[Graeme]

Why oil prices are at a record high

$this->bbcode_second_pass_quote('', 'U').S. crude oil hit a record high of $99.29 a barrel on Wednesday.

Strong demand for crude and a weak dollar have fuelled the rally from a dip below $50 at the start of the year.

Adjusted for inflation, oil is still below the $101.70 peak hit in April 1980, according to the International Energy Agency, a year after the Iranian revolution.

[mos6507]

I can't wait until they are no longer able to use that comparison with 1980 as positive spin-control anymore. It's really getting tedious--not to mention obviously manipulative.

[mkwin]

It's not anywhere near the all-time high yet. If you use the real inflation rate of the RPI as opposed to central banks CPI the 1979 high was actually closer to $200. The OECD ratio of oil required for 1 unit of GDP has also halved since 1979. Together they imply that oil could hit $400 a barrel before we hit the huge problems we had in the 70's. This is why Simmions says there is no ceiling to the oil price.

[Concerned]

$this->bbcode_second_pass_quote('mkwin', 'I')t's not anywhere near the all-time high yet. If you use the real inflation rate of the RPI as opposed to central banks CPI the 1979 high was actually closer to $200. The OECD ratio of oil required for 1 unit of GDP has also halved since 1979. Together they imply that oil could hit $400 a barrel before we hit the huge problems we had in the 70's. This is why Simmions says there is no ceiling to the oil price.

[vision-master]

$this->bbcode_second_pass_quote('mkwin', 'I')t's not anywhere near the all-time high yet. If you use the real inflation rate of the RPI as opposed to central banks CPI the 1979 high was actually closer to $200. The OECD ratio of oil required for 1 unit of GDP has also halved since 1979. Together they imply that oil could hit $400 a barrel before we hit the huge problems we had in the 70's. This is why Simmions says there is no ceiling to the oil price.

[peasea]

$this->bbcode_second_pass_quote('Graeme', '[')b]Why oil prices are at a record high

$this->bbcode_second_pass_quote('', 'U').S. crude oil hit a record high of $99.29 a barrel on Wednesday.

Strong demand for crude and a weak dollar have fuelled the rally from a dip below $50 at the start of the year.

Adjusted for inflation, oil is still below the $101.70 peak hit in April 1980, according to the International Energy Agency, a year after the Iranian revolution.

[mkwin]

$this->bbcode_second_pass_quote('', 'W')hen is the last time you inflation adjusted wages? Even the official scale shows the bottom 80% of workers in the US worse of. What happens to real wages when you use the "real inflation rate"?

[Armageddon]

$100.00 oil for 6 months will bankrupt this entire system. These high prices have barely started to get passed on to the consumer. Refineries are taking the hit right now to keep gas prices down, but in the next weeks months , look for the prices at the pump start to reflect the oil price. 3.50-4.00 gas is likely ( I am still paying 2.89 ) . People are maxed out on their credit cards and their home mortgage can no longer be used as an atm. All that is left is to start tapping their 401's, which has already started. It's over people, and long over due. Peak oil was the reason and most people will never realize this.

[WhatMeWorry]

It was $3.12 at the corner when I came home last night here in Sin City. That was for the cheap stuff.

[mkwin]

$this->bbcode_second_pass_quote('WhatMeWorry', 'I')t was $3.12 at the corner when I came home last night here in Sin City. That was for the cheap stuff.

[Armageddon]

$this->bbcode_second_pass_quote('mkwin', '')$this->bbcode_second_pass_quote('WhatMeWorry', 'I')t was $3.12 at the corner when I came home last night here in Sin City. That was for the cheap stuff.

[Concerned]

$this->bbcode_second_pass_quote('mkwin', '
')Who said anything about it being 'hunkey dorey'. My point is the ceiling on how high oil could go before we get significant demand destruction like in the 70's is far higher than people think. Especially mainstream economists. I would not at all be surprised if oil goes to $300+ a barrel in the next 5 years. I hope you Americans are ready for $15 gasoline

[americandream]

$this->bbcode_second_pass_quote('mkwin', '')$this->bbcode_second_pass_quote('WhatMeWorry', 'I')t was $3.12 at the corner when I came home last night here in Sin City. That was for the cheap stuff.

[ChefBoyardee]

$this->bbcode_second_pass_quote('mos6507', 'I') can't wait until they are no longer able to use that comparison with 1980 as positive spin-control anymore. It's really getting tedious--not to mention obviously manipulative.

[mkwin]

$this->bbcode_second_pass_quote('Concerned', '
')
How can you say that when you admit that for tens of millions of Americans their inflation adjusted incomes have retreated even on the official scales?

This means the tipping point is closer than you think we have only been in the $95 BBL range for a short time now.

A good six to nine months of $150-180 oil would do the demand destruction trick IMO. I understand Europe already pays far more than the US per Gallon they have had decades to adjust, smaller cars and public transport.

[threadbear]

$this->bbcode_second_pass_quote('mkwin', '
') Even a sudden 10% drop in US oil consumption would, however, only represent a drop of consumption of 2 million barrels or a little over 2% of global consumption. Hardly enough to bring the declining supply and demand back in line.

[Concerned]

$this->bbcode_second_pass_quote('mkwin', '')$this->bbcode_second_pass_quote('Concerned', '
')
How can you say that when you admit that for tens of millions of Americans their inflation adjusted incomes have retreated even on the official scales?

This means the tipping point is closer than you think we have only been in the $95 BBL range for a short time now.

A good six to nine months of $150-180 oil would do the demand destruction trick IMO. I understand Europe already pays far more than the US per Gallon they have had decades to adjust, smaller cars and public transport.

[Wiltshire_rules]

I had to pay 109 pence per litre (of diesel) to refuel yesterday, and one local filling station wants 111p/litre today, although there are cheaper sources in larger towns etc. I think that works out at around USD 10 per US gallon. About two thirds of the at-the-pump price is tax.

Petrol (gasoline) is a little cheaper.

The impact on my wallet of the equivalent of USD 175 to fill the car, empty to brim-full, led me to go on to pick up a lot of shopping after a long day at the office, instead of making a separate trip at the weekend. I was pretty tired when I finally got home, but it has saved a lot of mileage.

Oil prices will fall back when more people do this sort of thing, even a saving of five per cent in mileage will make a difference.

[Concerned]

$this->bbcode_second_pass_quote('Wiltshire_rules', '
')The impact on my wallet of the equivalent of USD 175 to fill the car, empty to brim-full, led me to go on to pick up a lot of shopping after a long day at the office, instead of making a separate trip at the weekend. I was pretty tired when I finally got home, but it has saved a lot of mileage.

Oil prices will fall back when more people do this sort of thing, even a saving of five per cent in mileage will make a difference.

[DantesPeak]

$this->bbcode_second_pass_quote('threadbear', '')$this->bbcode_second_pass_quote('mkwin', '
') Even a sudden 10% drop in US oil consumption would, however, only represent a drop of consumption of 2 million barrels or a little over 2% of global consumption. Hardly enough to bring the declining supply and demand back in line.