oil supply issues.

[Capt Caveman]

Originally posted by: 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.

Where? I've yet to see one.

 

[dmcowen674]

Originally posted by: Capt Caveman

Originally posted by: 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.

Where? I've yet to see one.

Out of oil too.

So it wouldn't matter if the refineries were able to produce enough, there is no oil for them.

 

[IGBT]

..you's guys are forgetting algore's co2 tax is gona bleed you bad. Liberals are actively opposed to lower energy prices and will do nothing to increase supply. it's only just begun. listen to your obama. he shoots down every suggestion to increase energy supply.

 

[Engineer]

Originally posted by: IGBT
..you's guys are forgetting algore's co2 tax is gona bleed you bad. Liberals are actively opposed to lower energy prices and will do nothing to increase supply. it's only just begun. listen to your obama. he shoots down every suggestion to increase energy supply.

LOL, just like Bush's and the GOP policies of the last 6 (7.5 for Bush) has helped us a ton. Bush stated in 2002 that high gas prices are a sign of a failed Presidency. In that case, Bush and the GOP = epic fail on that one front alone.

Let them raise....might be the best thing to happen long term.

 

[StageLeft]

In a way, of course it's a lack of supply because more supply would lower prices. If you doubled the supply, oil wouldn't be at $143 today. That said, supply vs demand hasn't changed massively, so something else is mainly affecting things.

I think unfortunately a lot of this is that we have an inelastic (mostly) demand and a mostly unchanged supply and the 'agreed upon' price used to be lower and now the cat is out of the bag and we know it can be higher, which is bad. The world can tolerate it...

 

[rchiu]

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!

You forget to mention the geopolitics in the middle east. If you look closely at the historical oil prices, you'd see that the big increase came right after 2003. What happened in 2003 you ask? That stupid war in Iraq of course.

Ever since 2003, we got oil production problem in Iraq, trash talking with Iran, continuing instability in Palestinian region. Together with booming demand in China and India, all those give speculators great reasons to put hot money into oil and push up the price at a real high pace.

US inflation varied from high 2.xx% to low 3.xx% over the last 5 years, dollar declined ~30% over the last few year, none of that can cause ~500% jump in oil price over that last 5 years. Oil production cost did increased, but nothing close to explain that large jump in the oil price.

Everytime there is a spike in the oil price, it is mostly caused by political problem. 1979 energy crisis caused by Iranian revolution. 1973 crisis caused by the conflict between Arab world and Israel. And it is no different this time.

So if you really want to know who is behind this crazy oil price, you don't need to look further then that guy in the white house and his people.

 

[Red Dawn]

Wait until this winter when households in the N.E. struggle to pay the cost to heat their homes.

 

[LegendKiller]

Originally posted by: 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).

50% weak dollar? Did you somehow miss the numerous highlights of the dollar only being down 28% since Nov 2001 whole oil is up over 620%?

Math much?

 

[nageov3t]

Originally posted by: Red Dawn
Wait until this winter when households in the N.E. struggle to pay the cost to heat their homes.

I'm investing in a closet stocked with sweaters

 

[IHateMyJob2004]

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.

Do you call up your real estate broker daily asking what hte price of your home is on any one day.

 

[IHateMyJob2004]

As for my numbers, remember that it is better to be approximately right than precisely wrong.

 

[LegendKiller]

Originally posted by: IHateMyJob2004
As for my numbers, remember that it is better to be approximately right than precisely wrong.

So, essentially you've got not fucking clue and you're sandbagging so you don't stick your neck out too far.

You're trying to underpromise and overdeliver to make yourself look good. Only thing worse than a kiss-ass is a save-ass.

I have all sorts of good sayings too.

 

[StageLeft]

Originally posted by: loki8481

Originally posted by: Red Dawn
Wait until this winter when households in the N.E. struggle to pay the cost to heat their homes.

I'm investing in a closet stocked with sweaters

I plan on burning poor people for heat.

The dollar has slipped by the amount legendkiller mentioned. It has slipped massively more against the euro but only because that one is stronger. His numbers are, as he has mentioned elsewhere, noted against a basket of various currencies, the only way to objectively determine the dollar's overall weakening.

