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"But if there is a villain in all of this, it is Congress itself...
It has done so by preventing the exploitation by IOCs of reserves available in nonpark federal lands in the West, Alaska and under the waters off our coasts. These areas hold an estimated 635 trillion cubic feet of recoverable natural gas – enough to meet the needs of the 60 million American homes fueled by natural gas for over a century. They also hold an estimated 112 billion barrels of recoverable oil – enough to produce gasoline for 60 million cars and fuel oil for 25 million homes for 60 years."
"But if there is a villain in all of this, it is Congress itself...
Or maybe the folks trying to sell blue sky and bs . . .
Quote:
'. . . They also hold an estimated 112 billion barrels of recoverable oil – enough to produce gasoline for 60 million cars and fuel oil for 25 million homes for 60 years."
. . . .
When the truth is 112 billion barrels, if we sucked every drop out, only lasts a little over 14 years at current US consumption rates of around 21 million barrels a day. Before 2020 we would still be looking at a total crash.
Staying with oil -- even our own -- makes US come out losers.
Would make more sense to take ALL those cars and houses off of oil and just keep oil around for aircraft and emergency back-up electrical generation..
The problem with all of this is that speculators aren't buying oil at some point someone is going to pay the spot price. Its hard to see how a bubble can be caused by speculators when they they aren't doing anything with the oil. They can bid up the futures, but the spot price should be fairly tied to fundamentals. Speculators aren't in the spot market, so how exactly are they driving up the prices in the spot market?
Financial Sense Market WrapUp with Gary Dorsch 05.29.2008
This article explains the effect speculators are having on the oil market. Everything goes thru speculative bubbles at one time or another. It is just that people always believe this time it is different, but it is not. Once the price passes reasonable levels, it causes action on the part of consumers to consume less, which raises supply. Many countries who subsidise fuel prices for their populations can no longer afford to do so at these prices. That will cause demand worldwide to decrease. Here in the U.S. if we cut our consumption by 1/4 it will have a drastic effect on oil prices. In the long run oil is a deminishing resource, but there is no shortage now. Just Americans with too much money and plenty of people ready and willing to relieve them of some of it.
Heck yeah there's manipulation. Just this week we had a report of low reserves, then an explanation that it was due to fog. Then, when no occurrance of fog could be found, a computer glitch. That alone triggered spikes over the past few days.
Everything goes thru speculative bubbles at one time or another. It is just that people always believe this time it is different, but it is not.
Its very easy to call something a bubble, and it can't be used as an excuse for everything. Needless to say you aren't responding to what I'm actually saying, for every article you post that supports the bubble idea I can post one that does not.
Clinton, Obama, and McCain aren't going to do anything to strengthen our dollar. oil may fluctuate back down to $100 a barrell over the short term, but long term, it's going no where but up. Also, the threat of a hurricane hasn't even been priced into the markets yet. We could easily hit 150-160 with a major hurricane in the gulf. It'll easily hit $200 a barrell by summer 2010. Maybe even sooner then that. There is no bottom in sight for the dollar. I just wish I knew when it was going to completely crash.
I think there is a bubble, maybe $10 or so but that is it.
One could just look at the surplus margin and can see it is around 1 to 2 million barrels as compared with aorund 14 million barrels in the late 90's which due to lack of foresight into the Asian economic crisis saw oil surpluses surge.
If the feds would crank up the interest rates I beleive that would help as it would shore up the dollar some (maybe), but hey, lets kepp it low because some dope can't make his house payment.
The dollar is a mess right now and is one reason for the price of oil, just one reason. Another reason is places like China which had a 16% increase in oil consumption this year.
OPEC? I don't blame them for not increasing output, even they can clearly see that they are meeting world demand, they are not going to produce more just because of our misguided economics.
Drilling? Stop please, it will not last very long, it is not going to make prices go down magically tomorrow and all in all, we do have a consumption problem.
I blame city planners for not zoning areas properly and allowing everything to be spread out all to heck with the thought that cheap fuel is forever. I still blame them even today as they think of even more ways to expand highways and make new corridors instead of tackling real upcoming issues.
All I know is in 1999 everyone said the dot com bubble was different, it was going to keep going for decades( The internet was going to eliminate brick and mortar).
I disagreed and liquidated all of my stock early in 2000.
The stock market crashed in 2001.
In 1995 everyone said the real estate bubble was different (after all they are not making any more land).
Again I disagreed and sold all of my investment real estate and went short on real estate and banking stocks.
The real estate market crashed in 2007.
Now everyone is convinced the oil bubble is different (we have reached peak oil).
I am now short on oil stocks.
Economic trends follow the pendulum theory. They can only go so far in one direction before they change direction and correct due to gravity. Gravity is market fundamentals. As price increases less people can afford to buy, reducing demand. As prices decrease more people can afford to buy increasing demand. In order to make money, you must be able to recognize when there is a divergence between fundamentals and market prices. Peak oil pundits assume incorrectly demand will continue to grow or at least stay at current levels due to the rising economies of China and India. How are the working classes in third world countries going to be able to afford to buy enough $4.00 per gal fuel to affect world wide demand on their $20 a week salaries. If fuel prices are decreasing demand in the U.S., which they are, what affect do you think they are having on the rest of the world?
During the time period between 1973 and 1983 the United States reduced its Oil consumption by 15% by buying smaller cars and conservation. This reduction was the natural result of excessive price increase. The price of oil at that time was about the same as now (inflation adjusted). What is very different now is that we are also facing the worst housing market since 1933 which is driving the U.S. and most of the rest of the world into recession, possibly the worst we have seen since the great depression. We are also facing the worst inflation we have seen in decades. The Oil Industry on the other hand is exploring and drilling at record levels. Alternative energy industries are now much more economically feasible. Toyota is planning a Hybrid factory here in the U.S. due to the popularity of their Hybrid vehicles. This is not an Oil crisis it is an affordable energy crisis, and there are alternative ways to produce energy, it just has been easier and cheaper to use oil up to now. Everything points to less demand, more competition, and soon falling oil prices.
....Everything points to less demand, more competition, and soon falling oil prices.
None of this has to do with a bubble, all you are saying is that the fundamentals are going to change.
But thanks for repeating yourself, apparently if you say it 3 times it makes it true?
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U.S. oil probes focusing on price manipulation: report
