Oil falls below $80 per barrel today

[catdog]

Newt is completely in the tank for the ethanol lobbyists.
http://www.newt.org/american-thinker-drill-here-drill-now-works-newt-gingrich

 

[fusion]

Fusion, if the oil companies are already shipping "cheap" (relative to Europe and Asia) fuels out of the USA, please explain how drilling for more will resolve the fuel prices for the average joe at the pump in the USA?

This stuff now sells on a world market and will ship to whomever will pay the most for the fuel. The only way increased drilling would bring the price of fuels down to American's is if the crude they find IN North America, had to STAY in North America. While I would be the first to sign a petition to mandate that, the oil companies would cry foul, and the law would get thrown out in court.

The way I see it is that we need to get as diverse as possible so that if the price of one fuel goes up, movement toward the others would bring the price right back down again. This is the ONLY way we get relief....

Anonomoose - have you ever studied economics at the college level? If so, how many semesters?
The answer to the question in your 1st para lies in those studies, and is rooted in the central theme of economic marketing principles.

 

[kevisip]

Hmmmmm oil....gotta love it!

 

[anonomoose]

Anonomoose - have you ever studied economics at the college level?

Yep! So what?

If so, how many semesters?

No semesters, but a bunch of TERMS, so what?

The answer .....is rooted in the central theme of economic marketing principles.

Exactly!! Only I would NOT call this a marketing principle, but rather the effects of a monopoly as it applies to the principles of supply and demand. When you own ALL the marbles you can dictate the "game"....when there is true competition you can't dictate anything. Questions....quiz on Friday!

 

[prowrench]

Increased supply without increased demand=lower price. Every time. No exceptions.
We could only hope it would actually work that way, not the OPEC way.
I would be really happy to be putting $50 worth of dead dinos in the sled right now, but mother nature is not cooperating.

 

[fusion]

Increased supply without increased demand=lower price. Every time. No exceptions.
We could only hope it would actually work that way, not the OPEC way.
I would be really happy to be putting $50 worth of dead dinos in the sled right now, but mother nature is not cooperating.

And you sir, get the JD board valedictorian award for today!

 

[anonomoose]

Increased supply WITHOUT INCREASING DEMAND, would in theory reduce prices, but as you can see above, the supply is going to the demand, which is outside this country.

GM sold more buicks last year in China than they did in the USA. Those buick buyers had nothing and now they drive a buick. So do you really think the demand is waning?

Here is what a CNN/money news story specified only yesterday.

"The head of OPEC said Wednesday that speculators are at least partly to blame for high oil prices -- not any lack of supply on world markets. Speaking at a World Petroleum Congress panel, OPEC Secretary General Abdulla Salem El Badri said the world has plenty of crude but that the number of barrels of oil changing hands in the financial markets is 35 times greater than the actual supply<SCRIPT type=text/javascript> cnnad_createAd("71649","http://ads.cnn.com/html.ng/site=cnn_money&cnn_money_position=220x200_ctr&cnn_money_rollup=markets_and_stocks&cnn_money_section=quigo&page.allowcompete=no&params.styles=fs","200","220");</SCRIPT>
The numbers he cited were 3 billion barrels per day traded on global exchanges, but only 76 million barrels per day in actual supply.
"Oil resources are clearly plentiful," said Badri, a Libyan. "Speculation is playing a very important part in inflating these prices."
Yet Badri doesn't think the cost of oil -- currently near $100 a barrel in the United States -- is excessively high.
"The current price is comfortable for producers and consumers," he said. "It allows producers to make investments, yet doesn't hinder the global economy."

If there were big switches on the dashboard of cars to push letting you choose to run CNG or gasoline....do you really think that the price of crude would be anywhere near those numbers?

 

[bearrassler]

Moose, almost every commodity is priced on a world market today, I agree that we should look at CNG powered cars but I am sure CNG would go up in price as soon as the demand is increased. As for oil, the USA has lots of crude and more of it is being discovered all the time, along with better ways of getting it out of the ground, if we drill more the price will go down or if it does go up it would be less than if we do nothing. Even if the price stays the same we are employing more Americans who are paying taxes to the government, spending their money at local stores, and not getting unemploynment, food stamps, etc. The companies that drill the oil also pay taxes, and royalties to the owners of the mineral rights. At least since the days when Jimmy Carter was president, I have heard the politicians talk about getting away from our dependance on foreign oil and we are still talking about it. With what we have in the US, including Alaska and the Gulf of Mexico, and what Canada and Mexico would import we are at a point where we can finally make that a reality in a reasonable amount of time, but the current administration is fighting it every day. The Keystone pipeline project, Fracking regulation uncertainty, bans on drilling in Alaska and the Gulf, all make us import more oil from the OPEC countries. In North Dakota where I live the state has a very large budget surplus, our taxes have dropped some, we have 3% unemployment, our population is increasing after going down since the 1930's, housing values are going up and the state is spending a lot more money on education, infastructure, roads, along with many other things. There is a lot more to our great economy than oil, but like I have heard, a rising tide lifts all ships. Alternative forms of energy need to be looked at also, but the so called green jobs that I have seen are only there because of tax credits, guaranteed loans, or government grants. We have a large wind turbine manufacturing business in town and they are hiring but have said if the tax credits go away their business slows by 70 to 90%. I also agree with you that the traders have a lot to do with the high price of almost all commodities now. I think that is enough for now.

 

[prowrench]

Good points mr. bearrassler. Pretty much sums it up. We could go on and on and on about this. I'm done with it for now.
A huge bloody revolution would solve a lot of this crap. Waiting for it........

