Why is oil below $50 right now?

[Wild Cobra]

If you increase "our oil by 5%" that does next to NOTHING to the price we pay at the pump, nor does it do anything near substantial to the price that refiners in the US pay for oil.

Do I need to explain the global market for oil yet again?

It would do no good. You are full of bull more than half the time.

[RandomGuy]

It would do no good. You are full of bull more than half the time.

The would mean that I am not full of bull at least some of the time.

Let me try once agian then:

If we increase our domestic supply by 5-10% that means that we have increased the GLOBAL supply by a very miniscule amount.

To wit:
http://www.eia.doe.gov/steo
US 2008 production: 8.5 million barrels per day.
total global prod: 85.52 million barrels per day.

These figures make it really easy to calculate the following:
Raising US production by 10% would add 1% to global supply.

Since the price of crude is a global market, as US production can be just as easily sold on the global market as consumed at home, and/or any US production simply lessens the amount of crude the US draws from the global market, this would have a negligible effect on the global supply/price.

I hope this helps. You seem to be under the impressiont that raising the US production figures by 10% would have some effect at the pump. It will, but on an order of magnatude smaller than you seem to think.

[RandomGuy]

Hasn't the Pirate corollary changed?

???

[Wild Cobra]

I hope this helps. You seem to be under the impressiont that raising the US production figures by 10% would have some effect at the pump. It will, but on an order of magnatude smaller than you seem to think.

At least you agree it will have some effect.

[RandomGuy]

At least you agree it will have some effect.

Some effect yes.

Just like pissing into Lake Michigan will have "some effect" in raising the water level.

Raising it by 10% will not change this curve, and would not be sustainable, in any case.



This curve will be followed eventually by the global production figures, very likely soon.

If you want to reduce pump prices, buy smaller cars, and start investing in efficiency.

Long term that is where you get the best bang for the buck, anyways.

[Rogue]

the oil is below 50 bcs we don't use it at all. the oil producers and oil merchants would rather to drink some iol but they know exactly that it is undrinkable. We refuse to buy cars from the big three who make no car whose oil cost is below 4 gallon/mile. We tend to buy japanese cars that nealy use no oil through 10 miles or even more. the problem is that we can just dig the oil out of the ground but can not inject the oil back.

[Heath Ledger]

Isn't it funny how mum is the word on alternate engery sources since oil has fallen? That texas oil tycoon has recently cancelled/postponed his plans to put up windmills ever since the bottom has fallen out as well. This country just does not get it, its inevitable we will see high oil prices again perhaps much higher than the latest e. Yet we will be crying about it when it happens the next time and stilll won't get done.

[MannyIsGod]

Isn't it funny how mum is the word on alternate engery sources since oil has fallen? That texas oil tycoon has recently cancelled/postponed his plans to put up windmills ever since the bottom has fallen out as well. This country just does not get it, its inevitable we will see high oil prices again perhaps much higher than the latest e. Yet we will be crying about it when it happens the next time and stilll won't get done.

Pickens hasn't canceled anything AFAIK.

[RandomGuy]

One note that should concern everybody.

We are in the middle of a global recession, but oil is still hovering around $50/bbl, meaning that is the current price point at the intersection of the supply curve and the demand curve.

What happens when demand picks up during the recovery?

The demand curve will shift and the supply curve will stay fairly constant.

Increased demand + stable supply = increased price point.

Do not ever count on gasoline being cheaper than it is now.

My gut feeling says that oil will cross the $100/bbl threshold within about 6 years, and $200 within 15 years.

That will translate into much higher prices for gas, probably around $3/gal within 6 years, and $5.50 or so within 15.

These are just gut feelings, but you heard it here first.

[RandomGuy]

One note that should concern everybody.

We are in the middle of a global recession, but oil is still hovering around $50/bbl, meaning that is the current price point at the intersection of the supply curve and the demand curve.

What happens when demand picks up during the recovery?

The demand curve will shift and the supply curve will stay fairly constant.

Increased demand + stable supply = increased price point.

Do not ever count on gasoline being cheaper than it is now.

My gut feeling says that oil will cross the $100/bbl threshold within about 6 years, and $200 within 15 years.

That will translate into much higher prices for gas, probably around $3/gal within 6 years, and $5.50 or so within 15.

These are just gut feelings, but you heard it here first.

Looks like it hit $3 a lot sooner.

Anybody want to take a pool as to when it will hit $6?

[SnakeBoy]

Anybody want to take a pool as to when it will hit $6?

When your predictions aren't so horribly wrong.

[Blake]

Looks like it hit $3 a lot sooner.

