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Re: Another Oil price Record

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Re: Another Record ($135.09)

Unread postby dohboi » Mon 02 Jun 2008, 16:29:21

Congratulations! (But does that mean that you've peaked?;-)
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Re: Another Record ($135.09)

Unread postby bodigami » Mon 02 Jun 2008, 19:23:21

The ranges we're talking and seeing are still above $110... which was "unthinkable" for some to happen in this decade... but PO is far from widely acknowledged... maybe when oil gets to $200; but then it will be too little too late.
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Re: Another Record ($135.09)

Unread postby yesplease » Mon 02 Jun 2008, 22:49:12

$this->bbcode_second_pass_quote('zensui', 'T')he ranges we're talking and seeing are still above $110... which was "unthinkable" for some to happen in this decade... but PO is far from widely acknowledged... maybe when oil gets to $200; but then it will be too little too late.
Too little too late for what?
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Re: Another Record ($135.09)

Unread postby lowem » Mon 02 Jun 2008, 23:34:12

$this->bbcode_second_pass_quote('dohboi', 'C')ongratulations! (But does that mean that you've peaked?;-)


I was thinking more of a bumpy plateau ... :lol:

And there's always Fission and Fusion to aspire to ... 8)
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Re: Another Record ($135.09)

Unread postby Rabbit » Tue 03 Jun 2008, 12:00:31

I don't understand a decline in price after a drop of 8 billion barrels from last weeks inventory report? Normally we see a rally after just a small drop in inventory.
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Re: Another Record ($135.09)

Unread postby Dan1195 » Tue 03 Jun 2008, 12:22:36

Well, traders act on things other than the numbers on the inventory reports. If you read the comments above on the thread you would see the traders bought the "fog" explanation and assume there will be a significant build tomorrow. Also, statements from people like Bernanke and reports suggesting the economy will remain sluggish, thus reducing demands, are also bearish on the market.

Note that traders at least in the short term appear to be ignoring the possibility of available imports available declining at a greater rate then the rate of demand destruction in the U.S. i.e. they take the demand destruction information "in a vacuum" and do not explicity suscribe to the Export Land Model and such.
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Re: Another Record ($135.09)

Unread postby Eli » Tue 03 Jun 2008, 12:58:14

Oil is still very very high, these price swings lower are nothing to get excited about, the market in general is entering into more instability.
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Re: Another Record ($135.09)

Unread postby AirlinePilot » Tue 03 Jun 2008, 13:00:35

$this->bbcode_second_pass_quote('yesplease', 'T')oo little too late for what?


I think he means it will be too late for us to get out from under the crushing weight of an energy and liquid fuel deficit which never ends.

The part that amazes me that folks don't get is this....

As the supply begins to become critical, as it is now, the price rises. With normal commodities this then causes demand to come back and price to come down. With oil this is not going to be the case, at least not the traditional way we think.

Why?

Because it is the ultimate inelastic commodity. It is necessary. It is the lifeblood of the way we live and how we have set up our economies, our businesses, transportation, and leisure. Now this is the key....

Even If the demand begins a slight decline as it seems to be now, the demand drop never is enough to truly affect the price in a traditional commodity like way. The crux of the problem I see coming is that demand will decrease but decline/depletion becomes the bigger factor and INCREASES over time due to our inability to wean ourselves off the oil teat.

Price may fluctuate and give the false pretense of normal commodities behavior, but it will inexorably continue to climb due to depletion/decline accelerating in front of demand destruction as we pass to the downslope of peak. I do believe this is why we will probably begin to see shortages (on a small scale at first) even though traditional economists scream that we should be building supply at such high prices.

That is what most folks cannot grasp. It took me a while to get it and I believe it's why the smarter folks on this board and at TOD are such doomers.

The time to nip this in the bud was before you see uncontrollable supply problems and increasing decline and export numbers.

Guess what? Looks to me like we are here. We have waited too long to acknowledge it and we have done virtually nothing on any large enough scale to do anything but prolong the agony for a few years. Humanity should have been engaged on a large scale to get off the oil addiction at least 15 years ago.

Waiting until depletion starts is too late. Unless there is some fairly miraculous oil finds which can come on line even miraculously faster than usual we dont stand a chance to mitigate the effects of possible double digit decline. We may solve a lot of the problems but it will undoubtedly mean very large scale economic and social dislocation for a very long time.

