Oil/Gas Question

[KissMy]

kissmy....lack of demand drove the prices down, i vaguely remember the news on it....

the supply did not increase with Bush's announcement, it takes years on new finds....and you are not even talking about a new find....you are talking about just getting permission to look for a new find.....not even a find...there is no way this could have affected the prices....in the way you have speculated.

seriously, the reduction in demand, drove prices downward...which is how it works....and increased demand would have increased prices...

Bush caused the speculators hoarding oil in floating storage to panic & that drove the price down. The demand was already lower than supply for a very, very long time & it never affected price because the Crushing Oklahoma storage was not climbing. Where do you think all the floating storage oil came from? Even though there was an over-supply & slack demand of oil the price kept going higher & higher. The US dollar was getting so weak for many years prior due to excess subprime loans that investors wanted to hold oil & gold instead of the value losing US dollars.

Also read up on how the Enron power scam worked. This was the same thing was done on a global scale. The tankers that are normally used to transport oil to markets were used up to park oil out in the ocean where it would not show up in inventory. This gave the illusion of a shortage & reduced the amount of available tankers to transport oil to the USA.

 

[edthecynic]

You are exactly right Care.

First of all, oil prices were heading straight down starting July 4, 2008 until they peaked at $147.27 on July 11 due to unrest over Iranian missile tests. They started to decline the very next day, two days before Bush made his speech that added not one single barrel of oil that day.

The real reason for the dramatic drop in oil prices was not due to an increase in SUPPLY, but the dramatic drop in DEMAND!!!!

The law catches up to oil Irwin Kellner - MarketWatch

What is even more interesting is the reason for this plunge. It is not so much due to increased supplies of crude as to decreased demand for the black stuff. This is indicative of a major change in lifestyles, personal and corporate.

What a load of crap! First you state oil headed straight down starting July 4th, 2008 because of dramatic drop in demand, but then it suddenly made a new all time high on July 11th 2008 You have no clue dude! First of all the oil numbers & report only come out on Wednesdays. That means when oil stocks, draw downs, supply & demand were tallied up & the Cushing Oklahoma oil storage was lower than expectations on Wednesday July 9th 2008 so the oil speculators drove prices up over the next 2 days culminating in a new all-time high $147.27 trade on Friday July 11th 2008. These traders were willing to head into the weekend holding the most expensive oil ever purchased because they knew that Monday July 14th 2008 was going to bring even higher oil prices & that following Wednesdays lower oil inventories were going to drive prices even higher. Except when that Monday July 14th 2008 came around President Bush had a big surprise waiting for these crude oil speculators.

BALONEY!
As I pointed out, prices were on their way down from July 4, 2008

[Past, Present and Future Oil Prices
[FONT=Verdana, System, Arial]Oil extends slide into 2nd day, losing over $5. Oil tumbled more than $5 a barrel Tuesday [7/8/2008] in its second big drop this week, hurling crude back to levels not seen since June 26 as traders wary about the health of the global economy cashed in gains from oil's recent rally.][/FONT]

until Iran tested a missile and there was speculation that Israel would attack Iran.

Past, Present and Future Oil Prices
[FONT=Verdana, System, Arial]Oil sets new trading record above $147 a barrel. It's only July, but it might be time to start loading up on blankets and sweaters. Oil spiked to a new trading record as hostilities rise between the West and Iran — raising the likelihood that this winter's heating bills will be the priciest yet.

[/FONT][FONT=Verdana, System, Arial]Crude Oil Rises to Record on Speculation Israel May Attack Iran. Crude oil rose more than $5 to a record on concerns that Israel may be preparing to attack Iran, while a strike in Brazil and renewed militant activity in Nigeria threaten to cut supplies.[/FONT]

And Bush's announcement had absolutely no effect on the price of oil because even though Bush lifted a ban on Continental Shelf drilling a Congressional prohibition remained!!!!!!!!!!

Here is a chart of daily oil prices for 2008 up to July, 16:

 

[HUGGY]

I am asking the forum members to help me out in a question I have.

What happens when gas/oil becomes too expensive for people to use? I mean, I live 20+ miles from the closest city [closest town is about 10-12] and we live on a farm in the middle of nowhere, we can't exactly bike/walk too town, even though I know I could probably bike 20 miles, I do not believe it would be a option for school lol, although who knows. Thank the lord I am getting out of here in 3 months.

