[zoidberg]

$this->bbcode_second_pass_quote('seldom_seen', 'I')t seems we'll never reach the inflation adjusted high of 1980. It will always be just out of reach, receding over the horizon.

It was $70.00, then $80.00, now it's like $107.00.

Remember, that no matter how bad things get. Oil will never be expensive as it was in 1980.

[Madpaddy]

Zoidberg,

If you read seldom_seens post again, you may detect the strong irony in his comment.

[TheTurtle]

Good news. It dropped back down to $79.91.

All is well.

[Leanan]

Oil hits $80 as skeptics stare down OPEC

A MarketWatch article that mentions peak oil by name!

$this->bbcode_second_pass_quote('', ' ')Such uncertainties also lead inevitably to renewed airing of the Peak Oil theory, which posits that the world's petroleum production is at or near an unsustainable high and doomed to drop as demand gradually overwhelms supply.

The oil industry dismisses this as hogwash and continues to offer assurances that it can continue to match supply to demand for decades to come.

But with crude at $80 a barrel, it's clear that fewer futures traders are willing to believe it. In fact, they are increasingly betting against it.

[seldom_seen]

Yes, I was being ironic (or trying).

Here's why I think the "inflation adjusted" talk is just a refrain to avoid spooking the herd.

This is completely non-scientific, but let's look at the price of gold and oil in 1980 and now.

In 1980 an ounce of cold cost approx. $640.00.
In 1980 a barrel of oil cost approx $38.00 (peak price).

Today an ounce of gold costs approx. $700.00 an ounce.
Today a barrel of oil costs approx. $80.00 barrel.

The bottom line is that you would need almost twice as much gold to buy a barrel of oil today then you would in 1980.

In 1980 the price of wheat was about $4.00/bushel. (Today it hit $9.00/bushel, which is worthy of a seperate thread). Yet the average yearly wheat price for the 06/07 marketing year was about $4.50/bushel

Once again you would need much more wheat today to buy a barrel of oil than in 1980.

[DantesPeak]

$this->bbcode_second_pass_quote('Leanan', '[')url=http://www.marketwatch.com/news/story/oil-hits-80-skeptics-stare/story.aspx?guid=%7B2835B209%2DEA8A%2D4DB0%2DBF9A%2D2D93E31FCAE9%7D]Oil hits $80 as skeptics stare down OPEC[/url]

A MarketWatch article that mentions peak oil by name!

$this->bbcode_second_pass_quote('', ' ')Such uncertainties also lead inevitably to renewed airing of the Peak Oil theory, which posits that the world's petroleum production is at or near an unsustainable high and doomed to drop as demand gradually overwhelms supply.

The oil industry dismisses this as hogwash and continues to offer assurances that it can continue to match supply to demand for decades to come.

But with crude at $80 a barrel, it's clear that fewer futures traders are willing to believe it. In fact, they are increasingly betting against it.

[mistel]

Part of the reason for the rise in Oil is the decline of the US$, which today hit multi year lows.

[Zardoz]

Bodman Says $80 a Barrel Oil Prices Are `Troublesome'

$this->bbcode_second_pass_quote('', 'R')ecord crude oil prices above $80 a barrel are "troublesome,'' U.S. Energy Secretary Samuel Bodman said today.

Oil futures rose to $80.18 a barrel in New York after a report today showed a larger-than-expected drop in U.S. oil inventories. The rise in prices follows yesterday's announcement that the Organization of Petroleum Exporting Countries would increase production by 500,000 barrels a day.

The record prices underscore "how vital it is that we lower energy costs, cut oil consumption and make America more energy independent,'' Senate Majority Leader Harry Reid, a Nevada Democrat, said in a statement today. "Democrats are working to do just that while Republicans continue to pander to big oil companies.''

Bodman praised the decision by OPEC to increase output.

"They have made a step, in my judgment, in the proper direction,'' he told reporters today after giving a speech in Washington.

[Heineken]

So when do gasoline/petrol prices rise also?

The gasoline price is where the buck stops.

[emersonbiggins]

$this->bbcode_second_pass_quote('', 'T')he oil industry dismisses this as hogwash and continues to offer assurances that it can continue to match supply to demand for decades to come.

[zoidberg]

$this->bbcode_second_pass_quote('seldom_seen', 'Y')es, I was being ironic (or trying).

Here's why I think the "inflation adjusted" talk is just a refrain to avoid spooking the herd.

This is completely non-scientific, but let's look at the price of gold and oil in 1980 and now.

In 1980 an ounce of cold cost approx. $640.00.
In 1980 a barrel of oil cost approx $38.00 (peak price).

Today an ounce of gold costs approx. $700.00 an ounce.
Today a barrel of oil costs approx. $80.00 barrel.

The bottom line is that you would need almost twice as much gold to buy a barrel of oil today then you would in 1980.

In 1980 the price of wheat was about $4.00/bushel. (Today it hit $9.00/bushel, which is worthy of a seperate thread). Yet the average yearly wheat price for the 06/07 marketing year was about $4.50/bushel

Once again you would need much more wheat today to buy a barrel of oil than in 1980.

[sicophiliac]

This throws a monkey wrench into the suspected plans for the Fed to cut rates now doesnt it? First its the housing bubble/credit crunch that took all the oxygen out of the economic room so to speak. Oil had been high but the economy had pretty much coped and dealt with it until now. Now if crudes in the 80 dollar range inflationary pressures will inevitably begin to build and the odds of a rate cut or a substantial rate cut diminish. Looks like the fed is in between a rock and a hard place. Im sure this is nothing new to anybody here but it looks like stagflation will be right around the corner. PS to those investors out there look into the fund "QID" (ticker symbol) and I suspect buy some gold related stocks or gold itself too.

[jdumars]

This crux is no mystery even to an economics hack like me. The Fed has been caught between a rock and a hard place for a while now, unable to move interest rates up or down, because one way is a death spiral of inflation, and the other is a death spiral of recession/depression. Oil prices are to some degree insulated from this and have the power to force the Fed's hand one way or the other. They have had the plates spinning on poles, but eventually they had to slow down and start falling off and breaking.

[Cobra_Strike]

Now it has closed over 80 for the first time. It was funny listening to the CNBC people talking about the demand driven nominal price increase. Then mentioning that it was no where near the 80 inflation adjusted high. Odd, but a few years ago the inflation adjusted high was 84. The last few years of inflation must not have been kind to us.

[Ferretlover]

$this->bbcode_second_pass_quote('Heineken', 'T')oday we reached the $80/bbl milestone so oft ruminated upon. It's happened without any corresponding ejaculation in the gasoline price. Also, it's occurred without the help of hurricanes or any other dramatic events, which obviously gives the event a lot more weight.

[Heineken]

No, it wasn't Heineken, Ferretlover. Of that I can assure you!

Maybe the analyst read my post . . .

More likely, he was just stating the obvious.

[Cobra_Strike]

I do wonder sometimes how often the threads are read by staffers.

[mos6507]

This is right on the main page for Yahoo. "Triple digit prices is not a spike," he said. "Triple digit oil prices is what is going to be required to maintain, let alone grow, world oil supplies."

How much longer will people be rushing out to by Hummers with news like this staring them directly in the face?

[Cobra_Strike]

Grow supplies...laughable.

I feel only slight pity for the people who will die because of this.

[Jack]

$this->bbcode_second_pass_quote('mos6507', '
')How much longer will people be rushing out to by Hummers with news like this staring them directly in the face?