Gas prices are getting rediculous y'all
- Thread starter QueEx
- Start date
Re: Oil prices soaring; But why?
Everyone has money except us (Americans).
Everyone has money except us (Americans).
Re: Oil prices soaring; But why?
Organized Crime had profits of 2 trillion dollars last year. Common sense says the market is being used to launder some of that money. Al Qaeda is a multi-national crime organization not just a Islamist terrorist group. Their main goal is undermining America's economy not defeating us in Iraq. The surge in oil price, violatile stocks, falling dollar should have our government working overtime to create some stability in the market before it is too late.
Organized Crime had profits of 2 trillion dollars last year. Common sense says the market is being used to launder some of that money. Al Qaeda is a multi-national crime organization not just a Islamist terrorist group. Their main goal is undermining America's economy not defeating us in Iraq. The surge in oil price, violatile stocks, falling dollar should have our government working overtime to create some stability in the market before it is too late.
Re: Oil prices soaring; But why?
· Output peaked in 2006 and will fall 7% a year
· Decline in gas, coal and uranium also predicted
Ashley Seager
Monday October 22, 2007
The Guardian
World oil production has already peaked and will fall by half as soon as 2030, according to a report which also warns that extreme shortages of fossil fuels will lead to wars and social breakdown.
The German-based Energy Watch Group will release its study in London today saying that global oil production peaked in 2006 - much earlier than most experts had expected. The report, which predicts that production will now fall by 7% a year, comes after oil prices set new records almost every day last week, on Friday hitting more than $90 (£44) a barrel.
"The world soon will not be able to produce all the oil it needs as demand is rising while supply is falling. This is a huge problem for the world economy," said Hans-Josef Fell, EWG's founder and the German MP behind the country's successful support system for renewable energy.
The report's author, Joerg Schindler, said its most alarming finding was the steep decline in oil production after its peak, which he says is now behind us.
The results are in contrast to projections from the International Energy Agency, which says there is little reason to worry about oil supplies at the moment.
However, the EWG study relies more on actual oil production data which, it says, are more reliable than estimates of reserves still in the ground. The group says official industry estimates put global reserves at about 1.255 gigabarrels - equivalent to 42 years' supply at current consumption rates. But it thinks the figure is only about two thirds of that.
Global oil production is currently about 81m barrels a day - EWG expects that to fall to 39m by 2030. It also predicts significant falls in gas, coal and uranium production as those energy sources are used up.
Britain's oil production peaked in 1999 and has already dropped by half to about 1.6 million barrels a day.
The report presents a bleak view of the future unless a radically different approach is adopted. It quotes the British energy economist David Fleming as saying: "Anticipated supply shortages could lead easily to disturbing scenes of mass unrest as witnessed in Burma this month. For government, industry and the wider public, just muddling through is not an option any more as this situation could spin out of control and turn into a complete meltdown of society."
Mr Schindler comes to a similar conclusion. "The world is at the beginning of a structural change of its economic system. This change will be triggered by declining fossil fuel supplies and will influence almost all aspects of our daily life."
Jeremy Leggett, one of Britain's leading environmentalists and the author of Half Gone, a book about "peak oil" - defined as the moment when maximum production is reached, said that both the UK government and the energy industry were in "institutionalised denial" and that action should have been taken sooner.
"When I was an adviser to government, I proposed that we set up a taskforce to look at how fast the UK could mobilise alternative energy technologies in extremis, come the peak," he said. "Other industry advisers supported that. But the government prefers to sleep on without even doing a contingency study. For those of us who know that premature peak oil is a clear and present danger, it is impossible to understand such complacency."
Mr Fell said that the world had to move quickly towards the massive deployment of renewable energy and to a dramatic increase in energy efficiency, both as a way to combat climate change and to ensure that the lights stayed on. "If we did all this we may not have an energy crisis."
He accused the British government of hypocrisy. "Tony Blair and Gordon Brown have talked a lot about climate change but have not brought in proper policies to drive up the use of renewables," he said. "This is why they are left talking about nuclear and carbon capture and storage. "
Yesterday, a spokesman for the Department of Business and Enterprise said: "Over the next few years global oil production and refining capacity is expected to increase faster than demand. The world's oil resources are sufficient to sustain economic growth for the foreseeable future. The challenge will be to bring these resources to market in a way that ensures sustainable, timely, reliable and affordable supplies of energy."
The German policy, which guarantees above-market payments to producers of renewable power, is being adopted in many countries - but not Britain, where renewables generate about 4% of the country's electricity and 2% of its overall energy needs.
http://www.guardian.co.uk/oil/story/0,,2196435,00.html
Steep decline in oil production brings
risk of war and unrest, says new study
risk of war and unrest, says new study
· Output peaked in 2006 and will fall 7% a year
· Decline in gas, coal and uranium also predicted
Ashley Seager
Monday October 22, 2007
The Guardian
World oil production has already peaked and will fall by half as soon as 2030, according to a report which also warns that extreme shortages of fossil fuels will lead to wars and social breakdown.
The German-based Energy Watch Group will release its study in London today saying that global oil production peaked in 2006 - much earlier than most experts had expected. The report, which predicts that production will now fall by 7% a year, comes after oil prices set new records almost every day last week, on Friday hitting more than $90 (£44) a barrel.
"The world soon will not be able to produce all the oil it needs as demand is rising while supply is falling. This is a huge problem for the world economy," said Hans-Josef Fell, EWG's founder and the German MP behind the country's successful support system for renewable energy.
The report's author, Joerg Schindler, said its most alarming finding was the steep decline in oil production after its peak, which he says is now behind us.
The results are in contrast to projections from the International Energy Agency, which says there is little reason to worry about oil supplies at the moment.
However, the EWG study relies more on actual oil production data which, it says, are more reliable than estimates of reserves still in the ground. The group says official industry estimates put global reserves at about 1.255 gigabarrels - equivalent to 42 years' supply at current consumption rates. But it thinks the figure is only about two thirds of that.
Global oil production is currently about 81m barrels a day - EWG expects that to fall to 39m by 2030. It also predicts significant falls in gas, coal and uranium production as those energy sources are used up.
Britain's oil production peaked in 1999 and has already dropped by half to about 1.6 million barrels a day.
The report presents a bleak view of the future unless a radically different approach is adopted. It quotes the British energy economist David Fleming as saying: "Anticipated supply shortages could lead easily to disturbing scenes of mass unrest as witnessed in Burma this month. For government, industry and the wider public, just muddling through is not an option any more as this situation could spin out of control and turn into a complete meltdown of society."
Mr Schindler comes to a similar conclusion. "The world is at the beginning of a structural change of its economic system. This change will be triggered by declining fossil fuel supplies and will influence almost all aspects of our daily life."
Jeremy Leggett, one of Britain's leading environmentalists and the author of Half Gone, a book about "peak oil" - defined as the moment when maximum production is reached, said that both the UK government and the energy industry were in "institutionalised denial" and that action should have been taken sooner.
"When I was an adviser to government, I proposed that we set up a taskforce to look at how fast the UK could mobilise alternative energy technologies in extremis, come the peak," he said. "Other industry advisers supported that. But the government prefers to sleep on without even doing a contingency study. For those of us who know that premature peak oil is a clear and present danger, it is impossible to understand such complacency."
Mr Fell said that the world had to move quickly towards the massive deployment of renewable energy and to a dramatic increase in energy efficiency, both as a way to combat climate change and to ensure that the lights stayed on. "If we did all this we may not have an energy crisis."
He accused the British government of hypocrisy. "Tony Blair and Gordon Brown have talked a lot about climate change but have not brought in proper policies to drive up the use of renewables," he said. "This is why they are left talking about nuclear and carbon capture and storage. "
Yesterday, a spokesman for the Department of Business and Enterprise said: "Over the next few years global oil production and refining capacity is expected to increase faster than demand. The world's oil resources are sufficient to sustain economic growth for the foreseeable future. The challenge will be to bring these resources to market in a way that ensures sustainable, timely, reliable and affordable supplies of energy."
