[kellynla]

"Speculators are often blamed for artificially inflating crude prices, but some experts say high prices are needed to cut demand and develop new resources."

[kellynla]

ping

[mysterio]

bookmark.

[2ndDivisionVet]

This from people who ride limos and the subway to work.

[papasmurf]

...high prices are needed to cut demand and develop new resources."

...high prices are needed to cut demand and develop new resources. to force action, such as DRILLING FOR MORE AMERICAN OIL!!!"

That's better.

[Terpfen]

With $120 oil not seeming to follow the fundamental law of supply and demand...

Stopped reading here. What BS.

[Goreknowshowtocheat]

With the dollar falling, I bet alot of the change in oil price is due to that rather than demand. Of course, demand is a factor, but throw in the dollar debasement and you get to 120 pretty fast.

[Redbob]

The high prices are merely an artifact of our artificially-depressed dollar.

The Fed should be setting the interbank rate at closer to 5% rather than 2% - it’s widely recognized that this rate should be almost identical to the annual rate of growth of the economy, the GDP.

[Amendment10]

As a side note to the pros and cons of the rising price of oil, I'm keeping an eye on the following development in non-corn ethanol production.

Non-corn ethanol

Also, there's indication that people might get as much or more bang per buck for their gas dollars with gas / ethanol mixtures.

Gas-competitive gas / ethanol mixtures

[JasonC]

It is simply a bubble.

Everyone always says "it is different this time". It isn't different.

Real estate wasn't different in its 2001 to 2006 bubble. Tech stocks weren't different in their 1996 to 2001 bubble. Junk bonds weren't different in their 1986 to 1991 bubble. Etc. Etc. Etc.

Commodities are the latest, that is all. Oil is in a bubble, grains are in a bubble, gold was in a bubble and has already begun correcting. Brazil is also a bubble. China was a bubble and is already correcting.

People who know nothing of finance outside of the one market they are looking at throw a straw, think the world has changed when the bubble gales roll through their favorite asset. The world hasn't changed. Only the speculative plaything of the week.

[LongTimeMILurker]

Energy Policy:

1) Open all federal lands with oil and natural gas potential for exploration.

2) A Manhattan Project to build new nuclear power plants like nuanced, environmentally conscious France has done.

3) Stop using grain for ethanol production for fuel.

4) Use nuclear power generated for desalination to solve water shortages.

5) Continue to explore and develop alternative energy and fuels, but with the idea that these are long term, not short term priorities.

[Mad_Tom_Rackham]

["The market is starting to send a signal: You got to get your alternative in line."]

It's government who is manipulating the market, to achieve an objective which, if put up for a vote, would see them losing 100-0. We are sheeple.

[tennteacher]

Hello, kellynla, attack dog.

This is tennteacher signing off. You are a jerk of the first order.

No more posting. No more contributions. Enjoy.

[AmericanExceptionalist]

From my standpoint, the reasons why $120-a-barrel oil is good (and why $150-a-barrel oil would be even better) are twofold: (1) we do very little driving--perhaps 25 or 30 miles per week, on average; and (2) our IRA's energy fund has increased exponentially over the past 16 months (it was at that time that I rolled over my 401(k) into a low-cost energy-fund).

Admittedly, at this stage of my life, a sector fund is rather risky. That said, however, I have no intention of switching to a balanced fund or an asset-allocation fund--or some other "safe" investment--just now. Oil will probably go much higher before it plateaus--especially if Israel should take out Iran's suspected nuclear facilities, as I expect to happen before 2008 belongs entirely to history.

[TheLion]

I want one of those French cars someone invented that runs on compressed air. It is @4300 psi and you can fill the tank in 2 hours with a compressor that comes with the car. Runs like a regular car with 130 mile range. $7000 is the price tag. For 22,000 you can get one with a gas engine also. The engine refills the compressed air tanks....giving you 100 mpg.

[MarkL]

"Speculators are often blamed for artificially inflating crude prices, but some experts say high prices are needed to cut demand and develop new resources."

Unfortunately the government can step in and introduce external forces, like subsidies, which make for very expensive boondoggles, like ethanol from corn.

I really think that were the oil companies to be freed up from the government shackles, AND were the government to stop using tax penalties and breaks to influence what the energy companies do, we would have had alternate sources of energy decades ago.

Mark

[webschooner]

and develop new resources."

To the nimrod author -- we can't develop resources when we know where they are but the frickin gubmint won't let us drill there.

[machenation]

I think greed is ok if there is sunlight. Getting the sun in with the arabs is a pipe dream, and china and south america and the snakes in congress.

[Caipirabob]

"Societies that ignore this kind of signal do so at their own peril."

Uh, hello? Democrats in the house and senate?

We're doomed...

[never4get]

..Oh com’on everybody, the dems, repubs in the senate/congress, and their families, many of whom own oil stocks and love the increased values and high dividend pay outs, will make sure that the industry they are there to regulate will drill more, will build refineries....Our elected officials and families who are swimming in the stock profits, dividends, will make sure to protect the electorate interests and work with the oil companies to produce and refine more oil so prices can drop.....Yes, I am positive they will do that.

[thackney]

The fundamental reality of oil - and the thing that makes it so attractive to investors in the first place - is that we are using ever more and finding ever less.

The author makes a false statement. Proved Reserves continue to grow at an average faster rate than increasing demands.

In 1980 those estimates said we had 27 years left.

In 1990 those estimates said we had 41 years left.

In 2000 those estimates said we had 36 years left.

In 2005 those estimates said we had 41 years left.

In 2007 those estimates said we had 43 years left.

On average, the petroleum industry meets the rising demand and still adds more to the proved reserves.

http://www.eia.doe.gov/pub/international/iealf/crudeoilreserves.xls

http://www.eia.doe.gov/emeu/ipsr/t44.xls

But oil in the ground isn't the same as oil flowing from wells. The World's Margin of Supply is tight. This prevents producers from taking advantage of high prices and putting more oil (immediately) on the market. Nearly all of the excess production capacity is held by OPEC, as they are the only ones willing to hold back oil production to raise global prices. And their margin is near a historic low, although Saudi Arabia is completing some expansions projects that will raise it. Recent reports from them state they do not plan to do more (in the near future) once those are completed.

In the near future, Non-OPEC supply is forecast to rise by 0.6 million bbl/d in 2008.