[stupendousman]

Originally Posted by CreepDogg 

I thought we all agreed that the timeframe was too short to prove any causation, much less correlation in events?

Prove? No. You'll never be able to prove what caused the drop even if it continues dropping for the next 2 years. You can speculate, but not really prove since it's clear that supply/demand isn't the only thing at work here. What I can show is that supply/demand isn't really that much significantly different now as it was when prices where at record levels and climbing. At least not so much as to discount an equal amount of additional supply that could be put into the market by the United States.

If demand is dropping, why would you increase supply?

Apparently we are told we don't have enough. Even with slightly reduced demand. That's why prices are said to be high.

As a supplier, you are squeezed on price and not getting value (profitability) out of the goods you sell. If no one wants B&W TV's any more, why would you push to make more of them? You'd be out of business fast.

Right now, we would have a monopoly on new B/W TV's at a time when demand is dropping slightly due to the price the monopoly charges. If the prices are unreasonably high, then it's to a supplier's benefit to start producing the same thing that the monopoly produces and take away some of their business. You aren't going to get that unless you start making the TV's to cover demand and even at lower prices, you will turn a profit. It doesn't help the monopoly, that's for sure. That is, until we can get to the point where color TV's are affordable and there is adequate programming available for them.

Also:

http://biz.yahoo.com/ap/080805/oil_prices.html?.v=13

A day after plunging as much as $5 a barrel in a dramatic sell-off, crude continued its downward trend Tuesday as traders sold oil contracts on the belief that prices are still too high in relation to demand and have further room to fall.

Light, sweet crude for September delivery lost $1.86 to trade at $119.55 a barrel on the New York Mercantile Exchange, after earlier falling to $118, the lowest level since May 5.

Crude has now fallen more than $25 since reaching a trading high of $147.27 on July 11.

"The market psychology has finally shifted," said Stephen Schork, an analyst and trader in Villanova, Pa., adding that "$4-a-gallon gasoline has clearly killed demand."

Lot's of talk about "psychology" and prices that "are still too high in relation to demand". Who has been saying that the past month? Who offered a solution and explained what criteria needed to be put into place to finally topple the prevailing "phychology" that told us that prices where never going to go down? Oh yeah...that guy was me.

Find alternatives to decrease the demand while doing what is necessary to increase the supply in case the alternatives do not present themselves. Very smart approach....

[CreepDogg]

Originally Posted by stupendousman 

Prove? No. You'll never be able to prove what caused the drop even if it continues dropping for the next 2 years. You can speculate, but not really prove since it's clear that supply/demand isn't the only thing at work here.

You just repeated what I said, albeit in a much more long-winded manner. Let's keep it short: The timeframe is too short to prove anything.

Right now, we would have a monopoly on new B/W TV's at a time when demand is dropping slightly due to the price the monopoly charges. If the prices are unreasonably high, then it's to a supplier's benefit to start producing the same thing that the monopoly produces and take away some of their business. You aren't going to get that unless you start making the TV's to cover demand and even at lower prices, you will turn a profit. It doesn't help the monopoly, that's for sure. That is, until we can get to the point where color TV's are affordable and there is adequate programming available for them.

I have no idea what the hell you're talking about. Are you saying B&W TV's = oil, and color TVs = other stuff (electric, hydrogen, whatever)? If so, your analogy is weak at best. One can assume a TV manufacturer can go on making TVs sustainably. Not so with oil. You drill a well, pump it, and it's gone.

Also - Who has a monopoly? On TVs? On oil? Last I checked for oil, there are lots of multinational corporations competing.

A supplier will jump into a market when high prices support their cost of entering in the market and they see they can sustainably make a profit. If you're jumping in the market to lower prices, you're defeating the purpose and creating a disincentive for your own cause.

Also:

http://biz.yahoo.com/ap/080805/oil_prices.html?.v=13

Lot's of talk about "psychology" and prices that "are still too high in relation to demand". Who has been saying that the past month? Who offered a solution and explained what criteria needed to be put into place to finally topple the prevailing "phychology" that told us that prices where never going to go down? Oh yeah...that guy was me.

Find alternatives to decrease the demand while doing what is necessary to increase the supply in case the alternatives do not present themselves. Very smart approach....

So you claim the psychology has changed and demand is going down, and prices do not support demand. And you say this:

Originally Posted by stupendousman 

What I can show is that supply/demand isn't really that much significantly different now as it was when prices where at record levels and climbing. At least not so much as to discount an equal amount of additional supply that could be put into the market by the United States.

Which is it? I guess whichever is convenient for your argument.

[stupendousman]

Originally Posted by CreepDogg 

You just repeated what I said, albeit in a much more long-winded manner. Let's keep it short: The timeframe is too short to prove anything.

Let's not make it too simple: it doesn't matter what the timeframe is - you aren't going to be able to "prove" the cause even if it is exactly what I claim.

I have no idea what the hell you're talking about. Are you saying B&W TV's = oil, and color TVs = other stuff (electric, hydrogen, whatever)? If so, your analogy is weak at best. One can assume a TV manufacturer can go on making TVs sustainably. Not so with oil. You drill a well, pump it, and it's gone.

...and then you go to another hole. We've been told since the first discovery of oil that we are running out, but somehow we keep finding more and more and we know there are places where it exists that we aren't even attempt to get to. It would be like saying that if a factory that makes TV's burns down, you can't make anymore TV's.

Also - Who has a monopoly? On TVs? On oil? Last I checked for oil, there are lots of multinational corporations competing.

For additional supply? We are?

Which is it? I guess whichever is convenient for your argument.

Demand is going down, but not any more significantly than it was back a month or so ago when we had record prices. Not so significantly that we can look at the increased supply that the slightly reduced demand has produced and negate the effect to prices that a similar or greater increase in supply (provided by us in the future} would likely cause. This all just illustrates the phoniness of the "oil twenty years from now (a myth in the first place) can't have any real impact on prices" lie. You can't say that when you have no idea of what demand will be in 20 years with increased competition from alternatives or what the "psychology" of the market might be at that time. I explained what would move the markets and the last thing needed was a psychological push. When it was applied, prices dropped heavily. We need to keep providing those pushes and the markets will stay stable as long as there is no real (not artificial) threats to supply above and beyond the norm.

[OldManMac]

Originally Posted by stupendousman 

...and then you go to another hole. We've been told since the first discovery of oil that we are running out, but somehow we keep finding more and more and we know there are places where it exists that we aren't even attempt to get to. It would be like saying that if a factory that makes TV's burns down, you can't make anymore TV's.