The German policy, which guarantees above-market payments to producers of renewable power, is being adopted in many countries - but not Britain, where renewables generate about 4% of the country's electricity and 2% of its overall energy needs.
http://www.guardian.co.uk/oil/story/0,,2196435,00.html
Falling Fortunes, Rising Hopes and the Price of Oil
<font size="5"><center>
Falling Fortunes, Rising Hopes
and the Price of Oil</font size></center>
Strategic Forecasting, Inc.
Geopolitical Intelligence Report
By Peter Zeihan
December 15, 2008
<font size="3">
Oil prices have now dipped — albeit only briefly — below US$40 a barrel, a precipitous plunge from their highs of more than US$147 a barrel in July. Just as high oil prices reworked the international economic order, low oil prices are now doing the same. Such a sudden onset of low prices impacts the international system just as severely as recent record highs.
But before we dive into the short-term (that is, up to 12 months) impact of the new price environment, we must state our position in the oil price debate. We have long been perplexed about the onward and upward movement of the oil markets from 2005 to 2008. Certainly, global demand was strong, but a variety of factors such as production figures and growing inventories of crude oil seemed to argue against ever-increasing prices. Some of our friends pointed to the complex world of derivatives and futures trading, which they said had created artificial demand. That may well have been true, but the bottom line is that, based on the fundamentals, the oil numbers did not make a great deal of sense.
Things have clarified a great deal of late. We are now facing an environment in which the United States, Europe and Japan are in recession, while China is, at the very least, expecting to see its growth slow greatly. Demand for crude the world over is sliding sharply even as the Organization of the Petroleum Exporting Countries (OPEC) member states so far seem unable (or, in the case of Saudi Arabia, perhaps unwilling) to make the necessary deep cuts in output that might halt the price slide. The bottom line is that, while the breathtaking speed at which prices have collapsed has caught us somewhat by surprise, the direction and the depth of the plunge has not.
Prices are likely to remain low for some time. Most of the world’s storage facilities — such as the U.S. Strategic Petroleum Reserve — are full to the brim, so large cuts are needed simply to prevent massive oversupply. Yet any OPEC production cuts — the cartel meets Dec. 17 and deep cuts are expected — will take months to have a demonstrable impact, especially in a recessionary environment. And there is the simple issue of scale. The global oil market is a beast: Total demand at present is about 86 million barrels per day. This is not a market that can turn on a dime. A firm fact that flies in the face of conventional wisdom is that oil actually falls far faster than it rises when the fundamentals are out of whack. This has happened on multiple occasions, and not that long ago.
Falls occurred both in the aftermath of the 1990-1991 Persian Gulf War and as a result of the 1997-1998 Asian financial crises that were similar in percentage terms to the present drop. Until the balance between supply and demand is restruck — something not likely until a global economic recovery is well under way — there is no reason to expect a significant price recovery. The journey, of course, is not necessarily a one-way trip. Quirks in everything from weather to shipping to Nigerian riots and Russian military movements can set prices gyrating, but the fundamentals are clearly bearish. It will most likely take several months for the core features of the new reality to change much at all.
Low oil prices create both winners and losers on the international scene. First, the winners’ list.
Far and away the biggest winner from drastically lower prices is the world’s largest consumer and importer of oil: the United States. The last two years of high prices have spawned a sustained American consumer effort to get by with less oil via a mix of conservation and a shift to better-mileage vehicles. Whether this purchase pattern in automobiles lasts is not at issue. The point is that it has already happened: Many Americans have already shifted to more fuel-efficient vehicles. Just as the 1990s obsession with sport utility vehicles artificially boosted American gasoline demand so long as those automobiles were on the road, so the new fleet of hybrids and smart cars will push demand in the opposite direction for a sustained period.
Overall U.S. oil consumption has plummeted by nearly 9 percent from its peak in August 2007 to November 2008, according to the U.S. Department of Energy. Combining this with the drop in prices since July translates into U.S. energy savings of approximately US$1.95 billion at a price of US$50 a barrel and US$2.1 billion at a price of US$40 a barrel. And that is daily cost savings. In recessionary times, that cash will go a long way to building confidence and stanching the recession.
Next on the list are the major European importers of crude: Germany, Italy and Spain. As a rule, European economies are less energy-intensive than the United States, but by dint of fuel mix and lack of domestic production these three major states are forced to rely on substantial amounts of imported oil. We exclude the other major European economies from this list as they are either major oil producers themselves (the United Kingdom and the Netherlands) or their economies are extremely oil efficient (France, Belgium and Sweden). Don’t get us wrong — the EU states are all quite pleased that oil prices have dialed back. Nevertheless, in terms of relative gain, Germany, Italy and Spain are the real winners. And with Europe facing a recession much deeper and likely longer than that in the United States, the Europeans need every advantage they can get.
India, far removed from Europe culturally and geographically, sports a somewhat similar economic structure in that it boasts (or suffers from, based on your perspective) an industrializing base that is highly dependent on oil imports. Broadly, the Indians are in the same basket as Spain in that they are voracious energy consumers who have seen their demand skyrocket in recent years. Between the Nov. 26 Mumbai attack, upcoming federal elections and the energy price pain from earlier in the year, the government is desperate to pass on the cost savings to the population to shore up its support.
Then there are the East Asian states of South Korea, China and Japan (listed in descending order of how much each one benefits from the price drop). All import massive amounts of crude oil, but we put them at the end of the list of winners because of their financial systems. In East Asia — and particularly in China and Japan — money is not allocated on the basis of rate of return or profitability as it is in the West. Instead, the concern is maximizing employment. It does not matter much in East Asia if one’s business plan is sound; the government will provide cheap loans so long one employs hordes of people. One side effect of this strategy is that firms can get loans for anything, including raw materials they otherwise could not afford — such as oil at US$147 a barrel.
Therefore, high oil prices just do not affect East Asia as badly as they affect the West. Just as the East Asian financial system mutes the impact of high prices, the converse is true as well. In the West, energy consumers are not shielded from high prices, so lower prices immediately translate into more purchasing power, and thus more economic activity. Not so in East Asia, where the same financial shielding that blunts the impact of high prices lessens the benefits of low prices.
The order in which we listed the three Asian giants relates to how much progress they have made in reforming their financial practices. South Korea’s financial system is much closer to the Western model than the Asian model: South Korea hurts more as prices rise, and so will be more relieved as prices fall. China is in the middle in terms of financial practices, but it is also attempting to unwind its system of energy price-fixing as oil costs drop; due to subsidies being reduced, Chinese consumers actually may not be seeing much of a change in retail prices. Finally, Japan will benefit the least because its system is already highly efficient compared to the other two, so the price impact was less in the first place. One barrel of oil consumed in Japan generates approximately US$2,610 of Japanese gross domestic product (GDP), while the comparative figures for Korea and China are US$1,270 and US$1,130 respectively.
In short, the heavily industrialized Asians still benefit, but the impact isn’t as much as one might think at first glance. In fact, the biggest benefit to these states from cheaper energy is indirect — lower prices spur consumption in the West, and then the West purchases more Asian products.
And now, the losers.
Venezuela and Iran top this list by far. Both are led by politicians who have lavished vast amounts of oil income on their populations to secure their respective political positions. But that public approval has come at its own price in terms of economic dislocation (why diversify the economy if strong oil prices bring in loads of cash?), low employment (the energy sector may be capital-intensive, but it certainly is not labor-intensive), and high inflation (high government spending has led to massive consumption and spurred rampant import of foreign goods to satiate that demand).
Of the two states, Venezuela is certainly in the worse position. By some estimates, Venezuela requires oil prices in the vicinity of US$120 a barrel to maintain the social spending to which its population has become accustomed. Iran’s number may be only somewhat lower, but President Mahmoud Ahmadinejad is in the process of at least beginning to bow to economic reality. On Dec. 5, he announced massive cuts in subsidy outlays with the intent of reforging the budget based on a price of only US$30 a barrel.
