LOL at the moronic senators. They're just playing to their dumbas constituency. double LOL at the poster who said his daddy was a petroleum engineer. Engineers have no clue about economics. Sorry
interesting..didnt know this..thanks for the info. heres my question..i posed it in another thread forget which one..think it got piled on and lost. you mention India and China with their demand driving up prices...is it safe to say we are screwed until we get another energy source? we arent going to be able to get India and China to quit growing obviously..so are we screwed until we can offer something else which others turn to, thus driving demand down? which i would imagine by that time most of the US would have the alternate product thus not needing gas anyways? i dont know much of anything about this stuff, thats why i usually stick with just reading threads in the D&D
goldman is the cream of the crop when it comes to analysts and trading. what have they done that makes you not want to trust them? granted they did make an ABSOLUTELY horrendous call on corporate earnings this quarter where they said earnings would be horrible. well....they weren't and that's why the market has been rallying in spite of oil lately. now oil is continuing to rally and it's finally taking it's toll. people are starting to worry about earnings for next quarter since businesses will have to start passing thru costs thus jacking up inflation. so now the market starts to sell again. sorry for the tangent...but back to the original question...why don't you trust goldman?
So now you post just to laugh at people rather than actually contribute to the discussion. What a waste of time. By the way...if you are going to post to call a large group of people a "dumbass," you might want to consider spelling it right. There is more than one "s" in dumbass. Dumbass.
I understand your point, but has the demand for the oil gone up in unison with the profits? Are the profits running more and more ahead of the demand? Does Exxon's profits include the whole globe, or just the USA, in this reference? .... Quote from Article: Sen. Arlen Specter, R-Pa., noting that Exxon's profits had nearly quadrupled from $11.5 billion in 2002, said he had heard nothing from the oilmen that would explain "why profits have gone up so high when the consumer is suffering so much."
If I were congress I would dump 100 million barrels of oil on the free market from the spr. This probably is a dangerous move, but sometimes you got to take drastic steps. What it will do is scare the speculators.
You're right, but here's the even sadder reality that's been proven over and over and over and over and over again: economists have no clue, either.
So now you post just to laugh at people who laugh at people rather than actually contribute to the discussion. What a waste of time. I know how to spell the word in question....I didn't want to use the actual word, brah
So many false premises are cooked into your very short argument. Amazing. You have so many learning curves to get up before you can understand this issue -- economics, finance, energy... 1. Oil companies do not raise or lower prices. Prices are set at worldwide, market-clearing levels. Refer to any economics textbook for backup there. 2. Companies make investmentss in order to make profits. That's the whole reason you invest. Companies are in business to create value for shareholders, and for no other reason. To penalize a company for success removes the incentive to invest, which shuts down capital flow, which shuts down innovation, which shuts down our economy. Period. Take away oil companies' profit and you take away investment in new supplies. What does that do? RAISES PRICES. 3. What non-regulated industry is only allowed to make profits in connection with their cost level? That's absurd. Regulated pipelines and utilities are two regulated industries that come to mind -- now there are two horrible examples to pattern an industry after. Ask any Rockies natural gas producer or California utility customer how that's working out for them... 4. Operating Leverage -- learn what it means. 5. Why are you not equally outraged that Apple or Google are making profits? Their profit margins are MANY TIMES higher than oil companies. Are they involved in some type of sinister plot to screw you like the evil oil companies apparently are? 6. Are you aware that American oil companies are tiny players on the global market? Why penalize American employees and taxpayers for a worldwide phenomenon? Do you think people in London or Berlin are getting gas for $1.00/gallon and we are the only ones paying high prices? 7. Quit purchasing oil products if you don't like the oil companies making profits. If everyone did that, the price of oil would plummet. Oh wait, you screwed your own self by becoming dependent on oil, didn't you? Guess what, I DRINK YOUR MILKSHAKE. I DRINK IT UP.
Engineers are paid to analyze the nuts and bolts of a drilling operation, a reservoir, at time geology, flow rates, casing pressure, well logs, etc... they are not paid to analyze prices. I'm sure your father is a world class engineer, but that in no way qualifies him to be an expert on oil prices and their demand/supply determinants.
The old "we have you over a barrell, so grab your ankles and take it" argument probably isn't going to be a winner this time. Most of the rest of your points are well taken, but this one is just silly. Other businesses that behaved in that manner wound up with a ton of regulation, and spawned antitust laws.