And therein lies the main flaw in your argument. You want to stay in denial, and want to believe that a substance which takes millions of years to make is an infinite resource, to be consumed at our pleasure. Yes, there is more oil, but much of it is in areas where it's harder to extract, which makes it more expensive. You're wrong.

[CreepDogg]

Originally Posted by stupendousman 

Let's not make it too simple: it doesn't matter what the timeframe is - you aren't going to be able to "prove" the cause even if it is exactly what I claim.

Actually longer timeframes gives us lots of data on which to base future decisions. That's "proof" in the sense that it influences real behavior.

...and then you go to another hole. We've been told since the first discovery of oil that we are running out, but somehow we keep finding more and more and we know there are places where it exists that we aren't even attempt to get to. It would be like saying that if a factory that makes TV's burns down, you can't make anymore TV's.

So you're saying you've invented a process to manufacture oil out of the elements, at a price as cheap as it is going today? Great - you'll be rich! Because it's certainly getting more expensive to find and drill, which will continue to increase pricing. On its own, offshore drilling is $5-$6/bbl more than conventional onshore, and I've read that there's a shortage of the mobile offshore platforms and the price of those is going up. So production costs are going up faster than new exploration technologies can hold them down. What will that do to the price? Hmmmmmmmm.

For additional supply? We are?

Again with faulty economics. Monopoly, oligopoly, and competition are looked at over total supply, not marginal supply.

Demand is going down, but not any more significantly than it was back a month or so ago when we had record prices. Not so significantly that we can look at the increased supply that the slightly reduced demand has produced and negate the effect to prices that a similar or greater increase in supply (provided by us in the future} would likely cause. This all just illustrates the phoniness of the "oil twenty years from now (a myth in the first place) can't have any real impact on prices" lie. You can't say that when you have no idea of what demand will be in 20 years with increased competition from alternatives or what the "psychology" of the market might be at that time. I explained what would move the markets and the last thing needed was a psychological push. When it was applied, prices dropped heavily. We need to keep providing those pushes and the markets will stay stable as long as there is no real (not artificial) threats to supply above and beyond the norm.

You keep talking in circles on whether demand is down or not among other thing. I see it here again - 'Demand is down, but not that much that it will ruin my argument'. 'You can't predict what's going to happen, but I can'. 'The timeframe is too short to prove any causation, but I predicted exactly what would happen and it did' Again - and on all 3 counts - which is it? On Friday, Obama (disappointingly, in my opinion) reversed his position on offshore drilling, so now both presidential candidates are in favor of it. By your model, that would have been another 'psychological push' immediately dropping prices. Yet there has been no significant drop. How do you explain that, swami?

[CreepDogg]

Here's a great real-world example of the relationship between supply and price.

North Dakota's Real-Life Jed Clampett

Of note:

It's always been known there was oil in the region, but it wasn't always cost effective to drill for it or the technology wasn't good enough. When oil was cheap overseas, it also was easier for a company to import it, rather than explore for it, experts say. But that's all changed with high oil prices.

[Chongo]

This what I have been saying. When there is serious noise about going after shale and deep oil, OPEC ups production to drop prices below what is economical to retrive those sources
http://forums.macnn.com/95/political...s/#post3636384

[CreepDogg]

Imagine what OPEC would do if there was serious talk of making a run at cutting oil consumption in half.

[Chongo]

That would have to include India and China(where the government basically pays for your gas)

[CreepDogg]

If there was technology available to cut oil consumption in half, why wouldn't India and China embrace it? Also - just to get the numbers out there - cutting consumption in half today would mean:

US - 10.5M bbls/day
China - ~3.5M bbls/day
India - ~1M bbls/day

[vmarks]

After an interesting article on solar panel installation for the home, Loyd Case at ExtremeTech has written a follow-up after about a month of normal use. Posting an $11.34 electric bill (roughly 3% of previous months), Loyd shares his experiences using solar power and how it can be fun for the geek, with computer monitoring services and power generation data. Of course, solar power isn't all fun and games, given the amount of required maintenance — even unpredictable maintenance, like wiping off accumulated ash from fires in Northern California."

http://www.extremetech.com/article2/...2308674,00.asp

and

http://www.extremetech.com/article2/...2326042,00.asp

are the articles, before and follow-up.

[stupendousman]

Originally Posted by CreepDogg 

Imagine what OPEC would do if there was serious talk of making a run at cutting oil consumption in half.

Imagine what would happen if we DID BOTH!?!?!

[stupendousman]

Originally Posted by CreepDogg 

Actually longer timeframes gives us lots of data on which to base future decisions. That's "proof" in the sense that it influences real behavior.

How could a longer timeframe ever prove that the final piece of the puzzle that was impetus for changing the "psychology" of the market was Bush's action in regards to drilling?

So you're saying you've invented a process to manufacture oil out of the elements, at a price as cheap as it is going today? Great - you'll be rich! Because it's certainly getting more expensive to find and drill, which will continue to increase pricing. On its own, offshore drilling is $5-$6/bbl more than conventional onshore, and I've read that there's a shortage of the mobile offshore platforms and the price of those is going up. So production costs are going up faster than new exploration technologies can hold them down. What will that do to the price? Hmmmmmmmm.

I'm guessing that even with added cost, the increase in supply will go above and beyond covering it in the marketplace. If I make widgets and I'm the only widget maker and widgets are in high demand, I can charge what I want - giving myself a 100% profit margin. Some guy comes along and decides he's going to take advantage of the demand and starts making widgets as well. Since he's the new guy, he can't take advantage of economies of scale the same as his competitor and his costs to create the widgets are higher. Since the demand is strong and he can get by with lower profit margins (say 30%) he's still getting rich even though he's adding supply at a higher production cost. You are sort of looking at this as a "zero sum" game.

Again with faulty economics. Monopoly, oligopoly, and competition are looked at over total supply, not marginal supply.

Again with the insistence on the inflexible use of your textbooks. If you aren't aware of what the markets think of OPEC's almost total control of additional supply, then your Econ 101 manuals won't help you understand what is going on.

You keep talking in circles on whether demand is down or not among other thing. I see it here again - 'Demand is down, but not that much that it will ruin my argument'.

I've never said that demand wasn't down slightly, and I'm sorry if the facts ruin YOUR argument.

'You can't predict what's going to happen, but I can'. 'The timeframe is too short to prove any causation, but I predicted exactly what would happen and it did' Again - and on all 3 counts - which is it?

You can predict what will happen the same as I. I explained what would move markets when prices were artificially high, and when those criteria were put into place, they did. Everyone said that the price was clearly just a reflection of supply/demand, and now that the price has dropped dramatically, you get quotes from experts that "prices are still too high in relation to demand and have further room to fall." I've been amazingly consistent and everyone else is either changing their tune or looking for reasons why their insistence that $4.00 a gallon gas was here to stay has suddenly changed when it's clear that the price wasn't in any way a direct reflection of current supply/demand analysis. You can't PROVE what goes on in people's heads to cause the psychological shift in the market that I predicted. Your inability to grasp that there's more than basic economic principles at work here is what makes your mind move around in circles.

