due to threats of decreased demand and added competition) in view of the increased price.

• The United States to start showing it was serious about providing added production into the market as competition.

All three happened, prices plummeted. Anyone with half a brain would refrain from totally discounting the psychological effects these things have on the market in light of what has happened and drop their proven false theory that an increase in production by the United States will yield no effect to the price of oil.

Just a month ago we were told by all the experts and OPEC that there was no relief in site from ultra-high prices and that the prices where going to be going up even more. Now we are told that the price of gas is probably going continue to drop over the coming months. Surely these experts could have estimated with all their economic prowess that there would be decrease in demand with a huge increase in price and this would lead to lower prices if all that was at work was supply/demand forces? What has happened unexpectedly that has turned the market around in ways that the experts said would not happen?

Surely after OPEC announced an increase in production and reports came in that there was a drop in demand that the price would THEN drop. It didn't. It didn't drop until all the three factors I mentioned where in place. The precipitous drops started after Bush made his speech. The facts are undeniable. While I (or anyone else) can't prove causation, it's pretty clear what's going on. People who try to deny it are likely doing so because of personal bias. This is basic logic. It doesn't take a rocket scientist (or even an economics major) to see what's going on. Sorry, it's just not that complicated.

[CreepDogg]

Originally Posted by stupendousman 

Demand has dropped slightly, yes (and it will likely stay at that point until prices go down dramatically). I pointed that out and said that was needed as part of the equation. Demand was going down prior to Bush dropping the restrictions on drilling and there was no significant drop in price though. It wasn't until after the restrictions were dropped that the price started to sink. I believe both had an effect on prices though. Without the decrease in demand, I don't think that the action by the President would have had as much impact.

Me neither. As in - probably none.

Again, you're basing your estimation on the false idea that "true supply" is the only determining factor on price. It's not. Traders discount the future. If they see a future where there is only one competitor for increase in production, they see monopoly powers at work and they know that means higher prices. It's just as much psychology as it is a pure numbers game. Often times you've got people gambling and going with their "gut". This is exactly how markets get a "bubble" and how in the 90's tech companies that were really worth nothing on paper could raise millions with IPO's only later to go down the drain. Often times it's not about true worth, supply or market forces. I (and others) believe that's what is happening now. Current events provides circumstantial evidence that this is true.

Yes. We've talked about the fact that market behavior and speculation exaggerates the effects of supply and demand. Again - the psychology is around speculators beliefs on how supply and demand will move. No other agendas.

I said that there needs to be three things to bring prices down, none requiring huge changes to the actual numbers involved;

• Decreased demand (which high prices will do on it's own)

• A willingness by OPEC to show that they would increase production (which they did, due to threats of decreased demand and added competition) in view of the increased price.

• The United States to start showing it was serious about providing added production into the market as competition.

All three happened, prices plummeted. Anyone with half a brain would refrain from totally discounting the psychological effects these things have on the market in light of what has happened and drop their proven false theory that an increase in production by the United States will yield no effect to the price of oil.

Just a month ago we were told by all the experts and OPEC that there was no relief in site from ultra-high prices and that the prices where going to be going up even more. Now we are told that the price of gas is probably going continue to drop over the coming months. Surely these experts could have estimated with all their economic prowess that there would be decrease in demand with a huge increase in price and this would lead to lower prices if all that was at work was supply/demand forces? What has happened unexpectedly that has turned the market around in ways that the experts said would not happen?

Surely after OPEC announced an increase in production and reports came in that there was a drop in demand that the price would THEN drop. It didn't. It didn't drop until all the three factors I mentioned where in place. The precipitous drops started after Bush made his speech. The facts are undeniable. While I (or anyone else) can't prove causation, it's pretty clear what's going on. People who try to deny it are likely doing so because of personal bias. This is basic logic. It doesn't take a rocket scientist (or even an economics major) to see what's going on. Sorry, it's just not that complicated.

I say it's just #1. #2 and #3 are unnecessary unless they have a significant impact on supply.

I think the surprise in the demand drop is how quickly it happened. I think demand has turned out to be a bit more elastic than many expected.

And I wouldn't say prices have 'plummeted'. To date, we've seen what is likely a modest correction (looks like about 16% drop in oil price from peak, gas prices maybe 2%). Talk to me when gas is under $3.

[stupendousman]

Originally Posted by CreepDogg 

Me neither. As in - probably none.

Consumer demand has been going down for months. The price of oil has not and in fact still went up - even after the Saudis announced increased production. The drastic downturn in the market started right after Bush made his speech.

Coincidence? Maybe, but not likely. I predicted such a thing would happen if a strong statement was made in regards to future drilling regardless of when the drilling might take place, in conjunction with the reduced demand and increased output. Reduced demand and promised increases by OPEC alone wasn't spuring the market.

Yes. We've talked about the fact that market behavior and speculation exaggerates the effects of supply and demand. Again - the psychology is around speculators beliefs on how supply and demand will move. No other agendas.

Apparently their beliefs have changed, despite everyone assuring us at current production levels we will always be paying the higher prices. What happened after demand dropped and production increased? Nothing. What happened after that and THEN the executive branch served notice (threw down the gauntlet essentially) that increased production was a top priority? Prices dropped dramatically. While you can't prove causation, simply ignoring what happened isn't going to prove that there was no causation. The best explanation is that speculators believe that supply issues (both based on demand, and increased production by all parties) isn't the problem it was just a month ago despite the fact that everything OTHER than Bush's order were known to speculators.

I say it's just #1. #2 and #3 are unnecessary unless they have a significant impact on supply.