Anybody want to take a pool as to when it will hit $6?

with the increase of alternative ways to run vehicles, I think the demand for oil will stay steady.

[boutons_deux]

"alternative ways to run vehicles"

ain't nothing gonna have a real impact for many, many years.

Everything running on 4-cyl diesels and getting 50+ mpg like VW Jetta and similar exposes hybrids (two propulsion systems, one with a life of only 5 years) as incredibly stupid.

They're ain't enough lithium on the planet to make all those proprietary, very expensive, short-lived batteries that cost $5K+ to replace and wipe out, eg, Prius' gasoline savings.

And why is the car mfr in the battery fuel business? The aren't in the gasoline fuel business. Dumb

[Blake]

"alternative ways to run vehicles"

ain't nothing gonna have a real impact for many, many years.

Everything running on 4-cyl diesels and getting 50+ mpg like VW Jetta and similar exposes hybrids (two propulsion systems, one with a life of only 5 years) as incredibly stupid.

They're ain't enough lithium on the planet to make all those proprietary, very expensive, short-lived batteries that cost $5K+ to replace and wipe out, eg, Prius' gasoline savings.

And why is the car mfr in the battery fuel business? The aren't in the gasoline fuel business. Dumb

eh, not just hybrids but natural gas.

There's a number of other reasons I don't see gas ever hitting $6 a gallon.

[Bartleby]

with the increase of alternative ways to run vehicles, I think the demand for oil will stay steady.

Not with China and India getting into the auto market as consumers.

[boutons_deux]

"natural gas."

phracking will, and does, phuck our water and our earth with all those proprietary, exempted chemicals the drillers bugger the Mother Earth with.

And guess what, they'll get the profits from the phracking, and we'll be stuck paying for cleaning up their pollution and ruined water supplies and living with/dying from diseases.

[RandomGuy]

eh, not just hybrids but natural gas.

There's a number of other reasons I don't see gas ever hitting $6 a gallon.

Want to bet a case of good beer?

I give it about 10-12 years, based on an average run up of about 6-7% per year.

If you are still here in 10 years... heh

[RandomGuy]

When your predictions aren't so horribly wrong.

That would actually be a motive to bet against me.

[boutons_deux]

With world-wide gasoline/oil demand down, why is the price up?

My bet is that it's commodity speculators/traders forcing it up to win some bets they made months ago. Then they'll bet on the price coming down, and win those short-sell bets, too.

[RandomGuy]

With world-wide gasoline/oil demand down, why is the price up?

My bet is that it's commodity speculators/traders forcing it up to win some bets they made months ago. Then they'll bet on the price coming down, and win those short-sell bets, too.

Remember that India and China both are growing their economies at rather impressive clips.

The market for cars is now larger in China than it is the US, meaning they are rapidly overtaking us in terms of number of drivers, if not overall miles driven, so their demand for oil is growing far faster than ours.

[boutons_deux]

"India and China"

supply 86 md/bd vs demand 70 mb/d http://omrpublic.iea.org/

The oil price is all about traders, not supply/demand.

US refiners are also closing refineries to restrict supply (and avoid refurbishing old refineries), force up the price. Gotta love those heavily taxpayer-subsidized oil/gas corps.

[TeyshaBlue]

"natural gas."

phracking will, and does, phuck our water and our earth with all those proprietary, exempted chemicals the drillers bugger the Mother Earth with.

And guess what, they'll get the profits from the phracking, and we'll be stuck paying for cleaning up their pollution and ruined water supplies and living with/dying from diseases.

It's fracking. And that's routine with oil wells as well. The main problem with a bad frac job is not the chemicals or the brine, even. It's usually the natural gas that finds it's way into the water table. Burning tap water is not unheard of in my old stomping grounds.

[Wild Cobra]

Looks like it hit $3 a lot sooner.

Anybody want to take a pool as to when it will hit $6?

With the democrats in power... Maybe two more years.

[Sec24Row7]

"natural gas."

phracking will, and does, phuck our water and our earth with all those proprietary, exempted chemicals the drillers bugger the Mother Earth with.

And guess what, they'll get the profits from the phracking, and we'll be stuck paying for cleaning up their pollution and ruined water supplies and living with/dying from diseases.

First of all... it is FRAC

Secondly Oil and Gas Companies are already required to put protection pipe up and cement in over ANY potable groundwater reservoirs.

The fracturing that has been done for YEARS has had no effect on any groundwater anywhere and in most cases the frac is thousands of feet away from the base of the water...

[boutons_deux]

"for YEARS has had no effect on any groundwater anywhere"

do you work for oil/gas companies? because You Lie