On Friday, Obama (disappointingly, in my opinion) reversed his position on offshore drilling, so now both presidential candidates are in favor of it. By your model, that would have been another 'psychological push' immediately dropping prices. Yet there has been no significant drop. How do you explain that, swami?

Prices are going down - not up. We need to keep pushing to keep prices low, and continuing to move on a path to increase domestic output will do that. Now that the prices are going down, there isn't likely going to be huge drops, and in fact at some point, the price will reflect actual current supply/demand and "pushing" alone won't work. That's why we also have to reduce demand as part of the strategy I suggest. At his point, we can't drill or conserve our way to stable energy prices.

[CreepDogg]

Originally Posted by stupendousman 

I'm guessing

Exactly.

that even with added cost, the increase in supply will go above and beyond covering it in the marketplace. If I make widgets and I'm the only widget maker and widgets are in high demand, I can charge what I want - giving myself a 100% profit margin. Some guy comes along and decides he's going to take advantage of the demand and starts making widgets as well. Since he's the new guy, he can't take advantage of economies of scale the same as his competitor and his costs to create the widgets are higher. Since the demand is strong and he can get by with lower profit margins (say 30%) he's still getting rich even though he's adding supply at a higher production cost. You are sort of looking at this as a "zero sum" game.

Depends on what prices the market will bear. You're hearing a lot of noise about drilling right now because of high prices - suppliers want in on the high prices and drilling, even in ways that are expensive, makes economic sense to them. If prices go down, the more expensive methods make less sense. Suppliers don't enter a market with the intent of driving prices down. You're assuming your widget maker 'automatically' will make a profit. Not the case.

Again with the insistence on the inflexible use of your textbooks. If you aren't aware of what the markets think of OPEC's almost total control of additional supply, then your Econ 101 manuals won't help you understand what is going on.

Again with the insistence that the fundamentals of economics no longer apply.

I've never said that demand wasn't down slightly, and I'm sorry if the facts ruin YOUR argument.

Circles. Circles. Circles. Yes you did.

Originally Posted by stupendousman, from an earlier post

What I can show is that supply/demand isn't really that much significantly different now as it was when prices where at record levels and climbing.

You can predict what will happen the same as I. I explained what would move markets when prices were artificially high, and when those criteria were put into place, they did. Everyone said that the price was clearly just a reflection of supply/demand, and now that the price has dropped dramatically, you get quotes from experts that "prices are still too high in relation to demand and have further room to fall." I've been amazingly consistent and everyone else is either changing their tune or looking for reasons why their insistence that $4.00 a gallon gas was here to stay has suddenly changed when it's clear that the price wasn't in any way a direct reflection of current supply/demand analysis. You can't PROVE what goes on in people's heads to cause the psychological shift in the market that I predicted. Your inability to grasp that there's more than basic economic principles at work here is what makes your mind move around in circles.

I understand there are more than basic economic principles at work here. There are complex ones too. That doesn't mean the basic ones don't apply. I'm simply showing you where your arguments violate basic principles, and we've agreed there have been no results that prove your arguments to be true. I don't think your argument holds much weight if it violates basic economic principles, no matter how much you wish to disregard them.

Prices are going down - not up. We need to keep pushing to keep prices low, and continuing to move on a path to increase domestic output will do that. Now that the prices are going down, there isn't likely going to be huge drops, and in fact at some point, the price will reflect actual current supply/demand and "pushing" alone won't work. That's why we also have to reduce demand as part of the strategy I suggest. At his point, we can't drill or conserve our way to stable energy prices.

So basically your theory holds no water. There were more actions similar to Bush's speech, and yet .....nothing...... happened.

I'm still waiting to see your plan on how we glut the market with supply to reduce prices, and reduce demand simultaneously.

[stupendousman]

Originally Posted by CreepDogg 

Depends on what prices the market will bear. You're hearing a lot of noise about drilling right now because of high prices - suppliers want in on the high prices and drilling, even in ways that are expensive, makes economic sense to them. If prices go down, the more expensive methods make less sense.

Prices won't go down unless demand goes down and/or supply goes up, ignoring the fact that we are dealing with an artificially inflated price at the moment. Prices aren't going to go down unless OPEC reacts to all the "pushing" they are hearing and increases production themselves (which they have, but they can do more). If OPEC reacts and increases production, then prices stabilize and the US has achieved a goal. It doesn't matter if we actually increase production or not - the psychological effect PLANNING TO will cause our competitors to react. It's happened time and again. As well, OPEC remembers how long it took them to recover from the seventies when high prices caused people to start energy savings with insulation and better fuel economy which reduced demand. They don't want to go back to that point. Couple that with increased research into alternatives and actually increasing supply somewhat, and you have the formula for stabilized prices

Suppliers don't enter a market with the intent of driving prices down.

Suppliers enter a market with the intent of making money. If they can supply something for less cost than their competitor in order to steal market share, and still make a profit, they will.

Again with the insistence that the fundamentals of economics no longer apply.

I didn't say they didn't apply, but rather that they were not the only things effecting the price and refusing to take action on those other things will simply result in failure of any kind of energy strategy as far as prices go. As we've seen, even the experts agree that "psychology" is playing a role. I'm not sure they teach pyschology in Econ 101.

Circles. Circles. Circles. Yes you did.

Feel free to quote me where I said that demand has not declined.

I understand there are more than basic economic principles at work here. There are complex ones too. That doesn't mean the basic ones don't apply. I'm simply showing you where your arguments violate basic principles, and we've agreed there have been no results that prove your arguments to be true.

Even the experts are now saying that the price of oil goes against the basic principles of "supply and demand". That's what happens when there are "corrections" to the market. That doesn't mean that if there were real significant changes to supply/demand that actually effected the value of oil that they would not necessarily apply. But rather that the price is effected by hunches, guesses, bets and bluffing almost as much as pure economics. That's why we are seeing such a drop right now.

As far as my results go, I said that there is nothing (and really there could never be anything) to "prove" my claim. You can't prove what was in the minds of speculators. Though, time and time again OPEC and the market has reacted to every "push" for things that would either decrease demand or increase supply, resulting in lower prices. You can ignore that if you want and strictly look at current supply/demand, but as it's been shown, that's a process that is likely to fail.

I don't think your argument holds much weight if it violates basic economic principles, no matter how much you wish to disregard them.

