Will you still buy V8s & huge SUVs ? Not long ago people thought $70 is pipe dream, now it's already at $80. What impact will this have on US car manufactures ? Fresh back from Burning Man 2007, I kept thinking the causal relationship between human and environment. Your comments are welcome.
In September 2003, oil was around $25/barrel. I'm sorry, but I have a difficult time believing that the fundamentals of this market have so drastically changed in 4 years time so as to make the price triple. That's beyond ridiculous. There's been a couple of big threads on this subject in the recent past that have been updated time and again. Particularly as the price swung back and forth. Hell, even OPEC is saying there aren't supply issues right now. We're on the verge of a recession in the States, and the price continues to soar. Something's fishy.
and it will plummet and crash when it doesn't happen for the umpteenth time. its freakin ridiculous. oil has risen $15 in two months with nothing happening.
the market priced in a lot of things this time last year...and oil fell to $55/barrel before Christmas this has to be the most irrational market ever. a worker gets taken hostage in nigeria and the price of oil on the world market jumps by a dollar.
And also if you think $100 oil is coming, then start hedging your bets in the market. You know, pay more at the pump and get it back on the investments.
exactly right. we might have a hurricane one day...so let's trade FUTURES much higher today!!! i think it's irrational speculation that is eventually going to be burst.
not like this. not tripling in 4 years. not that i'm aware of, anyway. last year's run up on price was a joke...and was followed by a pretty steady decline in the fall.
This article was written in 2004...when oil was still at about $44/barrel. the IEA was calling it "irrational exuberance" then. but the fundamentals have so changed now that it's "real." this article foreshadows a bubble burst even then. http://www.abc.net.au/news/stories/2004/08/11/1174391.htm Oil market continues 'irrational exuberance' Posted Wed Aug 11, 2004 9:00pm AEST Updated Wed Aug 11, 2004 9:12pm AEST World oil prices are continuing their march upwards, shrugging off a warning by the International Energy Agency (IEA) that the market is showing "irrational exuberance". Brent North Sea crude oil for September rose 18 cents to $US41.46 per barrel in early trading in London, heading towards the intra-day record high of $US41.70 reached on Monday. New York's light, sweet crude for September delivery climbed 11 cents to $US44.63 in pre-opening electronic trading. New York's main oil contract shot above $US45 for the first time on Tuesday to $US45.04 in formal trading, a level the IEA describes as unjustified. The IEA began its monthly review of global energy markets with a chapter headlined "Irrational exuberance". The title echoes prophetic words used by US Federal Reserve chairman Alan Greenspan well before the stock market bubble burst three years ago. "The market is tight, production and infrastructure capacity is less than desired and uncertainties continue to weigh on the market. But, does this justify 45-dollar oil?" the IEA said. "Current oil prices are a concern and are causing economic damage." Prices are rising as major producer Iraq says exports of the country's crude have halved following the closure of a southern pipeline earlier in the week. Iraq's Government says that the closure of a southern oil pipeline has led to daily losses of $US30 million. Limited amounts of oil are being loaded from the country's southern export terminals. Elsewhere, a top Russian energy official is urging the Justice Ministry to unfreeze the bank accounts of the country's largest oil producer, Yukos. Sergei Oganisyan, head of the federal energy agency, says Yukos's breakdown could see world oil prices soar. The comments represented a rare piece of good news for Russia's wounded giant, as it appear to win a key Government official to its cause. Mr Oganisyan says the company "will have to stop pumping oil" if it cannot pay for its equipment. He is urging the Justice Ministry "to unblock Yukos accounts so that the company's activities could continue". Yukos produces about 1.7 million barrels of oil per day, equivalent to about one fifth of Saudi Arabia's output and nearly as much as the maximum that Iraq has pumped recently. However, the IEA says that the tax claims and confusion threatening the future of Yukos are unlikely to undermine Russia as a leading oil producer. "We persist in the belief that sustained disruption to production and exports is in the interests of neither the Russian Government nor Yukos," it said.
Well, USD depreciated 30% against Euro since 2001. Most of Iraq's oil supply was gone due to Iraq War. Plus, demand from China and India keep rising. Also, the oil price before 2003 has been low due to low oil demand after dotcom bust. I think all these factors add together justify the 3x increase.
demand from india and china are consistently overstated by those who want to see the price rise. the oil price as of september 2004 was $25/barrel. we're not talking dotcom bust timetable. supply is not a problem according to OPEC and anyone else out there talking who isn't trying to sell imminent peak oil concerns. irrational exuberance. it will fall again.
I don't think it will fall much because it has been shown that demand has not decreased due to higher prices and producers can't produce anymore than they do now, so there is no reason why producers would charge any less for their goods.
They can produce more if they really want to. But I suppose their objective is to make sure MR=MC such that their profit is maximized. I still don't understand why people are so upset about oil price. The current oil price now is nowhere near the 70s as a percentage of personal income. But I suppose now people think driving is a divine right not a privilege.
This is what irks me most. Potential hurricane, oil price goes up; potential war, oil prices goes up; potential...... The price will go up at slightest sign of unrest.