With our addiction to a finite resource, it cannot work any other way. Humanity has a poor track record on getting together on issues such as this. Hence many of us who tend to grasp the severity and scale of the problem become pretty negative about the ultimate outcomes. None of this is sustainable for very much longer and we seem to be trying very hard to maintain the status quo as long as possible. It wont have a good ending.
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Re: Another Record ($135.09)

Unread postby catbox » Tue 03 Jun 2008, 13:07:25

Always seems like the price declines and then slingshots forward...each time a new record is reached. Almost time for the slingshot to happen...I like how Pickens put it, "You have 85 million barrels a day of oil available in the global energy market and 86.4 million barrels a day of demand." Simple. Killing demand is not an option for the rest of the world at this point.

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Re: Another Record ($135.09)

Unread postby threadbear » Tue 03 Jun 2008, 17:37:24

Bernanke's comments indicate he's going to hold firm on interest rates or raise. This is bearish for commodities, precious metals and oil. Gold dropped about 10 bucks, last I looked. If you're looking for reasons for the price drop today, look no further.
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Re: Another Record ($135.09)

Unread postby lowem » Wed 04 Jun 2008, 01:38:14

Ben "Helicopter" Bernanke concerned about inflation - that'll be the day. Not to forget that US M3 money supply is going parabolic and shooting for 20%.

Buy at support levels !!
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Re: Another Record ($135.09)

Unread postby dorlomin » Wed 04 Jun 2008, 06:44:03

$123.65 atm. Seems that the high oil price is killing alot of the economy with European consumer spending taking a beating today.

link

link


The dynamic between demand destruction and price is now up and running. When demand is to high for the amount of oil available, the price kills it and demand comes down, price drops a wee bit then stabilises. Setting a cealing on the energy availible for the economy.

How an export driven beast like China reacts to slow downs in its export markets is going to be very interesting.
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Re: Another Record ($135.09)

Unread postby yesplease » Wed 04 Jun 2008, 07:24:20

$this->bbcode_second_pass_quote('AirlinePilot', '')$this->bbcode_second_pass_quote('yesplease', 'T')oo little too late for what?


I think he means it will be too late for us to get out from under the crushing weight of an energy and liquid fuel deficit which never ends.

The part that amazes me that folks don't get is this....

As the supply begins to become critical, as it is now, the price rises. With normal commodities this then causes demand to come back and price to come down. With oil this is not going to be the case, at least not the traditional way we think.

Why?

Because it is the ultimate inelastic commodity. It is necessary. It is the lifeblood of the way we live and how we have set up our economies, our businesses, transportation, and leisure. Now this is the key....
Like any other commodity, it has some elasticity depending on locale and time period. It is not the ultimate inelastic commodity.
$this->bbcode_second_pass_quote('AirlinePilot', 'E')ven If the demand begins a slight decline as it seems to be now, the demand drop never is enough to truly affect the price in a traditional commodity like way. The crux of the problem I see coming is that demand will decrease but decline/depletion becomes the bigger factor and INCREASES over time due to our inability to wean ourselves off the oil teat.
Of course reductions in consumption and growth of consumption, reduce price. High oil prices reduced the growth of oil consumption in the states and have recently begun to result in negative growth. Some states use less than others, for instance CA has reduced demand by a percent per year for the last couple years, and it looks like this year will see consumption cut by a few percent.

Since the short-term elasticity of oil tends to be so much less than it's long term elasticity, there has been, and probably will be a delay of a year or two between high prices last seen around 1980 and the drop in oil consumption that was seen after. If it was 2012, and we were still consuming the same amount of oil as we did in 2005 with prices at $1000/bbl, then I might be inclined to agree, but we are mimicking the drop in consumption seen last time oil and gas prices were this high (give or take, IIRC prices as a percentage of GDP are lower this time around). The main difference being that this time, if we are at peak, the price of oil probably won't collapse in a couple years and we will continue to reduce consumption as alternatives and cuts in use continue in step w/ oil prices.
$this->bbcode_second_pass_quote('AirlinePilot', 'P')rice may fluctuate and give the false pretense of normal commodities behavior, but it will inexorably continue to climb due to depletion/decline accelerating in front of demand destruction as we pass to the downslope of peak. I do believe this is why we will probably begin to see shortages (on a small scale at first) even though traditional economists scream that we should be building supply at such high prices.

