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Forbes warns of oil bubble [price could return to $30-35]
Herald Sun (Australia) ^
| 31aug05
| James McCullough and Mandi Zonneveldt
Posted on 09/05/2005 7:39:23 AM PDT by cloud8
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To: ChadGore
Mr Forbes's comments came as the price of oil eased following US Government comments that it could release some of its Strategic Petroleum Reserve. Part of the demand has bee the filling of the Strategic Petroleum Reserve, which had just about been completed prior to Katrina. Presumably this was to give the US enough stocks to ride out an interruption when we invaded Iran, Venezuela, etc.
However, seeing what happened when Katrina took 1 million barrels per day off the market for a month or so, I'm not sure that taking Iran's 4 million barrels a day off the market for a year or two looks like an attractive proposition anymore.
To: cloud8
I would think that if refineries are incapacitated temporarily, at some point there's going to be a drop in demand for crude as inventories back up. Any economics experts have a model for a production chokepoint when demand and raw materials are both high?
22
posted on
09/05/2005 8:26:37 AM PDT
by
SlowBoat407
(My tagline has been looted.)
To: cloud8
Ok. So it drops to $35. Will the prices come down to the $35 per barrel level? Probably not. I seriously doubt they ever come back below $1.75 or so a gallon.
23
posted on
09/05/2005 8:27:11 AM PDT
by
RetiredArmy
(The Imperial Federal Government is your worst enemy! Don't give in to them!)
To: IronJack
I laugh to the bank. I did my homework and now the profits of investing wisely are far out weighing the cost of oil to this household. Many many times more in fact.
24
posted on
09/05/2005 8:27:46 AM PDT
by
jwh_Denver
(Damn the MSM, the truth full speed ahead!)
To: IronJack
Greed has a way to make a fool of those who try to call it something else.
25
posted on
09/05/2005 8:29:44 AM PDT
by
chiefqc
To: cloud8
Even if crude oil is destined to go higher eventually, its price could drop to $40-ish in the near term without surprise.
That's just a normal retracement of a price rise from $25 to $70.
26
posted on
09/05/2005 8:30:34 AM PDT
by
headsonpikes
(The Liberal Party of Canada are not b*stards - b*stards have mothers!)
To: xkaydet65
We face two different scenarios.
World prices of oil accd. to Forbes will drop. The bubble bursts, just like the one of Bill Clinton who then passed along a recession.
What directly affects the U.S. is refining, or precisely lack of refining capacity.
Prior to Katrina the U.S. was short 11% of refined products from heating oil to diesel to to gasoline, kerosene. Therefore we imported refined fuels from Mexico and Canada. We became dependents to pricing.
This shortage is directly due to not building any refineries for three decades.
Hurdles after hurdles were thrown into plans to expand. Environmental regulations are of the cumbersome variety to require between seven and nine years of approvals, with the high probability that some judge will block the whole process, even after approvals have been obtained.
We need to clearly hold in mind that Democrats are dependent on green votes, and for these reasons kept on blocking, stalling, and saying nay.
Only through Democrat tactics did we lose refining independence and face hardships at the pump.
Recall how their presidential candidates Gore and Kerry denounced, pilloried these oil monsters for the sake of garnering green anti oil, anti automobile votes.
Just when you see, as in the case of Unocal getting bought by the Chinese and thereby taking these profiteers and polluters off the Democrats hands they temporarily fall numb.
Oil does drive the U.S. economy, as well as the Chinese.
Difference is: These Chinese realize this and intend to continue growing.
Democrats and their green tax exempt interest groups have not caught up with reality and decided to stall some more, say nay, and when all else fails go filibustering.
27
posted on
09/05/2005 8:32:18 AM PDT
by
hermgem
To: HawaiianGecko
"It also seems that if $70 oil was thought to be sustainable, every oil company on the planet would be poking holes in your back yard. They aren't doing that, so common sense says it is speculation driving prices." That says it all.
28
posted on
09/05/2005 8:34:19 AM PDT
by
DaGman
To: jwh_Denver
I laugh to the bank. I did my homework and now the profits of investing wisely are far out weighing the cost of oil to this household. Many many times more in fact. Good for you! Whatever it takes to make a buck!
29
posted on
09/05/2005 8:35:37 AM PDT
by
IronJack
To: RetiredArmy
Ok. So it drops to $35. Will the prices come down to the $35 per barrel level? Probably not. I seriously doubt they ever come back below $1.75 or so a gallon.With production of the gasoline at 80-100% capacity, we're going to keep seeing inflated prices at the pump. Sadly, the countries that have the shortest downstream production (crude to gasoline) are Saudi Arabia and Venezuela.
