Oh yeah...go baby, go, my O&G stocks are doing great!
all this is a matter of perspective.
Hell, why not a hundred? LOL!
Boy I sure dont want to be anywhere near oil futures when the bubble breaks.
Oil will end the year about $ 100 bbl. unless U.S. attacks Iran . . . Then oil will skyrocket. American economy will implode. World wide recession. Buy gold. Yada, yada, yada.
This is but ONE of the factors that some around here do not understand regarding supply and demand matrix in the petroleum industry.
Which is why I'm having to job shop.
Iran and Venezuela sell oil at a discount to certain favored friends. They use oil as a tool of foreign policy. To get a nation to go along with it in the UN and in a dispute with the United States. Iran is selling oil to the ChiComs under long term contacts signed at lower prices
What percent of world oil is NOT sold on the spot market? My contention is the developed world pays $73 but many 3rd world nations don't. Venezuela is using oil as a foreign policy weapon in Latin America. To make it's oil dependents toe the line
When my customers ask why I'm charging more I'm just gonna pull out my gas card and say: "This is why".
Higher price = more supply; eventually.
I just wish we were burning more neutrons instead of Iranian crude. I hate putting our treasures in their pockets.
The price of oil has trebled since the start of 2002
3x
300%
I hope the people buying oil futures lose their ass big time. It's probably not going to happen but I sure wish them very bad luck.
The tip of that peak didn't last very long, and the one around 1980 was a very steep rise and then a big drop after just a few days (and you might also look at the other one commonly cited, which is even more dramatically vertical, just prior to the Gulf War):
And that was not in a vacuum: the matching chronology (they cross-reference the same numbers on the graph) shows some of the very significant events that were occurring:
1. OPEC begins to assert power; raises tax rate & posted prices2. OPEC begins nationalization process; raises prices in response to falling US dollar.3. Negotiations for gradual transfer of ownership of western assets in OPEC countries4. Oil embargo begins (October 19-20, 1973)5. OPEC freezes posted prices; US begins mandatory oil allocation6. Oil embargo ends (March 18, 1974)7. Saudis increase tax rates and royalties8. US crude oil entitlements program begins9. OPEC announces 15% revenue increase effective October 1, 197510. Official Saudi Light price held constant for 197611. Iranian oil production hits a 27-year low12. OPEC decides on 14.5% price increase for 197913. Iranian revolution; Shah deposed14. OPEC raises prices 14.5% on April 1, 197915. US phased price decontrol begins16. OPEC raises prices 15%17. Iran takes hostages; President Carter halts imports from Iran; Iran cancels US contracts; Non-OPEC output hits 17.0 million b/d18. Saudis raise marker crude price from 19$/bbl to 26$/bbl19. Windfall Profits Tax enacted20. Kuwait, Iran, and Libya production cuts drop OPEC oil production to 27 million b/d21. Saudi Light raised to $28/bbl22. Saudi Light raised to $34/bbl23. First major fighting in Iran-Iraq War24. President Reagan abolishes remaining price and allocation controls25. Spot prices dominate official OPEC prices26. US boycotts Libyan crude; OPEC plans 18 million b/d output27. Syria cuts off Iraqi pipeline28. Libya initiates discounts; Non-OPEC output reaches 20 million b/d; OPEC output drops to 15 million b/d29. OPEC cuts prices by $5/bbl and agrees to 17.5 million b/d output30. Norway, United Kingdom, and Nigeria cut prices31. OPEC accord cuts Saudi Light price to $28/bbl32. OPEC output falls to 13.7 million b/d33. Saudis link to spot price and begin to raise output34. OPEC output reaches 18 million b/d35. Wide use of netback pricing36. Wide use of fixed prices37. Wide use of formula pricing38. OPEC/Non-OPEC meeting failure39. OPEC production accord; Fulmar/Brent production outages in the North Sea40. Exxon's Valdez tanker spills 11 million gallons of crude oil41. OPEC raises production ceiling to 19.5 million b/d42. Iraq invades Kuwait43. Operation