It is an open question whether the Iranian government — and especially the increasingly unpopular Ahmadinejad — can survive such cuts (if they are indeed made), but at least there is a public realization of the depth of the crisis at the top level of government. In Venezuela, by contrast, the mitigation process has barely begun, and for political reasons it cannot truly be implemented until after a referendum in early 2009 on term limits that could allow Chavez to run for president indefinitely.
Next is Nigeria. In terms of seeing an increase in human misery, Nigeria should probably be at the top of the losers’ list. But the harsh reality is that Nigerians are used to corrupt government, inadequate infrastructure, spotty power supply and all-around poor conditions. Some of the perks of high energy prices undoubtedly will disappear, but none of those perks succeeded in changing Nigeria in the first place.
The real impact on Nigeria will be that the government will have drastically less money available to grease the political wheels that allow it to keep competing regional and personal interests in check. Those funds have been particularly crucial for funneling cash to the country’s oil-rich Niger Delta region, giving local bosses reason not to hire and/or arm militant groups like the Movement for the Emancipation of the Niger Delta to attack oil and natural gas sites. With Abuja having less cash, the oil regions will see a surge in extortion, kidnapping and oil bunkering (i.e., theft). We already have seen attacks ramp up against the country’s natural gas industry: Within the last few days, attacks against supply points have forced operators to take the Bonny Island liquefied natural gas export facility offline. And since Nigeria’s militants never really differentiate between the country’s various forms of energy export, oil disruptions are probably just around the corner.
Russia is also in the crosshairs, but not nearly to the same degree as Venezuela, Iran and Nigeria. Russia has four things going for it that the others lack. First, it exports massive amounts of natural gas and metals, giving it additional income streams. (Venezuela and Iran actually import natural gas and have no real alternative to oil income.) Second, Russia never spent its money on its population. Thus, Russians have not become used to massive government support, so there will be no sharp cuts in public spending that will be missed by the populace. Third, Russia has saved nearly every nickel it made in the past eight years, giving it cash reserves worth some US$750 billion. The financial crisis is hitting Russia hard, so at least US$200 billion of that buffer already has been spent, but Russia still remains in a far better position than most oil exporters. Fourth and last, the Russians can rely on Deputy Prime Minister and Finance Minister Alexei Kudrin to (somewhat forcefully) keep the books firmly in balance. At his insistence, the government is in the process of refabricating its three-year budget on the basis of oil prices of below US$35 a barrel, down from the original estimate of US$95.
At the end of the losers’ list we have two states that most people would not think of: Mexico and Canada. Both have other sources of economic activity. Canada is a modern service-based economy with a heavy presence of many commodity industries, while Mexico has become a major manufacturing hub. But both are major oil exporters, and have been leading suppliers to the American economy for decades. So both are exposed, but their concerns are more about unforeseen complications rather than the “simple” quantitative impact of lower prices.
Mexico has purchased derivatives contracts that, in essence, insure the price of all its oil exports for 2009. So should prices remain low, Mexico’s actual income will be unchanged. We only include Mexico on the list of losers, therefore, because it’s quite rare in geopolitics that such planning actually works out as planned. Hurricanes and strikes happen. (Mexico also faces the problem of insufficient funds, expertise and technology to counter rapidly declining output, something that will leave it with a lack of oil to sell in the first place — but that is an issue more for 2012 than 2009.)
As for Canada, most of the oil it produces comes from Alberta province, the seat of power of the ruling Conservative Party. Right now, the Canadian government is wobbling like a slowing top. Seeing the Conservatives’ power base take a massive economic hit due to oil prices is not the sort of complication the government needs right now. In the longer term, Alberta recently increased taxes on oil sands projects. Oil sands extraction is among the more capital-intensive and technologically challenging sorts of oil production currently possible. Combine the tax changes with the nature of the subindustry and the recent price drops and there is likely to be precious little investment interest in oil during — at a minimum — 2009.
Most readers will take note of the countries we have chosen not to include on the list of vulnerable states. These include the bulk of the OPEC states — specifically Angola, Iraq, Kuwait, Saudi Arabia, the United Arab Emirates, Qatar and Libya. All of these states count oil as their only meaningful export (except the United Arab Emirates and Qatar, which also export natural gas), so why do we feel such countries are not in the danger zone?
For its part, Angola only became a major producer recently. Nearly all of Angolan oil output is from offshore projects controlled by foreigners — shutting in such production is a very tricky affair for a country that is utterly reliant on foreign technology to operate its only meaningful industry. But the primary reason Angola is not feeling the heat is that most of its income has not been spent but instead has been stashed away due to a lack of the necessary physical and personnel infrastructure needed to leverage the income.
Iraq is in a somewhat similar position as far as finances are concerned. While Iraq has been producing crude for decades, its current government is only a few years old, and its institutions simply cannot allocate the monies involved. Despite massive outlays by both Iraq and Angola, their respective governments simply lack the capacity to spend, and so have stored up cash accounts worth US$26 billion and US$54 billion respectively.
The rest of the Arab oil producers warrant a much simpler explanation: They’ve been fiscally conservative. While all have shared the wealth with their somewhat restive populations, none of them has repeated the mistakes of the 1970s, when they overspent on gaudy buildings and overcommitted themselves to expensive social programs. All have been saving vast amounts of cash, with the Saudis alone probably having more than US$1 trillion socked away. Tiny Kuwait officially has a wealth fund worth more than US$250 billion.
So while none of the Arab oil states are particularly thrilled with the direction — and in particular the speed — oil prices have gone, none of these governments faces a mortal danger at this time. What they are now missing is the ability to make a substantial impact on the world around them. At oil’s height the Gulf Arab oil producers were taking in US$2 billion a day in revenues — far more cash than they could ever hope to metabolize themselves. Bribes are powerful tools of foreign policy, and their income allowed them — particularly Saudi Arabia — to wield outsized influence in Iraq, Syria, Lebanon, and even in Beijing, London and Washington. So while none of these states faces a meltdown from falling prices, there are certainly some hangovers in store for them. It is just that they are more political than economic in nature, at least for now.
Tell Stratfor What You Think.
</font size>
stratfor.com
<font size="5"><center>
Falling Fortunes, Rising Hopes
and the Price of Oil</font size></center>
Strategic Forecasting, Inc.
Geopolitical Intelligence Report
By Peter Zeihan
December 15, 2008
<font size="3">
Oil prices have now dipped — albeit only briefly — below US$40 a barrel, a precipitous plunge from their highs of more than US$147 a barrel in July. Just as high oil prices reworked the international economic order, low oil prices are now doing the same. Such a sudden onset of low prices impacts the international system just as severely as recent record highs.
But before we dive into the short-term (that is, up to 12 months) impact of the new price environment, we must state our position in the oil price debate. We have long been perplexed about the onward and upward movement of the oil markets from 2005 to 2008. Certainly, global demand was strong, but a variety of factors such as production figures and growing inventories of crude oil seemed to argue against ever-increasing prices. Some of our friends pointed to the complex world of derivatives and futures trading, which they said had created artificial demand. That may well have been true, but the bottom line is that, based on the fundamentals, the oil numbers did not make a great deal of sense.
Things have clarified a great deal of late. We are now facing an environment in which the United States, Europe and Japan are in recession, while China is, at the very least, expecting to see its growth slow greatly. Demand for crude the world over is sliding sharply even as the Organization of the Petroleum Exporting Countries (OPEC) member states so far seem unable (or, in the case of Saudi Arabia, perhaps unwilling) to make the necessary deep cuts in output that might halt the price slide. The bottom line is that, while the breathtaking speed at which prices have collapsed has caught us somewhat by surprise, the direction and the depth of the plunge has not.