30
posted on
09/05/2005 8:36:08 AM PDT
by
SlowBoat407
(My tagline has been looted.)
To: hermgem; Dog Gone; Grampa Dave; tubebender; Ernest_at_the_Beach; BOBTHENAILER
A most excellent summation!!! (China didn't get Unocal, however)
You, and all the others here, need to keep pounding this theme until it's picked up and becomes "conventional wisdom!"
31
posted on
09/05/2005 8:43:27 AM PDT
by
SierraWasp
(My Governor has morphed into the "FLINCHINATOR!!!")
To: xkaydet65
I am not suprised that the gov. of LA was not prepared. However I am suprised that the oil companies were not prepared. I would have thought they would have extensive plans in place for this when they knew it was going to happen. I understand that theres not much they can do when the cat 5 cane wrecks things but they should have forseen the need for workers and their families to survive and adapt and continue working.
32
posted on
09/05/2005 8:44:51 AM PDT
by
winodog
(We need to pull the fedgov.con's feeding tube)
To: chiefqc
Greed has a way to make a fool of those who try to call it something else. You said it.
33
posted on
09/05/2005 8:48:39 AM PDT
by
IronJack
To: ChadGore
I have to agree with Forbes on this.
Care to risk your own money on betting oil is going to $30's you could make a killing on shorting oil..
A fool and his money..forbes is sore he did not get in before prices rose and he is now talking it down to get some action..
low cost energy is a thing of the past and yes my money is long oil.
34
posted on
09/05/2005 8:49:34 AM PDT
by
ConsentofGoverned
(A sucker is born every minute..what are the voters?)
To: Lessismore
but aren't hedges tied to the bond which in turn is the cause for the current low mortgage rates (which are also inverse for the current fed rate hikes?)
35
posted on
09/05/2005 8:54:55 AM PDT
by
databoss
(WMD's, Syria and North Korea...)
To: SierraWasp
We had the grandkids up for part of the weekend. We went to Sacremento to take them to see the play Dora and the Pig Pirates.
Yesterday, we took them back home. My trophy bride commented that most of the gas stations on the way out of town had dropped their prices 5 to 12 cents per gallon overnight.
Considering that there were two more days in the Holdiday, that was a fairly significant drop.
36
posted on
09/05/2005 8:55:30 AM PDT
by
Grampa Dave
(Jamie Gorelick is responsible for more dead Americans(9-11) than those killed in Iraq.)
To: IronJack
"obscene" profits
Interesting choice of words...
I think you are making too much of a paycheck for your labor, please forward a portion of said "obscene paycheck" to: dakine.
37
posted on
09/05/2005 8:57:01 AM PDT
by
dakine
To: Zarro
Damn! It is unconscionable that those who spend 3-4 million (or more!) to drill a well get a return on their investment.
Ever stop to think that those profits get rolled over into the next round of technology which makes a lot of domestic production possible?
The well I am working on would not have been possible 20 years ago. When we are done we will have drilled a hole in a 6 foot thick target zone nearly two miles sideways, two miles down, effectively turning 6 feet of pay into nearly 11,000.
I know of no other industry so berated for making the money it needs to crash the price of its product.
38
posted on
09/05/2005 9:00:02 AM PDT
by
Smokin' Joe
(If you are not part of the solution, you are part of the problem.)
To: CharacterCounts
The demand is not just ours alone. India and China factor into the demand side of the equation, where before a couple of years ago, they did not. The paradigm has changed.
39
posted on
09/05/2005 9:02:03 AM PDT
by
Smokin' Joe
(If you are not part of the solution, you are part of the problem.)
To: FBD
"He said factors such as inflation and increased demand for oil from China and India accounted for only a small part of the price hike from $US25-30 a barrel three years ago."~eh?
"'The rest of it is sheer bubble speculation,' he said."
~eh?
"Mr Forbes, who was speaking at the opening of the Forbes Global CEO Conference in Sydney yesterday, said the higher the oil price rose, the harder it would eventually crash, creating more pain for hedge fund managers and their clients."
Smart man, Forbes.
Knows a fruad when he sees one.
But do remember where ya heard it *first*.
...'k. ;^)
40
posted on
09/05/2005 9:02:30 AM PDT
by
Landru
(- an intelligent person never relies on dumb-luck -)
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