oil supply issues.

[IHateMyJob2004]

Why do people think that there are supply issues with oil?

That is not why oil prices are high in the US.

1) Inflation over the past 5 years
2) dollar has fallen how much?
3) The oil we are going after costs more to extract/refine than it did 5 years ago.
4) Speculators *

* If you look at items 1-3, you will quickly realize that gas at hte pump should be well over $3/gallon. Even close to $4. It is my opinion that speculation has driven gas prices (at the pump) maybe 10% higher than where they should be. Meinging that where I live, gas is $4.35 or so. And prices should be right around $3.90.

Just my two cents, but reading headlines like this drive me insane:
Giant Saudi field is key to boosting oil output
There is no supply side issue!

 

[huberm]

if it is inflation causing it, then why has the price of a barrel of oil more than doubled in the past year? Has the value of the dollar been cut in half in one year?

I think it is a combination of many things, not just one problem.

 

[Capt Caveman]

YES, we need another one of these threads!!!!!!!!!!!!!!!!!!!!

And speculation has actually pushed gas prices up more like 30%.

 

[olds]

<--- P&N

 

[CFster]

There's no shortage of oil.

Countries such as China and India that are experiencing an automotive boom are drinking up much more oil than they used to - supply and demand raises the prices from OPEC. It really has nothing to do with domestic oil companies such as Exxon.

While we're still number one in the world for oil consumption, China is closing rapidly.

 

[HardcoreRobot]

oil is going to run out in the 70's guaranteed

 

[Xylitol]

Originally posted by: huberm
if it is inflation causing it, then why has the price of a barrel of oil more than doubled in the past year? Has the value of the dollar been cut in half in one year?

I think it is a combination of many things, not just one problem.

that's why there are more than 1

 

[LegendKiller]

Speculation is a hell of a lot more than 10%. I firmly believe it's on the order of 50% of the current price. If inflation, the decline in the dollar, or supply were such an issue, then why were prices at $65/bbl 12 months ago when almost none of the prior three factors have changed in any material respect?

 

[miketheidiot]

Originally posted by: LegendKiller
Speculation is a hell of a lot more than 10%. I firmly believe it's on the order of 50% of the current price. If inflation, the decline in the dollar, or supply were such an issue, then why were prices at $65/bbl 12 months ago when almost none of the prior three factors have changed in any material respect?

oils equilibrium price should be in the $70 range.

 

[rezinn]

Speculation has driven gas prices up 24.5%. 17% of people know that.

 

[Engineer]

Originally posted by: IHateMyJob2004
Why do people think that there are supply issues with oil?

That is not why oil prices are high in the US.

1) Inflation over the past 5 years
2) dollar has fallen how much?
3) The oil we are going after costs more to extract/refine than it did 5 years ago.
4) Speculators *

* If you look at items 1-3, you will quickly realize that gas at hte pump should be well over $3/gallon. Even close to $4. It is my opinion that speculation has driven gas prices (at the pump) maybe 10% higher than where they should be. Meinging that where I live, gas is $4.35 or so. And prices should be right around $3.90.

Just my two cents, but reading headlines like this drive me insane:
Giant Saudi field is key to boosting oil output
There is no supply side issue!

LK and JS80 have pointed out (in P&N) that the dollar has fallen around 28% in the last 10 years while oil has risen 640%.

It was pointed out on CNBC (yesterday) that oil costs $1.50 per barrel to extract from the ground and that amount hasn't increased much over the last decade.

Inflation? Depends on whether you believe the official government numbers (I don't)...

Call it speculation or whatever....there is a lot of money removed from housing, the stock market, other markets chasing oil right now and that is simply driving the prices to irrational exuberance levels....period.

 

[ponyo]

I will believe there's a supply issue when gas stations start running out of oil. I haven't heard or seen one gas station without oil so I don't believe in the lack of supply bs.

 

[AccruedExpenditure]

Originally posted by: Capt Caveman
YES, we need another one of these threads!!!!!!!!!!!!!!!!!!!!

And speculation has actually pushed gas prices up more like 30%.