Prices are likely to remain low for some time. Most of the world’s storage facilities — such as the U.S. Strategic Petroleum Reserve — are full to the brim, so large cuts are needed simply to prevent massive oversupply. Yet any OPEC production cuts — the cartel meets Dec. 17 and deep cuts are expected — will take months to have a demonstrable impact, especially in a recessionary environment. And there is the simple issue of scale. The global oil market is a beast: Total demand at present is about 86 million barrels per day. This is not a market that can turn on a dime. A firm fact that flies in the face of conventional wisdom is that oil actually falls far faster than it rises when the fundamentals are out of whack. This has happened on multiple occasions, and not that long ago.
Falls occurred both in the aftermath of the 1990-1991 Persian Gulf War and as a result of the 1997-1998 Asian financial crises that were similar in percentage terms to the present drop. Until the balance between supply and demand is restruck — something not likely until a global economic recovery is well under way — there is no reason to expect a significant price recovery. The journey, of course, is not necessarily a one-way trip. Quirks in everything from weather to shipping to Nigerian riots and Russian military movements can set prices gyrating, but the fundamentals are clearly bearish. It will most likely take several months for the core features of the new reality to change much at all.
Low oil prices create both winners and losers on the international scene. First, the winners’ list.
Far and away the biggest winner from drastically lower prices is the world’s largest consumer and importer of oil: the United States. The last two years of high prices have spawned a sustained American consumer effort to get by with less oil via a mix of conservation and a shift to better-mileage vehicles. Whether this purchase pattern in automobiles lasts is not at issue. The point is that it has already happened: Many Americans have already shifted to more fuel-efficient vehicles. Just as the 1990s obsession with sport utility vehicles artificially boosted American gasoline demand so long as those automobiles were on the road, so the new fleet of hybrids and smart cars will push demand in the opposite direction for a sustained period.
Overall U.S. oil consumption has plummeted by nearly 9 percent from its peak in August 2007 to November 2008, according to the U.S. Department of Energy. Combining this with the drop in prices since July translates into U.S. energy savings of approximately US$1.95 billion at a price of US$50 a barrel and US$2.1 billion at a price of US$40 a barrel. And that is daily cost savings. In recessionary times, that cash will go a long way to building confidence and stanching the recession.
Next on the list are the major European importers of crude: Germany, Italy and Spain. As a rule, European economies are less energy-intensive than the United States, but by dint of fuel mix and lack of domestic production these three major states are forced to rely on substantial amounts of imported oil. We exclude the other major European economies from this list as they are either major oil producers themselves (the United Kingdom and the Netherlands) or their economies are extremely oil efficient (France, Belgium and Sweden). Don’t get us wrong — the EU states are all quite pleased that oil prices have dialed back. Nevertheless, in terms of relative gain, Germany, Italy and Spain are the real winners. And with Europe facing a recession much deeper and likely longer than that in the United States, the Europeans need every advantage they can get.
India, far removed from Europe culturally and geographically, sports a somewhat similar economic structure in that it boasts (or suffers from, based on your perspective) an industrializing base that is highly dependent on oil imports. Broadly, the Indians are in the same basket as Spain in that they are voracious energy consumers who have seen their demand skyrocket in recent years. Between the Nov. 26 Mumbai attack, upcoming federal elections and the energy price pain from earlier in the year, the government is desperate to pass on the cost savings to the population to shore up its support.
Then there are the East Asian states of South Korea, China and Japan (listed in descending order of how much each one benefits from the price drop). All import massive amounts of crude oil, but we put them at the end of the list of winners because of their financial systems. In East Asia — and particularly in China and Japan — money is not allocated on the basis of rate of return or profitability as it is in the West. Instead, the concern is maximizing employment. It does not matter much in East Asia if one’s business plan is sound; the government will provide cheap loans so long one employs hordes of people. One side effect of this strategy is that firms can get loans for anything, including raw materials they otherwise could not afford — such as oil at US$147 a barrel.
Therefore, high oil prices just do not affect East Asia as badly as they affect the West. Just as the East Asian financial system mutes the impact of high prices, the converse is true as well. In the West, energy consumers are not shielded from high prices, so lower prices immediately translate into more purchasing power, and thus more economic activity. Not so in East Asia, where the same financial shielding that blunts the impact of high prices lessens the benefits of low prices.
The order in which we listed the three Asian giants relates to how much progress they have made in reforming their financial practices. South Korea’s financial system is much closer to the Western model than the Asian model: South Korea hurts more as prices rise, and so will be more relieved as prices fall. China is in the middle in terms of financial practices, but it is also attempting to unwind its system of energy price-fixing as oil costs drop; due to subsidies being reduced, Chinese consumers actually may not be seeing much of a change in retail prices. Finally, Japan will benefit the least because its system is already highly efficient compared to the other two, so the price impact was less in the first place. One barrel of oil consumed in Japan generates approximately US$2,610 of Japanese gross domestic product (GDP), while the comparative figures for Korea and China are US$1,270 and US$1,130 respectively.
In short, the heavily industrialized Asians still benefit, but the impact isn’t as much as one might think at first glance. In fact, the biggest benefit to these states from cheaper energy is indirect — lower prices spur consumption in the West, and then the West purchases more Asian products.
And now, the losers.
Venezuela and Iran top this list by far. Both are led by politicians who have lavished vast amounts of oil income on their populations to secure their respective political positions. But that public approval has come at its own price in terms of economic dislocation (why diversify the economy if strong oil prices bring in loads of cash?), low employment (the energy sector may be capital-intensive, but it certainly is not labor-intensive), and high inflation (high government spending has led to massive consumption and spurred rampant import of foreign goods to satiate that demand).
Of the two states, Venezuela is certainly in the worse position. By some estimates, Venezuela requires oil prices in the vicinity of US$120 a barrel to maintain the social spending to which its population has become accustomed. Iran’s number may be only somewhat lower, but President Mahmoud Ahmadinejad is in the process of at least beginning to bow to economic reality. On Dec. 5, he announced massive cuts in subsidy outlays with the intent of reforging the budget based on a price of only US$30 a barrel.
It is an open question whether the Iranian government — and especially the increasingly unpopular Ahmadinejad — can survive such cuts (if they are indeed made), but at least there is a public realization of the depth of the crisis at the top level of government. In Venezuela, by contrast, the mitigation process has barely begun, and for political reasons it cannot truly be implemented until after a referendum in early 2009 on term limits that could allow Chavez to run for president indefinitely.
Next is Nigeria. In terms of seeing an increase in human misery, Nigeria should probably be at the top of the losers’ list. But the harsh reality is that Nigerians are used to corrupt government, inadequate infrastructure, spotty power supply and all-around poor conditions. Some of the perks of high energy prices undoubtedly will disappear, but none of those perks succeeded in changing Nigeria in the first place.
The real impact on Nigeria will be that the government will have drastically less money available to grease the political wheels that allow it to keep competing regional and personal interests in check. Those funds have been particularly crucial for funneling cash to the country’s oil-rich Niger Delta region, giving local bosses reason not to hire and/or arm militant groups like the Movement for the Emancipation of the Niger Delta to attack oil and natural gas sites. With Abuja having less cash, the oil regions will see a surge in extortion, kidnapping and oil bunkering (i.e., theft). We already have seen attacks ramp up against the country’s natural gas industry: Within the last few days, attacks against supply points have forced operators to take the Bonny Island liquefied natural gas export facility offline. And since Nigeria’s militants never really differentiate between the country’s various forms of energy export, oil disruptions are probably just around the corner.
