Current Oil Price Rising

Oil is near its 1 year high: Current price up $1.63 to $86.32/barrel (was as high as $86.68 this morning, 1yr high $86.84 on 4/06). Some of this is due to the weak dollar, but also to a speculation that the economy will be doing better, thus increasing demand. Not going to say that is correct or not, because I don't see any great light at the end of the tunnel yet. Just wanted to open a discussion to see what others think the "new normal" for oil prices will be now and "IF" we do see the economy improving into 2011-2012. Anyone?

By 2012 oil prices will be over $100/barrel if the global economy does not take another dump.

India/China's economies haven't stopped growing and their demand for oil is huge.

I would not be surprised to see oil over $100/barrel by next summer.

There are three factors that will impact oil prices in the mid-range future - the time frame of our ownership of a new Leaf

1. the Global economy - Oil is a global commodity, and as that economy grows out of recession, demand will increase and prices will rise.

2. Cost of additional oil exploitation - New sources of oil will have a higher cost of extraction( oil sands, deep water drilling, new technology to force addition oil out of depleted reserves) that will mean higher prices.

3. Oil futures speculation - Speculation on oil futures by wall street, unrelated to any real intent to sell or purchase actual barrels of oil is becoming an increasingly larger segment of the oil futures market - it may be the majority of that market. The speculators are using oil futures as a proxy for international currency fluctuations. This creates upward price pressure on those, such as airlines, who actually use futures to buy oil. At best, it creates price fluctuations that are not based on real supply and demand, at worst it leads to bubble/bust scenarios.

So all factors point to higher prices, with the third leading to unusually quick price changes that will be difficult to adjust to in the short term.

I don't have any particular expectation of where the price of gas will at any date in the future, but I don't expect it to go anywhere but up, and I do expect periods where the price increases will be dramatic, due to speculation.

Good economic reasons to limit our consumption of oil. Of course, we've had good reason since the 1970's......

At this point SA probably has 2 mbpd surplus. So, the big question is what will Saudi Arabia do ? The Kingdom wants oil to be
- Above 70. This will allow SA to have budget surplus.
- Below 85. That way Iran is kept in check as they reel under budget deficits.

I expect continued volatality of oil price.

ps : Remember when the oil prices go up the world economy starts going down, as higher energy prices soak up money that would have otherwise gone into spending on consumer products.

Based on historical gasoline prices you can predict future prices. The problem is, you can plausibly predict just about any price you want. The chart below plots average US retail price for regular gas, from http://www.eia.doe.gov/petroleum/data_publications/wrgp/mogas_history.html

The straight lines are linear regressions through various ranges of dates, which could arguably be held to be representative of the future. But of course oil prices are set by: (3) oil production (supply), (2) economic activity and oil consumption (demand), and (1) politics. Still it's interesting to look and think about what might happen. It seems like every time oil prices spike it takes us by surprise, and then when they fall we convince ourselves that it will never happen again.



(The blue line looks grey on some monitors.)

walterbays said:

(The blue line looks grey on some monitors.)

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That's a curious thing to say, since the "blue line" is actually perfect grey in that PNG. (179,179,179) in RGB
It doesn't get any more grey than that.
If your monitor is showing it as having any significant color, then it needs to be calibrated to look like "some monitors".

Sorry, off topic. Interesting graph, anyway.

walterbays said:

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So you're predicting gas prices of $3.00 - $9.00 per gallon in 2012.

walterbays said:

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Here is mine. As the economy goes through expansions and contractions - expect gas price shocks and plunges like we saw in 2008. But each "stable" price will be higher than the last "stable" price. Also nobody can predict the timeline for these see-saw fluctuations - and thus a simple numeric x-axis.

palmermd said:

So you're predicting gas prices of $3.00 - $9.00 per gallon in 2012.

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That's a pretty safe range, eh? Actually in my calculations of driving costs I look at three scenarios for 2011-14. I expect gasoline will be about $4.25 US average, and $0.25 higher in California. My worst case EV scenario is gasoline at $2.50 in California, all EV tax credits repealed, and public recharging costs somewhat more than the highest home TOU electricity rates. That's the scenario if the recession dips down again, stifling worldwide demand. My worst case ICE scenario is for gasoline prices to increase a similar percentage as in the 1973 oil embargo, to $14.00 in California. That's the scenario if Iran provokes another Mideast war.

And no, I don't think statistics can predict whether a new financial meltdown will occur, let alone predict what Ahmadinejad and Netanyahu are thinking.

The short line to the left of "1990 fit" in the legend ... is blue.
The corresponding line on the graph is grey.

Oil continues to climb higher....up $1.10 today at $87.82. Highest since October 2008.

