Posted on 04/23/2008 6:47:43 AM PDT by thackney
I can agree the discussion may impact investors decisions.
If you believe the garbage that a obviously low IQ Nancy Pelosi spews, then you have an even poorer understanding of energy economics than she does.
The only way for gas to go down in price is temporary, at best, and would involve the State and Federal government rescinding taxes on gasoline (a pipe dream).
Unless someone in the DNC can magically increase the world’s known oil reserves and can stop China, India and the rest of the develpoing world from continually increasing consumption then prices will continue to rise.
Even if we cut our (United States) consumption to near zero, the price effect would be temporary (5 to 10 years?) then it would shoot back up until oil runs out in the latter years of this century.
In short - Nancy Pelosi is lying to you.
The tipping point is right where the stinking speculators (spearheaded by the oil companies themselves) figure they can no longer ride this horse to obscene profits any longer.
They may have already screwed themselves as several marvelous electric cars are approaching the market. You can get electricity from nuclear, sun, wind, water etc. What people don’t know about electric motors is they are really really powerful and have more torque than internal combustion engines. If the battery makers don’t fold for the ‘old tech’ car makers we will enter a new world.
Oil will go down to $30 bucks a barrel.
But mainly coal and natural gas.
Oil will go down to $30 bucks a barrel.
Are you putting your own money on that claim in the futures market? If US gasoline consumption fell by 20%, that is only a 2% decline in the world oil consumption.
Yes, theoretically there could be lot's more oil out there, but theory is nowhere near fact and we seem to have several major impediments in turning that theory into fact - Political, technological and the “where's Waldo” factor.
Note that reserves have increased significantly since 2007, yet the price continues to sky rocket.
The source of the pricing pressure is not OPEC production, oil company profits or levels of proved reserves. The pricing pressure is coming from the fact that the developing world (led by China and India) are developing ravenous appetites for oil that will rival our own within the next 25 years. The current (and recent historical) levels of exploration and production have no hope of keeping up with that demand.
Unfortunately oil exploration and production has turned into a world wide political football, and as with everything politicians touch it turns to sh#%. The politics prevents us from addressing the immediate needs and enacting logical solutions.
We’re already making changes to our summer plans because of driving costs. The heating season was a killer here in PA. We’re considering replacing our 45 year old oil burner with a gas furnace. Based on current prices, it appears to be a significant money saver. However, having no crystal ball, I’m trying to understand the driving forces behind natural gas pricing. We’d hate to make the conversion only to see the price balance shift dramatically the other way. I’d appreciate any thoughts from among our energy experts. I have more respect for the assembled wisdom and knowledge of this group than many other sources. Thank you!
Counter question:
What if oil doesn’t HAVE a “tipping point”?
- John
What is so obscene about them? The oil companies’ profit margins haven't increased. At the risk of insulting you (which is not my intent), many people look at the dollar AMOUNT of profit, instead of the PERCENT of profit over costs. In a booming market, one would EXPECT to see an increase in the dollar amount of profits even though the profit margins haven't changed at all. The oil companies are making record profits because the global demand for their product has increased dramatically in the last ten years, and THEY'RE SELLING MORE!
Having said that, the high cost of petroleum is going to wreak havoc on our economy. I don't believe that the price of oil is ever going to fall significantly because of the increasing demand worldwide. No, despite the hopes of some here, we will never be able to produce ourselves out of this situation, as others have said: oil sources are becoming harder to come by; both cost and amount. They take many years to exploit and meanwhile, the demand increases exponentially.
We are in for some very tough times ahead; we may very well go into a deep recession, not because of the silly subprime mess, but because the price of fuel will bring us to a standstill. The travel and tourism sectors are already suffering and may really get killed this summer. It won't get better until either our standard of living and economy adapts to expensive energy, or we effectively develop new forms that are cheap and easy to use. Either way, we're talking about many years.
I didn’t say oil companies are making obscene profits. I said speculators. Call me old fashioned but I think money should be made not pulled out of thin air by pushing paper.
I'm sorry, but you're just being mean-spirited. Nancy Pelosi and the Democrats are honest and care about little people like me. You must be a bitter rich white person clinging to your guns and religion. The MSM told me all this, so you must be wrong! /s
It’s hard to see how you could go wrong by installing a gas furnace to replace your old oil furnace. Really, I’d bet your pay back would be within 5 years or less. By then all the rest of us may have switched over to micro nuclear reactors, but you’ll at least have gotten your money back.
The way I see it is that oil burners are bad all around. They are inefficient, fuel oil cost more, yours is 45 years old. Hard to see a downside replacing it, particularly if your local utility will give you a reward for converting.
No reward, but the connection to the road is around $450, which is probably worth it to us.
Yes I am mean sprited and the MSM would never mislead any of us. Beria and Goebbels told me this in a dream.
I should have pointed out that my shot was at the village idiots that actually believe Pelosi's drivel, not yourself. A /s at the end of your first post would have helped. :)
Right, somebody should pressure OPEC. Make Mexico and Russia increase production also. Oh, and make the sun spots count move up a little.
I think money should be made not pulled out of thin air by pushing paper
I understand your point, but think of the meaning of the word “speculator.” Imagine the price of food keeps rising daily, you figure that soon you won’t be able to afford some of your favorite foods. So, you decide to stock up on them while you can still buy them. You’ve just speculated. Now if next year the world has a bumper crop of this favorite food of yours and the price falls due to its abundance, you’re going to be kicking yourself for wasting your money.
Yet if the price goes exponentially higher and someone offers you an amount that is far more than you paid for it, should you be punished for making a gain?
This is whole basis of the commodities markets! They are a valuable mechanism for distribution and pricing of the world’s resources, not just oil, but corn, metals, meat,... you name it. This has been going on since history began. Originally, it was clay tablets, today we use paper, or more likely computer files. What does it matter? The medium records human action, it has no value in itself.
The tipping point may come when a Cuban/Chinese oil consortium floods the market with large quantities of newly drilled supply from over-the-horizon wells in the Florida Strait.
Reserves have no impact on the market out a few years unless the facilities have been built to produce them. Production rate capacity.
The source of the pricing pressure is not OPEC production, oil company profits or levels of proved reserves. The pricing pressure is coming from the fact that the developing world (led by China and India) are developing ravenous appetites for oil that will rival our own within the next 25 years.
The production capacity rates have similar effect on the market as demand.
The current (and recent historical) levels of exploration and production have no hope of keeping up with that demand.
The recent historical levels have reserve growth exceeding demand growth. See post #40 again since 2007.
The Department of Energy disagrees with your assessment.
http://www.eia.doe.gov/oiaf/ieo/pdf/ieoreftab_4.pdf
http://www.eia.doe.gov/oiaf/ieo/pdf/ieopol.pdf
Unfortunately oil exploration and production has turned into a world wide political football, and as with everything politicians touch it turns to sh#%. The politics prevents us from addressing the immediate needs and enacting logical solutions.
In this I greatly agree.
Thank God that the Chinese and Cubans are drilling off of the coast of Florida. The US certainly can’t.
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