Russia is also in the crosshairs, but not nearly to the same degree as Venezuela, Iran and Nigeria. Russia has four things going for it that the others lack. First, it exports massive amounts of natural gas and metals, giving it additional income streams. (Venezuela and Iran actually import natural gas and have no real alternative to oil income.) Second, Russia never spent its money on its population. Thus, Russians have not become used to massive government support, so there will be no sharp cuts in public spending that will be missed by the populace. Third, Russia has saved nearly every nickel it made in the past eight years, giving it cash reserves worth some US$750 billion. The financial crisis is hitting Russia hard, so at least US$200 billion of that buffer already has been spent, but Russia still remains in a far better position than most oil exporters. Fourth and last, the Russians can rely on Deputy Prime Minister and Finance Minister Alexei Kudrin to (somewhat forcefully) keep the books firmly in balance. At his insistence, the government is in the process of refabricating its three-year budget on the basis of oil prices of below US$35 a barrel, down from the original estimate of US$95.
At the end of the losers’ list we have two states that most people would not think of: Mexico and Canada. Both have other sources of economic activity. Canada is a modern service-based economy with a heavy presence of many commodity industries, while Mexico has become a major manufacturing hub. But both are major oil exporters, and have been leading suppliers to the American economy for decades. So both are exposed, but their concerns are more about unforeseen complications rather than the “simple” quantitative impact of lower prices.
Mexico has purchased derivatives contracts that, in essence, insure the price of all its oil exports for 2009. So should prices remain low, Mexico’s actual income will be unchanged. We only include Mexico on the list of losers, therefore, because it’s quite rare in geopolitics that such planning actually works out as planned. Hurricanes and strikes happen. (Mexico also faces the problem of insufficient funds, expertise and technology to counter rapidly declining output, something that will leave it with a lack of oil to sell in the first place — but that is an issue more for 2012 than 2009.)
As for Canada, most of the oil it produces comes from Alberta province, the seat of power of the ruling Conservative Party. Right now, the Canadian government is wobbling like a slowing top. Seeing the Conservatives’ power base take a massive economic hit due to oil prices is not the sort of complication the government needs right now. In the longer term, Alberta recently increased taxes on oil sands projects. Oil sands extraction is among the more capital-intensive and technologically challenging sorts of oil production currently possible. Combine the tax changes with the nature of the subindustry and the recent price drops and there is likely to be precious little investment interest in oil during — at a minimum — 2009.
Most readers will take note of the countries we have chosen not to include on the list of vulnerable states. These include the bulk of the OPEC states — specifically Angola, Iraq, Kuwait, Saudi Arabia, the United Arab Emirates, Qatar and Libya. All of these states count oil as their only meaningful export (except the United Arab Emirates and Qatar, which also export natural gas), so why do we feel such countries are not in the danger zone?
For its part, Angola only became a major producer recently. Nearly all of Angolan oil output is from offshore projects controlled by foreigners — shutting in such production is a very tricky affair for a country that is utterly reliant on foreign technology to operate its only meaningful industry. But the primary reason Angola is not feeling the heat is that most of its income has not been spent but instead has been stashed away due to a lack of the necessary physical and personnel infrastructure needed to leverage the income.
Iraq is in a somewhat similar position as far as finances are concerned. While Iraq has been producing crude for decades, its current government is only a few years old, and its institutions simply cannot allocate the monies involved. Despite massive outlays by both Iraq and Angola, their respective governments simply lack the capacity to spend, and so have stored up cash accounts worth US$26 billion and US$54 billion respectively.
The rest of the Arab oil producers warrant a much simpler explanation: They’ve been fiscally conservative. While all have shared the wealth with their somewhat restive populations, none of them has repeated the mistakes of the 1970s, when they overspent on gaudy buildings and overcommitted themselves to expensive social programs. All have been saving vast amounts of cash, with the Saudis alone probably having more than US$1 trillion socked away. Tiny Kuwait officially has a wealth fund worth more than US$250 billion.
So while none of the Arab oil states are particularly thrilled with the direction — and in particular the speed — oil prices have gone, none of these governments faces a mortal danger at this time. What they are now missing is the ability to make a substantial impact on the world around them. At oil’s height the Gulf Arab oil producers were taking in US$2 billion a day in revenues — far more cash than they could ever hope to metabolize themselves. Bribes are powerful tools of foreign policy, and their income allowed them — particularly Saudi Arabia — to wield outsized influence in Iraq, Syria, Lebanon, and even in Beijing, London and Washington. So while none of these states faces a meltdown from falling prices, there are certainly some hangovers in store for them. It is just that they are more political than economic in nature, at least for now.
Tell Stratfor What You Think.
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stratfor.com
Who's To Blame For Rising Gas Prices?
from Human Events
Who's To Blame For Rising Gas Prices?
by Mark Skousen (more by this author)
Posted 06/15/2009 ET
“I’m a free-market guy, but the government must step in to stop the speculators!” ~ Bill O’Reilly, The O’Reilly Factor
Crude oil prices have now doubled this year to over $70 a barrel, and gasoline prices are moving back up quickly, and have even hit $3.00 a gallon in California.
American consumers are getting restless again, worried that gas prices might return to $4 or more in the near future, and all this is happening at a time when Americans can least afford it.
Why would gas prices rise in the midst of a deep recession and high unemployment? It makes no sense! On the supply side, gasoline and oil inventories at historical highs, and on the demand side, fewer goods are being transported by trucks, trains and airplanes. So what gives? Why are energy prices suddenly going back up in the midst of a glut?
Bill O’Reilly and other populists are blaming the commodity speculators for bidding up the price of oil and gasoline futures on the New York Merc and other exchanges. They want the government to impose higher margin requirements, from the current 10% to 50% or more, to curtail speculation in oil and gas prices.
There are two important points to be made about the role of the futures markets in determining the pricing of basic commodities. First, it is true that speculators can push commodities far beyond their fundamental long-term value. We saw that when oil prices rose to $147 a barrel a year ago. That’s when speculators are labeled the bad guys.
But don’t forget that it was also speculators who pushed the oil prices down to $34 a barrel in January -- far below their fundamental long-term value.
Second, futures markets are not only for speculators, but for hedgers. These are producers who sell and lock into higher prices in order to protect their profits against the possibility of prices coming back down (and they need those higher profits to find new reserves). And they are customers who buy commodity contracts to protect themselves from the possibility of having to pay higher prices down the road.
In reality, blaming the speculators for the high price of energy is really attacking the messenger instead of the ultimate culprit. Speculators are looking into the future, and what they see is a very different supply and demand situation for energy. That is, they see a coming shortage in crude oil and a sharp rise in the dollar demand for energy. Let me explain.
On the supply side, speculators see surpluses turning into shortages. OPEC and major oil producers are cutting production. In the long run, most of the cheap oil deposits have already been found. New oil deposits have been discovered off the coasts of South America, Africa and elsewhere, but the new reserves are in inhospitable and inaccessible places, such as the deep waters off Africa and Brazil, or the frozen oceans of the Arctic. And deep-water exploration is extremely expensive compared to land-based exploration. Deep-water extraction isn’t profitable unless oil prices exceed $75 to $80 a barrel, compared to $25 to $30 a barrel for some land-based deposits. In addition, governments everywhere are over-regulating the oil & gas market, either by outright nationalization (OPEC nations) or restricting drilling in new oil fields for environmental reasons (Alaska). The Obama administration wants to impose huge new taxes on traditional oil & gas markets (cap & trade).
On the demand side, speculators see more consumption of energy products as the global economy recovers and emerging markets expand (China, India, Latin America). They also see a new round of inflation coming, as reflected in a weak dollar. To fight the current depression, governments everywhere have adopted “easy money” policies, pumping trillions of new dollars into the economy, and aggressively running massive deficits -- deficits funded with depreciating dollars. Don’t forget that the price of oil is quoted in dollars, and as the dollar weakens, the price of oil inevitably goes up.