That is what most folks cannot grasp. It took me a while to get it and I believe it's why the smarter folks on this board and at TOD are such doomers.

The time to nip this in the bud was before you see uncontrollable supply problems and increasing decline and export numbers.
I don't think that any reasonable economist, ie not a talking head, sees oil's behavior as it not being a commodity. It's a commodity just like any other, and due to it's high short term elasticity, can easily see price spikes w/ little destruction of demand. That being said, given it's long term elasticity, this can't last forever, and probably won't, if we mimic the behavior seen in the past. IMO it'll settle around $200-300/bbl, maybe lower, with spikes up to $300-500. At anything higher, the difference in price between it and alternatives is insanely high.
$this->bbcode_second_pass_quote('AirlinePilot', 'G')uess what? Looks to me like we are here. We have waited too long to acknowledge it and we have done virtually nothing on any large enough scale to do anything but prolong the agony for a few years. Humanity should have been engaged on a large scale to get off the oil addiction at least 15 years ago.

Waiting until depletion starts is too late. Unless there is some fairly miraculous oil finds which can come on line even miraculously faster than usual we dont stand a chance to mitigate the effects of possible double digit decline. We may solve a lot of the problems but it will undoubtedly mean very large scale economic and social dislocation for a very long time.

With our addiction to a finite resource, it cannot work any other way. Humanity has a poor track record on getting together on issues such as this. Hence many of us who tend to grasp the severity and scale of the problem become pretty negative about the ultimate outcomes. None of this is sustainable for very much longer and we seem to be trying very hard to maintain the status quo as long as possible. It wont have a good ending.I agree, those effects will be horrible. EVs, public transportation, more efficient use of oil where it's still used, with the usual reductions in pollution and wealth sent to the ME, disastrous. ;) The amount of energy required for implementation of alternatives and conservation is so small that we would have to be a decade or so into peak at ~7-8% depletion rates while taking no measures in the interim to actually be in hot water.

*Danger AirlinePilot! Danger!*

<rant, read at own risk>
Oil is used with the least amount of efficiency, both thermodynamic, and practical, of all our energy sources. If cars were houses we would all live alone in 4-6 bedroom McMansions. Clearly, some houses are, but the amount of conspicuous consumption seen in the auto industry has no equal. Only in America can the average two ton car get ~17mpg while a semi weighing fifteen times more gets ~12mpg. Based on what I've seen, oil depletion is the solution to the deliberately inefficient use of oil in order to leverage it's profitability. If we used it at even half the rate we have so far, it probably wouldn't have a chance to peak and run up in price thanks to reductions in it's use due to the externalities from pollution and Carbon emissions, not to mention the involvement of the military in you know who's backyard. Do you think it's a coincidence that there was a bizarre unification of the 'Publican's right on the eve of CA's ZEV mandate coming into effect, and trashed the high mileage program Clinton started. No demand for a five seat car that gets ~80mpg? Yup, must be why the Prius is posting such horrible sales. :roll: Clearly selling more gas guzzlers would improve profit margins. Course... It did, just not for GM and other American auto companies. Fortunately, using financial institutions as third parties, it's quite easy and legal to gain controlling interest in American auto companies, and pump out guzzlers, even at a loss, because the profits from sending oil through the roof will more than cover that. For instance, State Street Corp owns more of GM than anyone else. They also happen to have seven times more cash in Exxon, three times more in Chevron, etc... Who clearly only want to compete.$this->bbcode_second_pass_quote('', 'G')eneral Motors has urged investors to reject all 10 of the shareholder proposals for its June 5 annual meeting and to re-elect its board.

The proposals include requiring disclosure of political donations, cutting emissions of greenhouse gases and making it easier for smaller shareholders to elect directors, GM said Friday in a regulatory filing.FWIW, cutting emissions of greenhouse gases means increasing fuel economy, and I'm sure you understand the significance of disclosing political donations and giving smaller share holders more power to elect the directors, who decide what the company does. How horrible, poor State Street Corp won't be able to churn out guzzlers and drive up the price of oil until 2015.

