Anyone else see a huge price bust coming? Inventories are at record highs in the US. I don't think the prices are real. I don't know what that will do to our local economy, so energy heavy. What do you think?
Maybe I remember oil was like $10 barrels in the early 1990s I think However, as far as the near future goes, I think it's going to stay around where it's at and, if it goes anywhere, it going to rise...maybe even $100 a barrel.
I don't think the prices are real...it's not a supply issue, but...the market hasn't really done much to cut demand in the face of rising price, either. Of course, with prices this high you can handle a little slack in demand. Long term, though, there's a need to move product. Producer nations need to convert barrells into treasury. It doesn't help to holdback and stockpile inflated assets. They need operating cash.
Would there be some way to extract or de-emphasize Mideast policy, tensions and current events from the oil pricing model? Is it possible if/when oil production shifts from these countries, the pricing goes down to $45-55, where it was, what, a year-and-a-half, two years ago?
Most of the countries are producing at capacity, part of the problem. They are not holding back on production(from what I know).
Two other problems. 1) We're still short on refineries and 2) Oil refineries are being forced to use more ethanol since MTBE was banned and the transition period to switch to ethanol is creating some supply issues. Also, supply really is an issue. There are parts of the country in which gas stations literally are out of gas at times. The ethanol thing really messed things up in combo with all of the high oil prices coming from producers.
Good points, and when gasoline production goes up, and gas prices go down a bit (not a lot... we've seen the last of gas below $2, IMO), then inventories will drop, putting upward pressures on oil prices re the US. I don't see a good scenario for US drivers anytime soon. And Max, I doubt that oil prices will drop a great deal, either. They better start building hybrids like crazy. If I were running Ford, for example, I'd make a big announcement that Ford is going to produce hybrids almost exclusively, and then do it. The world as we've known it these last several decades is changing, and changing fast. Keep D&D Civil.
Tensions in Iran kept the speculation high, but the summer season's coming soon. Prices will hold or escalate because there's "political instability" in oil rich countries and because demand from all countries are growing at a steady rate.
Demand for oil does go up leading into the summer. About a month from now, gas prices should go up leading into Memorial day weekend. Oil is also used for electrical power plants, so we all will also be feeling the pain on our light bills.
Everything I've heard suggests that oil prices will never "come back down" and that the current prices could jump 2-3x their current amount for several reasons: 1. Oil demand is steadily increasing in America plus China and India's demand (the 2 most populous nations on earth) are growing exponentially. 2. Oil supply is steadily decreasing. Google the term "Peak Production." Basically oil companies have exhausted all the "low-hanging fruit" oil wells. The amount of oil pumped from the ground has been decreasing for years now but we've still matched the demand. That will soon change in the next 10 years or so. MYTH: The middle east is the largest importer of oil to the U.S. FACT: Canada is actually the largest single importer of oil into America. Canda's oil sands deposits and traditional oil reserves have direct pipelines into the Mid-West, Rockies and the west coast making if far cheaper to transport.
Oil isn't used very much in Texas power generation. It's used more in the Northeast. Coal, Natural Gas and Nuclear make up ~90% of what's used in TX. Natural gas prices are somewhat correlated with oil prices, but coal prices don't correlate much with oil prices since it's a regional market.
That is a hotly debated topic that we've reached peak oil production on a worldwide scale (we reached it in the US many years ago, though). You seem to have accepted the alarmists' view without examining the other side of the story. Use those googling skills of yours to read the other side's view. The peak oil optimist blog is an interesting read from the other camp.
We have not reached peak consumption because oil is naturally produced by the earth. Oil is not a fossil fuel.
I'm not talking about whether we reached Peak Oil production. I'm talking about that Peak Oil production is somewhere down the line and therefore oil prices are likely to increase ...not decrease. Google this. The cheap sources of oil are drying up. Deep sea wells and oil sands are ensuring that costs will continue to increase. Nobody is debating this. But since you want to debate Peak Oil, it is not a matter of IF but a matter of WHEN. It is inevitability. The hotly debated part is whether it is going to happen in the next 10 years or much later. And actually, the link I included talks about the Canadian oil sands. From what I understand, it hasn't been thought of as a traditional source of oil and not considered in most of the Peak Oil discussions. ...and there is a crap load of oil there. Problem is its expensive to process. So again, the point is, oil prices are not likely to drop.
Well the inevitability of peak oil becomes trivial if we move away from consuming large amounts of oil (the demand side of the equation that you failed to address). Sadly that's not likely to occur soon, but I'd like to think that it could. Oil prices will certainly drop if tensions in Nigeria and the Middle East die down. Many people believe that is accounting for >$20/barrel in the global price of oil.
The rise in oil prices of late is reflective of the uncertainty in the politics of oil. 1. China - unlimited demand 2. Iran - saber rattling makes an embargo plausible 3. Venezuala - ditto 4. Nigeria - chaos and ananrcharcy limit it's future It's not so much the supply today as it is the outlook for the near future that has traders bidding up the price. I see it as a positive really, the US economy is still OK (if you don't look to hard at our debt) and it has policy makers coming to the realization that we will have to make changes in the American way of life, just like Jimmy Carter and Ross Perot said we would back in the 70's. The good news is, as pirces increase we can afford to employ advanced technologies in domestic fields that vastly increases the efficiency with which we can exploit them. I read recently that we have been able to extract only 20-30% of the oil in in the ground but with new tchniques we may get that up to 50%, effectivly doubling the amount of recoverable oil.
Unfortunately none of those are going to fly. Solar panels are still too inefficient for something like a car, without it making the car ridiculously expensive. Wind power obviously doesnt work. Nuclear power can't be minimized into a car motor and it would probably have some serious safety issues. And electric cars somehow just disappeared off of the planet. I remember in the 90s, they were supposed to be the future but then they just disappeared. And I know arguments that, they can't hold enough power aren't true anymore. Modern electric motors can get more mileage than a full tank of gas. I'm still kind of baffled by this one. The future probably is going to be in hydrogen fuel cells if anything. They get the most funding and publicity and the technology is evolving relatively quickly. The big problem today is finding a stable source of hydrogen that doesn't end up polluting more than whatever we save from a fuel cell. Also, we've produced hydrogen combustion engines which are also more efficient than your standard gasoline engine.
It's always been my opinion that the world isn't exploiting natural gas nearly as much as they should. It not only can radically reduce pollution, but natural gas is plentiful and you can fuel your vehicle in your own garage if you want to. I understand it might not be the cheapest, but it's the best available alternative from everything I have read/heard about it. I understand there are some difficulties associated with it just like any other alternative to petroleum-based byproducts, but it should be explored more, IMO. I saw segment about this once on PBS, where a family had two vehicles that operated entirely on natural gas and could be fueled right from your own home.