My argument acknowledges both basic economic principles and the fact that despite those principles, people will act based on what they think their future PERCEIVED interests might be despite there being any real concrete proof of how their interests might be effected. Otherwise, there would be no "corrections" or a situation where oil is priced well over what it should be given supply/demand (the opinion of the expert I quoted) Hunches, guesses, attempts to see into the future and gut feelings are added into the equation along with economic analysis. If you act ONLY on the economic analysis you are going to come up short, just as the experts who could not forsee diving oil prices just a month or two ago did. If this was just about pure economic principles, there would be nothing to "speculate" about and there would be no risk.

So basically your theory holds no water. There were more actions similar to Bush's speech, and yet .....nothing...... happened.

Um..the price of oil for the most part keeps going down. That is..."something". My theory wasn't that for every "push" there would be a specific hit to the market. I stated that there needed to be a major push to turn things around and that we needed to keep pushing in order to keep the price low. As well, I stated that this can only go far as "pushing" will only act to correct overvalue of the market. We still need to do something about the demand side and in order for the "pushes" to have any credibility we need to be moving towards more production. Yo

So let's see....

Demand down - price still went up.

Saudis said they'd increase production - prices still went up

Bush throws down the gauntlet to Congress and now even Obama is on the offshore oil drilling bandwagon - prices going down.

I don't think it takes an Economics PHD or a rocket scientist to see that all three elements taken together have likely played the role in the recent change to the market. You can ignore if if you want, but I don't think many with even a moderate level of observation skills will do the same.

I'm still waiting to see your plan on how we glut the market with supply to reduce prices, and reduce demand simultaneously.

I never said we needed to "glut" the market. The amount of increased supply is secondary to simply providing new sources for increased supply. Remember, we are dealing with more than JUST supply/demand here. Once we get the price down to true market value, we focus on efforts to further decrease demand.

[CreepDogg]

Originally Posted by stupendousman 

Prices won't go down unless demand goes down and/or supply goes up, ignoring the fact that we are dealing with an artificially inflated price at the moment. Prices aren't going to go down unless OPEC reacts to all the "pushing" they are hearing and increases production themselves (which they have, but they can do more). If OPEC reacts and increases production, then prices stabilize and the US has achieved a goal. It doesn't matter if we actually increase production or not - the psychological effect PLANNING TO will cause our competitors to react. It's happened time and again. As well, OPEC remembers how long it took them to recover from the seventies when high prices caused people to start energy savings with insulation and better fuel economy which reduced demand. They don't want to go back to that point. Couple that with increased research into alternatives and actually increasing supply somewhat, and you have the formula for stabilized prices

So, basically, "Let's not and say we did"? OPEC will increase or decrease production to maximize profits. That's pretty much all they're doing. They'll increase production, increasing dependence. Investments in alternatives will go down because fewer will see an upside (short- to mid-term profit potential). Then in a bit, we'll be right back where we started.

Suppliers enter a market with the intent of making money. If they can supply something for less cost than their competitor in order to steal market share, and still make a profit, they will.

Yes. The part in bold is key. Suppliers have fixed costs to overcome. That's why you see the stories about drilling in places that are harder to get to when prices go up.

I didn't say they didn't apply, but rather that they were not the only things effecting the price and refusing to take action on those other things will simply result in failure of any kind of energy strategy as far as prices go. As we've seen, even the experts agree that "psychology" is playing a role. I'm not sure they teach pyschology in Econ 101.

That would be Psych 101. And yes - even in Econ 101 it's understood that perception impacts supply and demand and impacts markets. As we've talked about, it tends to follow and exaggerate the market, and from time to time 'corrections' occur. That doesn't mean the fundamentals don't apply.

Feel free to quote me where I said that demand has not declined.

Uh, maybe you should read my prior post again. I did.

Even the experts are now saying that the price of oil goes against the basic principles of "supply and demand".

Are you seeing a consensus in what people are saying that the rest of the world is not seeing? I think I saw you quote one guy. Is that "the experts"? Not to mention - I don't think anyone has said the price goes against the basic principles of supply and demand. Perceptions are that demand is up and supplies are tight. High prices would be right in line with the principles of supply and demand, assuming those perceptions. If widespread perceptions prove to be untrue, the market will 'correct' itself. You'll get various opinions on whether the actual situation supports actual prices at any given time.

That's what happens when there are "corrections" to the market. That doesn't mean that if there were real significant changes to supply/demand that actually effected the value of oil that they would not necessarily apply. But rather that the price is effected by hunches, guesses, bets and bluffing almost as much as pure economics. That's why we are seeing such a drop right now.

Yes - and where did I ever say that was not true? If you like, I'll concede it again - speculation and perception have an impact on the market. However, people still follow the principles of economics in doing so - they're just hedging based on perceived data. If someone were to speculate there will be tight supply, they will hedge that the price will go up.

As far as my results go, I said that there is nothing (and really there could never be anything) to "prove" my claim.

Exactly. Yet you've been here thumping your chest about it.

Originally Posted by an earlier stupendousman post

T HAPPENED NOW and did so with much more of a drop than it was suggested it would do 20 years from now (just as I said it would).

My argument acknowledges both basic economic principles and the fact that despite those principles, people will act based on what they think their future PERCEIVED interests might be despite there being any real concrete proof of how their interests might be effected. Otherwise, there would be no "corrections" or a situation where oil is priced well over what it should be given supply/demand (the opinion of the expert I quoted) Hunches, guesses, attempts to see into the future and gut feelings are added into the equation along with economic analysis. If you act ONLY on the economic analysis you are going to come up short, just as the experts who could not forsee diving oil prices just a month or two ago did. If this was just about pure economic principles, there would be nothing to "speculate" about and there would be no risk.

Again, where have I said that perceptions play no part? We've been over this again and again. That said, I think it's unwise to set long-term policy based on perceptions. You set long-term policy based on what you can back up. To me, the goal is energy independence. No amount of additional drilling leads us there, no matter what perceptions you conjure.

Um..the price of oil for the most part keeps going down. That is..."something". My theory wasn't that for every "push" there would be a specific hit to the market. I stated that there needed to be a major push to turn things around and that we needed to keep pushing in order to keep the price low. As well, I stated that this can only go far as "pushing" will only act to correct overvalue of the market.

Oil prices were close to $150. Demand was dropping, the dollar strengthened a bit and Bush made his little speech. Prices dropped to around $120 and have hovered there ever since. Obama flip-flopped, adding more "push", and ...nothing... So is the 'correction' over and the market now accurate?

We still need to do something about the demand side and in order for the "pushes" to have any credibility we need to be moving towards more production.

Once again, how do you propose we do that if prices are low because of a flooded market?

So let's see....