A King Dollar policy -- a stronger dollar -- and deregulating the energy markets, would be the best remedies for stabilizing energy prices. But neither one is going to happen, so you better get used to higher gasoline prices. They are inevitable.
from Human Events
Who's To Blame For Rising Gas Prices?
by Mark Skousen (more by this author)
Posted 06/15/2009 ET
“I’m a free-market guy, but the government must step in to stop the speculators!” ~ Bill O’Reilly, The O’Reilly Factor
Crude oil prices have now doubled this year to over $70 a barrel, and gasoline prices are moving back up quickly, and have even hit $3.00 a gallon in California.
American consumers are getting restless again, worried that gas prices might return to $4 or more in the near future, and all this is happening at a time when Americans can least afford it.
Why would gas prices rise in the midst of a deep recession and high unemployment? It makes no sense! On the supply side, gasoline and oil inventories at historical highs, and on the demand side, fewer goods are being transported by trucks, trains and airplanes. So what gives? Why are energy prices suddenly going back up in the midst of a glut?
Bill O’Reilly and other populists are blaming the commodity speculators for bidding up the price of oil and gasoline futures on the New York Merc and other exchanges. They want the government to impose higher margin requirements, from the current 10% to 50% or more, to curtail speculation in oil and gas prices.
There are two important points to be made about the role of the futures markets in determining the pricing of basic commodities. First, it is true that speculators can push commodities far beyond their fundamental long-term value. We saw that when oil prices rose to $147 a barrel a year ago. That’s when speculators are labeled the bad guys.
But don’t forget that it was also speculators who pushed the oil prices down to $34 a barrel in January -- far below their fundamental long-term value.
Second, futures markets are not only for speculators, but for hedgers. These are producers who sell and lock into higher prices in order to protect their profits against the possibility of prices coming back down (and they need those higher profits to find new reserves). And they are customers who buy commodity contracts to protect themselves from the possibility of having to pay higher prices down the road.
In reality, blaming the speculators for the high price of energy is really attacking the messenger instead of the ultimate culprit. Speculators are looking into the future, and what they see is a very different supply and demand situation for energy. That is, they see a coming shortage in crude oil and a sharp rise in the dollar demand for energy. Let me explain.
On the supply side, speculators see surpluses turning into shortages. OPEC and major oil producers are cutting production. In the long run, most of the cheap oil deposits have already been found. New oil deposits have been discovered off the coasts of South America, Africa and elsewhere, but the new reserves are in inhospitable and inaccessible places, such as the deep waters off Africa and Brazil, or the frozen oceans of the Arctic. And deep-water exploration is extremely expensive compared to land-based exploration. Deep-water extraction isn’t profitable unless oil prices exceed $75 to $80 a barrel, compared to $25 to $30 a barrel for some land-based deposits. In addition, governments everywhere are over-regulating the oil & gas market, either by outright nationalization (OPEC nations) or restricting drilling in new oil fields for environmental reasons (Alaska). The Obama administration wants to impose huge new taxes on traditional oil & gas markets (cap & trade).
On the demand side, speculators see more consumption of energy products as the global economy recovers and emerging markets expand (China, India, Latin America). They also see a new round of inflation coming, as reflected in a weak dollar. To fight the current depression, governments everywhere have adopted “easy money” policies, pumping trillions of new dollars into the economy, and aggressively running massive deficits -- deficits funded with depreciating dollars. Don’t forget that the price of oil is quoted in dollars, and as the dollar weakens, the price of oil inevitably goes up.
A King Dollar policy -- a stronger dollar -- and deregulating the energy markets, would be the best remedies for stabilizing energy prices. But neither one is going to happen, so you better get used to higher gasoline prices. They are inevitable.
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Now, fast forward another 2 years later . . .
<font size="5"><center>Remember $4 gasoline?
Oil speculators are back</font size></center>
Gas prices Nov. 23 in San Francisco. AP Photo/Paul Sakuma
McClatchy Newspapers
By Kevin G. Hall
December 8, 2010
WASHINGTON — Despite weak demand in the U.S. and Europe, oil prices climbed this week to near $90 a barrel and gasoline prices have passed $3 a gallon on the West Coast and parts of the Northeast.
Why? If demand is down and supplies are plentiful — and they are — why would prices be going up?
<SPAN style="BACKGROUND-COLOR: #ffff00">Because Wall Street speculators are driving up oil and gasoline prices again — just in time to dampen holiday cheer</span>.
"It's all about investor optimism, and that's been the story about 2010 ... that's the primary reason why we're seeing oil prices at $90 (a barrel) and gasoline making an uncharacteristic climb in December towards $3 a gallon," said Troy Green, a national spokesman for the AAA Motor Club, which monitors gasoline prices.
AAA's Fuel Gauge Report shows the nationwide average for a gallon of regular unleaded gasoline stood at $2.968 on Wednesday. That's up 11 cents a gallon from a month ago and 33 cents a gallon over one year ago. That means it costs about $1.65 more per fill-up than a month ago and $4.95 more than a year ago.
It's even worse on the West Coast, where this week prices have averaged higher than $3.15 a gallon, according to Energy Department data.
If oil prices keep climbing beyond $100 per barrel, as Goldman Sachs projects for 2011, higher fuel prices may blunt efforts by the Obama administration and the Federal Reserve to stimulate the weak economy.
"I think we're at that point. With (nearly) 10 percent unemployment, it's a much more impoverished consumer that can't afford it. It's almost a bludgeoning instrument in terms of what it will do to consumer sentiment," said John Kilduff, a veteran energy analyst and partner in the hedge fund Again Capital. "What might have been a very bright shopping season could get the wind taken out of its sails by these high prices."
Rising prices could erase the stimulus coming from the 2 percentage point reduction in payroll taxes proposed this week by President Barack Obama and Republican congressional leaders. This would hit the working poor particularly hard.
"The money they get from government tax relief, they'll have to go pay in higher prices for food and energy," said Michael Masters, head of Masters Capital Management and a frequent witness before Congress about financial speculation in oil contracts.
The Energy Information Administration, the statistical arm of the Energy Department, said Wednesday that there is, in fact, increasing demand for oil compared with last year's low demand amid the recession.
But supplies are abundant, it said in its weekly report, This Week in Petroleum — especially when compared with a few years ago.
Obama's departing chief economic adviser, Lawrence Summers, shrugged off rising oil prices Wednesday.
"Oil goes up, oil goes down," he said.
Economic growth in emerging markets and China has raised global demand for oil, the EIA said, while U.S. demand for oil year-over-year grew by 750,000 barrels per day in August and 900,000 in September. The numbers, it said, are of "an order approaching, or even exceeding, growth levels seen in China."
However, the EIA cautioned that "even given strong growth this year, U.S. oil demand remains well below peak levels seen in 2005, and recent growth rates relative to year-ago levels are not expected to continue."
There's been so much oil in storage on land this year that oil tankers were actually converted into floating storage facilities.
"Those (oil inventory) numbers were extremely high two months ago, but pretty much the majority of that floating storage has been liquidated," said Joe Poscillico, an account executive at MF Global. "The inventories on land are starting to decrease week by week and getting more toward average numbers."
Another explanation for falling inventories, one that belies the justification for higher prices, is that refiners who convert oil into gasoline are operating at extremely low utilization rates. They were operating at 86 percent of their capacity on average during the first nine months of the year.
That's higher than last year's average of 82.9 percent but well below the late 1990s and a period from 2000 to 2006, when refiners operated at well over 90 percent of their installed capacity to make gasoline.
Lower production runs create tightened supplies, which in turn drives up prices and sets the table for speculators.
"I really don't remember a period where we've had refinery run rates so low for this long," said Kilduff, who likened the low production to "draining the swamp."
"Financial physics" is again behind high prices, he warned, adding that crude oil "represents a store of value, the way gold and some other commodities do."
The Federal Reserve is also driving investment into oil contracts, Kilduff said, because of its moves to force investors out of the safe haven of government bonds and into risk taking — a process called quantitative easing.
That's a view shared by Masters, who thinks that "financial flows are the primary reason why you are getting increases in prices, because investors are trying to 'hedge,' because of quantitative easing and who knows what else," Masters said. "They've decided that they want to own crude and other commodities anyway because they just want to own them."