If these projections hold, I know I, for one, will be very happy to be driving a LEAF .... :lol:

"JPMorgan Says Crude Oil Price Will Reach $120 a Barrel Before End of 2012"

http://www.bloomberg.com/news/2010-...ll-reach-120-a-barrel-before-end-of-2012.html

Oil will advance to $120 a barrel before the end of 2012 as consumption grows in emerging economies, according to JPMorgan Chase & Co.

The Organization of Petroleum Exporting Countries, which is responsible for about 40 percent of global supplies, is unlikely to increase production in the first half of next year unless prices surge through $100 a barrel, the bank said in a report today. Futures traded around $87 a barrel in New York today, near their highest price in two years.

“Strong emerging oil demand growth over the next 24 months is very likely to lift the call on OPEC production to levels last seen at the peak of the oil price spike in 2008,” analysts led by Lawrence Eagles in New York said. “We expect oil inventories to continue their drawing trend over the first quarter.”

JPMorgan boosted 2011 price forecasts for oil contracts in New York and London. West Texas Intermediate on the New York Mercantile Exchange will average $93 a barrel next year, up 3.6 percent from a previous estimate of $89.75, it said. Brent crude traded in London will average $95 a barrel next year, up from an earlier assessment of $91.75.

The bank said the North Sea benchmark, used to price two- thirds of global crude, will average $105 in 2012. It expects futures to reach $100 a barrel in the first half of 2011.

Brent crude for next month is trading at a 4-cent premium to the February future, a price situation known as backwardation that suggests immediate supplies are more in demand than later deliveries. This is a “structure that is likely to remain in place for much of 2011 and 2012,” JPMorgan said.

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I already see our local Los Angeles gas prices rising steadily as I drive around the last couple of weeks....about $3.59 for regular per gallon even at the cheapest places. Places like Chevron much higher.

$2.93 for regular at my local Costco as of today

Kataphn said:

I already see our local Los Angeles gas prices rising steadily as I drive around the last couple of weeks....about $3.59 for regular per gallon even at the cheapest places. Places like Chevron much higher.

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A funny quote from a CNBC interview today (not exact, so I won't use quotes)

When gas is at $5 a gallon you can't buy a Prius, at $2 a gallon you can't sell one.

I decided to post here, since I cant find a dedicated gasoline price topic.

Recent threads on peak oil, instability in OPEC countries, etc. don't seem to me to fully address the flaws in the ICE fueling infrastructure.

The recent history of gasoline prices shows just how vulnerable all ICE cars are to supply/price instability.

What will my electricity costs per kWh be in 2012-13?

I can look up the latest PG&E PUC rate case and answer they will be (within a few percent) exactly what they are today.

What are gas prices going to be over the same time period?

Your guess is as good as mine. An accurate forecasts is impossible, due to the many variables in our unstable Oil/gas markets.

Will a hurricane hit the gulf coast refineries again?

Will demand in other nations or a depreciating dollar cause domestic gasoline prices to skyrocket?

Will one or more of the OPEC governments collapse, leading to production disruptions?

My belief is that relatively secure, predictable, and low US electricity prices will very soon drive public acceptance of BEV's in the United States.

Many seem concerned about the depreciation and resale value of BEV's.

In my opinion, the greater depreciation risk today is in purchasing a new ICE that could be seen as an obsolescent money pit, in only a few years.

Conveniently, it appears that fracking works for oil shale, too. Seems we as a country are hell bent on staying on the petroleum train until it crashes, rather than investing in something more sustainable.

The only silver lining here is that at least it's domestically produced rather than imported. Small consolation, that...
=Smidge=

edatoakrun said:

I can look up the latest PG&E PUC rate case and answer they will be (within a few percent) exactly what they are today.

What are gas prices going to be over the same time period?

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This is the argument I use when someone tells me that electricity is expensive. I ask them how often their electricity rates go up......once a year if that, when the new tariffs are announced. Then I ask them how often the prices at the gas pumps fluctuate.....sometimes a few times a day!!!

I agree stability is the key. Gas prices are inherently unstable. Electricity prices are only as unstable as your usage.

just filled up Prius... the amount is "telling. drove it 457.3 miles (a bit disappointing on the performance but i not the driver) and it cost $31.40 to fill up. check my sig. that is more than it cost me to drive the nearly 1000 miles on my Leaf.

gas is only $3.17 so far, so not really bad except that it set a record for highest price ever at this time of year. normally gas is a bit cheaper at this time of year. i personally think its cheaper because oil companies know that the Northeast has to pony up the cash for heating oil so they dont want to double whammy them too much.

so all the signs are here for a pretty hefty price come the summer driving season