Oh good grief. What is this, amateur hour where every dimestore theory is trotted out, only to be utterly annihilated? Are you suggesting following the path of Saudi, Venezuela, Mexico, etc? Are you aware that countries that have done this have lagged behind in technological advances, and many of them are BEGGING firms from the U.S. to come in and help them? Mexico's oil situation is the biggest clustermess you have ever witnessed, because they have not allowed free markets to dictate the terms of investment there. The Canterell field is going t*** up and they looking at losing a HUGE chunk of their government revenues (i.e. 20%) as a result. Nationalizing the resource base leads to mammoth underdevelopment and gross inefficiencies. It does not spur competition. It does not spur advancement. It does not attract investment. It would decimate our production levels and lead to the US having to import MORE OIL which would then cause prices to SKYROCKET. It's outrageous. Argentina is headed for a disaster of titanic proportions if they can't increase production there. The problem is no one wants to be there because you only get $40-$46/bbl produced there. Why would anyone want to drill there when you can get $130+/bbl elsewhere? See how it works? Your idea is founded in communist principles. Go to Berlin sometime. Tell me which side is nicer -- East or West. Go to Hungary or the Czech Republic. Tell me if they are better off economically than their Western European peers. Communism doesn't work, nor does it's principles. Period.
Refman, the point was that all of the people complaining have adopted a lifestyle that is highly dependent on oil. It's a bit hypocritical to complain, when the choices these people have made have put them in this position.
The problem is that in today's world, everybody is dependent on oil. You have to get to work, and people in cities with little in the way of reliable public transportation, that means driving. Oil is used to create electricity. Oil is pretty much everywhere. It is a little hypocritical to say that since people are trying to get along in the society that currently exists so they should just take whatever price is set. Last week, Saudi Arabia announced a production increase of 300,000 barrels. What was the market reaction? The price jumped almost $3.00 per barrell. That is some wonky market reaction. I tend to agree with some analysts that think this is a bubble that will eventually burst.
Thanks for the lecture, I mean it, but I just don't believe the available supply left on the free market will accurately reflect its value anyways, just like how the price of rice skyrocketed after Vietnam and India imposed export bans on their crops. Every country is moving around and laying a stake in natural resources, and at this pace it will never be enough. We're really shooting in the dark at this rate without a national inventory and a plan to allocate resources. I am aware of the gross inefficiencies of a government run bureaucracy, but that's more or less the situation we have now with our public land. We allow companies to rent the land with bargain rates, extract whatever resources, subsidize them more by building roads there, and hope in good faith that they return back into a livable condition. Or on the flipside, things get bogged down by litigation from public interest groups because ultimately it's the power is held by the government. On your point of the lack of investment or innovation, I'm still in the mindset that petroleum will have to serve as a stop gap for renewables because even if we do drill in ANWR or offshore, that could only serve to offset, not entirely replace, a fraction of what we'd get elsewhere overseas. Doing so would temporarily reduce the price of gas, but the demand for fossil fuels will not diminish anytime soon while discovery rates of conventional oil fields will not keep up pace. I realize nationalization is a radical step for libertarian or market minded members, but we are in a national energy crisis or on the verge of one. If anything, I think both sides can agree that we need a national energy plan, and hopefully a consensus from various parties preceding it.
That's not nearly enough information to prove a disconnection with fundamentals. The world uses 85 million barrels a day. 300,000 barrels a day isn't enough to move the needle. Plus, you have to look at the nature of the production increase. Is it actually new production, or is it an acceleration of existing reserves' production? There are different ways to characterize production rate increases. Some are sustainable over time, some aren't. Was the market expecting much more than 300,000 bbs/d increase and got that instead? Way too much information left out of your analysis.
The primary reason for oil prices spiking as of late is that the market is fscking speculative. Data is not reliable, or not even available in the quantity needed to do a traditional sort of analysis. Particularly in "newer" markets like China and India. Supply and demand dictate price, but if you don't have good data on production, consumption, and inventory - the market ceases to be transparent. Experts place crude at 70-500 bucks a barrel in the coming year or so. Think about that.
some of the traders i work with were saying that a guy like t boone shouldn't be on cnbc broadcasting his thoughts about oil and natural gas
