[DantesPeak]

SevenTen - great summary. Newcomers should read this, and since you appear to be a newcomer too, welcome.

I only have one very minor additional comment on your summary. While in terms of inflation adjusted US dollars the price of oil would fall in a population crash, it still may rise in unadjusted terms. This is due to the likelihood that governments would increase deficit spending to attempt to solve major problems of society, which would increase future inflation.

[thylacine]

Do these analysts keep any sort of record of their past performances at oil price prediction? Is there any website that might show what predictions were being made 3 years ago about the prices we're currently paying? It might help us make a more informed call on whether these gents do actually know their arse from their elbow.

I love the quoting to 2 decimal places. If you can't get the accuracy, go for precision.

[SevenTen]

Thanks for the accolade, Dante. What you said is certainly true, however, in such an environment, what happens to the value of said governmental deficit-based spending over time, and during global depletion, who's got the resources (of all types) to sell?

If a government's economy starts to decline, they could try to "buy" their way out of it by a combination of (1) printing more money or (2) issuing more debt.

Printing more money just makes the money supply larger while the actual accessible resource base is still shrinking. This causes inflation all around, but also ends up being a way of redistributing wealth, dependent on what the government spends the newly minted money.

Issuing more debt in a market with ever-mounting financial, environmental, and security risks will have high risk premiums attached (read: exceptionally high interest rates). In a contracting global economy, I think the long term effect would be to push the real value of the debt downward, incurring effective real-world losses (adjusted for inflation) for debt holders and increasing the overall pressure on debt-issuers to repay. Repay, again, from a shrinking pie.

Or something along those lines. My end point anyway is I think it's a screwed-screwed situation, and governments will go down this road anyway, hoping that these debts will one day be ultimately resolved by war. In the short term, a few people make money, a few crooks get away, and most people get the shaft.

[SevenTen]

And I forgot about how much of the medical profession and healthcare are dependent on plastics and other petrochemicals, another contributor to the economy, and highly inelastic consumer of oil.

[jdmartin]

I would not want any economist or any other financial advisor getting their information for making decisions off of Peak Oil forum, or any other internet chat hall for that matter. A lot of the "information" posted on here is a slant towards a particular viewpoint, hence the site name Peak Oil. If you're trying to make educated and accurate deductions, you try to find independent, non-biased sources of information.

That said, the signs of oil being a lot more expensive are all over the place, for anyone willing to acknowledge them. You could even ignore all of them except for OPEC and figure out that $30 oil is not going to happen, because OPEC's not going to let it happen irrespective of how much oil happens to be found; consensus is that OPEC will become more, not less, important in the future for oil supplies, and they've already proven that for whatever reason (no supplies, weak dollar, whatever), they're going to protect a high pricepoint for oil - hence their production cuts of the past several months (at least on paper).

Back to the original point - economists are damn fools. They are quite possibly one of the most useless "professions" to ever come out of colleges. I have rarely heard an economist that knows how to do anything but spout the common lines they've been taught; god forbid they actually think for themselves

[TreebeardsUncle]

There was an article in the Sacramento Bee this morning saying that the price of gas in California is unlikely to fall below $3.00/gallon this summer. In the article the statement is made "The US Department of Energy forecasts that California prices will keep rising but at a moderate pace compared to the rest of the country." ... Then one sees the USDE's prediction for crude oil prices this summer. "The forecast assumes oil prices will average $65.68 a barrel, nearly $5 a barrel less than last summer." I suppose that could be the case if there are no lasting significant political dustups and no hurricanes impact the oil-producing regions of the Gulf coast this summer.
Right now gasoline is average $3.28 in California and $3.24 in Sacramento. "That was 3 cents shy of the all-time high of $3.27 recorded last May. Motorists interviewed Tuesday said they're still struggling to adjust to $3-plus gas. It's affecting their driving habits [Heavens forbid!!!!!!] and, in some cases, eating into their discretionary income.