</font size>
http://www.mcclatchydc.com/2010/12/...e-oil-speculators.html#storylink=omni_popular
<font size="3">
Got dammit, I'm tired of these gas prices
</font size>
Gas prices top $3.40 nationwidehttp://money.cnn.com/news/storysupplement/economy/gas_prices_by_state/index.html </font size><font size="3">NEW YORK (CNNMoney) -- Gas prices jumped 4 cents overnight, with the average American driver now paying more than $3.40 a gallon.
The national average price for a gallon of regular gasoline rose to $3.427 on Thursday, according to a daily survey by motorist group AAA. That's up from $3.387 a gallon on Wednesday.
Gas prices have not averaged more than $3.40 a gallon since October of 2008. The record high was over $4.11 a gallon in July 2008.
The highest gas prices were in Hawaii, where drivers pay an average of $3.82 a gallon. California also has gas prices above $3.80 a gallon, while Alaskans pay $3.77 on average.</font size>
<font size="4">Lack of information, not lack of oil, driving price risehttp://www.mcclatchydc.com/2011/03/02/109735/lack-of-information-not-lack-of.html</font size><font size="3"> WASHINGTON — The continued climb in global <SPAN style="BACKGROUND-COLOR: #ffff00">oil prices brought on by unrest in Libya is due more to fear than to a shortage of petroleum</span>, but experts warned Wednesday that the Obama administration may have to take steps to drive prices down if they don't fall on their own soon.
The price for a barrel of crude oil for April delivery rose $2.60 Wednesday to $102.23 on the New York Mercantile Exchange — the first time that oil settled above $100 since September 2008, the month that the U.S. financial meltdown began in earnest.
"<SPAN style="BACKGROUND-COLOR: #ffff00">Global supply is adequate. This is really a fear trade,"</span> said Andrew Lebow, a broker at MF Global in New York. </font size>
Got dammit, I'm tired of these gas prices
</font size><font size="4">
Gas prices top $3.40 nationwidehttp://money.cnn.com/news/storysupplement/economy/gas_prices_by_state/index.html </font size><font size="3">NEW YORK (CNNMoney) -- Gas prices jumped 4 cents overnight, with the average American driver now paying more than $3.40 a gallon.
The national average price for a gallon of regular gasoline rose to $3.427 on Thursday, according to a daily survey by motorist group AAA. That's up from $3.387 a gallon on Wednesday.
Gas prices have not averaged more than $3.40 a gallon since October of 2008. The record high was over $4.11 a gallon in July 2008.
The highest gas prices were in Hawaii, where drivers pay an average of $3.82 a gallon. California also has gas prices above $3.80 a gallon, while Alaskans pay $3.77 on average.</font size>
<font size="4">Lack of information, not lack of oil, driving price risehttp://www.mcclatchydc.com/2011/03/02/109735/lack-of-information-not-lack-of.html</font size><font size="3"> WASHINGTON — The continued climb in global <SPAN style="BACKGROUND-COLOR: #ffff00">oil prices brought on by unrest in Libya is due more to fear than to a shortage of petroleum</span>, but experts warned Wednesday that the Obama administration may have to take steps to drive prices down if they don't fall on their own soon.
The price for a barrel of crude oil for April delivery rose $2.60 Wednesday to $102.23 on the New York Mercantile Exchange — the first time that oil settled above $100 since September 2008, the month that the U.S. financial meltdown began in earnest.
"<SPAN style="BACKGROUND-COLOR: #ffff00">Global supply is adequate. This is really a fear trade,"</span> said Andrew Lebow, a broker at MF Global in New York. </font size>
<font size="3">
Got dammit, I'm tired of these gas prices<font size="4">
Gas prices top $3.40 nationwidehttp://money.cnn.com/news/storysupplement/economy/gas_prices_by_state/index.html </font size><font size="3">NEW YORK (CNNMoney) -- Gas prices jumped 4 cents overnight, with the average American driver now paying more than $3.40 a gallon.
The national average price for a gallon of regular gasoline rose to $3.427 on Thursday, according to a daily survey by motorist group AAA. That's up from $3.387 a gallon on Wednesday.
Gas prices have not averaged more than $3.40 a gallon since October of 2008. The record high was over $4.11 a gallon in July 2008.
The highest gas prices were in Hawaii, where drivers pay an average of $3.82 a gallon. California also has gas prices above $3.80 a gallon, while Alaskans pay $3.77 on average.</font size>
<font size="4">Lack of information, not lack of oil, driving price risehttp://www.mcclatchydc.com/2011/03/02/109735/lack-of-information-not-lack-of.html</font size><font size="3"> WASHINGTON — The continued climb in global <SPAN style="BACKGROUND-COLOR: #ffff00">oil prices brought on by unrest in Libya is due more to fear than to a shortage of petroleum</span>, but experts warned Wednesday that the Obama administration may have to take steps to drive prices down if they don't fall on their own soon.
The price for a barrel of crude oil for April delivery rose $2.60 Wednesday to $102.23 on the New York Mercantile Exchange — the first time that oil settled above $100 since September 2008, the month that the U.S. financial meltdown began in earnest.
"<SPAN style="BACKGROUND-COLOR: #ffff00">Global supply is adequate. This is really a fear trade,"</span> said Andrew Lebow, a broker at MF Global in New York. </font size>
I'M ON THE WAY WITH YOUR VOUCHER QUE!!!!!!!!
`
Is that your way of humor ??? I'm not humored. I travel extensively in my practice and this speculation is adversely affecting me, my partners, our associates and, most importantly, our clients.
I'm thinking speculators are a cog in the free market wheel that we could do without. But the call for regulation normlly evokes a scream from the free-markteers because, as they say, government regulation is so opposed to concepts of free markets -- all while "Greed" (where is he anyway?) steals us all blind.
QueEx
Is that your way of humor ??? I'm not humored. I travel extensively in my practice and this speculation is adversely affecting me, my partners, our associates and, most importantly, our clients.
I'm thinking speculators are a cog in the free market wheel that we could do without. But the call for regulation normlly evokes a scream from the free-markteers because, as they say, government regulation is so opposed to concepts of free markets -- all while "Greed" (where is he anyway?) steals us all blind.
QueEx
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Got dammit, I'm tired of these gas prices
The Federal Reserve Is Causing Turmoil Abroad
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History has shown us what happens when you ration such, ie Jimmy Carter. This is mostly attributed to the rise of scarce resources by the growing economies of China and India. Just as if the apple crop was ruined through a winter freeze. Those who make apple juice, sauce, pies etc. will be bidding for that product. That said there will be an increase in said commodity.
China and India my ass. I know about their increased demand and the pressure that is putting on the markets, but the Saudi's have vowed (if they have not already done so) to increase production to offset any decreased Libyan production. They sharp rises that we've seen since the beginning of the Libyan unrising is due to specu-damn-lators driving up prices, just as they did in the recent past.
This is your "flawed" free-market at work.
QueEx
Bro, your one dimensionalism is showing. BTW, I asked a local doctor today why so many people sitting in the lobby seem to have colds today. He told me he'd been reading somewhere on an internet message board that it was due to the FedRes. I asked him if he had ever heard of Lamar.
He damn near choked on his stethoscope.
QueEx
If the Fed stops printing, the banks collapse along with the Federal government, the military, and the multinationals.
If the Fed keeps printing, the middle class in the United States disappears and the rest of the world collapses.
I wonder which choice the Fed will make?
you don't have to wonder, its seen in the stock market!
the writing is on the wall but some refuse to acknowledge it
Funny how you guys didn't blame Obama. Look if you can't afford the price of the ticket, sit your ass at home. Think of other ways to get your reach your clientele. Economics has to do with the way scarce resources are allocated. Someone will by the gas if you don't. Once the Arabs see that we are not buying their crude. Their profit margin will drop as well as the price of a barrel of crude. I knew you were a communist. No labels my ass!