Desert Storm begins; 17.3 million barrels of SPR crude oil sales is awarded44. Persian Gulf war ends45. Dissolution of Soviet Union; Last Kuwaiti oil fire is extinguished on November 6, 199146. UN sanctions threatened against Libya47. Saudi Arabia agrees to support OPEC price increase48. OPEC production reaches 25.3 million b/d, the highest in over a decade49. Kuwait boosts production by 560,000 b/d in defiance of OPEC quota50. Nigerian oil workers' strike51. Extremely cold weather in the US and Europe52. U.S. launches cruise missile attacks into southern Iraq following an Iraqi-supported invasion of Kurdish safe haven areas in northern Iraq.53. Iraq begins exporting oil under United Nations Security Council Resolution 986.54. Prices rise as Iraq's refusal to allow United Nations weapons inspectors into "sensitive" sites raises tensions in the oil-rich Middle East.55. OPEC raises its production ceiling by 2.5 million barrels per day to 27.5 million barrels per day. This is the first increase in 4 years.56. World oil supply increases by 2.25 million barrels per day in 1997, the largest annual increase since 1988.57. Oil prices continue to plummet as increased production from Iraq coincides with no growth in Asian oil demand due to the Asian economic crisis and increases in world oil inventories following two unusually warm winters.58. OPEC pledges additional production cuts for the third time since March 1998. Total pledged cuts amount to about 4.3 million barrels per day.59. Oil prices triple between January 1999 and September 2000 due to strong world oil demand, OPEC oil production cutbacks, and other factors, including weather and low oil stock levels.60. President Clinton authorizes the release of 30 million barrels of oil from the Strategic Petroleum Reserve (SPR) over 30 days to bolster oil supplies, particularly heating oil in the Northeast.61. Oil prices fall due to weak world demand (largely as a result of economic recession in the United States) and OPEC overproduction.62. Oil prices decline sharply following the September 11, 2001 terrorist attacks on the United States, largely on increased fears of a sharper worldwide economic downturn (and therefore sharply lower oil demand). Prices then increase on oil production cuts by OPEC and non-OPEC at the beginning of 2002, plus unrest in the Middle East and the possibility of renewed conflict with Iraq.63. OPEC oil production cuts, unrest in Venezuela, and rising tension in the Middle East contribute to a significant increase in oil prices between January and June.64. A general strike in Venezuela, concern over a possible military conflict in Iraq, and cold winter weather all contribute to a sharp decline in U.S. oil inventories and cause oil prices to escalate further at the end of the year.65. Continued unrest in Venezuela and oil traders' anticipation of imminent military action in Iraq causes prices to rise in January and February, 2003.66. Military action commences in Iraq on March 19, 2003. Iraqi oil fields are not destroyed as had been feared. Prices fall.67. OPEC delegates agree to lower the cartel’s output ceiling by 1 million barrels per day, to 23.5 million barrels per day, effective April 2004.68. OPEC agrees to raise its crude oil production target by 500,000 barrels (2% of current OPEC production) by August 1—in an effort to moderate high crude oil prices.69. Hurricane Ivan causes lasting damage to the energy infrastructure in the Gulf of Mexico and interrupts oil and natural gas supplies to the United States. U.S. Secretary of Energy Spencer Abraham agrees to release 1.7 million barrels of oil in the form of a loan from the Strategic Petroleum Reserve.
Source: Federal Department of Energy.
This is really gonna crimp CHINA's style.
Yes, this certiainly impacts the US greatly, and all of us individually, but China is taking a beating with fuel costs this high.
Whats good for Russia, is not good for China, but may be good for us in the end.
So far, China is holding the line on sanctions for Iran, along with their "buddy" Russia. That's aprtnership destined to fail if this goes on much longer.
$100 ? ... anyone ??