Here is more from the article:

"The Department of Energy said it expected gas prices nationwide to go up through the summer, but not by much. The price is expected to average $2.81 a gallon through the summer, or 3 cents lower than last summer. Currently, the U.S. average is $2.79, AAA said.
As in California, the national average shot up because of refinery problems, higher crude costs and other issues,
The U.S. average has riser 64 cents since January, roughly the same as the California average."

Note January, February, March, and April are four months. 64 cents divided by 4 is 16 cents. So, thus far, gas prices have risen at least 16 cents a month. Why should they not rise another 16 cents by May? Well, perhaps the idea is that the refineries are all fine now so we don't need to worry about them anymore. Why should gas not rise at least another 48 cents by August.

Does anyone think it strange that the US Department of Energy is predicting that national gas prices will average $2.81 this summer when they are already averageing $2.79 now and are up 64 cents since January? That is basically demanding that a fairly continuous ramp function nearly discontinuously changes to a constant. That would be quite a kink, very nasty and unphysical. Seriously, this is well past my level of credulity. I know journalists are innumerate and largely incapable of reason and logic, but there must be some people in the US DE who are not. I know one of them at least. Thus, I think we can safely say that the US Department of Energy "predictions" as regards oil prices are the work of another lying, shilling, sham job and their statements are to be dismissed.

G

[TreebeardsUncle]

I passed this note along to some folks via email
and had posted it with an addition (in brakets []) to a place on AOL for folks to complain about gas prices (http://journals.aol.com/dailypulseblog/ ... ournalism/).

g

Hello.

I suggest you folks investigate the phenomenon of peak oil. The supply of oil is not inexhaustible and in fact the maximum amounts of light sweet crude that is ever likely to be mined on an annual basis has most likely already passed, in 2005 or so. [Oh, and another thing, just because you do not understand mathematics or physical limits does not mean they won't affect you.]

In particularly see http://www.raisethehammer.org/index.asp?id=285:
which shows the peak of all pretroleum liquids and natural gas is expected by about 2010. That is how much time you have before the easy motoring American suburban lifestyle starts becoming significantly less easy.

[shortonoil]

$26.81 in 2010 is quoted in what will then be the new Freedom Currency that will be issued in 2009 to replace the ailing dollar. It will be worth 1/10,000 of the old 2005 dollar.




"The Senior White House staff is living proof that Pentecostal
mongoloids regularly cohabit with chimpanzees, frogs and Norway rats"
-Dr. Myron Kalbfuss, Biology Department, Stanford University

[TreebeardsUncle]

Hello.

Noticed some interesting posts over on msnbc.com:
http://journals.aol.com/dailypulseblog/ ... omment=all

In addition to a couple posts like this about electric cars, there were even a couple (besides me) who mentioned an imminent peak oil event in such a way to show that they either believe it was true or considered it credible.

Why are we all still filling up at the pump and paying for high priced gasoline? Why are we as our President said in his state of the union address, "America YOU'RE ADDICTED To Foreign Oil" I urge everybody to see the DVD movie "Who Killed The Electric Car?" Directed by Chris Paine. in 1996 General Motors developed a car called the EV1 that ran totally on ELECTRIC. Top speed was 70MPH. Celebrities like Tom Hanks, Mel Gibson, Alexandra Paul and U.S. Senators who drove this remarkable vehicle gave it rave reviews. These cars were ONLY LEASED and when the lease ran out these "Cars That Could Break America's Danerous Addiction To Foreign Oil" were taken back by GM and were CRUSHED. Why??? Check out the website www.pluginamerica.com GM is not the only one that developed electric cars. Search the internet for the Toyota Rave4 EV (Electric Vehicle) or the Ford Th!nk car and the Ford Ranger EV a pick up that ran on electric. Most of these cars were destoyed by their own manufacturers because they argued "Nobody WANTED to BUY and OWN these CARS!!!! And our politicians AGREED. A car you could have plugged into an electical wall socket in your garage to it "REFUEL" it. A car that never needed an oil change because it doen't run on a GASOLINE INTERNAL COMBUSTION engine. No SMOG check because an ELECTRIC CAR doesn't have any tail pipe or produce any polluting exhaust. Remember the car companies said "Nobody Wanted To BUY or OWN these type of vehicles" REALLY.....ARE THEY RIGHT???? check out www.pluginamerica.com
Comment from lldreal - 4/11/07 11:15 PM