I have already closed the idea of getting a truck, seeing as how the Jeep I like just as much gets 23-29mpg average, a lot better then 14-20; now I am wondering, are vehicles really all that important? I have no problem riding a horse to work, although I'd prefer a mule or donkey, less issues and have more sense. (Have raised members of all the families, horse/donkey/mule/cow/emu/llama)

I am just wondering cause I personally have no idea, I mean, the only thing I can think is riots/mobs in the streets trying to figure out how their going to survive.

Keep clinging to your stupid market forces prices on a strategic commodity. The only way to control the price of a vital national security power supply it to nationalize our oil and buy up the rights to all the oil we can.

Price of a gallon of gas in Venezuela......12 cents.

CNN/Money: Global gas prices

 

[editec]

I think nationalizing the nations oil production would be a disaster.

The solution is to regulate the industry only as much as is necessary to keep that industry from becoming a cancer on the economy.

Right now that NOT what we're doing.

 

[HUGGY]

I think nationalizing the nations oil production would be a disaster.

The solution is to regulate the industry only as much as is necessary to keep that industry from becoming a cancer on the economy.

Right now that NOT what we're doing.

At this point every little flare up in the world that could possibly be construed as having a theoretical effect on the delivery of oil to anywhere on earth is an excuse for the speculators to drive up the prices of gas at the pump here in the USA. THAT is a disaster on our economy. It is not a POSSIBLE disaster. It is a real and present disaster. We need to wake up and decide if our over all economy should be subject to these forces that only benefit a handful of people.

It does not have to be an all or nothing situation. Even just the presence of a government owned and operated oil production, refining and gasoline/fuel industry would have a significant effect on stabilizing the market fluctuations that effect all commerce in our country.

 

[spectrumc01]

I am asking the forum members to help me out in a question I have.

What happens when gas/oil becomes too expensive for people to use? I mean, I live 20+ miles from the closest city [closest town is about 10-12] and we live on a farm in the middle of nowhere, we can't exactly bike/walk too town, even though I know I could probably bike 20 miles, I do not believe it would be a option for school lol, although who knows. Thank the lord I am getting out of here in 3 months.

I have already closed the idea of getting a truck, seeing as how the Jeep I like just as much gets 23-29mpg average, a lot better then 14-20; now I am wondering, are vehicles really all that important? I have no problem riding a horse to work, although I'd prefer a mule or donkey, less issues and have more sense. (Have raised members of all the families, horse/donkey/mule/cow/emu/llama)

I am just wondering cause I personally have no idea, I mean, the only thing I can think is riots/mobs in the streets trying to figure out how their going to survive.

First I moved into town six years ago, then I bought a bike four years ago, and now I walk and bike everywhere depending what the weather is. Snowing... I walk, raining... I ride my bike. The distance is 2 mi. one way to the first job and several block to the second job. Sad isn't it... work two jobs and still can't afford gas over other nessecities, i.e. medical bills, food, shelter.

 

[spectrumc01]

I think nationalizing the nations oil production would be a disaster.

The solution is to regulate the industry only as much as is necessary to keep that industry from becoming a cancer on the economy.

Right now that NOT what we're doing.

Nationalization may work later, but I would rather see oil taken off the comodity market, to kepp the speculators from artificially inflating the prices.

 

[edthecynic]

I think nationalizing the nations oil production would be a disaster.

The solution is to regulate the industry only as much as is necessary to keep that industry from becoming a cancer on the economy.

Right now that NOT what we're doing.

I think the threat of nationalization can be a very powerful tool. Right now, the oil monopoly controls the supply by capping productive wells. By threatening to nationalize all CAPPED wells if the oil is not put on the market, I think would light a fire under the oil monopoly and motivate them to increase supply.

 

[Samson]

kissmy....lack of demand drove the prices down, i vaguely remember the news on it....

....
seriously, the reduction in demand, drove prices downward...which is how it works....and increased demand would have increased prices...

So the rise in oil prices ($68.01 - 105.20/BBL) in the past 52 are weeks a result of increased demand?

Thanks for straightening that out for me Care, I could have sworn it had something to do with "Unrest" in Egypt and the fact that nearly 3 million barrels of oil transit daily through the Suez Canal controlled by Egypt.