BZZT. More assumptions that the psychological aspect of speculation plays only a small role. Otherwise, prices would have dropped as they have just recently BEFORE Bush rescinded his order.

I think the surprise in the demand drop is how quickly it happened. I think demand has turned out to be a bit more elastic than many expected.

The drop in demand was evident a month before the current drastic drop in price. What where they waiting for?

And I wouldn't say prices have 'plummeted'. To date, we've seen what is likely a modest correction (looks like about 16% drop in oil price from peak, gas prices maybe 2%). Talk to me when gas is under $3.

The price has dropped a record amount in such a short time. Analysts say we'll soon be half way to your goal. This after months of being told it was impossible.

There's an entire industry that needs to figure out what it's doing, since they have been proved spectacularly wrong in just a month or two's time. Speculation is about the future. When you predict the future wrong , things don't go as planned. It's all a guessing game. When someone is guessing, they can be bluffed and influenced by psychological factors to go with their gut at times when simple numbers aren't enough to do it for them. Otherwise, people wouldn't have put billions into companies that created nothing and had no real product or market back before the tech bust of the nineties. It's all about gambling and guessing. It should be the government's job to make sure these quessers aren't confused about where our priorities are. Bush helped do that recently, and we are reaping the rewards at the pump.

Just remember, when people say we can't avoid $4 a tank gas - they don't know what they are talking about. When people say increased production by the US won't make a difference in price, ignore them. All we need to do is continue finding ways to decrease demand via alternatives and increase supply via drilling and we'll stabilize prices via market forces. It's happening now, and unless something drastic happens, it should. We just have to keep doing the same things.

[CreepDogg]

Originally Posted by stupendousman 

Consumer demand has been going down for months. The price of oil has not and in fact still went up - even after the Saudis announced increased production. The drastic downturn in the market started right after Bush made his speech.

Coincidence? Maybe, but not likely. I predicted such a thing would happen if a strong statement was made in regards to future drilling regardless of when the drilling might take place, in conjunction with the reduced demand and increased output. Reduced demand and promised increases by OPEC alone wasn't spuring the market.

Coincidence? Just as likely as not. Again - Bush's speech has absolutely no teeth. There will still be no additional drilling unless Congress acts (which is unlikely). Could that have a psychological effect on some speculators? Sure. A major sustainable impact on prices? No.

Apparently their beliefs have changed, despite everyone assuring us at current production levels we will always be paying the higher prices. What happened after demand dropped and production increased? Nothing. What happened after that and THEN the executive branch served notice (threw down the gauntlet essentially) that increased production was a top priority? Prices dropped dramatically. While you can't prove causation, simply ignoring what happened isn't going to prove that there was no causation. The best explanation is that speculators believe that supply issues (both based on demand, and increased production by all parties) isn't the problem it was just a month ago despite the fact that everything OTHER than Bush's order were known to speculators.

See above. Bush's order is meaningless, so it must be the first two.

BZZT. More assumptions that the psychological aspect of speculation plays only a small role. Otherwise, prices would have dropped as they have just recently BEFORE Bush rescinded his order.

Just as you find it surprising that I place so much importance on the fundamentals of economics, I find it surprising that you place so much importance on Bush's often incoherent and unenforceable ramblings.

The price has dropped a record amount in such a short time. Analysts say we'll soon be half way to your goal. This after months of being told it was impossible.

There's an entire industry that needs to figure out what it's doing, since they have been proved spectacularly wrong in just a month or two's time. Speculation is about the future. When you predict the future wrong , things don't go as planned. It's all a guessing game. When someone is guessing, they can be bluffed and influenced by psychological factors to go with their gut at times when simple numbers aren't enough to do it for them. Otherwise, people wouldn't have put billions into companies that created nothing and had no real product or market back before the tech bust of the nineties. It's all about gambling and guessing. It should be the government's job to make sure these quessers aren't confused about where our priorities are. Bush helped do that recently, and we are reaping the rewards at the pump.

Yep - predicting the future is tricky business, and people get it wrong just as often as they get it right. No one knows - and people constantly adjust their predictions based on new information. Most base future predictions on past behavior, and the encyclopedia of past behavior grows every day.

Again - I'd be careful about throwing around loaded statements like 'plummeted', 'record drop', etc. Not surprising it's a 'record drop' - it was also a 'record rise' by far. Prices are still far above where they were a year ago. Yes - speculators probably caused an exaggeration of the situation and we're likely seeing a correction of that now.

Just remember, when people say we can't avoid $4 a tank gas - they don't know what they are talking about. When people say increased production by the US won't make a difference in price, ignore them. All we need to do is continue finding ways to decrease demand via alternatives and increase supply via drilling and we'll stabilize prices via market forces. It's happening now, and unless something drastic happens, it should. We just have to keep doing the same things.

You are absolutely right - decreasing demand and increasing supply will cause a price drop. There is a cost to increasing supply. The question is - is the gain we get from that increase in supply worth the cost? Based on all accounts I've seen, the answer is no.

[stupendousman]

Originally Posted by CreepDogg 

Coincidence? Just as likely as not. Again - Bush's speech has absolutely no teeth. There will still be no additional drilling unless Congress acts (which is unlikely).

I disagree. If the prices don't go down and stay down, you're going to see pressure on Congress to act and Bush essentially threw down the gauntlet to them. The fact that such a small drop in demand (what you claim is the major reason for the price drop) could cause a decrease in price of about 50 cents (what analysts expect) proves that high prices simply must be tolerated as part of a carbon fuel based lifestyle is a lie.

Just as you find it surprising that I place so much importance on the fundamentals of economics, I find it surprising that you place so much importance on Bush's often incoherent and unenforceable ramblings.