Demand down - price still went up.

Really? Do you know whether the market had sufficient time to react to data and build up excess reserves that would drop prices in the timeframe? No timeframe is stated.

Saudis said they'd increase production - prices still went up

Bush throws down the gauntlet to Congress and now even Obama is on the offshore oil drilling bandwagon - prices going down.

I don't think it takes an Economics PHD or a rocket scientist to see that all three elements taken together have likely played the role in the recent change to the market. You can ignore if if you want, but I don't think many with even a moderate level of observation skills will do the same.

Yes - it's possible perception, politics, and speculation can affect the market. We've talked about this. Remember it goes both ways. What if demand 'corrected' the market on its own, and Bush's 'gauntlet' actually caused a price 'black hole' where prices are artificially deflated due to a perception of excess supply? What if offshore or Alaska drilling proves to be more expensive or take longer than originally thought due to weather or inaccuracies in geological data or whatever? The market would have to 'correct' with a price increase. I'm not saying that's what's happened, because I don't know. But neither do you.

I never said we needed to "glut" the market. The amount of increased supply is secondary to simply providing new sources for increased supply. Remember, we are dealing with more than JUST supply/demand here. Once we get the price down to true market value, we focus on efforts to further decrease demand.

I would define 'glutting' the market as increasing supply with the intent of deflating prices (that's why I used that word in the first place). So yes, you're saying we need to glut the market.

To decrease demand when prices are low (as I've said, I think artificially low), you have to come up with alternatives that cost less. How do you propose to do that? I'm simply saying we should at least level the playing field and let each market play itself out.

[stupendousman]

Originally Posted by CreepDogg 

So, basically, "Let's not and say we did"? OPEC will increase or decrease production to maximize profits. That's pretty much all they're doing.

You don't maximize profits by pricing yourself in a way that increases competition and takes away some of the market from you. That's why OPEC acts to control prices and the market via their supply.

Yes. The part in bold is key. Suppliers have fixed costs to overcome. That's why you see the stories about drilling in places that are harder to get to when prices go up.

Fixed costs which currently still allow some producers to make up to 400% profit on a barrel of oil. They can afford to sell at reduced prices even while drilling in places that are "harder to get to" and still make a profit.

That would be Psych 101. And yes - even in Econ 101 it's understood that perception impacts supply and demand and impacts markets. As we've talked about, it tends to follow and exaggerate the market, and from time to time 'corrections' occur. That doesn't mean the fundamentals don't apply.

It depends on what your definition of "apply" is.

Uh, maybe you should read my prior post again. I did.

I read it twice. That's why I asked you point out where I said what you claim. It wasn't there.

Yes - and where did I ever say that was not true? If you like, I'll concede it again - speculation and perception have an impact on the market.

Okay, then it's clear you just wish to argue.

We take care of both the demand side, and fight against speculation and perception. My solution works. It recognizes both economic and psychological forces in play. Any "solution" which doesn't will fail.

I'm pretty much done arguing now against "strawmen" like "you claimed demand is not down", "you claim "fundementals don't count for anything" and "you suggest we need to flood the market". I've never claimed any of that and I really have no desire to engage you in YOUR circular arguments.

[CreepDogg]

Well, I've pointed out examples of circular arguments and no one has pointed out any specific circular logic in mine, but whatever. I agree this has gotten tedious and we're so far down a tangent that I'm not even sure what we're arguing about any more. So let's back up - what are we arguing about? I think it's this: You claim there are 3 things necessary, working congruently, to send oil prices down - approximately:

1. a drop in demand
2. OPEC to increase supply
3. The US (or some other non-OPEC supplier) to step up and announce a further increase in supply through additional drilling, emptying of reserves, or whatever.

Correct me if I'm not quite accurate but I think that's the crux of it.

I claim that #2 and #3 are not necessary. Not that those actions can't influence prices - they can - they are part of supply and demand, after all (mostly the supply part). Simply that they aren't necessary to lower prices to a sustainable market level. You don't need #1, #2, and #3 to impact prices, you need #1, #2, or #3. (Or, I suppose, a multitude of other things...)

I would then add that #1 works in tandem with the overarching goal of energy independence (a decrease in demand for an item leads to an increase in demand for needed substitutes), while #2 and #3 work against it. (An increase in supply requires a corresponding increase in quantity demanded to maintain equilibrium - it may drop the price but essentially means more is being consumed.) That's the reason I oppose additional drilling and the reason I think it's logically consistent to ask for additional supply neither from OPEC nor ourselves.

So basically, I think our argument boils down to and vs. or.

[el chupacabra]

another factor I oddly haven't seen mentioned in the thread is that people are buying oil as a hedge against inflation.

everyone's throwing the word speculation around but thats really too general. As long as people think inflation is getting worse oil will be high. And with the government and fed bailing out the useless gambling financial institutions to protect the interests and poor choices of the richest people in the world,... most of them foreigners I might add... inflation isnt getting better any time soon.

[stupendousman]

Originally Posted by CreepDogg 

You claim there are 3 things necessary, working congruently, to send oil prices down - approximately:

Three things need to send oil prices down when they are at record levels....

CORRECTED

1. a drop in demand
2. OPEC to increase supply
3. The US (or some other non-OPEC supplier) to step up and announce a further future increase in supply through additional drilling, emptying of reserves, or whatever.

Correct me if I'm not quite accurate but I think that's the crux of it.

I claim that #2 and #3 are not necessary.

Demand had been dropping while prices where going up. Drops in demand at record prices is something that could have been forseen, but even higher prices were forcast. OPEC also announced increased supply and prices still rose.

Not that those actions can't influence prices - they can - they are part of supply and demand, after all (mostly the supply part). Simply that they aren't necessary to lower prices to a sustainable market level. You don't need #1, #2, and #3 to impact prices, you need #1, #2, or #3. (Or, I suppose, a multitude of other things...)

I claimed you needed the three things back before #2 or #3 were a reality, in order to convince speculators that despite the tightness of the market and what they saw as future problems for supply, that the price of oil was too high. Once those 3 criteria where put into place, prices dropped. I don't know how I can provide further proof of my claims other than for what I claim to actually happen. You can disagree, but your claims DID NOT happen. You claim all you want, but if it's not working, it ends up being not as credible.

[CreepDogg]

Originally Posted by stupendousman 

Three things need to send oil prices down when they are at record levels....

CORRECTED

1. a drop in demand
2. OPEC to increase supply
3. The US (or some other non-OPEC supplier) to step up and announce a further future increase in supply through additional drilling, emptying of reserves, or whatever.

Just curious - did you intend to change something here? This is the same as what I'd posted.

