Oil Hits Fresh Post-War Highs

Reuters ^ | 1-9-2004 | Reuters

[kellynla]

I know you follow the oil industry more than I so maybe you can enlighten me. LOL But as long as we are in Iraq, America will not have to worry about sky rocketing oil prices and/or embargoes like we had in the seventies will we? I guess what I am saying is that as long as we have troops in Iraq the oil prices will remain pretty stable won't they?

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[alloysteel]

The rise in the price of oil has a couple of unheralded and so far, seemingly unrecognized effects. The higher price means it becomes economically feasible to uncap some wells here in the US and start pumping our own. It also means that consumption of oil will decrease as a direct result of the higher price. And what petroleum is consumed, will be done more conservatively.

Cheap fuel encourages wasteful consumption. Expensive fuel encourages conservation measures. Simple as that. Oil companies do not make unconscionable profits on higher-priced crude, they make more efficient use of the refining process so more useful product is recovered. At a certain point, it becomes economically feasible to make petroleum out of organic waste, creating a product vastly superior to the crude that is drawn out of the ground. As long as plants grow, this world shall never run out of petroleum.

[Looking for Diogenes]

As long as plants grow, this world shall never run out of petroleum.

That is correct. But the price will not be $34 a barrel.

[Looking for Diogenes]

I guess what I am saying is that as long as we have troops in Iraq the oil prices will remain pretty stable won't they?

Why do you say that? Since Iraq is not producing a significant amount of oil at the moment it has little effect on prices. Should it return to large-scale exportation that would probably drive down the price of oil, which is not stability. If terrorist were to start attacking oil production or transportation in other Gulf nations that wold probably drive prices up, which isn't stability either. (Perhaps the troops in Iraq could help fight those other terrorists as well). Finally, if oil production is increased but is not reliable that could lead to swings in prices.

Best thing is not to worry about it.

[deport]

Well don't start me to lying.... lol

There are many factors above Iraq that will and do influence the price of petroleum..... So us being there won't mitigate the world prices to any large degree imo but it is a stabilizing force to some degree I'd think.

Recently in I've seen a 14 cent rise in gasoline prices. It began shortly before Christmas with an 8 cent jump and then a 6 cent jump just a couple of days ago. I think part of it may have been the Terror alert thing and the closing of the Port in Alaska which supplies a portion of the lower 48 crude.

[biblewonk]

Yup, that's exactly how it works. It's nice to hear that instead of the typical response like "Thank the greens" or "Kill all the Arabs and take their oil".

[Freebird Forever]

typical response like "Thank the greens" or "Kill all the Arabs and take their oil".

I personally do not advocate killing all the arabs.

Killing OPEC, on the other hand.......

[alloysteel]

I didn't say that artificial petroleum will be produced at $34 a barrel. More like $150 to $200 a barrel. But it is possible.

Fuel could come from a source not now used, coal that is converted in place. Heat up a bed of coal, until it gives up its volatiles, and converts into coke. Keep the internal temperature of the coke at about 1,000° C., by maintaining a fire beneath the bed, fed by a measured amount of oxygen from outside air. Inject water into the hot coke, and a mixture of hydrogen gas and carbon monoxide is generated, which may then be collected, piped out through a distribution system, and used directly as a fuel. This is not new or revolutionary science, or even engineering. Burns hot, burns clean, with no particulate matter. The carbon dioxide may be reclaimed with scrubbers, and used as an industrial chemical. Much more cheaply than the equivalent amount of artifical petroleum, which would not be used as an energy source in any event.

[AdamSelene235]

But as long as we are in Iraq, America will not have to worry about sky rocketing oil prices and/or embargoes like we had in the seventies will we?

??

So long as we print money to pay for Free Drugs for Granny, Free Drugs for Africa, Social Security for Mexico, and the War we will see the same inflationary impact on oil prices as we saw from LBJ's Great Society and Vietnam spending.

[BOBTHENAILER]

I guess what I am saying is that as long as we have troops in Iraq the oil prices will remain pretty stable won't they?

The real factor involved, is demand. China will continue to need ever larger supplies, year by year, and the result will be prices in the low to mid $30's.

Only a major debilitating strike on Saudi facilities at Ras Tanura (sp?) would cause wild spikes upward, IMHO.

[biblewonk]

Killing OPEC, on the other hand.......

Shirley yer kidding.

[familyofman]

Part of the increase in oil prices is the continuing decline in the US$ which result from out-of-control balance of payments.

[alloysteel]

Duck, people. There is a HUGE bubble of inflation headed at us. While the numbers have been artificially low in this country, in the real world (outside the US), the cost of goods and services has readjusted to the change in the market price of gold bullion. One ounce of gold buys just about as much as it used to, but now gold is costing everybody more per ounce.

[Truth666]

[Freebird Forever]

Shirley yer kidding.

On the contrary, I'm totally serious.

This illegal cartel extracts far too much wealth from the US. That capital in turn, goes to finance terror worldwide & provides the lone pillar of support for numerous regimes who vilify Christians / Christianity.

IMO, the first step should be to peel off Venezuela ... by ANY means necessary.

Encouraging Libya to cheat on its production quota is another possibility. Qaddafi has sent signals (some posted on FR) that he is looking to be more Afrocentric & that adhering to the middle eastern "party line" was a nonproductive foreign policy.

The goal should be: reduce the price of crude to the level where Russia can still extract at a profit, and hold it there.

And DON'T CALL ME SHIRLEY!!!

: )

[Looking for Diogenes]

artificial petroleum will be produced at ... $150 to $200 a barrel. But it is possible....artifical petroleum, .. would not be used as an energy source in any event.

Those are two important caveats to remember. Once we run out of inexpensive petroleum the alternatives get a lot more expensive and complex. Artifical petroleum may be needed for a variety of products and fuels (we can't fly airliners on batteries), but it will not be cheap nor will it be an original source of energy. On the contrary, it may take more energy o create then it produces. (Some say ethanol is in that category today).

It's worth doing whatever we can to make sure we have a longterm supply of affordable natural petroleum. That includes both conservation and long term planning (like keeping the ANWR off-limits to drilling until we really need it.)

[biblewonk]

How is the cartel illegal? I have nothing but respect for capitalism and protecting a resource by trying to keep it's value high is no different from Harley Davidson.

[Freebird Forever]

protecting a resource by trying to keep it's value high is no different from Harley Davidson.

LOL

Do you really want to stick with that argument ... comparing OPEC to Harleys?

I’ll grant you that HD produces a fine product, & has an extremely loyal customer base. But with all due respect BW, they’re nothing but a niche market & are more aptly compared to Apple Computer.

Now if you had brought up pre divestiture Standard Oil, ATT, or even the DeBeers cartel, then we would have had a basis for intelligent discourse.

You also wrote: How is the cartel illegal?

When applying the same criterion to OPEC that was applied to ATT & Standard Oil, it’s only logical to suggest that the same conclusion would be drawn.

Now before you get your skivvies all in a wad, and start yelling “but they’re not in the US, we can’t judge them by our standards”, let me run this thought past you.

The same countries / culture who see it as perfectly just to collude in controlling the price of a fungible product, crude oil, also champion the practice of “honor killings”.

By the laws & ideals with which I was raised, the two practices mentioned herein are both reprehensible and illegal.

Does that answer you question?