Given that the euro is stronger than other currencies, it hasn't hit the same squeeze in oil, so it may not be enough to say the US has dropped certain % but oil has gone up a certain % but they're still worth mentioning as comparisons.

 

[blackangst1]

I'd like to know who exactly says there is a supply problem? I havent seen a talking head on CNN, MSNBC, or Fix that thinks this. Or anyone on this board actually.

 

[AccruedExpenditure]

Originally posted by: blackangst1
I'd like to know who exactly says there is a supply problem? I havent seen a talking head on CNN, MSNBC, or Fix that thinks this. Or anyone on this board actually.

Anyone who says 'Drill in Alaska'
-AE

 

[ericlp]

Originally posted by: LegendKiller

Originally posted by: 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).

50% weak dollar? Did you somehow miss the numerous highlights of the dollar only being down 28% since Nov 2001 whole oil is up over 620%?

Math much?

Hahaha... Damn, gotta love how he says that. ONLY 28%. sheesh... Only?????? 10% is way to much I could see if was only 3%...

hahaha

What a joke!

 

[LegendKiller]

Originally posted by: ericlp

Originally posted by: LegendKiller

Originally posted by: 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).

50% weak dollar? Did you somehow miss the numerous highlights of the dollar only being down 28% since Nov 2001 whole oil is up over 620%?

Math much?

Hahaha... Damn, gotta love how he says that. ONLY 28%. sheesh... Only?????? 10% is way to much I could see if was only 3%...

hahaha

What a joke!

28% isn't a huge deal over the last 7 years. It's a factor of differentials in economic outlook, interest rates driving currency demand (higher rates in Europe and elsewhere equates to higher demand in their currencies and less in ours), among others.

It's all relative to what you're measuring. Compared to oil's runup, 28% is a tad more than 4.5%.

 

[yllus]

Originally posted by: Engineer
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.

*shakes head* That's a really misleading statement for them to make.

Sure, perhaps the act of sucking the oil out of the ground costs that much. It doesn't take into account the costs of exploration or refinery upgrades/maintenance, which IIRC currently cost Exxon ~$70 million a day. Then you have all these nations like Venezuela and Russia that continue to tear up and rewrite contracts in their favour. All in all, not exactly a walk in the park for oil conglomerates these days.

 

[blackangst1]

Originally posted by: AccruedExpenditure

Originally posted by: blackangst1
I'd like to know who exactly says there is a supply problem? I havent seen a talking head on CNN, MSNBC, or Fix that thinks this. Or anyone on this board actually.

Anyone who says 'Drill in Alaska'
-AE

Perhaps. But I do know the conservative talking heads are NOT saying this, and actually call out those who do. Two of the biggest proponents of the drilling bullshit are Limbaugh and O'Reilly.

 

[fskimospy]

Originally posted by: yllus

Originally posted by: Engineer
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.

*shakes head* That's a really misleading statement for them to make.

Sure, perhaps the act of sucking the oil out of the ground costs that much. It doesn't take into account the costs of exploration or refinery upgrades/maintenance, which IIRC currently cost Exxon ~$70 million a day. Then you have all these nations like Venezuela and Russia that continue to tear up and rewrite contracts in their favour. All in all, not exactly a walk in the park for oil conglomerates these days.

You're right. I mean some people might see those conglomerates and say "wow man, you just had the most profitable year for any human organization in all of mankind's history, things must be good for you!" Really though, people don't take into account the fact that their business, like all businesses has expenses too. If you took all those out, they probably could have made $100 billion in profits in 2007. Life ain't easy if you're Exxon.

 

[ericlp]

Originally posted by: LegendKiller

Originally posted by: ericlp

Originally posted by: LegendKiller

Originally posted by: 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).

50% weak dollar? Did you somehow miss the numerous highlights of the dollar only being down 28% since Nov 2001 whole oil is up over 620%?

Math much?

Hahaha... Damn, gotta love how he says that. ONLY 28%. sheesh... Only?????? 10% is way to much I could see if was only 3%...

hahaha

What a joke!

28% isn't a huge deal over the last 7 years. It's a factor of differentials in economic outlook, interest rates driving currency demand (higher rates in Europe and elsewhere equates to higher demand in their currencies and less in ours), among others.

