oil hits two year high
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Herm
Well-known member
Yet the market is glutted with both oil and gasoline, almost no storage space remain empty.. meanwhile we see announcements in the US about new cars that get 40 mpg or better.
Speculators may drive up the cost again, unless market regulators put a stop to it this time.
Speculators may drive up the cost again, unless market regulators put a stop to it this time.
DaveinOlyWA
Well-known member
not speculators, its very real issues with the supply areas and all the turmoil they are experiencing. Libya is on the brink of "genocide" except that they are not targeting a specific segment of their population, its simply random mass murder going down there.
it seems now that its not likely to stop without intervention and i sure as hell hope we stay out.
it seems now that its not likely to stop without intervention and i sure as hell hope we stay out.
hodad66
Well-known member
ditto on staying out........
jcesare
Well-known member
Expect the trend to continue. WikiLeaks confirmed Peak Oil a few weeks back. Saudi Arabia has overstated it's reserves by 40%. This started the uptick in speculation. The Middle East unrest, excuse the metaphor, is adding fuel to the fire.
http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks
http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks
LeafinThePark
Well-known member
Oil hit $100 today on concerns with stability of Libyan oil.
http://money.cnn.com/2011/02/23/markets/oil/index.htm
http://money.cnn.com/2011/02/23/markets/oil/index.htm
AndyH
Well-known member
We don't have enough refining capacity in the US to provide the liquid fuel needs so we have to import both crude and refined fuels.Herm said:
Really? Other posts suggest you have a right of center leaning - you think we need regulation? And especially want to blame the price of oil on speculators?
TRONZ
Well-known member
The price of oil started up when Congress went GOP. With the Republican oil lobby now elected in the House, there will be no Congressional investigations for two years minimum. The oil markets can run away unchecked... again.
It is just like the CA "utilities crisis" of 2000. Constant brown outs, rolling blackouts... until the very week that the CA government went Democrat and investigations were opened. I could not believe it. The next week there was no more "utilities crisis". It was like the crisis never happened. :roll: Go Figure.
It is just like the CA "utilities crisis" of 2000. Constant brown outs, rolling blackouts... until the very week that the CA government went Democrat and investigations were opened. I could not believe it. The next week there was no more "utilities crisis". It was like the crisis never happened. :roll: Go Figure.
AndyH
Well-known member
I've been watching the currency markets the past few weeks. The dollar's taking a beating today. It's down compared with all the major currencies. It's even down VS. Canada and New Zealand - and the NZ dollar's been down in the region since the earth quake.
The shrinking dollar is a 'hidden inflation.'
The shrinking dollar is a 'hidden inflation.'
evnow
Well-known member
Absolutely - except when the products are priced in dollars (as most are).AndyH said:
In terms of oil - it may get to be expensive for us - not so much in other countries. Along with reduced spending because of clueless deficit hawks this will lead to the next bout of recession.
AndyH
Well-known member
Oil isn't trading only in dollars any longer. The hidden inflation kills those of us with our retirement funds in USD...evnow said:
And if any of those products with a final USD price are made from bits sourced from places outside the US...
Herm
Well-known member
AndyH said:
Yet Valero closed a refinery in the US last year.. we do import a lot of gasoline probably because its cheaper to do so.. I do know that we trade excess diesel product with Europe and they export their excess gasoline to us. The fact remains that there is a glut of oil in the market right now, perhaps it wont last.
Dont be a hater, conservatives do not necessarily rule out some market regulation, and can be for less energy dependence on imports, and support local corn based ethanol... Same way that conservatives can be green and still not believe in AGW.
AndyH
Well-known member
Careful, Herm - ain' no hatin' goin' on here. Just trying to figure out where you're standing when you're describing the elephant.Herm said:
Valero can close what they wish. Seems to me that within the US market adding excess refining capacity would hurt the oil companies with a double whammy - they'd lose the grandfathered ability to emit pollution hand over fist, and it would remove price pressure and lead to lower fuel prices in the US. Both of those would hurt corporate profits.
As a fiscal conservative, 21-year veteran, and a recovering former Republican (hello, my name is Andy and I voted for Ronny and Bush I :lol: ) I think I can paint a picture of 'right' and Repub.
