[lutherquick]

Again, the dollar goes down today (7.July.2006)
This is a trend. If it continues, then the very commodities, services, products that energy companies need to extract and refine more energy will also go up in price, just to stay even. Forget about price increases do to demand growth. Energy companies need steel, machines, pipe, tankers, energy, and so forth. Their workers need to pay the bills, live, and they will in turn require more money.

As long as so much is denominated in dollars, and as the dollar keeps tanking, then oil MUST go up, and this is just to stay even. A recent article about the tar sands in Canada shows that their expenses are leaping 50%, billions of extra dollars needed to make oil, beyond what was budgeted, the dollars can't effect EROEI laws. Countries like China are not dumping the dollar on the forex but are actually on a spending spree, buying rights and access for oil, natural gas and political favors, using those dollars.

Bottom line, the US FED pumps and pumps more liquidity, foreign governments are blowing and spending the dollar as if the dollar has some time sensitive, vanishing ink. Oil isn't really going up. Even as it approached $100, it's barely keeping up with it's liquidity. We are fast learning that more dollars doesn't make more energy. The dollar isn't the holly grail after all.

[rogerhb]

$this->bbcode_second_pass_quote('lutherquick', 'T')he dollar isn't the holly grail after all.

[Gazzatrone]

Why is it that Mankind seems strangely drawn to the seemingly powerful significance of a round figure?

Take the preceding paranoia of the year 2000. The "end of the World is nigh" became encapsulated in Y2K bug. The result? To my knowledge a fishermans boat lost its GPS and couldn't get back home.

So it appears that for no apparent reason when the price of oil reaches $100 that will signal the beginning of the end.

My thinking is that when we reach $100 noone will care, accept it and go on living blissfully ignorant lives. The majority of society will do so otherwise and will have to run to catch up in order to stay in a job.

Naturally Sustainable Growth practice will have a lot to do with this acceptance. The Economy must prevail albeit a lot more painfully and slowly than before.

But why $100? Whats wrong with $76.32 or long sustained period of oil staying at $73.

My thinking is that Mankind puts a breaking point on figures that ultimately seem remote or unthinkable.

Ask anyone in the street last year if the price of oil would fetch $100 within 2 years, you would probably have been laughed at. Before Katrina you could probably say the same for the figure of $75 yet 75 doesn't seem as scary or remote as 100.

I am raising this point because for a while now at Peak Oil.com it is clear that the $100 has come to be regarded as the Flashpoint for the coming crisis to really start. It seems that Peakers too are starting to live in denial of the fact that Peak Oil is round the corner, or if not behind us already, in a vain hope to put off the inevitable. And when $100 arrives will $150 be the next "regarded flashpoint"

But why can't a sustained period of between $75 - 80 for a year be just as painful.

I have no conclusion to this as it seems that it is something we can only agree on collectively.

[dissident]

I agree, there isn't going to be a phase transition at $100 or even $200. Things will get progressively worse for a sizeable chunk of the population but it will not destroy the system. The de-industrialization of America is an example were people lost high paying jobs and gained low paying service sector jobs. They lost thousands of dollars in income. An oil price increase to $200 is less of a shock than this.

[TheTurtle]

$this->bbcode_second_pass_quote('Gazzatrone', '
')But why can't a sustained period of between $75 - 80 for a year be just as painful.

[Gazzatrone]

$this->bbcode_second_pass_quote('TheTurtle', 'B')y the way, Y2K fears were not due to any mystical connotations surrounding the year 2000, but rather the fact that the practice of coding a year with just two digits since the advent of computing suggested a problem would occur as the calendar moved from 99 to 00. The fact that significant problems did NOT occur is due to the BILLIONS of dollars that were spent during the late 90s recoding crucial software.

[emailking]

There's no real fundamental significance to using a base 10 system. It derives from the fact that we have 10 fingers. People are drawn to round figures because they think there *is* something fundmentally significant about 10, 100, 1000, etc. But most people never really appreciated math and thus do not see this absurdity.

[TheTurtle]

$this->bbcode_second_pass_quote('emailking', 'T')here's no real fundamental significance to using a base 10 system. It derives from the fact that we have 10 fingers. People are drawn to round figures because they think there *is* something fundmentally significant about 10, 100, 1000, etc. But most people never really appreciated math and thus do not see this absurdity.

[Concerned]

$this->bbcode_second_pass_quote('Gazzatrone', 'W')hy is it that Mankind seems strangely drawn to the seemingly powerful significance of a round figure?

[pea-jay]

I think it also depends on how fast the rise is. Drifting to 100 over the next year and a half due to market ups and downs is certainly less scary than crashing through the barrier in a day or two of panicked trading due to a natural disaster or man made incident. Option one is the status quo. We will adapt which probably include a recession. Option two is a recipe for an economic crisis that many of us have come to expect.

[jdumars]

$99 per barrel I can live with... but $100??? NO WAY DUDE!!

Math is arbitrary enough. Add human "meaning" on top an already completely man-made invention and the results can be disasterous.

[savethehumans]

$this->bbcode_second_pass_quote('', '$')99 per barrel I can live with... but $100??? NO WAY DUDE!!

[rogerhb]

If that's true then why do we see prices like $9.99 or $9.95 rather than $10.00?

Prices are psychological unless we leave it to the computers to do all the bidding.

[emailking]

I think that reflects more the tendenacy to see $9.99 as $9 and not $10. I do this all the time myself when I'm just browsing and haven't started seriously considering the prices or the total. Moreover, I pretty much always round gas prices down to the cent for all pruposes, when really they are almost a full cent higher.

[pea-jay]

$this->bbcode_second_pass_quote('emailking', ' ')Moreover, I pretty much always round gas prices down to the cent for all pruposes, when really they are almost a full cent higher.

[Gazzatrone]

$this->bbcode_second_pass_quote('pea-jay', 'I') think it also depends on how fast the rise is. Drifting to 100 over the next year and a half due to market ups and downs is certainly less scary than crashing through the barrier in a day or two of panicked trading due to a natural disaster or man made incident. Option one is the status quo. We will adapt which probably include a recession. Option two is a recipe for an economic crisis that many of us have come to expect.

[garyp]

$this->bbcode_second_pass_quote('rogerhb', 'P')rices are psychological unless we leave it to the computers to do all the bidding.

[Ludi]

$this->bbcode_second_pass_quote('Gazzatrone', ' ')We'll reach $100 and then find an excuse or reason to make $150 the new flashpoint for peak to begin and we won't have realised how far beyond Peak we have gone.

[whereagles]

Price is not an issue. 100, 200, 500, 1000 is all the same. Money is paper, money circulates, the economy adapts itself.

Now, supply shortages, THAT'S a whole different ball game. That's the true flashpint.

[Doly]

I've been wondering what the market reaction will be when oil hits the psychologically significant $100 mark. What do the experts think?