[smacintush]

Crude has dropped $11 so far, India and Malaysia are forced to raise fuel prices, demand is down, the dollar is showing signs of strengthening. Some analysts use the late 70's/early 80's as an example where oil prices were sky high and the consequential 13% drop in demand created an oil glut. The same could happen here. The also say the price could go down to $60-$70 a barrel over the next few years.

Even if these predictions turn out to be inaccurate i think we can see that the sky isn't falling.

Also, the first refinery in 30 years is gonna be built in South Dakota. Dropping oil prices and more refining capacity. Seems as if gas prices WILL drop, sorry those of you who are hoping for soul-crushing gas prices to save the world.

OilVoice | Oil Hits 124 Dollars Per Barrel
Oil bubble shows sign of bursting | NECN
The Associated Press: S.D. county approves rezoning for new oil refinery

[olePigeon]

Prices go up when there's no demand, prices go up when there's too much demand. Can't win.

[Weyland-Yutani]

Originally Posted by olePigeon 

Prices go up when there's no demand, prices go up when there's too much demand. Can't win.

That would indicate fixed pricing.. wouldn't it?

[peeb]

There is no 'bubble' - the world is running out of oil. Over the medium term it will continue to rise.

[Atomic Rooster]

Originally Posted by smacintush 

Even if these predictions turn out to be inaccurate i think we can see that the sky isn't falling.

Also, the first refinery in 30 years is gonna be built in South Dakota. Dropping oil prices and more refining capacity. Seems as if gas prices WILL drop, sorry those of you who are hoping for soul-crushing gas prices to save the world.

Texas-based Hyperion Resources requested the rezoning for the $10 billion refinery, billed as a potential step toward national energy independence.

The Hyperion Energy Center would process 400,000 barrels of thick Canadian crude oil a day.

Since when is Canada part of the U.S.?

After intense speculation that high oil prices have finally begun to cut into consumer demands, the price of oil lowered to 124 dollars per barrel. The chance of further corrections in oil pricing is becoming more possible. The drop in oil prices is now 11 dollars less than the peak of 135.09 on May 22. The price of oil in Futures exchange also dropped.

There's your answer in front of your nose. People have parked their guzzlers.

[turtle777]

We all wish.

The high oil and gas prices are here for good.

We won't see prices go back to $ 70 / barrel or $ 2.50 per gallon.

-t

[smacintush]

Originally Posted by Atomic Rooster 

Since when is Canada part of the U.S.?

I'm not sure exactly what you are laughing at.

The refinery will be in S. Dakota and will refine oil we buy from Canada into ultra-low sulphur gasoline and diesel fuel for use here in the US.

[Atomic Rooster]

Originally Posted by smacintush 

I'm not sure exactly what you are laughing at.

The refinery will be in S. Dakota and will refine oil we buy from Canada into ultra-low sulphur gasoline and diesel fuel for use here in the US.

a potential step toward national energy independence.

[smacintush]

Originally Posted by turtle777 

We all wish.

The high oil and gas prices are here for good.

We won't see prices go back to $ 70 / barrel or $ 2.50 per gallon.

-t

Well it's all speculation so we shall see. The price has been outpacing the demand for some time now so it is silly to assume that these prices will be here for good.

[smacintush]

Originally Posted by Atomic Rooster 

a potential step toward national energy independence.

We are buying fuel from other countries as well as oil and demand for gas is not going to drop enough to change that. (not until we start using something OTHER than gas) So yeah, this would restore some that lost independence we used to have with regard to gasoline.

[Eug]

reportonbusiness.com: How about oil at $75 a barrel?

Clément Gignac, chief economist and strategist at National Bank Financial, sees crude prices tumbling to $75 (U.S.) to $80 a barrel over the next 18 to 24 months, which is a long way from current levels of around $126 and even further off the $135 intraday high reached on May 21. It is also well below the $107 a barrel that West Texas intermediate has averaged so far this year. At $75, the price would only be slightly higher than the average price last year.

Originally Posted by Atomic Rooster 

a potential step toward national energy independence.

Maybe you should capitalize it and change the font size.

[Atomic Rooster]

The Alberta Oil Sands...

I don't understand this. I remember a segment on 60 Minutes where an engineer told Steve Kroft that there is a possibility of 3 trillion barrels and Steve almost sh!t his pants. How does that shrink to 175 billion?

Alberta's oil sands deposits total 2.4 trillion barrels of oil, and established reserves are only second to Saudi Arabia's 263 billion barrels at 175 billion barrels.