Sure - we buy fuel from other parts of the globe. And we can get it relatively cheaply because we have LOWER fuel standards than even China. We're like the fat kid in the corner of the lunch room taking everyone's left-overs.
Regulation...Unfortunately this teabag-infused far-right (not necessarily you - not personal!) supports regulation that benefits corporate interests over the public. Endangered species, EPA, reproductive rights, a vast array of other personal rights, and even the right to a court hearing are being attacked while rules are put into place to improve profits for the banking industry, Wall St, and the fossil fuel industry. They say it's about jobs, but even green economy companies like Evergreen Solar and A123-Systems have moved manufacturing to Europe and the Far East. Corn-based ethanol is a perfect example - it's a subsidy for corporate farming and agribusiness that's petroleum dependent and unsustainable - greenwashing spin over substance.
Case in point: "believe in AGW" is akin to "believe in gravity". It's there, it's proven, and science has been screaming for at least the past 40 years. Only politicians from the worlds's largest polluting countries are trying to spin AGW as a 'belief' issue. :roll:
[I'll be in the fetal position under my desk for a bit...]
walterbays
Well-known member
Protests are spreading to Saudi Arabia online. It's much richer, less repressive, and more stable, with a popular king, so the calls are for reform not revolution. Still any instability there affects oil prices, as of course does the civil war in Libya. Price is up to $113. http://www.npr.org/2011/02/23/133999078/nearby-uprisings-stoke-saudis-political-passions?ps=cprs http://www.theglobeandmail.com/news...ifling-revolution-with-riyals/article1916975/
AndyH
Well-known member
One of this evening's Dow Jones news service notes said things are heating up in Iran as well.
Interesting times, these...
Interesting times, these...
Herm
Well-known member
Reasons for oil not to hit $150
http://blogs.ft.com/energy-source/2011/02/23/reasons-for-oil-not-to-hit-150/
"As the oil price continues to surge, hitting $109 a barrel, the oil price movement for 2011 has begun to look very much like that in 2008, when the price ended up hitting $145, and became a contributing factor to the slump.
But Leo Drollas, chief economist at the Centre for Global Energy Studies, thinks it won’t, even though there are many similarities with the situation in 2008, including high oil demand.
The main factor keeping a lid on prices, Drollas told an audience in London on Wednesday, is relatively low pure speculation compared to 2008. According to CGES’ indicator of pure speculation (which, for markets geeks among you is taken by measuring the positions of pure speculators that exceed those which merely match those taken by hedgers such as airlines), pure speculation is low and has been dropping since September.
The second reason Drollas mentioned was that spare capacity was higher than it was in 2008, when it was under 4 per cent of world oil demand. Currently, the outlook is being boosted especially by the prospect of much higher production from Iraq.
Of course, for this to be a significant factor, it would take a willingness by Opec to raise output, and there are few signs of that happening yet – although that position may change if the oil price threatens demand. (And, I should add here before the commenters pile in, you would also have to accept that Opec has the supplies it claims, and there are reasons not to.)
There are several other reasons the price could yet dip. High prices could reduce demand, China and India could be overtaken by inflation, Opec could lose control of production or climate change policies could fall by the wayside.
But the trouble in the Middle East is of course the great unknown here. Drollas believes that production in Libya, or any other major producer that is hit by revolution, will only remain interrupted for a short period of time, because the population will demand those revenues. But the risk is that in the long term, production will be limited by a lack of investment and expertise, as happened after the Iranian revolution. He says:
Everything is up in the air. Libya is the first major producer and exporter to be affected by the turmoil. Companies are pulling out. If all goes well they will be back soon, but production is being cut as we speak, so it could get worse. And if contagion spreads to the Gulf, it could get a lot worse. In that case, all bets are off"
http://blogs.ft.com/energy-source/2011/02/23/reasons-for-oil-not-to-hit-150/
"As the oil price continues to surge, hitting $109 a barrel, the oil price movement for 2011 has begun to look very much like that in 2008, when the price ended up hitting $145, and became a contributing factor to the slump.
But Leo Drollas, chief economist at the Centre for Global Energy Studies, thinks it won’t, even though there are many similarities with the situation in 2008, including high oil demand.