 

[Hoosier]

Increased supply WITHOUT INCREASING DEMAND, would in theory reduce prices, but as you can see above, the supply is going to the demand, which is outside this country.

GM sold more buicks last year in China than they did in the USA. Those buick buyers had nothing and now they drive a buick. So do you really think the demand is waning?

Here is what a CNN/money news story specified only yesterday.

"The head of OPEC said Wednesday that speculators are at least partly to blame for high oil prices -- not any lack of supply on world markets. Speaking at a World Petroleum Congress panel, OPEC Secretary General Abdulla Salem El Badri said the world has plenty of crude but that the number of barrels of oil changing hands in the financial markets is 35 times greater than the actual supply<SCRIPT type=text/javascript> cnnad_createAd("71649","http://ads.cnn.com/html.ng/site=cnn_money&cnn_money_position=220x200_ctr&cnn_money_rollup=markets_and_stocks&cnn_money_section=quigo&page.allowcompete=no&params.styles=fs","200","220");</SCRIPT>
The numbers he cited were 3 billion barrels per day traded on global exchanges, but only 76 million barrels per day in actual supply.
"Oil resources are clearly plentiful," said Badri, a Libyan. "Speculation is playing a very important part in inflating these prices."
Yet Badri doesn't think the cost of oil -- currently near $100 a barrel in the United States -- is excessively high.
"The current price is comfortable for producers and consumers," he said. "It allows producers to make investments, yet doesn't hinder the global economy."

If there were big switches on the dashboard of cars to push letting you choose to run CNG or gasoline....do you really think that the price of crude would be anywhere near those numbers?

Moose- I agree 100% that cars should run on either. The risk in the short run to this approach would be the increase in natural gas prices, which impacts home energy costs. BUT, I think that risk is small as only new cars would have the ability to run natural gas, and that would provide time for production to increase also.

 

[Hoosier]

Moose, almost every commodity is priced on a world market today, I agree that we should look at CNG powered cars but I am sure CNG would go up in price as soon as the demand is increased. As for oil, the USA has lots of crude and more of it is being discovered all the time, along with better ways of getting it out of the ground, if we drill more the price will go down or if it does go up it would be less than if we do nothing. Even if the price stays the same we are employing more Americans who are paying taxes to the government, spending their money at local stores, and not getting unemploynment, food stamps, etc. The companies that drill the oil also pay taxes, and royalties to the owners of the mineral rights. At least since the days when Jimmy Carter was president, I have heard the politicians talk about getting away from our dependance on foreign oil and we are still talking about it. With what we have in the US, including Alaska and the Gulf of Mexico, and what Canada and Mexico would import we are at a point where we can finally make that a reality in a reasonable amount of time, but the current administration is fighting it every day. The Keystone pipeline project, Fracking regulation uncertainty, bans on drilling in Alaska and the Gulf, all make us import more oil from the OPEC countries. In North Dakota where I live the state has a very large budget surplus, our taxes have dropped some, we have 3% unemployment, our population is increasing after going down since the 1930's, housing values are going up and the state is spending a lot more money on education, infastructure, roads, along with many other things. There is a lot more to our great economy than oil, but like I have heard, a rising tide lifts all ships. Alternative forms of energy need to be looked at also, but the so called green jobs that I have seen are only there because of tax credits, guaranteed loans, or government grants. We have a large wind turbine manufacturing business in town and they are hiring but have said if the tax credits go away their business slows by 70 to 90%. I also agree with you that the traders have a lot to do with the high price of almost all commodities now. I think that is enough for now.

x2. Thanks for sharing perspective of what increased energy production can do for a local economy in an fly-over state. I can't understand why we've been waiting 3+ years for approval on the Keystone project. It is "shovel-ready."

 

[anonomoose]

All valid points, and the economic impact that they provide for places like North Dakota are certainly nothing to sneeze at. The problem with all this is that it is assumed that these crudes extracted in sensitive areas such as Alaska and off the coasts of populated areas, does not mean that it will bring relief to Americans. As the re-start of this thread demonstrates, it gets shipped here refined and then shipped away again to whomever will pay the highest price. Clearly the price must be higher somewhere else if they bring the crude here and refine it only to send it away again.

As far as regulations are concerned, this process is all steeped in politics. There has to be a balance between over regulation, and no regulation. All to fresh in my mind is the Gulf spill, where regulations were ignored and oversight was laughable. Alaska is still dealing with the Valdez spill and lawsuits are still stalled off by the oil corporations who find it easier to do that than to pay the damages. These are government suits against oil companies that won't pay when they make mistakes.

So I believe that these issues should be confronted head on...not behind the scenes in smoke filled rooms. I am not going to hold my breath on it though because I see alternatives as the solution to this issue. We have vast stores of natural gas just waiting to be tapped and it is all domestic....while it probably will cause the prices of it to go up, some....the demand for CNG is no where near the price fluctuations that crude is, and most of the NG would be used right here with virtually zero sent abroad. This keeps jobs here, taxes here, and the most important ingredient, the fuel here. But it is not the only solution to this problem....electric can contribute along with other fuels perhaps yet undeveloped.

Long term we need to move in that direction, because in the long term, we can see where the demand for crude is going to go, and in doing so it will continue to gut this country of it's economy and prosperity. Our kids kids, are depending upon us to have that vision and to remember that it is our responsibility to get a handle on it, and provide these kids with the very same opportunities YOU and YOUR grandfather's had. We owe it to them to do it right without screwing up the environment in our haste to make waste. Been there, done that!