[nth]

$this->bbcode_second_pass_quote('DoctorDoom', 'C')learly, the collective wisdom of the traders is that more supply is coming on line and the price will ease; I believe someone posted a report showing that several mega-projects are coming in 2005 and 2006. However, there are no mega-projects in the pipeline after that point, so it does make you wonder.

[Roccland]

$this->bbcode_second_pass_quote('', 'A')lan Greenspan's low- interest, subprime, snake-oil Caravan took another spin down Wall Street today---ripping up pavement, knocking down power-poles and sending traders scampering for safety. When the dust finally settled, "Maestro's" wrecking ball had lopped another 387 points off the Dow Jones leaving markets reeling and investors cringing in fear.

No doubt about it; the mood on the "Street" has taken a 180
overnight. A long procession of bears---marching three-abreast with arms locked—can now be seen winding through downtown Manhattan. Their sense of triumph is palpable. Meanwhile the last wounded bull—still writhing at curbside-- is being carted off to slaughter.

[threadbear]

I posted this article on another thread, Roccland--It definitely deserves a thread all of it's own. It's by far the best article written on the fubar, I've read yet. Whitney is THE best writer, on these topics out there.

From same article:

"In an economy as diverse and healthy as this, losses may occur in a number of institutions, but that overall this is contained and we have a healthy economy."

“Contained”?!? This is “contained”?

Newsweek’s Daniel Gross had this reaction to Paulson’s remarks:

“If the containment policy of the Cold War worked as well as this subprime-mess containment policy, we'd all be speaking Russian and living on collective farms”.

[alokin]

I don't understand this. Bush announced his rate cuts at least a week ago, but yesterday stocks sloped like mad and recovered after he officially announced his package.
Why? The brokers knew more or less what will happen and when. Why this crazy downslope?
Why this quick recover? Nothing is different now, the US government is printing a bit more money and that's it.

This is my opinion, but my economical knowledge is really underdeveloped.

What will happen next? Will the stock markets recover and with it the rest of the economy?

[americandream]

plunge protection team?

[kokoda]

Quite simply ... the market is nervous.

This is what nervous markets do ... they panic.

They are expecting the crash to come, and come very soon.

[Tyler_JC]

$this->bbcode_second_pass_quote('alokin', 'I') don't understand this. Bush announced his rate cuts at least a week ago, but yesterday stocks sloped like mad and recovered after he officially announced his package.
Why? The brokers knew more or less what will happen and when. Why this crazy downslope?
Why this quick recover? Nothing is different now, the US government is printing a bit more money and that's it.

This is my opinion, but my economical knowledge is really underdeveloped.

What will happen next? Will the stock markets recover and with it the rest of the economy?

[greenworm]

$this->bbcode_second_pass_quote('', 'W')hy?

[Lighthouse]

$this->bbcode_second_pass_quote('greenworm', '
')
A well planned move to make money.

[Plantagenet]

$this->bbcode_second_pass_quote('alokin', 'I') don't understand this. Bush announced his rate cuts at least a week ago, but yesterday stocks sloped like mad and recovered after he officially announced his package.
Why? The brokers knew more or less what will happen and when. Why this crazy downslope?
Why this quick recover?

[greenworm]

$this->bbcode_second_pass_quote('', 'I')s there anything you do not suspect a conspiracy?