You place importance on them while essentially ignoring other important (and now essentially proven) factors in play. That's what I don't understand.

Yes - speculators probably caused an exaggeration of the situation and we're likely seeing a correction of that now.

Precisely. My point was that the extremely high prices was a reflection of an exaggeration of the market by speculators. This sort of thing can be managed by ensuring that those in the market see what our priorities are so they aren't confused into thinking that we will sit back and let OPEC have sole ownership over future increases in production. That's the sort of thing that makes investors bet for increased prices. Apparently, they've changed their mind. SOMETHING has changed that and it wasn't simply decreased demand since prices did not start dropping rapidly after it was clear there was decreased demand.

You are absolutely right - decreasing demand and increasing supply will cause a price drop. There is a cost to increasing supply. The question is - is the gain we get from that increase in supply worth the cost? Based on all accounts I've seen, the answer is no.

I think most Americans trying to raise a family and make it on a middle class income would disagree. Especially once they witness a decent sized drop in gas prices WITHOUT increases in production when they were told there's nothing that can be done about the high price.

[CreepDogg]

Originally Posted by stupendousman 

I disagree. If the prices don't go down and stay down, you're going to see pressure on Congress to act and Bush essentially threw down the gauntlet to them. The fact that such a small drop in demand (what you claim is the major reason for the price drop) could cause a decrease in price of about 50 cents (what analysts expect) proves that high prices simply must be tolerated as part of a carbon fuel based lifestyle is a lie.

So you think a lame-duck president can 'throw down the gauntlet' on Congress in the next 5 months?

Back to Econ 101 - the relationship of price to demand is not linear. Just as a small increase in demand can cause a large price increase, the opposite can happen. The other factor you are not considering is longer-term worldwide demand projections. US demand may decrease, but overall demand is expected to increase.

You place importance on them while essentially ignoring other important (and now essentially proven) factors in play. That's what I don't understand.

Proven?

Originally Posted by stupendousman in an earlier post

It's impossible to prove what caused the market to act the way it did. We can only speculate based on the facts, and the facts are as I stated.

Precisely. My point was that the extremely high prices was a reflection of an exaggeration of the market by speculators. This sort of thing can be managed by ensuring that those in the market see what our priorities are so they aren't confused into thinking that we will sit back and let OPEC have sole ownership over future increases in production. That's the sort of thing that makes investors bet for increased prices. Apparently, they've changed their mind. SOMETHING has changed that and it wasn't simply decreased demand since prices did not start dropping rapidly after it was clear there was decreased demand.

You don't know that. Maybe they wanted to see some form of sustained decrease in demand. Maybe there's a natural lag in the way the market is set up. Maybe they were waiting for some profit-taking. All of those are just as likely as a toothless speech from a lame-duck president.

I think most Americans trying to raise a family and make it on a middle class income would disagree. Especially once they witness a decent sized drop in gas prices WITHOUT increases in production when they were told there's nothing that can be done about the high price.

I'm one of those Americans. What I don't want to see is an artificial and temporary price drop, which WILL curtail investment in alternatives. Plus, as we've learned in Econ 101, if prices go down, quantity demanded will increase again, further increasing our dependence on imports. I don't want to end up right back here in 10 years, again with high prices, fewer options, and even more dependence on OPEC and other questionable sources for energy.

We've witnessed a decrease in prices WITHOUT increases in production - that's great! Our options are still open, and it shows there's much that can be done on the demand side without even touching the supply side. The market is taking its natural course without our subsidies - good news!

[stupendousman]

Originally Posted by CreepDogg 

So you think a lame-duck president can 'throw down the gauntlet' on Congress in the next 5 months?

The executive barrier is down. That's the case no matter who ends up being president, unless you really think that the next president is going to go to the trouble of putting the order back in place any time soon. It's now up to Congress to act, or not act. Those who choose not to act risk being blamed for the problem and the pressure to act is increasing, not decreasing. I'd be willing to bet that certain restrictions are removed in the near future. I'm willing to bet that speculators believe the same thing.

Back to Econ 101 - the relationship of price to demand is not linear. Just as a small increase in demand can cause a large price increase, the opposite can happen.

Or nothing can happen. There was an increase in supply. Price actually went up. We aren't dealing with something that is directly pegged to supply/demand and that's why the economists can't explain why what is happening is happening and why just a month ago they were predicting record breaking increases in the price of oil for months to come. Economics 101 didn't seem to help these guys then, even though it could be predicted that there would be a decrease in demand as prices went up. It's clear that basic economics premises don't always apply when you are dealing with speculative marketeers who are looking for a quick buck.

You don't know that. Maybe they wanted to see some form of sustained decrease in demand. Maybe there's a natural lag in the way the market is set up. Maybe they were waiting for some profit-taking. All of those are just as likely as a toothless speech from a lame-duck president.

Not at all, for all the reasons I explained BEFORE he made his speech when I predicted that such a thing would help drop the price. Even if you can't prove causation, I've got the results on my side of the equation.

I'm one of those Americans. What I don't want to see is an artificial and temporary price drop, which WILL curtail investment in alternatives. Plus, as we've learned in Econ 101, if prices go down, quantity demanded will increase again, further increasing our dependence on imports. I don't want to end up right back here in 10 years, again with high prices, fewer options, and even more dependence on OPEC and other questionable sources for energy.

I've already said that in addition to personal conservation and increased drilling, that we have to find alternatives to the future. My plan was/is a stopgap measure until alternatives are developed that make fossil fuels less attractive. I think that with national security concerns and the latest price scares, people are now and will be more attuned to making it happen. We can't rely entirely on promises of future technology or discoveries - we've got to have a Plan B while we still need foreign oil in vast quantities.