All this while the administration preaches about eliminating our oil addiction while killing the ZEV mandate and the big three's high mileage program from Clinton's administration, while opening up a loophole so big an SUV could drive through it for free over the course of it's depreciation, as well as destabilize the largest oil producing region in the world while insuring the only oil producer in the area whose output had been cut thanks to UN embargoes and previous conflicts, couldn't bring anything else onto the market because of "sectarian conflict" ie civil war.

The only way they could've been more transparent about driving prices up would be to give away free government subsidized Hummers to everyone while starting an E85 from pine trees program in the Iraqi desert. The biggest problem we have with oil is that it's being used, just like plenty of other things, to rip us a new one. :twisted:
<end rant>
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Re: Another Record ($135.09)

Unread postby patience » Wed 04 Jun 2008, 09:15:36

Without a govt mandate, or sponsorship push, I can't see EV's being cost competitive for some time yet. If I do rough figures for a cheap used small car (30 to 40 mpg) vs any EV, even a homemade EV, the EV loses today. Relative lifetime cost has to come down vs ICE. Or, we can wait until fuel costs go high enough to make the EV competitive.

What difference does it make if big money/big corps are manipulating things? Is it not always so? The Big Three used ad campaigns to brainwash the public into huge cars long ago, and if we were gullible enough to fall for it, oh well.

What can an individual do? Same as always, make your own choices on a rational basis, with an eye to the future. I'll probably own an electric bike one day, but not for a while yet. Gas is too cheap, and batteries are too weak and expensive just now. For me, if it doesn't make dollars, it doesn't make sense. The paradigm is changing, so this situation will change with it. By the time it does, my garden tractor will run on wood-gas, or I'll own a small horse and not travel much at all.
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Re: Another Record ($135.09)

Unread postby Revi » Wed 04 Jun 2008, 12:14:38

I think this EV will make sense:

www.sunnev.com

We've already paid for more than half of it.

It will run on a penny a mile. I think it will work to cut our gas costs a lot.

We live in a town, so we can drive it around here.
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Re: Another Record ($135.09)

Unread postby frankthetank » Wed 04 Jun 2008, 12:17:37

Oil at $123
lawns should be outlawed.
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Re: Another Record ($135.09)

Unread postby Revi » Wed 04 Jun 2008, 12:51:22

I was hoping for a dip, so I can buy next winter's heating oil. How long should I wait? I am thinking around $110 a barrel is all it will go down. I could be wrong. It could go as low as $100, and then start back up again.

I am waiting to pounce on that low.
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Re: Another Record ($135.09)

Unread postby threadbear » Wed 04 Jun 2008, 15:51:17

$this->bbcode_second_pass_quote('Revi', 'I') was hoping for a dip, so I can buy next winter's heating oil. How long should I wait? I am thinking around $110 a barrel is all it will go down. I could be wrong. It could go as low as $100, and then start back up again.

I am waiting to pounce on that low.


The dollar is strengthening at the moment, but I wouldn't give it much more than a month before things could break down pretty bad, if Bush&co are successful in pursuing their goal of bombing Iran. They desperately want to do this, and if they do, oil costs will go through the roof. And who knows when they'll come back down? It may be a month or it could be a year or more. Can you heat with wood, if you have to?
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Re: Another Record ($135.09)

Unread postby AirlinePilot » Wed 04 Jun 2008, 17:39:08

I'd really like to know beyond extremely wild speculation why folks insist we are going to end up attacking Iran. They are not near any critical point for development of weapons yet and probably wont be for at least a few more years. I'd guess the worst you see is some sort of surgical strike next year or in 2010. Oil prices will likely be in bigger trouble by then due to import declines and more rational market realization of supply issues.

While I don't think this administration is very smart, I really don't believe they are that dumb. It would be political suicide for the Republicans to even openly speculate on it.

This latest pullback is profit taking and some dollar gains. How long does that last? I don't know but reading the supply and problem threads probably not very long. I think we will be lucky to go below the 105-110$/bbl zone. If it does go below 115 Im buying a whole lot more Oil etf shares at that point.
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Re: Another Record ($135.09)

Unread postby mos6507 » Wed 04 Jun 2008, 17:59:27

$this->bbcode_second_pass_quote('AirlinePilot', 'I')'d really like to know beyond extremely wild speculation why folks insist we are going to end up attacking Iran.


It's just people's paranoia and anxiety getting the better of them.
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