I also thought that Libya, an oil producing nation that was (is?) having some internal politcal strife might have had something to do with it

the loss of 1.6 million barrels per day of sweet oil could potentially trigger a steep rise in prices and force a sharp reduction in demand to balance the system.

Actually, I'm being sarcastic.

The price of oil had become inelastic back in October, 2010.

Crude oil prices have surged to year high recently, as the economy is showing its first signs of recovery. Mark my words: the economy is not booming, far from that. There are however some signs that the worst part is behind us. But a surge in oil prices like we are witnessing seems out of proportion with today's growth, stagnant at best. This is due to the lack of elasticity in crude oil pricing

 

[Foxfyre]

I am asking the forum members to help me out in a question I have.

What happens when gas/oil becomes too expensive for people to use? I mean, I live 20+ miles from the closest city [closest town is about 10-12] and we live on a farm in the middle of nowhere, we can't exactly bike/walk too town, even though I know I could probably bike 20 miles, I do not believe it would be a option for school lol, although who knows. Thank the lord I am getting out of here in 3 months.

I have already closed the idea of getting a truck, seeing as how the Jeep I like just as much gets 23-29mpg average, a lot better then 14-20; now I am wondering, are vehicles really all that important? I have no problem riding a horse to work, although I'd prefer a mule or donkey, less issues and have more sense. (Have raised members of all the families, horse/donkey/mule/cow/emu/llama)

I am just wondering cause I personally have no idea, I mean, the only thing I can think is riots/mobs in the streets trying to figure out how their going to survive.

Keep clinging to your stupid market forces prices on a strategic commodity. The only way to control the price of a vital national security power supply it to nationalize our oil and buy up the rights to all the oil we can.

Price of a gallon of gas in Venezuela......12 cents.

CNN/Money: Global gas prices

Do you honestly think that gallon of gasoline only cost 12 cents in Venezuela? Do you really want to trade our freedoms and liberties for a Venezuelan style government? Do you really think that if our government would relax all unnecessary regulation and restrictions, including refinery processes, and turned loose our American producers that we would not improve our own situation and produce cheaper fuel?

Right now a single refinery in West Texas supplies gasoline to several surrounding states. Each state and sometimes each city requires a different forumlation of the gasoline which requires the refinery to shut down and retool before it can make the product to ship to the various places. That is the story all over the country. If we would just settle on one formulation that we were all willing to live with, we could greatly increase fuel production overnight which would help. And producing our own crude oil needs would not only make us less vulnerable to whims of countries that don't like us very much, but would also lower the cost if we can produce enough of it.

Supply and demand is far superior to government controls over the long haul.

 

[edthecynic]

Right now a single refinery in West Texas supplies gasoline to several surrounding states. Each state and sometimes each city requires a different forumlation of the gasoline which requires the refinery to shut down and retool before it can make the product to ship to the various places. That is the story all over the country. If we would just settle on one formulation that we were all willing to live with, we could greatly increase fuel production overnight which would help.

I have to agree with you 100% on that!

 

[KissMy]

And Bush's announcement had absolutely no effect on the price of oil because even though Bush lifted a ban on Continental Shelf drilling a Congressional prohibition remained!!!!!!!!!!

You are so dumb! Congress had already signaled that they were letting its yearly imposed Congressional OCS ban lapse.

ANWR: Obama defines OCS future for Alaska, the Nation

In July 2008 President George W. Bush lifted the Presidential ban on OCS and in September of that year Congress let lapse its yearly imposed Congressional ban

All in all President Obama's plan closed more areas of America’s OCS than it opened, and the areas it opened are only open after study periods and subject to Congressional approval.

 

[edthecynic]

And Bush's announcement had absolutely no effect on the price of oil because even though Bush lifted a ban on Continental Shelf drilling a Congressional prohibition remained!!!!!!!!!!

You are so dumb! Congress had already signaled that they were letting its yearly imposed Congressional OCS ban lapse.

ANWR: Obama defines OCS future for Alaska, the Nation

In July 2008 President George W. Bush lifted the Presidential ban on OCS and in September of that year Congress let lapse its yearly imposed Congressional ban

All in all President Obama's plan closed more areas of America’s OCS than it opened, and the areas it opened are only open after study periods and subject to Congressional approval.