[Uncle Doof]

In other news, the US is raising its debt ceiling to help bail out Fannie and Freddie. Since oil prices are tied into US national debt, expect prices to rise.

[CreepDogg]

Originally Posted by stupendousman 

The executive barrier is down. That's the case no matter who ends up being president, unless you really think that the next president is going to go to the trouble of putting the order back in place any time soon. It's now up to Congress to act, or not act. Those who choose not to act risk being blamed for the problem and the pressure to act is increasing, not decreasing. I'd be willing to bet that certain restrictions are removed in the near future. I'm willing to bet that speculators believe the same thing.

Kind of depends who gets elected, doesn't it? Or maybe not. I believe both remaining candidates have said they oppose drilling, so we'll see.

Or nothing can happen. There was an increase in supply. Price actually went up. We aren't dealing with something that is directly pegged to supply/demand and that's why the economists can't explain why what is happening is happening and why just a month ago they were predicting record breaking increases in the price of oil for months to come. Economics 101 didn't seem to help these guys then, even though it could be predicted that there would be a decrease in demand as prices went up. It's clear that basic economics premises don't always apply when you are dealing with speculative marketeers who are looking for a quick buck.

Yes, they still apply. Time is a factor. And yes, as we've discussed, speculators can exaggerate the effects of the market and/or shift the timing. I've never said that it's a simple equation - just that the fundamentals apply.

Not at all, for all the reasons I explained BEFORE he made his speech when I predicted that such a thing would help drop the price. Even if you can't prove causation, I've got the results on my side of the equation.

No more than I do. Any of the reasons I mentioned is just as plausible. If that's all it takes, heck, the president should make a speech every week - oil would be $10 a barrel in a few months!

Yes - the president made a speech. But there has been no actual increase in supply, so you have no data to support your claim. Yes - you can play on the emotions of speculators, but in the end, they follow the market -- they don't lead it.

I've already said that in addition to personal conservation and increased drilling, that we have to find alternatives to the future. My plan was/is a stopgap measure until alternatives are developed that make fossil fuels less attractive. I think that with national security concerns and the latest price scares, people are now and will be more attuned to making it happen. We can't rely entirely on promises of future technology or discoveries - we've got to have a Plan B while we still need foreign oil in vast quantities.

Let's look at 1995 - cheap gas = no incentive to explore alternatives. I'm sure everyone will be just CLAMORING to make sacrifices and change their lifestyle in an electric car when it's cheaper to keep doing what they're doing.

I agree we need a Plan B - no more subsidies and artificial price controls, increased investment in alternatives, and a steady decrease in the amount of foreign oil consumption. Some here claim we need to completely turn off the spigot today. That's not me - I understand that's unrealistic. But - artificial price controls will do exactly the opposite.

[CreepDogg]

Well, oil is up today, so I guess Bush's speech didn't work.

Also of interest is this story about the Commodity Futures Trading Commission's report on the impact of speculation on oil prices. In short, it concludes that speculation is not driving prices, rather it is the natural forces of supply and demand. Hmmmm.

http://money.cnn.com/2008/07/24/news...ion=2008072417

There's a link in there to the actual report. I skimmed it - of interest....

Originally Posted by The CFTC Report

The Task Force’s preliminary assessment is that current oil prices and the increase in oil prices between January 2003 and June 2008 are largely due to fundamental supply and demand factors. During this same period, activity on the crude oil futures market – as measured by the number of contracts outstanding, trading activity, and the number of traders – has increased significantly. While these increases broadly coincided with the run-up in crude oil prices, the Task Force’s preliminary analysis to date does not support the proposition that speculative activity has systematically driven changes in oil prices.

and

Originally Posted by The CFTC Report

The Task Force’s preliminary analysis, based
on the evidence available to date, suggests that changes in futures market participation by speculators have not systematically preceded price changes. On the contrary, most speculative traders typically alter their positions following price changes, suggesting that they are responding to new information – just as one would expect in an efficiently operating market.

Sounds suspiciously like...

Originally Posted by me

predicting the future is tricky business, and people get it wrong just as often as they get it right. No one knows - and people constantly adjust their predictions based on new information. Most base future predictions on past behavior, and the encyclopedia of past behavior grows every day.

and separately

you can play on the emotions of speculators, but in the end, they follow the market -- they don't lead it.

[stupendousman]

Originally Posted by CreepDogg 

Kind of depends who gets elected, doesn't it? Or maybe not. I believe both remaining candidates have said they oppose drilling, so we'll see.

McCain has supported offshore drilling. Even so, I doubt that a smart politician would go and put the barrier back into place signaling an unwillingness to explore all options in regards to energy. That could really be used as an effective weapon by the opposition party.

No more than I do. Any of the reasons I mentioned is just as plausible.

Where you predicting maybe a month back that what has happened would happen simply if demand dropped slightly, or where you one of the people saying that extreme high prices were an irreversible long-term problem that could not be battled via even small increases in supply (essentially, the same thing small decreases in demand provides)?

Yes - the president made a speech. But there has been no actual increase in supply, so you have no data to support your claim.

Saudi Oil increases: Price goes up.
Demand decreases: Oil continues to go up.
Executive branch removes barrier to oil drlling: Prices go down a lot.

There's some data for you. Again, it doesn't prove causation, but it does show that supply/demand alone will not necessarily move markets and that other factors can be just as powerful. Speculators apparently see the market moving in a direction it did not just a month ago, even though it could be quessed that the high prices would effect demand in a reasonable amount of time, and apparently just coincidentally decided this not long after Bush made his speech.

http://kudlow.nationalreview.com/pos...ZmNDVmMjA0ZWY=

Bush Says Drill, Drill, Drill — and Oil Drops $9!

