Gotta have it to spend.
Are we now. Dan have you kinda figured in inflation in
your calculations? I would say we aren't too much above
inflation rates on what we pay.
I think we all would love to go back to the old days of
18 and 19 cents a gallon. But don't think we will see too
much of that anymore. Seems like we were paying about
58 cents or more per gallon back in the 70's when you
could find someone to sell it to you. Or were you around in
those days?
Here dan, read this little column from today's E-N. I found
it quite interesting. Maybe you will too.
David Hendricks: Oil will rise, but it will also fall
Web Posted: 10/30/2007 08:01 PM CDT
San Antonio Express-News
If he lives long enough, 79-year-old T. Boone Pickens Jr. someday will see his beloved prediction come true: Crude oil prices will hit $100 per barrel.
Although it could happen before longtime oilman and private-equity investor Pickens turns 80 in May, he is publicly projecting that prices will reach $100 by New Year's Eve. But trading above $100 might not last long enough to mean much.
With oil prices surging to $93.80 on Monday, it wouldn't take much adverse news to shove the trading price above the $100 mark for the first time, acknowledged Lynn Westfall, Tesoro Corp.'s chief economist, on Tuesday.
Bad weather in oil production areas or a good U.S. cold snap could do it. If the Federal Open Market Committee reduces interest rates today, that could further hike oil prices as Middle East producers try to recoup purchasing power from the weakening dollar, Westfall said.
Unsettling headlines from the Middle East can always e oil prices in a hurry. That threat won't go away anytime soon.
Gasoline-buying drivers ought to relax, though, by peering down the road beyond the next few months to the outlook for the next several years.
O
Despite the risk factors, the world still floats on a sea of oil.
"As a company that buys 660,000 barrels of oil each day, that owns no oil (reserves) and has no long-term contracts, we have no trouble buying all of the crude oil we need, from more sources than ever in the past," Westfall said. "There's no shortage of supply."
Take away the usual risk factors and the billions of dollars in speculative investments seeking high returns in petroleum commodities trading, and the price of oil should trade at about $60 a barrel, just from pure supply and demand, Westfall said.
At $90 a barrel, gasoline should be selling for $3.05 a gallon, but it sells for 30 cents less than that in San Antonio because demand is lower this time of year. Refining companies such as San Antonio-based Tesoro are waiting to see how long oil prices remain above $90 before translating crude costs to gas prices, Westfall said.
A report last week on gasoline price factors from the Dallas Federal Reserve Bank cites oil-futures trading trends to predict that oil prices will trend back down to $75 a barrel by the end of 2010. Westfall believes oil can easily trade between $60 and $70 for much of that period.
Even at that, drivers should never expect gasoline prices to fall below $2 a gallon again. Even periods below $2.50 a gallon are likely to be short-lived. The days of cheap gasoline are over.
But don't expect $100-a-barrel oil to last, either.
Pickens, chairman of Dallas-based BP Capital, bases his projections on his belief that global oil production has peaked at 85 million barrels a day. As production shrinks and demand rises, oil prices naturally will increase.
Prices never move in a straight line or even logically, however. Many analysts doubt that world production has peaked since new reserves await discovery.
"They talked like $50 was going to be difficult, and $60 and $70," Pickens recalled to the Fort Worth Star-Telegram this month. "We went through those like a knife through hot butter."
Pickens can try to talk up the price of oil all he wants. But the butter still will be soft when the knife cuts the other way.
[email protected]
Keyword: David Hendricks
For more recent commentary. Online at: http://www.mysanantonio.com/columnis...s.2a855fd.html
We've had a negative savings rate since, IIRC, 2005.
I'm happy for the nations who have oil. Unfortunately, Argentina is not one of them.
I'm no expert in the industry but, I've noticed that as oil prices rise, I see more and more oil field equipment in the pastures and moving up and down the roads. It's not to the levels seen in the 70's but, it is increasing.
It can only mean good things for Texas.
Last edited by Yonivore; 11-01-2007 at 08:04 AM.
SuburbiaIt is only a matter a years before we start down the bell curve of Oil (some say we are already there) and as it slides, but demand increases, it will be the beginning of the end of the age of Oil and Suburbia USA will be the first to feel the effects of this no way out/self dug grave.
This Do entary explores what is on the horizon and the coma that America is in and will more then likely not wake from in time to save our own asses. The American dream was built on Cheap oil and now that dream is going to turn into one of a nightmare
Video: Crude ImpactCRUDE IMPACT is a powerful and timely story that deftly explores the interconnection between human domination of the planet and the discovery and use of oil. This do entary film exposes our deep-rooted dependency on the availability of fossil fuel energy and examines the future implications of peak oil the point in time when the amount of petroleum available worldwide begins a steady, inexorable decline.