I claimed you needed the three things back before #2 or #3 were a reality, in order to convince speculators that despite the tightness of the market and what they saw as future problems for supply, that the price of oil was too high. Once those 3 criteria where put into place, prices dropped. I don't know how I can provide further proof of my claims other than for what I claim to actually happen. You can disagree, but your claims DID NOT happen. You claim all you want, but if it's not working, it ends up being not as credible.

Ah, but my claim DID happen. In the story I'd posted at the time, people were talking about the fact that data had just come out showing that reserves were up (a consequence of a drop in demand) and that the dollar was strengthening. That was around the same time as #3. So at best you can say it's unclear what the cause was and what the 'evil speculators' reacted to. Yet you claimed 'victory', and still seem to be. Sorry, but you need to be called out on that.

We'll never know, so quite frankly I don't care any more. I'm less concerned with the price and more concerned with carving a path to energy independence.

[stupendousman]

Originally Posted by CreepDogg 

Just curious - did you intend to change something here? This is the same as what I'd posted.

No, there was a slight change.

Ah, but my claim DID happen. In the story I'd posted at the time, people were talking about the fact that data had just come out showing that reserves were up (a consequence of a drop in demand) and that the dollar was strengthening. That was around the same time as #3. So at best you can say it's unclear what the cause was and what the 'evil speculators' reacted to. Yet you claimed 'victory', and still seem to be. Sorry, but you need to be called out on that.

Demand had been dropping and supply had increased. ALL BEFORE #3. #3 happened and prices dropped dramatically. As the story I posted earlier points out, the prices started dropping almost as soon as the President gave his speech. At this point, prices have dropped about 20%. which seems to point to this being more than just a downward "blip", but rather the start of a major correction. There's nothing to "call" me out on. Really.

Besides, it seems more and more people are beginning to see things the way I saw them a month or two ago

The great oil bubble has burst - Telegraph

Just possibly, it means that what investors refer to in shorthand as the great "oil up" story has finally revealed itself not as the fundamental reflection of scarce supply that its adherents liked to claim, but as a simple, speculative bubble that was always going to burst.

The market's conviction that oil prices were set on an unstoppable upswing was underpinned by a set of mantras to be chanted daily before breakfast by anyone hoping to make money by following the crowd: insatiable demand from China; indolent Opec sheikhs unwilling to open the supply taps; that nasty Vladimir Putin playing political hardball with Russia's oil and gas resources; those mad Iranian mullahs hell-bent on nuclear conflict; and beyond all these, the looming threat of "peak oil", the inevitable moment when Mother Earth's carbon-fuel gauge starts pointing towards empty.

One way or another, said the fundamentalists, the only destination for oil prices in the medium term was somewhere north of $200 a barrel. And hooray to that, chorused the green lobby, because it may be the only thing that will ever make us wake up to the need to stop cooking the planet with carbon emissions.
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Layered on top of these long-term factors were the short-term headlines. As a matter of market psychology for the past several years, any news item suggesting temporary disruption of supply - rebel activity around Nigerian refineries, strikes in Venezuela, hurricane warnings in the Gulf of Mexico, Anatolian shepherds lighting their cooking fires beside a leaking pipeline - has motivated oil traders to push prices upwards: sometimes just long enough to turn a quick buck before settling back for the next jump, but always trending higher.

Now the psychological tide seems to be turning. On the supply side, Saudi Arabia, the dominant member of Opec, is now signalling greater willingness to open the oil taps. When the princes of the desert made a rather smaller gesture of willingness in that direction in June, the market took no notice and prices marched on. But in the new mood, any hint of an increase in Saudi supply is a reason to mark down prices.

Again..what has changed is the "psychology". If you don't have a plan in place which will decrease demand AND push the psychology of the market in a way that ensures stable pricing, your strategy isn't likely to work given that we a long ways from being able to be totally oil free any time in the very near future.

[CreepDogg]

...and the chest-thumping continues. You say there's no way to "prove" your outcome (and Bush's speech happened about the same time as reports on increasing reserves), yet you prattle on about how right you are. That in itself is a circular argument. Yes - needs to be called out. I'll be happy to continue to point out your faulty economics and circular arguments if you want to continue to make them.

[stupendousman]

Originally Posted by CreepDogg 

...and the chest-thumping continues. You say there's no way to "prove" your outcome (and Bush's speech happened about the same time as reports on increasing reserves), yet you prattle on about how right you are.

I WAS right about what would happen. The outcome was proven and I also believe that the circumstantial evidence points to my being right due to the reasons I stated. I do understand however that the evidence [b]is[b] circumstantial and not enough to prove my point definitively, as far as why what I claimed would happen did happen.

There's really not much you can provide as "proof" as to what's going on in people's minds unless they tell you. I guess if we ask everyone involved in oil speculation what it was that caused them to decide that the price of oil was too high, but that isn't likely to happen.

There is nothing "circular" about my argument. You want to find points that go together perfectly and consider them mutually exclusive via strawmen. That makes little sense.

[CreepDogg]

No strawman necessary to illustrate circularity.

Originally Posted by stupendousman 

I WAS right about what would happen.

One sentence later...

Originally Posted by stupendousman 

I do understand however that the evidence is circumstantial and not enough to prove my point definitively, as far as why what I claimed would happen did happen.

Combine that with this nugget...

Originally Posted by stupendousman, from an earlier post

It depends on what your definition of "apply" is.

...and it's almost like you're channeling Bill Clinton!

[olePigeon]

CreepDogg, just stick him on ignore. It's in one ear and out the other with this guy. Just give him 1 or 2 pages and he'll ask the exact same questions, bring up the exact same points he did before, completely ignoring (or forgetting?) that you've already answered them.

I've quite literally lead him through a step at a time, practically sentence-by-sentence, addressing his concerns one at a time using answers I had already provided in a previous page or thread. Even still, a page later, he asks the exact same question... again... as if it had never been addressed in the first place. He's a broken record.

[stupendousman]

Creepdog,

I see your problem. Logic isn't your strong suit. You are incapable of getting your brain wrapped around arguments that are more complex than X=Y. Let me take the time to outline what you are having difficulties with. Maybe if I diagram it like a math problem, or formula, or some other basic conceptual description you'll be about to grasp what I've said. It's clear that you're not able to do it by yourself:

If someone says "Despite everyone saying that Y will happen, I believe X will happen but only if A,B and C would exist, because A,B and C are necessary to cause a reaction with Z." Most "experts" here disagreed.

A,B, and C came into being, and X DID happened. I WAS RIGHT. There's really nothing to debate about my correct prediction here.

It can't be proven though if the REASON for X happening is the reaction between A,B and C with Z. It could reasonably be suggested that it wasn't, even though most of the circumstantial evidence seems to point in that direction.