In a dramatic move yesterday President Bush removed the executive-branch moratorium on offshore drilling. Today, at a news conference, Bush repeated his new position, and slammed the Democratic Congress for not removing the congressional moratorium on the Outer Continental Shelf and elsewhere. Crude-oil futures for August delivery plunged $9.26, or 6.3 percent, almost immediately as Bush was speaking, bringing the barrel price down to $136.

But - artificial price controls will do exactly the opposite.

No one is asking for artificial price controls, just to combat artificially high prices due to speculation with an effective display of proper priorities in the effort to reduce reliance on foriegn oil. Artificially high prices are no more beneficial than artificially low prices, and I think that much like post 9/11 people now see a different view of the world differently post $4 gas. I think most people understand why we need alternatives to keep from fluctuating between what we had in 1995 and 2008.

As for the task force, for every group or person who claims that there is little to no reason to believe speculative forces are at work, I can find you another expert that will tell you the opposite. We should really have the experts arm wrestle, and decide the truth that way.

[CreepDogg]

Originally Posted by stupendousman 

McCain has supported offshore drilling. Even so, I doubt that a smart politician would go and put the barrier back into place signaling an unwillingness to explore all options in regards to energy. That could really be used as an effective weapon by the opposition party.

Well, it's another predicting the future thing that we don't know. We'll see. I'd thought I'd seen that McCain opposed drilling (may have been just ANWR) but don't have time to look it up.

Where you predicting maybe a month back that what has happened would happen simply if demand dropped slightly, or where you one of the people saying that extreme high prices were an irreversible long-term problem that could not be battled via even small increases in supply (essentially, the same thing small decreases in demand provides)?

Can it have a lasting impact on prices?
Small increases in supply: Yes
Small increases in supply in 20 years: No. We have no idea what the market will look like in 20 years.

Saudi Oil increases: Price goes up.
Demand decreases: Oil continues to go up.
Executive branch removes barrier to oil drlling: Prices go down a lot.

There's some data for you. Again, it doesn't prove causation, but it does show that supply/demand alone will not necessarily move markets and that other factors can be just as powerful. Speculators apparently see the market moving in a direction it did not just a month ago, even though it could be quessed that the high prices would effect demand in a reasonable amount of time, and apparently just coincidentally decided this not long after Bush made his speech.

I like this part:

Originally Posted by The Kudlow Article

Crude-oil futures for August delivery plunged $9.26, or 6.3 percent, almost immediately as Bush was speaking, bringing the barrel price down to $136.

Almost sounds like it was happening before speculators knew of Bush's speech, doesn't it?

No one is asking for artificial price controls, just to combat artificially high prices due to speculation with an effective display of proper priorities in the effort to reduce reliance on foriegn oil. Artificially high prices are no more beneficial than artificially low prices, and I think that much like post 9/11 people now see a different view of the world differently post $4 gas. I think most people understand why we need alternatives to keep from fluctuating between what we had in 1995 and 2008.

The federal government giving public land to the oil companies to drill on and keep the profits is a subsidy. Subsidy = artificial price control. Put any wrapper around it you want - it's an attempt at an artificial price control. If the oil companies had to pay the owners of the land (us) what it was worth at a market rate for the right to drill there, it would be as expensive if not more so as any oil on the market today.

If prices are artificially high due to irrational speculation, then we should curtail the speculation. It makes no sense to overreact with an unrelated nanny-state price control measure.

With a subsidy, there will be no incentive to find more efficient alternatives. I'm predicting the future based on past behavior. We saw the same thing with reaction to gas rationing in the 1970's and didn't learn from that. Why would this be different?

As for the task force, for every group or person who claims that there is little to no reason to believe speculative forces are at work, I can find you another expert that will tell you the opposite. We should really have the experts arm wrestle, and decide the truth that way.

Read the report. It's more than a 'claim'. They did a regression analysis on the market behavior and the behavior of speculators, including the timing. Based on actual data - not just anecdotal comments. Could their method be flawed? Sure. But it's a lot more credible than anything else I've seen.

[stupendousman]

Originally Posted by CreepDogg 

Can it have a lasting impact on prices?
Small increases in supply: Yes
Small increases in supply in 20 years: No. We have no idea what the market will look like in 20 years.

Which is why predictions of what small increases of supply in 20 years will do to the markets are pretty much meaningless and clearly an attempt to simply influence political matters. What we do know is that OPEC will react to any competition, and competition is good no matter how small.

Almost sounds like it was happening before speculators knew of Bush's speech, doesn't it?

"Almost immediately", which equals shortly after. It really doesn't take any time at all for markets to react to news (the stock market moves almost instantly when the Fed or other agency makes an announcement that has impact) and it was rumored the day before that Bush WOULD rescind the order. It's not all that surprising.

The federal government giving public land to the oil companies to drill on and keep the profits is a subsidy. Subsidy = artificial price control.

I never suggested that they should do such a thing. I believe that now if a company wants to drill on public land they have to pay the government. Me? I want us to do everything we can to encourage both domestic production and increased research and development in alternatives. That's the only thing that is going to keep prices stable long term.

Could their method be flawed? Sure. But it's a lot more credible than anything else I've seen.

I don't have to do a regression analysis to see that the price kept going up pretty much until the executive branch reacted. You can call it a coincidence if you like, but I called it way before it happened.

[OreoCookie]

Originally Posted by stupendousman 

No one is asking for artificial price controls, just to combat artificially high prices due to speculation with an effective display of proper priorities in the effort to reduce reliance on foriegn oil.

