[Carlhole]

link$this->bbcode_second_pass_quote('Klare', '[')b]Reading the Gas Pump Numbers
What Do Falling Oil Prices Tell Us about War with Iran, the Elections, and Peak-Oil Theory By Michael T. Klare:

What the hell is going on here? Just six weeks ago, gasoline prices at the pump were hovering at the $3 per gallon mark; today, they're inching down toward $2 -- and some analysts predict even lower numbers before the November elections. The sharp drop in gas prices has been good news for consumers, who now have more money in their pockets to spend on food and other necessities -- and for President Bush, who has witnessed a sudden lift in his approval ratings.

Is this the result of some hidden conspiracy between the White House and Big Oil to help the Republican cause in the elections, as some are already suggesting? How does a possible war with Iran fit into the gas-price equation? And what do falling gasoline prices tell us about "peak-oil" theory, which predicts that we have reached our energy limits on the planet?

[Taskforce_Unity]

Why do people keep saying such things:

are claiming that we have already consumed approximately half the world's original inheritance of 2 trillion barrels of conventional (i.e., liquid) petroleum, and so are at, or very near, the peak-oil moment and can expect an imminent contraction in supplies.

Overdramatizing the message of ASPO, "imminent", five to six years (Colin Campbell current prediction) is not imminent...

[DantesPeak]

While many POers have said there will be a contraction of supplies sometime in the next few years, the number that say there will a huge contraction is small. Perhaps Klare is reffering to those, which helped foster the recent flood of anti-PO debunking comments from the media that we are not "running out of oil". The issue is not whther we are running out of oil, but how will we adjust to more or less steadily falling worldwide production of oil in the future.

I gather from this article that he thinks the possible US attack against Iran will be postponed until after elections.

[rumspringa]

$this->bbcode_second_pass_quote('', '[')b]TREASURY SECRETARY'S FIRM MAY HAVE PLAYED MAJOR ROLE IN GAS PRICE DROP

LE METROPOLE CAFE - In yesterday's WSJ in Section C there is a very, very interesting item in the article, Some Investors Lose Their Zest For Commodities. The article notes that over that past few months, commodity funds have been liquidating commodity holdings. But here's the stunner: "Consider the Goldman Sachs commodity index, one of the most popular vehicles for betting on raw materials. In July, Goldman Sachs tweaked the index's content by cutting its exposure to gasoline. Investors tracking the index had to adjust their portfolios accordingly“ which sent gasoline futures prices tumbling."

Prior to Goldman's July GSCI revision, unleaded gas accounted for 8.45% of the GSCI. Now unleaded gas is only 2.30%. This means commodity funds had to sell 73% of its gasoline futures to conform to the reformulated GSCI. . .

Here we have Goldman, qua keeper of the commodities index, manipulating markets simply by adjusting index components. It is noteworthy in several respects. First, we are used to the notion of them front running market sensitive information announced by third parties, but here a glorified hedge fund - albeit one dominating central banks and finance ministries worldwide - maintains market-moving indices itself. . . . Second, it lends credence to the theory that the current well-publicized commodities decline is just a well-timed, well-orchestrated head fake to benefit the incumbents in the run up to the midterm elections - someone noted recently that Bush's ratings vary inversely with gas prices. . .

[mrobert]

Looks like gas will become free by the elections

[PeakOilPrincess]

So how high will gas go after the elections?

[rwwff]

$this->bbcode_second_pass_quote('PeakOilPrincess', 'S')o how high will gas go after the elections?

[joewp]

rwwff, this is Karl Rove we're talking about.

This is a more appropriate scenario with him involved:

- Oil prices start creeping up due to supply/demand imbalance (nowish)
- around 2nd week of October a terror attack is attempted on a US ship in the Persian Gulf
- after 7-10 days of "international investigations and diplomacy", severe sanctions are taken against Iran; Russia and China go along when shown "evidence" of Iran's responsibility for the attack
- oil price spikes, passing $80, surprisingly, gasoline only reaches back to $2.70, but heating oil goes through the roof (heating oil is mostly used in the mostly blue northeast anyway)
- Republicans nearly sweep congressional elections, some staunchly Democratic districts even vote Rep. 51-49 (where computer voting is used) Every close election seems to be an GOP win...
- oil prices find a new floor around $75 during the after-Christmas low, rising again with the severe cold snap in the Northeast in February.

You could be right, of course, but my scenario is more exciting, isn't it?

[JustinFrankl]

$this->bbcode_second_pass_quote('PeakOilPrincess', 'S')o how high will gas go after the elections?

[Doly]

$this->bbcode_second_pass_quote('JustinFrankl', '
')I think oil will hit $100 by the end of March, 2007, assuming the recent several years' overall runup in price is indicative of the underlying peak oil supply problem.

[Tanada]

$this->bbcode_second_pass_quote('Doly', '')$this->bbcode_second_pass_quote('JustinFrankl', '
')I think oil will hit $100 by the end of March, 2007, assuming the recent several years' overall runup in price is indicative of the underlying peak oil supply problem.

[mrobert]

If we rule out the speculations from the oil market ... where should the price be?

Speculation will be the first to go.

[EnemyCombatant]

$this->bbcode_second_pass_quote('mrobert', 'L')ooks like gas will become free by the elections

[EnemyCombatant]

Don't be sure that elections are always stolen in favor of Republicans.

There are good Republicans out there that will loose to neo-liberals.

If necessary, they would use Diebold to protect Hilliary's seat. But of course that's not required in this case.

[Dreamtwister]

Both parties play the oil game at election time. Clinton released a bunch of oil from the SPR to lock up his second term, too IIRC.

Granted, it's not quite the same thing as having Goldman Sachs as your personal bitch...

[ohanian]

$this->bbcode_second_pass_quote('mrobert', 'I')f we rule out the speculations from the oil market ... where should the price be?

[mrobert]

I found the solution to the oil issues :

Change the constitution, and have the president elected every 6 months!

Am I smart?

[Temperedoil]

The price of oil has been falling because there has been a lot of good news lately. All of the speculators who were reacting to bad news have now halted the activity that was driving the price upwards. However, there are two problems with this. One is that the good news might not all be so good. The other is that, even with the good news that we have had, oil is still at about US$60 per barrel - which is not exactly cheap by historical standards.

Good news has included: a cooling of tensions with Iran, tempered with the USA's continued pressure for sanctions against Iran; discovery of "large" oil find in the Gulf of Mexico, though this find is still not large enough for production to make any noticeable difference when considering that other, much larger, fields around the world are in decline - also notable that the oil is not only under deep water but is also deep under the sea bed (how cheap is that oil really going to be, and will such not-so-cheap finds be all the cheap oil we can get in sizeable quantities now?); cessation of hostilities between Israel and Hezbollah, and the fact that the conflict did not spread to include neighbouring states as feared, but was the end of that conflict really a resolution or just a pause brought about through the combination of political pressure and miscalculations on the Israeli part about how tough the fight would be? Another reason for the falling price of oil has been reduction in demand growth - linked to the high price of oil and cooling economies. Is it really good news when we see demand growth falling in response to high prices, but not to such an extent as to allow a continued buffer in years ahead as supply falls?

There is nothing in the reasons behind the recent falling price of oil to suggest that Peak Oil is anything less of a problem than it was when prices were on the upswing.