It's the cost of doing business. Add a fee to the service you provide. Teleconferencing? One of the boards I sit on have had productive meetings via that avenue. Do you know what it takes to process crude a bring it to market? We should all be pissed that all we have to do is squeeze a tit and we have milk. No exploration required, yet milk is 4.50 a gallon.
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What for? If its warranted, why not? What exactly is it your saying ???
Thank you for the advice. I've been senior partner in my firm for 15 years and you've enlightened me. This lump on my head must have come from the fall I just took from the turnip truck now rumbling away.
Again, thanks for the economics 098 lesson. You knowledge in this area is startling.
QueEx
<font size="6"><center>
Gas up 33 cents </font size><font size="5">
second biggest two-week jump ever </font size><font size="4">
Private Lundberg survey says average cost
of a gallon of regular nationwide is $3.51 </font size></center>
NEW YORK — Gasoline prices in the United States posted their second-biggest increase ever in a two-week period, <SPAN style="BACKGROUND-COLOR: #ffff00">due to the rise in crude oil prices stemming from the turmoil in Libya</span>, an industry analyst said Sunday.
The national average for a gallon of self-serve, regular gas was $3.50 on March 4, according to the Lundberg Survey of about 2,500 gas stations, up 32.7 cents from the previous survey on Feb. 18.
The gross price increase was the biggest since the 38.44 cent-rise that occurred in the Aug. 26-to-Sept. 9, 2005, period following Hurricane Katrina, according to survey editor Trilby Lundberg.
<SPAN style="BACKGROUND-COLOR: #ffff00">"It is certainly in response to the jump in crude oil prices, which are responding both to the output reduction from Libya and from the shock value of Libya's crude on other crudes,"</span> Lundberg said.
<SPAN style="BACKGROUND-COLOR: #ffff00">Traders are also responding to the "fear factor" caused by continuing turmoil in 15 countries in the Middle East and Africa, several of which are important oil producers</span>, she said.
"The effect ripples to the physical crude oil market around the world," she said.
The current average price is nearly 78 cents above the year-ago level, but is still about 61 cents below the all-time high of $4.1124 on July 11, 2008.
Among the U.S. metropolitan areas in the survey, San Diego has the highest per-gallon average price at $3.87, while Billings, Montana, was the lowest, at $3.15.
Even if crude oil prices do not rise further, Lundberg said she would not be surprised to see the pump prices go higher in the near future, because refiners and retailers have not fully passed through the increase in crude prices.
"In the short-term, we may easily see another 10- to 15-cent rise merely from catch-up in margins of refiners and retailers," she said.
The survey results could provide more ammunition for a U.S. strategic oil reserve release.
White House Chief of Staff William Daley said earlier Sunday on NBC's "Meet the Press" that the Obama administration was considering tapping into the strategic reserve as a way to help ease soaring oil prices.
http://www.msnbc.msn.com/id/41938193/ns/business-oil_and_energy?gt1=43001
Gas up 33 cents </font size><font size="5">
second biggest two-week jump ever </font size><font size="4">
Private Lundberg survey says average cost
of a gallon of regular nationwide is $3.51 </font size></center>
NEW YORK — Gasoline prices in the United States posted their second-biggest increase ever in a two-week period, <SPAN style="BACKGROUND-COLOR: #ffff00">due to the rise in crude oil prices stemming from the turmoil in Libya</span>, an industry analyst said Sunday.
The national average for a gallon of self-serve, regular gas was $3.50 on March 4, according to the Lundberg Survey of about 2,500 gas stations, up 32.7 cents from the previous survey on Feb. 18.
The gross price increase was the biggest since the 38.44 cent-rise that occurred in the Aug. 26-to-Sept. 9, 2005, period following Hurricane Katrina, according to survey editor Trilby Lundberg.
<SPAN style="BACKGROUND-COLOR: #ffff00">"It is certainly in response to the jump in crude oil prices, which are responding both to the output reduction from Libya and from the shock value of Libya's crude on other crudes,"</span> Lundberg said.
<SPAN style="BACKGROUND-COLOR: #ffff00">Traders are also responding to the "fear factor" caused by continuing turmoil in 15 countries in the Middle East and Africa, several of which are important oil producers</span>, she said.
"The effect ripples to the physical crude oil market around the world," she said.
The current average price is nearly 78 cents above the year-ago level, but is still about 61 cents below the all-time high of $4.1124 on July 11, 2008.
Among the U.S. metropolitan areas in the survey, San Diego has the highest per-gallon average price at $3.87, while Billings, Montana, was the lowest, at $3.15.
Even if crude oil prices do not rise further, Lundberg said she would not be surprised to see the pump prices go higher in the near future, because refiners and retailers have not fully passed through the increase in crude prices.
"In the short-term, we may easily see another 10- to 15-cent rise merely from catch-up in margins of refiners and retailers," she said.
The survey results could provide more ammunition for a U.S. strategic oil reserve release.
White House Chief of Staff William Daley said earlier Sunday on NBC's "Meet the Press" that the Obama administration was considering tapping into the strategic reserve as a way to help ease soaring oil prices.
http://www.msnbc.msn.com/id/41938193/ns/business-oil_and_energy?gt1=43001
Que. For the sake of your business, you better hope to high heaven the protest wave doesnt hit Saudi Arabia. The world better hope that it doesnt hit Saudi Arabia. Or it is gaaammmmeee over.
Just be glad you don't live on the westcoast of Canada. We pay some of the worst prices in all of North America. In recent months we've been paying $1.16 a liter (equivalent of $4.38/gallon, with 1 gallon = 3.78L or so). The past week we've been paying $1.30/L now (or $4.91 a gallon). The worst it ever got to was $1.48/L during late-summer/early-fall of 2008 when prices were at their worst. Back in 2003 we were only paying $0.73 - 0.77 per L. Back in 1995/1996 when I started driving it was a mere $0.33 - 0.39/L.
Re: Oil prices: You ain't seen nuthin' yet
Americans should just refuse to pay more than $3.00 per gallon. Don't say it can't be done if peasants can overthrow the Egyptian govt educated, upwardly mobile Americans can put gas companies in check. The internet is a way to organize and get the word out that when gas reaches $3.00 we stop buying except for work. Why will this never happen.. because we are educated and upwardly mobile thats why.
Americans should just refuse to pay more than $3.00 per gallon. Don't say it can't be done if peasants can overthrow the Egyptian govt educated, upwardly mobile Americans can put gas companies in check. The internet is a way to organize and get the word out that when gas reaches $3.00 we stop buying except for work. Why will this never happen.. because we are educated and upwardly mobile thats why.
it's not that the price of oil has increased; the issue is that the value of the dollar has decresed, therefore, it takes more dollars to get the same amount of oil.
This is just an unintended consequence of stimulus spending, quantitative easing, etc. Get used to more of this as Bernanke & Obama "spend our way back to prosperity"!
This is just an unintended consequence of stimulus spending, quantitative easing, etc. Get used to more of this as Bernanke & Obama "spend our way back to prosperity"!
$4.09/gal unleaded regular + a bottle of octante boost $5. Pricey!
Same place, today the gas is $4.15!
New tires and inner tubes on my bicycle. $50, installed. I haven't changed the tires in 10years. I'll be doing alot more riding...
Same place, today the gas is $4.15!
New tires and inner tubes on my bicycle. $50, installed. I haven't changed the tires in 10years. I'll be doing alot more riding...
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It ain't the dollar, it ain't supply and demand, it's unregulated capitalism. Love it yet?
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We could drill for more oil, and invest in a new refinery... I mean we could do that....
You could; and you should. Just do it with safety as a primary concern, and not with safety being way down there somewhere below: profits, greed, golf, workers, workers' family and loved ones, etc. And, as a government, recognize that alternatives should and must be developed/pursued.
QueEx
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