Far more than 30 percent. It's a bubble, it will pop, sub 70 dollar a barrel/ sub 3 dollar a gallon oil will return
-AE

 

[vi edit]

I just saw a stat the other day on ABC nightly news and they figured that speculation added in around $35 a barrel. That's right at the 10% premium you "speculated" .

 

[alkemyst]

I don't think it's anything to do with speculation. It has to do with much like diamonds the market is bearing the costs.

Once the market decides not to pay more that oil will hold.

It's making a lot of people extremely rich. The war is not helping, but I don't get these fucking wars that we just don't stake our claim. America's real downfall is we go to bat, win and then rebuild our enemies countries on our dime. We don't get discounts handed back from them.

This is really a P&N topic but even there it will erode to falacies and a whole bunch of side issues.

Some things we really should halt is 3k mile oil changes though...it's really a waste.

 

[Kalvin00]

Originally posted by: AccruedExpenditure

Originally posted by: Capt Caveman
YES, we need another one of these threads!!!!!!!!!!!!!!!!!!!!

And speculation has actually pushed gas prices up more like 30%.

Far more than 30 percent. It's a bubble, it will pop, sub 70 dollar a barrel/ sub 3 dollar a gallon oil will return
-AE

:laugh:

Good thing you're kidding and don't actually believe that.....right?

 

[miketheidiot]

Originally posted by: Kalvin00

Originally posted by: AccruedExpenditure

Originally posted by: Capt Caveman
YES, we need another one of these threads!!!!!!!!!!!!!!!!!!!!

And speculation has actually pushed gas prices up more like 30%.

Far more than 30 percent. It's a bubble, it will pop, sub 70 dollar a barrel/ sub 3 dollar a gallon oil will return
-AE

:laugh:

Good thing you're kidding and don't actually believe that.....right?

actually, thats the standard estimate.

 

[natto fire]

They should add another P to P&N and then it could be petroleum, politics and news. Not that a thread in OT about petroleum or one of it's byproducts every single day isn't great...

 

[Capt Caveman]

Originally posted by: AccruedExpenditure

Originally posted by: Capt Caveman
YES, we need another one of these threads!!!!!!!!!!!!!!!!!!!!

And speculation has actually pushed gas prices up more like 30%.

Far more than 30 percent. It's a bubble, it will pop, sub 70 dollar a barrel/ sub 3 dollar a gallon oil will return
-AE

Nope. Not with the weakening of the dollar.

 

[AccruedExpenditure]

Originally posted by: Kalvin00

Originally posted by: AccruedExpenditure

Originally posted by: Capt Caveman
YES, we need another one of these threads!!!!!!!!!!!!!!!!!!!!

And speculation has actually pushed gas prices up more like 30%.

Far more than 30 percent. It's a bubble, it will pop, sub 70 dollar a barrel/ sub 3 dollar a gallon oil will return
-AE

:laugh:

Good thing you're kidding and don't actually believe that.....right?

I absolutely believe it.
-AE

 

[Duddy]

The coming Iran war. That's what's causing it.

 

[jlee]

I can handle gas prices at the moment, even with my Tundra...but it's going to suck buying heating oil this year.

 

[Mermaidman]

I understand very little about commodities, so help me here:

When a barrel of oil goes up by say, $10, then who gets most of that $10?

 

[Midnight Rambler]

50% speculation/50% weak dollar, with the two intertwined.

As I have noted in similar threads on oil, as well as the stock market's woes, there is a very simple cure, but our so-called leaders are too weak and too heavily "funded" by companies and lobbyists to make the necessary move.

U.S. interest rates need to be raised significantly (to somewhere around 6-7% min.), and now, not later. Not only is the 2% rate weakening the dollar (and driving up oil), it is also causing even more inflation. The so-called "stimulus checks" were the absolute worst thing we could have done. They actually drove up spending (and thus inflation).

 

[dmcowen674]

Originally posted by: Naustica
I will believe there's a supply issue when gas stations start running out of oil. I haven't heard or seen one gas station without oil so I don't believe in the lack of supply bs.

What?

They have been crying that there is no refining capacity becaused there hasn't been a new refinery built since 1979.

Gas stations are out of gas everywhere.