Posted on 03/14/2005 8:30:35 AM PST by expat_panama
Last week the price of benchmark West Texas Intermediate (WTI) crude oil came within pennies of its nominal record of $55.67 per barrel. The recent oil-price run-up has ignited concerns that the trend could take some steam out of America's robust economy, which has grown by more than 8.5 percent during the past two years. There were also fears that the recent WTI price spike, which reflected an increase of more than 20 percent from one month earlier and more than 50 percent from a year ago, could jeopardize last year's solid expansion of the global economy.
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Too right!!
We've pared the spending way down to insure that we have enough money for the basics.
Fuel - got to be able to get to work to earn more$..
Food - 'nuff said.
Ammo - ' "" ".
No one guaranteed anyone cheap fuel.
I just wanted to say it too.
One side usually feels angry and sad and takes the position that if they see anyone else that's happy it must be because happiness (or the cause of happiness) got stolen. These sad angry people decide that the only reason that nobody else wants anything to do with them is some kind of conspiracy. Of course the real reason is that these sad angry people are dangerous.
The other side of the conflict are people happy with a lot or a little, and what these people really like is working hard and doing good. When this group buys and sells things they make big profits because others trust them.
I know this is simplified down but I'm talking about a problem we all have of keeping track of what side we're on. We got to remember that it's just not healthy to covet other peoples oil or stuff. There's no benefit to be gained by hating others or wanting bad things to happen to them.
If it's really true that the oil companies are making huge profits, than anyone can buy oil company stocks. At the moment I'm checking out REM, UNT, FTO, PTR, CRK, SGY, and NBL. REM is my favorite-- it's up 20% so far this year. You can buy a share for about $30, (plus maybe a $5 commission depending on who you hire for a broker). If more people bought oil stock then these oil company borrowing costs would go down and they could afford to lower the price of their oil, increase market share and make bigger profits and the bidding on their stock will soar.
I work for the oil companies in this sense: I am a consulting geologist. I do wellsite work, and when they are not drilling I don't work.
I'm getting a little gray around the muzzle to fill in doing construction work in the hard times, and few want to hire someone they know will be gone when the price of crude goes up in a year or two. What can be boodled up in the good times is usually consumed in the crunches. This leaves little for a retirement portfolio. (Come on, powerball!(8^D))
I'm not sure where you are, but I also heat with natural gas, and I live in North Dakota. We can only use the fireplace (house built in 1912) when the weather is warmer in the fall and spring, or the infiltrating air will cause a net heat loss (winter temps commonly reach -30F). Vehicles have to be plugged in at night during the winter to keep the engines warm or engine damage can occur during startup.
In summer, we seldom use air conditioning except in years when the temps get into the high '90s and above (our summers tend to be fairly extreme too).
The real wonder of it all, is that few people realize that oil goes to more than just fuels. Plastics, synthetic fabrics, numerous chemicals, asphalt, many cosmetics, parafin, etc. are all derived at least in part from petroleum, even some pharmaceuticals. (Buy a tube of topical antibiotic ointment--the base is petroleum jelly).
Even if oil were to cease to be a primary energy source, we would still need it.
While increasing global demand is a factor, part of the reason there is a shortage is that repeatedly in the last two decades, the industry has suffered major price collapses, with the loss of people and infrastructure. While little drilling occurred during the lean times, reservoirs continued to deplete, and we come up short later. I hope the market can equalize and stabilize (at whatever level) for a while, just so we can catch up.
As oil prices stay up or continue to rise, the alternate technologies you wish for will be further developed and become more economically attractive, which will help alter the demand side of the equation. But a collapse will only mean that the other technologies will be either set aside or in such demand that their prices will be prohibitively high for quite a while (especially initial capital outlay). Heat pump (shallow geothermal wells with heat exchangers) can greatly reduce heating costs (and cooling), but the buy-in is too much for many folks, even though the savings will be great down the line. Phased in development is probably best for all concerned.
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