In 1956, M. King Hubbert, a geologist at S Research Labs, shocked the oil industry by predicting that United States oil production, the largest in the world at that time, would peak in the early 1970s and then continuously and irreversibly diminish. His prediction was vilified and largely ignored until it came true. In CRUDE IMPACT, modern day disciples of Hubbert presage how quickly global peak oil will become a reality and its many serious implications for our way of life and our world. Journeying from the West African Delta region to the heart of the Amazon rainforest, from Washington to Shanghai, from early Man to the unknown future, CRUDE IMPACT chronicles the collision of our insatiable appe e for oil with the rights and livelihoods of indigenous cultures, other species and the planet itself. With great depth and insight, the film highlights the underlying myths and beliefs that are propelling us toward what many experts believe will be a cataclysmic period for humanity.
This timely, eye-opening investigation parallels the high-powered drama of SYRIANA but brings it to a level of accessibility, awareness and action for citizens on all points of the economic-cultural-political spectrum. A story filled with discovery, sorrow, outrage, humor and ultimately, hope. CRUDE IMPACT uncovers the complex entanglement of the fate of humankind with its fierce dependence on petroleum, while providing a vital inspiration for change
Every time you see oil and gas prices rising look to see how much farther down the scale the dollar has fallen against world currencies. What we are seeing is not really a rise in the price of oil, per se, rather a fall in the dollar.
Gasoline prices are up nearly 30% over the lows from earlier this year in the USA, however, in the UK, petrol prices remain stable over the last several months...
We’ve posted this before - but as the ailing US currency drops through $1.47 against the euro and $2.10 against sterling, it merits a second (and updated) airing.
The chart comes from Sempra Metals, who make a couple of additional points:
* The US dollar has now lost more than a third of its value (-35%) against a basket of major currencies since Feb 2002.
* The decline is accelerating. The USD has shed 2.5% of its value in the last year, 3.5% in the last month, and 1.5% in the last week alone
.
The impetus for this morning's fall was comments overnight indicating that China might further diversify its reserves away from the US dollar.
Still looking for that sub 80 safety net in the dollar index. It's at 75.41 right now. Maybe 70? If it falls into the 60s that might cause a psychological meltdown for the big foreign dollar holders.
And gold will soon break the $850 per ounce record set in 1980.
http://www.bloomberg.com/apps/news?p...er=commodities
Just to put things into perspective about how high gold could go in the long term: $850 in 1980 is the same thing as $2275.99 in today's dollars, and these inflation calculators are conservative.
http://www.westegg.com/inflation/infl.cgi
Oil price hit record highs, as the dollar hits record lows....coincidink?
LinkOil prices hit a record high of $97 a barrel on Tuesday, but the next generation of consumers could look back on that price with envy. The dire predictions of a key report on international oil supplies released Wednesday suggest that oil prices could move irreversibly over the $100 a barrel threshold in the not too distant future, as the global economy faces a serious energy shortage.
This gloomy assessment comes from the International Energy Agency, the Paris-based organization representing the 26 rich, gas-guzzling member nations of the Organization for Economic Cooperation and Development (OECD). The agency is not known for alarmist warnings, and its World Energy Outlook is typically viewed by policy wonks as a solid indicator of global energy supplies. In a marked change from its traditionally bland, measured tones, the IEA's 2007 report says governments need to make urgent, bold decisions on energy policy, or risk massive environmental and energy-supply crises within two decades — crises and shortages that could spark serious global conflicts.
"I am sorry to say this, but we are headed toward really bad days," IEA chief economist Fatih Birol told TIME this week. "Lots of targets have been set but very little has been done. There is a lot of talk and no action." .
The reason for the IEA's alarm is its expectation that economic development will raise global energy demands by about 50% in a generation, from today's 85 million barrels a day to about 116 million barrels a day in 2030. Nearly half that increase in demand will come from just two countries — China and India, which are electrifying hundreds of cities and putting millions of new cars on their roads, most driven by people who once walked, or rode bicycles and buses. By 2030, those two countries will be responsible for two-thirds of the world's carbon gas emissions, which are the primary human activity causing global warming .
Dan, we've been saying this for some time that there is a direct correlation between the value of our dollar and what we pay for oil.
Now to add to your graph, see this:
The RED is the Nasdaq, the GREEN is the Dow Jones, and the BLUE is the S&P 500. The trend is up, but there are short term drops that correspond to farther dropping of the dollar. The graph link is:
Here it is set to max:
Notice the approximate 1987 market drop, which corresponds to a dollar devaluation, but late as it bottoms out, before such a thing had been well understood.
Sure, other factors change the market, but changes in the value of money on the world market has a dramatic short term effect. Still, it always stabilizes when it is due to changing currency values as the true stock values remain intact.
Rich dudes in turbans don't want our worthless dollars... can you blame them?
What about rich dudes in suits?
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