What makes you think that the oil which may be drilled for in ANWR will be offered on the domestic market? What stops the oil companies from selling the oil to -- say -- India or China?

[stupendousman]

Originally Posted by OreoCookie 

What makes you think that the oil which may be drilled for in ANWR will be offered on the domestic market? What stops the oil companies from selling the oil to -- say -- India or China?

Nothing, but oil produced domestically won't have it's profits diverted to terrorism and domestic oil production provides competition for added supply to OPEC. When OPEC sees a challenge, they react. They just assured us a month agao that prices where always going to be to the point where they where $4 a gallon or more and that there was nothing they could do about it. Now analysts predict gas dropping 50 cents just weeks later.

Of course, they saw the decrease in demand coming and the tough talk in the US about increasing domestic supply and actually reacted with an announcement that they would be increasing supply themselves, surely to try and stabilize the price so it didn't go down too far.

...and there's nothing to say that the increased supply won't go to the US. Increasing production in reasonable ways is simply a smart thing to do for a number of reasons.

[CreepDogg]

Originally Posted by stupendousman 

Nothing, but oil produced domestically won't have it's profits diverted to terrorism and domestic oil production provides competition for added supply to OPEC. When OPEC sees a challenge, they react. They just assured us a month agao that prices where always going to be to the point where they where $4 a gallon or more and that there was nothing they could do about it. Now analysts predict gas dropping 50 cents just weeks later.

Of course, they saw the decrease in demand coming and the tough talk in the US about increasing domestic supply and actually reacted with an announcement that they would be increasing supply themselves, surely to try and stabilize the price so it didn't go down too far.

...and there's nothing to say that the increased supply won't go to the US. Increasing production in reasonable ways is simply a smart thing to do for a number of reasons.

If current consumption numbers hold, about 1/4 of it would go to the US. It will probably be less than that based on recent trends (US consumption dropping, other countries rising). The US would still need to import 70%+ of its oil. More if we have artificial price controls in place and consumption continues to grow. (The percentage we import has grown from about 40% to about 70% since 1980.) It will come nowhere close to divorcing anyone from OPEC.

OPEC won't care about marginal competition if worldwide demand is rising, They'll have to produce more as well.

[CreepDogg]

Originally Posted by stupendousman 

Which is why predictions of what small increases of supply in 20 years will do to the markets are pretty much meaningless and clearly an attempt to simply influence political matters. What we do know is that OPEC will react to any competition, and competition is good no matter how small.

So you have a better estimate? Something that shows there will be some dramatic, lasting impact on price?

"Almost immediately", which equals shortly after. It really doesn't take any time at all for markets to react to news (the stock market moves almost instantly when the Fed or other agency makes an announcement that has impact) and it was rumored the day before that Bush WOULD rescind the order. It's not all that surprising.

Yup, and reactions like that rarely reflect long-term market trends.

I never suggested that they should do such a thing. I believe that now if a company wants to drill on public land they have to pay the government. Me? I want us to do everything we can to encourage both domestic production and increased research and development in alternatives. That's the only thing that is going to keep prices stable long term.

Let's review:

The government is going to give the oil companies drilling rights on public land for something WAY less than market rates.
The oil companies are going to drill, and, in 17-20 years, maybe get some oil.
The oil companies are going to sell said oil on the world market and keep the profits.

Subsidy. Yes - you are suggesting an artificial price control.

I truly can't understand why anyone would want to consume a STRATEGIC ASSET and let it be sold on the world stage for the sake of a price control measure, particularly where no one is sure of the impact on price (although by all expert accounts it will be small) and lasting impacts wouldn't be seen for 17-20 years. It makes absolutely no sense.

I don't have to do a regression analysis to see that the price kept going up pretty much until the executive branch reacted. You can call it a coincidence if you like, but I called it way before it happened.

Then your conclusions aren't credible.

[stupendousman]

Originally Posted by CreepDogg 

The government is going to give the oil companies drilling rights on public land for something WAY less than market rates.

How much less are they going to charge the companies than normal market rates for oil leases?

Then your conclusions aren't credible.

The experts (some at least) told us what was going to happen, and why. What they said would happen did not happen. They were wrong and many still make excuses for why they don't understand it.

I told you what would happen if certain criteria would exist, it did, and what I said would happen happened.

You can claim lack of credibility all you want, and based on results it's clear that the experts lack credibility. I can claim something they can't - results.

Debate on oil speculators hits new pitch
http://www.ft.com/cms/s/0/0ce7d722-5...nclick_check=1

Whoops. Price looks to not being going up very fast these days.

Again, I don't claim that there will be long-term benefits if further action is not taken by the government. In fact, I predict it won't. It will take further action to keep prices stable. But for there to be a "correction", something was not "correct" in the first place. It's just like back in the nineties when speculators simply bet wildly based on a desire to make quick bucks. Once a set of criteria was in place that made it very hard for them to keep justifying outrageous stock prices for companies who would never live up to the potential they once claimed, they had to pull their money back out and there was a "correction". It wasn't about supply and demand, it was simply about capitalism and a desire to make a buck however you can (not that there's anything wrong with that).

I've got past precedent and results on my side. I'll take that over a faulty regression analysis any day.

[PaperNotes]

The three majors parties to blame for today's oil price are:

-Terrorists. Attacks by them on human populations and oil installations and pipelines have caused stock markets to worry about the availability of oil and the cost of transporting and refining crude. Oddly, or not, many terrorists have been funded directly and indirectly by Saudi petro-dollars.
-Speculators, who have seen the price of oil going up due to market concerns and seen the escalation in price as a sign to jump on a profitable bandwagon.
-Environmentalists (of all kinds, including corporations who are riding on the hype), who have ploughed millions of dollars into feeding climate change paranoia and alarmism, and also stood in the way of new drilling.