Alberta Oil Sands

[tie]

...And now oil has jumped right back up to $138 a barrel. I have no idea what is going on. Soros says, (link)

“I find commodity index buying eerily reminiscent of a similar craze for portfolio insurance, which led to the stock market crash of 1987,” Mr. Soros said earlier this week. But he cautioned that an oil market crash was not imminent. “The danger currently comes from the other direction. The rise in oil prices aggravates the prospects for a recession.”

Morgan Stanley is forecasting $150 a barrel in the next month and UBS and other financial firms are concurring, but are they just talking up their own speculations? My own feeling is that oil will probably stay over $100 for quite a while because demand is still very strong, but I don't really know.

Originally Posted by smacintush

The price has been outpacing the demand for some time now so it is silly to assume that these prices will be here for good.

What does "price outpacing demand" mean?

[Eug]

Originally Posted by Atomic Rooster 

The Alberta Oil Sands...

I don't understand this. I remember a segment on 60 Minutes where an engineer told Steve Kroft that there is a possibility of 3 trillion barrels and Steve almost sh!t his pants. How does that shrink to 175 billion?

Proven and recoverable oil reserves.

Some aren't proven, and some aren't economically recoverable either.

Originally Posted by tie 

What does "price outpacing demand" mean?

He means that the demand doesn't justify the price. ie. Price speculation driving up price.

[smacintush]

Originally Posted by tie 

...And now oil has jumped right back up to $138 a barrel. I have no idea what is going on. Soros says, (link)



Morgan Stanley is forecasting $150 a barrel in the next month and UBS and other financial firms are concurring, but are they just talking up their own speculations? My own feeling is that oil will probably stay over $100 for quite a while because demand is still very strong, but I don't really know.

They seem to think that this is due to the weakening dollar, this too will probably change as the dollar should still be strengthening in the long term. Any graph of the oil price over the next few years will be a saw toothed one, the question is will it be an upward or downward trend? Who do we believe?

What does "price outpacing demand" mean?

The price of oil is higher than it should be for as much oil as the world is using. Demand has been pretty flat.

[CreepDogg]

I agree it will be a sawtooth - upward trending. Long-term worldwide demand for energy will continue to grow, shifting the demand curve outward. Meanwhile, oil is a finite resource, and easily attainable supply is becoming more scarce, requiring more investment and/or running cost to obtain what's there. The flow ain't gonna stop tomorrow, but it's not going to increase dramatically either. This will continue to shift the supply curve inward.

The sawtooth will continue to be driven by irrational speculation and short-term supply/demand issues.

[Big Mac]

What a difference a couple of days make, huh?

The really wonderful thing is that we're now transferring even more obscene amounts of our wealth to mostly the Arab dictatorships. Sickening.

[tie]

Obviously smacintush forgot to knock on wood when he started this thread .

[NZFL]

Since most of the Oil we are all using is stolen from the middle east and that the true cost to extract oil out of the ground in Iraq is $1 USD per barrel. The price reflects the arseholes (Oil Barons) in the White House and their owners in Saudi. They are like drug lords who know they have the only supplier in town and are racketeering. It is obvious when you look who is out there sucking it up and who is out there building a new democracy in the middle east. It's all bollox, get off your fat arses and walk or cycle to where ever you are going. What do you think people did 50 years ago? Do you think everyone had a car? Duh. Its so easy to get complacent and when things aren't going to plan to blame someone. Try looking at your owners in Saudi for the answers.

[chris v]

Excellent thread timing, dude. Yeah, when I saw all the big prognosticators speculating that the bubble was about to burst, I thought to myself (who else would I be thinking to?) "Self, we're in for it, now."

The prognosticators are either A. Dunderheads or B. speculators themselves, trying to drive a price drop so they could buy in.

[smacintush]

Originally Posted by tie 

Obviously smacintush forgot to knock on wood when he started this thread .

Yes I did. Dammit.

Oh well, I'm ever ever optimistic. These things are rarely bad as the experts tell us they will be. At least the experts that get all the press anyways.

[Zeeb]

I was thinking back when oil was around $90 how everyone thought we would be in another depression if it hit $100. Things are getting harder--but the world hasn't ended yet.

This last rise was entirely news driven. Israel threatened to bomb Iran if they didn't stop developing nuclear weapons. You can bet there was a very stern call from Washington to Jerusalem over that. Regardless, if there are no news items for awhile I bet the price will come down and then the speculators will be on to whatever the next irrational bubble is.