So, you are now saying that it was the Democratic Congress that brought down oil prices by signaling they would allow the ban to lapse BEFORE Bush lifted the ban. That would explain why crude prices fell BEFORE the EXACT day Bush lifted the ban. So again Bush's speech had nothing to do with the fall of crude prices, it was Congress' earlier signaling!
Thank you.

 

[Care4all]

no, it was the the fact that demand had reached an all time low....and the recession and bank failures showed demand would stay low....

if you still think it was just a simple announcement of drilling a few years down the road, then you should have no problems showing us any oil find around the world, that made prices go down....there has NOT been one...anywhere that has reduced the price of oil on the market, even a mega find, has not reduced prices on the market....so why you think a simple announcement caused the crash of oil prices is beyond me?

 

[xsited1]

"...the United States’ combined recoverable natural gas, oil and coal endowment is the largest on Earth."

US fossil fuel | Government report shows U.S. oil, natural gas reserves largest in world | The Daily Caller - Breaking News, Opinion, Research, and Entertainment

 

[Mr. H.]

Endowment. I like that.

Sure beats the term "curse", as libs are want to use.

 

[Douger]

I am just wondering cause I personally have no idea, I mean, the only thing I can think is riots/mobs in the streets trying to figure out how their going to survive.

Crude oil is such a wonderful chemical feedstock that burning it to move ourselves from here to there for cigarettes, beer and fast food is perhaps one of the most ignorant misallocation of resources since the dawn of man.

But there is just so much of the stuff around..."Why not use it!" seems more like the operative attitude.

Modify your behavior, and your expectations, and you won't notice rising gas prices in the least.

My personal example. When gas was $1.50/gal I drove a V8 powered pickup at 13 mpg. At $3/gal I'll drive an Escape Hybrid at 26 mpg. At $4/gal I'll switch to a Camry hybrid at 39mpg. At $5/gal I buy a Prius.

Under all these scenario's I spend the exact same amount for fuel, even though the price has gone up by 300%+.

Correspondingly, you can drive less. Drive half as much for each doubling in price and you'll still pay the same money for fuel. And can keep your Jeep, if that is really want to drive.

So pick your price point, and make your capital investment accordingly.

Unfortunately, rising fuel prices effects every aspect of the global economy, not just our Sunday driving habits.

*The price of corn has doubled over the last six months.
*The price of wheat has more than doubled over the past year.
*The price of soybeans is up about 50% since last June.
*The price of cotton has more than doubled over the past year.
*The commodity price of orange juice has doubled since 2009.
*The price of sugar is the highest it has been in 30 years.

Then of course, there's the small business, and it's capacity to hire/maintain employees.

But there's no inflation !!!
Gawd Blass murka !!!

 

[KissMy]

no, it was the the fact that demand had reached an all time low....and the recession and bank failures showed demand would stay low....

if you still think it was just a simple announcement of drilling a few years down the road, then you should have no problems showing us any oil find around the world, that made prices go down....there has NOT been one...anywhere that has reduced the price of oil on the market, even a mega find, has not reduced prices on the market....so why you think a simple announcement caused the crash of oil prices is beyond me?

If you think it was demand & not off-shore oil hoarding then why was the Baltic Dry Shipping Index rising while the Baltic Tanker Shipping Index falling?

Commodities traders have learned to use tankers to store oil out of sight in the ocean creating a shortage of available tankers to ship oil to hungry markets there-by driving up the price of the oil they are holding in those tankers.

Baltic Dry Shipping Index (BDI)

Baltic Dirty Tanker Shipping Index (BDTI)

 

[Flopper]

If you look at the gas price rise from 2001 to 2008, the approximate average increase per year is about 11%. Of course in any one year gas can jump all over the place. If 11% is a good number $3.60/gal gas will be right at $10/gal in ten years. I think this projection is probably on the low side looking at the huge growth in demand from China, India, and third work world countries.

With a fill-up costing $170 to $200, the future for hybrids and electrics look very good.

Gasoline Price History

 

[Old Rocks]

The future looks very good for an algea or bacterial produced replacement for diesel oil. Many modern diesels now exceeding the hybrids on mileage, and are cheaper to produce.

The future of the electrics depends entirely on the manufacture of a reasonably priced high capacity battery.