It's all relative to what you're measuring. Compared to oil's runup, 28% is a tad more than 4.5%.

Not sure where you are getting 4.5% numbers from. But, the falling dollar vs. the raise in oil costs play a big part in the reason why we are paying more at the pump. You obviously know that oil is traded in dollars (most of it). When the dollar slides then the people in China and Europe can get more oil for their money.

But that's not the whole picture obviously... There is a lot to it then that. Some people have different views on where the number really stands ... I find it hard to believe that the falling dollar is only making oil go up 4.5%.

Tho, you quote 7 years ago the dollar started sliding. I don't go back that far, I only am going back 3 years or so when the dollar really slid and when it did oil prices went out of sight. I've seen charts on the dollar falling and oil raising it's almost like looking into a mirror. I think it has more play on the price then you give credit.

One could say that the reason why people poring money in energy investment is because the dollar is so weak that there really isn't much else to invest in besides gold. Energy is a safe bet that won't fluctuate or lose it's value when the dollar loses even more. In a lot of peoples eyes Investing in energy might be a safer investment then keeping it in bonds or treasury funds.

 

[yllus]

Originally posted by: eskimospy

Originally posted by: yllus

Originally posted by: Engineer
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.

*shakes head* That's a really misleading statement for them to make.

Sure, perhaps the act of sucking the oil out of the ground costs that much. It doesn't take into account the costs of exploration or refinery upgrades/maintenance, which IIRC currently cost Exxon ~$70 million a day. Then you have all these nations like Venezuela and Russia that continue to tear up and rewrite contracts in their favour. All in all, not exactly a walk in the park for oil conglomerates these days.

You're right. I mean some people might see those conglomerates and say "wow man, you just had the most profitable year for any human organization in all of mankind's history, things must be good for you!" Really though, people don't take into account the fact that their business, like all businesses has expenses too. If you took all those out, they probably could have made $100 billion in profits in 2007. Life ain't easy if you're Exxon.

$100 billion? Nah, just $65 billion or thereabouts.

Point is, it's silly for the talking heads to state that oil costs $1.50 per barrel to extract and that oil companies' costs haven't changed in a decade. There's plenty to dislike about the oil industry without stooping to blatant misinformation.

 

[Fern]

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

Some economists say that there is.

Paul Krugman just had another article/editorial this weekend explaining why speculation is not the problem. He invites people to his web site for details. he says it's demand.

The financial named Kramer (can't recall his first name, he's the one usually screaming on TV about stocks etc.) also says it's demand.

I'm starting to think no one really knows; if they did, it be able to be explained to every one's satisfaction.

Too many experts disagreeing with each other now.

Fern

 

[Fern]

Originally posted by: ericlp

Originally posted by: LegendKiller
50% weak dollar? Did you somehow miss the numerous highlights of the dollar only being down 28% since Nov 2001 whole oil is up over 620%?

Math much?

Hahaha... Damn, gotta love how he says that. ONLY 28%. sheesh... Only?????? 10% is way to much I could see if was only 3%...

hahaha

What a joke!

3% you say?

28% over 7 years is only 4% per year on average.

Originally posted by: Engineer
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.

That sounds like a load of crap to me.

The cheapest production is in SA etc. They don't tell anybody how much it costs to extract. It's confidential info.

Fern

 

[Engineer]

Originally posted by: Fern

Originally posted by: ericlp

Originally posted by: LegendKiller
50% weak dollar? Did you somehow miss the numerous highlights of the dollar only being down 28% since Nov 2001 whole oil is up over 620%?

Math much?

Hahaha... Damn, gotta love how he says that. ONLY 28%. sheesh... Only?????? 10% is way to much I could see if was only 3%...

hahaha

What a joke!

3% you say?

28% over 7 years is only 4% per year on average.

Originally posted by: Engineer
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.

That sounds like a load of crap to me.

The cheapest production is in SA etc. They don't tell anybody how much it costs to extract. It's confidential info.

Fern

Just reporting what the analyst stated. I also find it somewhat low, but what do I know. Just how much money does it take to extract one barrel from the ground (no mention of transportation costs, etc., just extraction costs). $1.50 can power a 100 watt light bulb in most of Lexington, KY for 25 hours, so maybe it's as cheap as they say.