The main factor keeping a lid on prices, Drollas told an audience in London on Wednesday, is relatively low pure speculation compared to 2008. According to CGES’ indicator of pure speculation (which, for markets geeks among you is taken by measuring the positions of pure speculators that exceed those which merely match those taken by hedgers such as airlines), pure speculation is low and has been dropping since September.
The second reason Drollas mentioned was that spare capacity was higher than it was in 2008, when it was under 4 per cent of world oil demand. Currently, the outlook is being boosted especially by the prospect of much higher production from Iraq.
Of course, for this to be a significant factor, it would take a willingness by Opec to raise output, and there are few signs of that happening yet – although that position may change if the oil price threatens demand. (And, I should add here before the commenters pile in, you would also have to accept that Opec has the supplies it claims, and there are reasons not to.)
There are several other reasons the price could yet dip. High prices could reduce demand, China and India could be overtaken by inflation, Opec could lose control of production or climate change policies could fall by the wayside.
But the trouble in the Middle East is of course the great unknown here. Drollas believes that production in Libya, or any other major producer that is hit by revolution, will only remain interrupted for a short period of time, because the population will demand those revenues. But the risk is that in the long term, production will be limited by a lack of investment and expertise, as happened after the Iranian revolution. He says:
Everything is up in the air. Libya is the first major producer and exporter to be affected by the turmoil. Companies are pulling out. If all goes well they will be back soon, but production is being cut as we speak, so it could get worse. And if contagion spreads to the Gulf, it could get a lot worse. In that case, all bets are off"
evnow
Well-known member
What I mean is - a lot of the exporters to US set their prices in USD. So they take a ht when they export to US (like Nissan with Leaf). All the contracts that Walmarts and Targets draw up with Chinese exporters is in USD.AndyH said:
In this sense, the inflationary pressure because of USD depreciation is lesser than - say what happenned in SE Asia when their currencies depreciated.
Commodities, OTOH, will go up. But if US is a large consumer, the upward pressure on price will be balanced by downward pressure on demand because of that price increase.
evnow
Well-known member
The spare capacity isn't any higher now. This is just normal mainstream talk (the same ones who think SA doesn't exaggerate their reserves).Herm said:
The spare capacity is probably about 2mbpd - that is why trouble in Libya (with 1.5mbpd export) or Algeria (with nearly 2 mbpd) will have a huge impact.
evnow
Well-known member
Oh yes - with plenty of subsidy, fossil fuel inputs, degradation of top soil, immense waste of water resources, terrible price the poor all over the world pay for it and nearly zero return on energy "local" ethanol is indeed to be supported :evil:Herm said:
Appaently only things conservatives have suddenly become "expert scientists" and don't "beleive" in is AGW and evolution. How rational.
Herm
Well-known member
evnow said:
There is a requirement for ethanol to be blended in, on top of that there is a subsidy ($0.40 per gallon I think) that the consumer ends up getting.. and that is not good, we dont need to encourage people to drive more. The blenders (refineries) get that money but they just pass it along.
Fossil Fuel inputs: To make 22 gallons of ethanol 1 gallon of diesel is used (tractors, tankers etc) and 1 gallon diesel energy equivalent in coal and/or natural gas for process heat, fertilizer etc.. the rest of the energy comes from the sun. We have plenty of gas and coal.. in Brasil they do better because they burn the sugar cane waste for process heat.
Water resources: In some places water is plentiful, not in others.. in any case sustainable farming practices should be used.. unlike what is going on in California.
Prices of corn for the poor: I think the poor are still going to have trouble if the farmers dont plant corn because its not profitable. Cost of corn is maintained stable by ethanol.. there is some debate about it affecting food prices in Mexico and it definitely increases the cost of meat a bit... cost of diesel probably has a bigger impact.
The whole point is to reduce our demand for imported fuel and reduce pollution at the same time.. True we could do much better and cheaper ($0.80 a gallon) by making methanol directly from coal but that lobby is not as powerful as the one farmers have. It is to the worlds benefit that US farmers are profitable and keep all their land in efficient production, after all in an emergency all that corn can be instantly diverted to feeding humans directly.. it is also a good idea that the Feds dont have to pay money to keep the farmers inactive. I trust farmers to conserve their soil.
So yes, I think corn ethanol is not a bad idea.. given all the options.