Prediction: CORRECT
Reason why prediction was correct: Unprovable.

Two separate things.

Your insistence that somehow this represents a "circular argument" only goes to show limitations on your understanding of the argument. That's really not my fault, no more than it's my fault that you can't see outside the "economic fundamental" box as it appears even some other experts are doing now.

olePigeon: I vaguely remember asking certain questions several times and not really getting answers. I remember people talking around the answers and being unable to justify things, and my pressing for more information, but like the current argument it's not my fault when people are so stuck in their way of thinking that they aren't able to see the points of others.

[CreepDogg]

OK - here's another logic lesson then.

I believe X will happen but only if A,B or C would exist, because A,B or C are necessary to cause a reaction with Z."

A,B, and C came into being, and X DID happen. I WAS JUST AS RIGHT. There's really nothing to debate about my correct prediction here.

It can't be proven though if the REASON for X happening is the reaction between A,B or C with Z. It could reasonably be suggested that it wasn't, even though most of the circumstantial evidence seems to point in that direction.

Prediction: EVERY BIT AS CORRECT
Reason why prediction was correct: Unprovable.

Two separate things.

And yet I'm not the one thumping my chest about how right I was.

"I WAS RIGHT*"

*even though there's absolutely no proof of causation in the sequence of events

is a circular argument. What's your point, exactly? There's no predictable, repeatable behavior off of which to base decisions (in fact, the A, B, and C scenario occurred again with different results which goes to disprove your argument, and you pawn that off as somehow different). What exactly were you so "RIGHT" about if if can't be proven?

[besson3c]

For some reason this argument reminds me of that episode of the Simpsons where Lisa sells her Dad that rock that keeps tigers away.

[stupendousman]

Originally Posted by CreepDogg 

OK - here's another logic lesson then.

I believe X will happen but only if A,B or C would exist, because A,B or C are necessary to cause a reaction with Z."

A,B, and C came into being, and X DID happen. I WAS JUST AS RIGHT.

A and B happened. X did not happen. It wasn't until C happened that X happened. That shows that A and B can happen and X still not appear. My claim was that in order for X to happen when prices are at record highs as they were, they needed C as well. That's what happened. It wasn't just one - it wasn't until ALL where present.

Nice try though

And yet I'm not the one thumping my chest about how right I was.

Because you weren't right. A and B happened. Prices went up. I don't believe though you said that C would do anything initially either. Not until it was clear that it had made an impact.

"I WAS RIGHT*"

*even though there's absolutely no proof of causation in the sequence of events

is a circular argument.

I don't have to prove causation to simply prove that my prediction came true, and just about everyone else's didn't. The circumstantial evidence however does point in the direction that the reason I gave for why my prediction is true, to be true. Maybe you just don't understand what a "circular argument" is?

What's your point, exactly? There's no predictable, repeatable behavior off of which to base decisions (in fact, the A, B, and C scenario occurred again with different results which goes to disprove your argument, and you pawn that off as somehow different).

When in the past month has prices went back to record highs, and A, B and C happened? It hasn't. You are grasping at straws.

[CreepDogg]

Originally Posted by stupendousman 

A and B happened. X did not happen. It wasn't until C happened that X happened. That shows that A and B can happen and X still not appear. My claim was that in order for X to happen when prices are at record highs as they were, they needed C as well. That's what happened. It wasn't just one - it wasn't until ALL where present.

Can you prove C caused it? No. Obviously it's you that doesn't understand logic.

Because you weren't right. A and B happened. Prices went up. I don't believe though you said that C would do anything initially either. Not until it was clear that it had made an impact.

C is about scaring the 'evil speculators' into submission, right? Where did I say speculation plays no role?

I don't have to prove causation to simply prove that my prediction came true, and just about everyone else's didn't.

Yes, you kinda do. If you say only A, B, and C will cause X (which is what you said), you need to prove that causation. Otherwise, you're not as "RIGHT" a you claim you are.

When in the past month has prices went back to record highs, and A, B and C happened? It hasn't. You are grasping at straws.

Ah, so your theorem only holds true when prices are at record highs. I guess there's no need to talk about drilling any more until the price hits $150 then. Cool!

I was talking about when the presidential candidates, Obama, in particular, flip-flopping on the drilling issue. That's more of your patented "psychological pressure". Same scenario. Different result.

[stupendousman]

[QUOTE=CreepDogg;3705605]Can you prove C caused it? No. Obviously it's you that doesn't understand logic.[quote]

Probably not beyond a reasonable doubt. I've just strong circumstantial evidence. But the fact is I DON'T HAVE TO PROVE CAUSATION. to prove that what I predicted would happend DID. The results are clear.

But hey...I"ll agree. Up is down, right is left and a straight line is a circle. I'll accept your version of "logic". You win.

[Chongo]

I missed this last night, but here is the synopsis from the History Channel website:http://www.history.com/shows.do?epis...&action=detail

Modern Marvels
Episode: Secrets of Oil
Rubber, Plastic, Nylon, Aerosols, Resins, Solvents, and Lubricants--none can exist without oil. If we stopped driving our cars tomorrow, America would still need five million barrels of oil a day. Visit Vulcan Materials, where oil tanks are emptied into massive double-barrel mixers to make asphalt and then continue to the Rolls Royce Aerospace Facility where complex jet fuels are blended. Travel back to the 1870's to see how an unemployed whale oil salesman turned a greasy oil-drilling by-product into a household staple: Vaseline. Finally discover how cutting-edge recycling techniques can breathe new life into used motor oil, and where a number of renewable fuels and technologies take aim at oil sovereignty.

Rating: TVPG

Running Time: 60 minutes

Genre:Science & Technology

There will still be a need for petroleum until those new technologies mature.

[dcmacdaddy]

Here is an interesting article from today's Washington Post that details the extent to which speculators, and one company in particular, had influenced the price of oil on the two main US commodity exchanges.
A Few Speculators Dominate Vast Market for Oil Trading - washingtonpost.com

I'm sure this will help bolster some of those on here claiming the price rise was due primarily to speculation. But, at the same time, I would like to see some sort of economic or mathematical analysis that calculates the extent of that speculative influence apart from normal market forces of supply and demand.

[stupendousman]

Thanks for the link!

My argument always have been that supply and demand play a HUGE part in the current price of oil, but that speculation and market manipulation can play as much or more a part on extreme shifts in price

The CFTC, which learned about the nature of Vitol's activities only after making an unusual request for data from the firm, now reports that financial firms speculating for their clients orfor themselves account for about 81 percent of the oil contracts on NYMEX, a far bigger share than had previously been stated by the agency. That figure may rise in coming weeks as the CFTC checks the status of other big traders.

