[joeltrout]

How about they focus on making solar economic.

joeltrout

[lorenzo]

$this->bbcode_second_pass_quote('joeltrout', 'H')ow about they focus on making solar economic.

[WisJim]

$this->bbcode_second_pass_quote('lorenzo', 'I')'m against any type of incentives for renewables. Crappy corn biofuels receive billions of tax breaks and subsidies - this action has resulted in the death of possibly hundreds of thousands, if not millions of farmers in developing countries.

[Tyler_JC]

The bill included a windfall profits tax on oil companies, if I recall correctly. As much as I love the solar energy tax credit, I hate the windfall profits tax more. I'd be one of those Republican Senators holding his nose and voting against that bill.

[aahala2]

$this->bbcode_second_pass_quote('lorenzo', 'A') free market and an abandonment of absurd subsidies would allow us to import sustainable biofuels from developing countries. These countries can make biofuels that are 10 times more efficient, 3 times less costly, requiring 10 times less land for a given amount of fuel, and with a GHG-balance 5 times stronger than corn ethanol.
Likewise, promoting a technology like solar PV - which is 20 times more costly than the most cost-effective and only profitable alternative renewable (biomass) - is absurd. No subsidies or tax breaks for wind, biomass or solar, as such, please. This simply weakens these technologies.

[Specop_007]

$this->bbcode_second_pass_quote('aahala2', '')$this->bbcode_second_pass_quote('lorenzo', 'A') free market and an abandonment of absurd subsidies would allow us to import sustainable biofuels from developing countries. These countries can make biofuels that are 10 times more efficient, 3 times less costly, requiring 10 times less land for a given amount of fuel, and with a GHG-balance 5 times stronger than corn ethanol.
Likewise, promoting a technology like solar PV - which is 20 times more costly than the most cost-effective and only profitable alternative renewable (biomass) - is absurd.
No subsidies or tax breaks for wind, biomass or solar, as such, please. This simply weakens these technologies.

[ProudFossil]

So what is causing the drop in oil?
It can't be the dollar. That has risen in value 6 or 7%, from 1.59 to a Euro to about 1.50 to a Euro.

It can't be supply. OPEC has dropped 300,000 bpd, Iran is going to stockpile, Kuwait is going to stockpile, Mexico has dropped, Turkey has had a pipe go kapoot.

It can't be demand because China, India, and Indonesia are offsetting the drop in US and Europe.

If can't be speculators because I would imagine those long are taking a bath right now.

So it must be that Pelosi and Congress has gone on vacation.

[smallpoxgirl]

I'm pretty sure it's because Obama reminded everyone to check their tire pressure.

[Homesteader]

As in "price fixing" or as in making it all better.

[Cid_Yama]

Banks are being forced to sell a whole variety of assets including commodities such as oil.

[Cashmere]

No more than the Chinese fixed the weather in Beijing.

[Nickel]

It's speculators. People who bought at lower prices have realized the ceiling's been hit and they're taking their profits.

[Micki]

$this->bbcode_second_pass_quote('', 'S')o what is causing the drop in oil?
It can't be the dollar. That has risen in value 6 or 7%, from 1.59 to a Euro to about 1.50 to a Euro.

[MadScientist]

Congress doesnt the set the price of oil on the world market.


I figured out what's going on last night and I'll try to explain.

First off, World Oil Production is on a plateau running right beneath the ceiling and has been for some time.

As demand pushes the upper limits of that plateau, price rises.

Now you have to think in terms of cycles and months, not days.

As the price rises, the oil producers go "all out" to meet the extra demand.

Once the price gets to a certain limit (i'll propose $130ish), demand destruction occours.

In the case of this last round, the demand destruction and extra oil hit the market at the same time, leading to an oversupply and subsequent short term drop.

I think of it like the chugging your oil can does if you dump it in your truck all at once.


So price falls, producers quickly cut back, people think "its over", and the price rises again.

It's the nature of a plateau running right beneath the ceiling. Every time you hit the top you get a little owie and drop back some.

Just wait till the ceiling starts to drop ><

[joeltrout]

$this->bbcode_second_pass_quote('MadScientist', '
')

So price falls, producers quickly cut back, people think "its over", and the price rises again.

[smallpoxgirl]

That's exactly right MS. Prices of stocks, commodities, all sorts of things move in a stutter step sort of fashion. Supply and demand are constantly equilibrating and prices move back and forth. Nothing has fundamentally changed about the supply and demand of oil. This is just a stutter step.

[MadScientist]

$this->bbcode_second_pass_quote('joeltrout', '')$this->bbcode_second_pass_quote('MadScientist', '
')

So price falls, producers quickly cut back, people think "its over", and the price rises again.

[joeltrout]

$this->bbcode_second_pass_quote('MadScientist', '
')
oh yes they do. If you know anything about OPEC, you know they historically have cut back production to prevent oversupply. Oversupply kills the price even further. Remember the lack of swing capacity is a relatively new development.

[DantesPeak]

Any attempts to drive the price below market levels will result in shortages, although in the short run intervention may succeed and increase demand.

Due the low levels of oil and gasoline inventories in the US, even an increase in demand as low as 1% more from last week's levels may result in shortages by around Labor Day. This is not a prediction but what is likley to happen to the price of gasoline falls and stays down the next three weeks.

[MadScientist]

ok I can see we're coming at this from two different directions. The production cut I referred to has nothing to do with price. It's to get back to a "normal" production level. .

Like when Scotty tells Cpt. Kirk.."She's givin us all she's got, Sir"

The things you do when you have to, but quickly lay off the throttle once the danger has passed. Case in point the extra 200k or so barrels the saudi's promised to produce in late spring 2008.


I agree with your point completely and highly doubt OPEC will ever need to officially cut production in general to affect price ever again.