Without those three factors, oil would be currently at $50 a barrel maximum!

The US has enough oil to become independent of foreign oil if it were allowed to drill in its coastal waters. Arctic oil also offers huge reserves for North America and Europe and there is so much more to be discovered, meaning we have plenty of oil to last for years until technology really does reach the point where we can have a new and transformed energy industry.

We are also a decade or two away from scientists being able to create anything biological artificially. We could have meat grown for consumption without having to battery breed animals. We could also grow crude oil. Imagine being able to create an identical replica of fossil fuels in a factory instead of having to spend billions hunting and drilling for it. It wouldn't even have to be an identical replica. It could be a fuel completely made from scratch using genetic science that could be an improvement in every way over natural fossil fuel. Environmentalists/Greens will oppose this, therefore we must remove their irrational voices from the debate otherwise we'll have more delays and higher energy prices.

Supply and demand is not a major problem. It's an overstated problem issued forth by the very people who don't want to be seen at fault.

[CreepDogg]

Originally Posted by stupendousman 

I told you what would happen if certain criteria would exist, it did, and what I said would happen happened.

It did? Last I checked, oil was still well over $120/barrel. Gas is still over $4/gallon. What exactly has happened? The price dropped from its peak. Happens in the market all the time.

You can claim lack of credibility all you want, and based on results it's clear that the experts lack credibility. I can claim something they can't - results.

I've got past precedent and results on my side. I'll take that over a faulty regression analysis any day.

What results? Your aim was to take oil from $140 to $120? Good job then. I guess we're done.

[CreepDogg]

Originally Posted by PaperNotes 

The three majors parties to blame for today's oil price are:

-Terrorists. Attacks by them on human populations and oil installations and pipelines have caused stock markets to worry about the availability of oil and the cost of transporting and refining crude. Oddly, or not, many terrorists have been funded directly and indirectly by Saudi petro-dollars.
-Speculators, who have seen the price of oil going up due to market concerns and seen the escalation in price as a sign to jump on a profitable bandwagon.
-Environmentalists (of all kinds, including corporations who are riding on the hype), who have ploughed millions of dollars into feeding climate change paranoia and alarmism, and also stood in the way of new drilling.

Without those three factors, oil would be currently at $50 a barrel maximum!

I don't even know where to start with this.

The three parties to blame for prices are:
- Look in the mirror.
- Look in the mirror again.
- Look in the mirror one more time.

The US has enough oil to become independent of foreign oil if it were allowed to drill in its coastal waters. Arctic oil also offers huge reserves for North America and Europe and there is so much more to be discovered, meaning we have plenty of oil to last for years until technology really does reach the point where we can have a new and transformed energy industry.

...

Supply and demand is not a major problem. It's an overstated problem issued forth by the very people who don't want to be seen at fault.

This is laughable. The US consumes 21,000,000 barrels/day. It produces about 5,500,000 barrels/day. The US Department of Energy has estimated that drilling will produce another 800,000-900,000 barrels/day. I don't know about you, but when I do the math, that does not end up at energy independence.

Please do your homework before coming with such silly claims.

[PaperNotes]

Originally Posted by CreepDogg 

I don't even know where to start with this.

The three parties to blame for prices are:
- Look in the mirror.
- Look in the mirror again.
- Look in the mirror one more time.

Wrong. I don't own a car. I eat once or twice a day. I have always been a lightweight consumer, and that has nothing to do with being "Green". It's just the way I am because I like to sit at a desk and read most of my waking hours, and I have always been a walker rather than someone who takes a car to travel something pathetic like 5 miles. YOU look in the mirror if you want. I'm going to stick what I said. Without those three factors oil would be at $50.

This is laughable. The US consumes 21,000,000 barrels/day. It produces about 5,500,000 barrels/day. The US Department of Energy has estimated that drilling will produce another 800,000-900,000 barrels/day. I don't know about you, but when I do the math, that does not end up at energy independence.

The oil that is waiting to be drilled along the US coasts and in US territorial waters elsewhere is FAR higher than the number you have given, but by energy independence one never means 100% independence because it is bad for international trade and relations. When one talks about energy independence, it means cutting as much MIDDLE EASTERN oil as possible which the US is far far from doing because of the meddling of enviro groups.

Please do your homework before coming with such silly claims.

I don't like to resort to cliché by saying such silly things such as pot called the kettle black but **** I just did.

[stupendousman]

Originally Posted by CreepDogg 

It did? Last I checked, oil was still well over $120/barrel. Gas is still over $4/gallon. What exactly has happened? The price dropped from its peak. Happens in the market all the time.

Price was going up and up. Everyone said that retreat was unlikely any time soon and the price was instead going to go up. I SAID that if the criteria I stated was put into place (and it was) that the price would start going down. Gas is well under $4 a gallon where I live (after being at a high of around $4.10) and most analysts say that it's likely to go even lower - probably around $3.50

So, YES - IT DID.

What results? Your aim was to take oil from $140 to $120? Good job then. I guess we're done.

Of course, not "done". I stated so myself, even back before prices dropped dramatically.

If that's the best you can do in order to diffuse the point that what I said was right, and happened as I said it would...well....GOOD TRY!

[CreepDogg]

Originally Posted by PaperNotes 

Wrong. I don't own a car. I eat once or twice a day. I have always been a lightweight consumer, and that has nothing to do with being "Green". It's just the way I am because I like to sit at a desk and read most of my waking hours, and I have always been a walker rather than someone who takes a car to travel something pathetic like 5 miles. YOU look in the mirror if you want. I'm going to stick what I said. Without those three factors oil would be at $50.