[Shaddim]

I was speeding along a remote highway earlier today, giving my car a little fun-run, listening to a bit of news. While downshifting to 3rd for a series of switchbacks, they announced that oil hit almost $140 /barrel.

"Wow", I thought, "that's starting to get out of hand". Then, while cresting the mountain, I wound the engine out to 8 grand, shifted to 4th, and hit the backside straightaway. "Better do this while I can."

[peeb]

Originally Posted by tie 

Obviously smacintush forgot his head was made of wood when he started this thread .

Fixed.

[Railroader]

Originally Posted by peeb 

Fixed.

That's pretty rude and uncalled for.

[Andy8]

You guys are still using oil?

[macintologist]

The thing is, no matter how high the price of gas gets, people are still driving the same. They change a little, but when you have to commute 30 miles to work, there's no way around that unless you change your job or move which most people aren't willing to do.

[peeb]

Originally Posted by macintologist 

The thing is, no matter how high the price of gas gets, people are still driving the same. They change a little, but when you have to commute 30 miles to work, there's no way around that unless you change your job or move which most people aren't willing to do.

That's not true - I'm astonished that we're already seeing real behavior change at only 4/gal. Most people change their job every 5-7 years. They'll look for one closer, or at least closer to a public transit hub.

[smacintush]

Originally Posted by Railroader 

That's pretty rude and uncalled for.

Um…it's peeb…

[peeb]

Smacintush, I did not see Railroader's post, but no, it's not uncalled for. Too many people around here get a free pass to post endless screeds of nonsense. It's caustic to sensible debate, and has to be shown the door when it occurs.

[Eug]

Originally Posted by peeb 

Smacintush, I did not see Railroader's post, but no, it's not uncalled for. Too many people around here get a free pass to post endless screeds of nonsense. It's caustic to sensible debate, and has to be shown the door when it occurs.

Sounds good to me. Don't forget to shut that door on your way out.

[smacintush]

Originally Posted by Eug 

Sounds good to me. Don't forget to shut that door on your way out.

[peeb]

Originally Posted by smacintush 

This kind of juvenilia is precisely why I don't read Eug's posts any more. I'm beginning to wonder why I haven't blocked you too.

[peeb]

National Volcanic Monument?

[smacintush]

Originally Posted by peeb 

this Kind Of Juvenilia Is Precisely Why I Don't Read Eug's Posts Any More. I'm Beginning To Wonder Why I Haven't Blocked You Too.

Nvm.

[Shaddim]

Originally Posted by Eug 

Sounds good to me. Don't forget to shut that door on your way out.

Score. Good one, sir.

[peeb]

Score one more in the pointless juvenile comment column for Eug.

[Railroader]

Originally Posted by peeb 

Score one more in the pointless juvenile comment column for Eug.

Ummm... It's the same comment.

[Atomic Rooster]

Originally Posted by Eug 

Sounds good to me. Don't forget to shut that door on your way out.

You disappoint me Eug. I thought you were beyond that.

[Railroader]

Originally Posted by Atomic Rooster 

You disappoint me Eug. I thought you were beyond that.

You aren't either.

[turtle777]

Originally Posted by peeb 

I am immune to a sensible debate, and have to be shown the door when it occurs.

Fixed.

-t

[Helmling]

Originally Posted by Atomic Rooster 

Since when is Canada part of the U.S.?

That's a joke, right?

[The Godfather]

Are speculators setting up oil investors for a violent bubble explosion? Or are they right in rising their prices?

Oil prices rise despite Saudi pledge - CNN.com

[Arkham_c]

There was a really interesting special section in Sunday's AJC.

DRILLING DOWN ON OIL | ajc.com

The online article seems to lack all the pretty charts of the print version, but the data is there. Basically, what it boils down to is that the price of oil will not likely ever go down, and drilling off the coast or in ANWR won't make any appreciable difference. Our only option is to significantly reduce consumption, to significantly increase our fuel economy, and to find alternate sources of energy.

[turtle777]

Originally Posted by Arkham_c 

There was a really interesting special section in Sunday's AJC.

DRILLING DOWN ON OIL | ajc.com

I agree with this article.

Overall, the fundamental forces of supply and demand now in play are simply too powerful to be denied. Until alternative energy sources are developed and scaled up, adaptation, not denial, will be the only rational course.

-t