So now the regulator who assured us just a month or so ago that everyone was following the rules and that speculation wasn't a big deal is issuing a big "whoops"? You can't have a single player have control nearly 100% of something and not suspect that it will have an effect on that thing's price. It doesn't even pass the "sniff test". That's why regulators usually don't allow investors to get control of that much of the market.

Vitol was "flying under the radar" apparently by using a misleading classification and buying up the market for a single investor. I'm not a betting man, but I'd almost be willing to wage my current year's salary that George Soros is involved somehow.

[stupendousman]

Just checked.

Yep.

Price of oil still trending downward.

You're welcome.

[Chongo]

oil below $92 at close 0/16/08
Looks like the Democrats are attempting to pull the wool over our collective eyes. The passed an "energy bill" that would "lift" the offshore drilling ban. There's one problem, it is filled with poison pills.

The House measure would allow drilling in waters 50 miles (80 kilometers) from shore almost everywhere from New England to Washington state as long as a state agrees to go along with energy development off its coast. Beyond 100 miles (160 kilometers), no state approval would be required. The drilling ban would remain in the eastern Gulf of Mexico

The bill would not share royalties from energy production with the adjacent states, which Republicans said would keep states from accepting any new drilling off their beaches. Republicans also cited Interior Department estimates that 88 percent of the 18 billion barrels of oil believed to be in waters now under drilling bans would remain off-limits because they are within the 50-mile (80-kilometer) protective coastal buffer.

The House bill also would:

--Provide tax credits for wind and solar energy industries, the development of cellulose ethanol and other biofuels.

--Require utilities nationwide to generate 15 percent of their electricity from solar, wind or other alternative energy sources.

--Give tax breaks for new energy efficiency programs, including the use of improved building codes, and for companies that promote their employees' use of bicycles for commuting.

These should be in separate bills. One bill to lift the ban, and one for alternative energy.

The best thing that can be done is for this bill to get bottled up in the Senate and the ban will sunset on 09/30/08. (Then really watch the price of oil drop) Then they can vote on alternative energy.

[Dual Porpoise]

Originally Posted by Chongo 

The best thing that can be done is for this bill to get bottled up in the Senate and the ban will sunset on 09/30/08. (Then really watch the price of oil drop)

Why do you think that that will cause the price of oil to drop? The amount of addition supply from such drilling is not significant, and the cost is high. Despite the environmental costs more drilling, I haven't seen a serious economist propose it, even if they believed lowering the cost of oil was a good goal. Where are you getting the impression that oil prices would drop?

[Chongo]

Originally Posted by Dual Porpoise 

Why do you think that that will cause the price of oil to drop? The amount of addition supply from such drilling is not significant, and the cost is high. Despite the environmental costs more drilling, I haven't seen a serious economist propose it, even if they believed lowering the cost of oil was a good goal. Where are you getting the impression that oil prices would drop?

From the fact that oil dropped below $92 since Bush lifted the executive ban. There are industry experts that have gone on record stating there are offshore wells that were capped when the ban went into effect and can be producing oil in 12 to 18 months.


What environmental cost? Where was the big oil spill caused by hurricanes Katrina, Gustav, or Ike? If there were any the MSM would have been all over it.

[Dual Porpoise]

Originally Posted by Chongo 

From the fact that oil dropped below $92 since Bush lifted the executive ban. There are industry experts that have gone on record stating there are offshore wells that were capped when the ban went into effect and can be producing oil in 12 to 18 months.

I think you are assuming a pretty simple system of cause and effect there. Oil markets are enormously complex, there are a lot of things going on there. Still, if you think you have a model that simple that predicts oil prices, you should be able to get rich pretty quick!

Originally Posted by Chongo 

What environmental cost?

If we burn all the oil we have now, we will create irreversible climate damage. The best climate science we have tells us that looking for more oil is the last thing we should be doing.

[stupendousman]

Originally Posted by Chongo 

From the fact that oil dropped below $92 since Bush lifted the executive ban. There are industry experts that have gone on record stating there are offshore wells that were capped when the ban went into effect and can be producing oil in 12 to 18 months.

QFT

Maybe people haven't been reading this thread. The "estimate" of how much new drilling might effect the price is a wild guess at best, given the fact that even LESS of an addition to supply of late has caused the price of oil to go down to where it is now, under $100 a barrel and it's looking to go even lower. Just a month or two ago we were assured by the folks who insisted that additional supply wouldn't effect price that we were stuck with extremely high oil prices for the foreseeable future. That of course, turned out to be false.

The idea of new drilling scares speculators and those with a tight grip on supply TO DEATH. Lack of control = lack of an ability to keep prices sky high. Prices will go down and stay down as long as efforts to increase drilling (absent any significant real disruptions to supply) continue.

[Helmling]

Originally Posted by stupendousman 

QFT

Maybe people haven't been reading this thread. The "estimate" of how much new drilling might effect the price is a wild guess at best, given the fact that even LESS of an addition to supply of late has caused the price of oil to go down to where it is now, under $100 a barrel and it's looking to go even lower. Just a month or two ago we were assured by the folks who insisted that additional supply wouldn't effect price that we were stuck with extremely high oil prices for the foreseeable future. That of course, turned out to be false.

The idea of new drilling scares speculators and those with a tight grip on supply TO DEATH. Lack of control = lack of an ability to keep prices sky high. Prices will go down and stay down as long as efforts to increase drilling (absent any significant real disruptions to supply) continue.

I still say let them leave prices sky high. Let them price themselves right out of a market. Have the government provide relief to our shipping industry and let's get off oil now.

We have the technology. Now we have the will. Energy independence will save us from untold number of messy situations around the world, from Iran to Georgia. The windfalls in economic terms are extraordinary. This is a no brainer.

[Dual Porpoise]

Agreed Helmling.

[Chongo]

Looks like the Democrats have thrown in the towel.

Democrats to let offshore drilling ban expire

WASHINGTON (AP) - Democrats have decided to allow a quarter-century ban on drilling for oil off the Atlantic and Pacific coasts to expire next week, conceding defeat in a months-long battle with the White House and Republicans set off by $4 a gallon gasoline prices this summer.

House Appropriations Committee Chairman David Obey, D-Wis., told reporters Tuesday that a provision continuing the moratorium will be dropped this year from a stopgap spending bill to keep the government running after Congress recesses for the election.

Republicans have made lifting the ban a key campaign issue after gasoline prices spiked this summer and public opinion turned in favor of more drilling. President Bush lifted an executive ban on offshore drilling in July.

The oil companies have to get on the ball and uncap the wells that were mothballed when the ban went into affect, and send ot the exploration ships on 09/30/08