Do you have electricity in your house for your reading light? Do you ever take trains or rent cars? Have you ever left your city on an airplane? If your answer is 'yes' to any of these, you consume energy. Look in the mirror. I agree - I'm just as much to blame as you are - maybe more, maybe less.

The oil that is waiting to be drilled along the US coasts and in US territorial waters elsewhere is FAR higher than the number you have given, but by energy independence one never means 100% independence because it is bad for international trade and relations. When one talks about energy independence, it means cutting as much MIDDLE EASTERN oil as possible which the US is far far from doing because of the meddling of enviro groups.

What evidence do you have that there is so much oil off the coasts? Even oil men such as T. Boone Pickens, who is also a geologist, are saying we can't drill our way to independence.

And I love how you're backing off your statement about energy independence. Let's be clear - energy independence is that we can produce as much energy as we consume. Period. We will not achieve that with oil as our main source of energy.

I don't like to resort to cliché by saying such silly things such as pot called the kettle black but **** I just did.

Read this thread. I've brought in:

- Research on US and worldwide oil production and consumption
- Research on US refinery capacity
- A speculator report on the oil market
- A CFTC report on the impact of speculation on prices

You've brought

::crickets::

Come back when you've got something tangible to show.

[CreepDogg]

Originally Posted by stupendousman 

Price was going up and up. Everyone said that retreat was unlikely any time soon and the price was instead going to go up. I SAID that if the criteria I stated was put into place (and it was) that the price would start going down. Gas is well under $4 a gallon where I live (after being at a high of around $4.10) and most analysts say that it's likely to go even lower - probably around $3.50

So, YES - IT DID.

I don't remember anyone in here saying prices were going to go up and up. My point is that it's driven by supply and demand - for which there will be peaks and valleys. I do expect long-term upward trend. Week-over-week trends hardly show anything. It's like saying global warming is imminent because today is a hot day.

Still over $4 in my area.

Of course, not "done". I stated so myself, even back before prices dropped dramatically.

If that's the best you can do in order to diffuse the point that what I said was right, and happened as I said it would...well....GOOD TRY!

You have nothing but a week or two of data to go on. These types of actions need to have a sustainable impact, and that hasn't been proven one way or the other. So we have an anecdotal correlation, no evidence of causation, and a very small data sample. Sorry - not buying it.

[PaperNotes]

[QUOTE]

Originally Posted by CreepDogg 

Do you have electricity in your house for your reading light?

No, my laptop screen is bright enough.

Do you ever take trains or rent cars?

No.

Have you ever left your city on an airplane?

Yes. My energy consumption is still very low compared to Al Gore and Leonardo Di Caprio or MOST people who would call themselves an environmentalist. It's low, not because of any moral or political position, but because I am naturally hermetic and simple without wanting to impose my lifestyle upon anyone else. If someone wants to rip down the street in a Dodge Challenger R/T then all power to them. I might even ask them for a go.

What evidence do you have that there is so much oil off the coasts?

Unless you have been on Mars for the last year, it has been the subject of many news articles and forum debates that there are up to 15 billion barrels of oil waiting to be drilled in US territorial waters of the Gulf of Mexico ALONE.

And I love how you're backing off your statement about energy independence.

Clarification to a spoonfed adult doesn't qualify as backing off.

Let's be clear - energy independence is that we can produce as much energy as we consume. Period. We will not achieve that with oil as our main source of energy.

I never stated oil should be the only or main source of energy. To the contrary I said we should exploit it as much as possible to lower or stabilise prices, fuel economy and pay for R+D into the real deal that will replace oil with the same or better levels of efficiency.

Come back when you've got something tangible to show.

I have, but you had nothing to say except being annoying and self-important with your accusations that I, SOMEONE YOU DO NOT KNOW, should examine how much energy I consume because the price of oil is MY fault somehow. Bollocks to that. Point at your holy self instead of pointing at others.

[stupendousman]

Originally Posted by CreepDogg 

I don't remember anyone in here saying prices were going to go up and up.

That's what all the experts just about everywhere said. Economists. Oil Men. OPEC. I was the saying if XYZ happens, prices will go down. Prices didn't start to drop quickly until all of XYZ happened, just as I said it would. You can point to "supply and demand" all you want, but the supply and demand isn't all that much different right now as it was right before the President's speech. For some reason, around the time he decided to act, prices started dropping dramatically.

You have nothing but a week or two of data to go on.

It's only been that long since the criteria I laid out has been met. The experts are saying prices will continue to get lower at least for the summer. Are you saying they are wrong NOW TOO? I wouldn't be surprised if they were, to tell the truth, based on past precedent. Do you know what I"m not buying? The assurances from the economic experts and their analysis. If this is simply a supply and demand issue and they didn't see it coming, then they aren't worth much when I SAW what was going to happen coming.

[ebuddy]

Originally Posted by OreoCookie 

It's a very-short-term dent (coming from the speculative component of the oil market) and will not change one bit at the pumps.

oops. Wrong and... wrong.

[smacintush]

Originally Posted by OreoCookie 

What makes you think that the oil which may be drilled for in ANWR will be offered on the domestic market? What stops the oil companies from selling the oil to -- say -- India or China?

Oil companies "sell" the oil they drill to their own refineries for market price. You think it makes sense for them to drill for oil, sell it to China for $124 a barrel (or whatever the price du jour is), then import oil from Saudi Arabia for $124 a barrel to to refine?

They will sell it to themselves first and import whatever they need to make-up for their shortfall.