$135 a barrel

[PlaneDrvr]

Not an expert, but pretty knowledgeable, so here goes.

The GS and Boone Pickins statements about $150-200/bbl. oil comes from the following FACTS.

-The world currently has the ability to produce somewhere around 85-86M bbls of oil a day; and the world currenly consumes about 83-84M bbls of oil a day. Meaning there is only about 2M bbls of spare capacity and any supply disruption (instability in Middle East, Nigeria, etc), and the market is in the Negative.

Current growth trends in the world economy (think China, India), call for an increase in demand for oil of about 4-5% per year, and current growth in supply (increase in production) of oil going forward is about 1% per year. So, the growth of oil being produced is very Very likely NOT going to keep up with the growth in Demand in the future years (at least 1-5yrs out).

The Saudis do have about 2M bbls of extra/spare capacity available; however, most of that crude is 'heavy sour crude' which is very expensive to refine, and further there are few refineries that have the capability to refine it.

Off the U.S. east coast (the outer continental shelf) there is an estimated 20-40 Billion Barrels of oil, and even more, there is Billions of cubic feet of 'clean burning' Natural Gas. WE, thanks to Congress and 'special interests' in the this Country, completely refuse to drill for it. ALL of the Oil Executives before congress yesterday, all said, open up these areas for us to drill for more oil here, Domestic Production. In the future, we will be paying $7-9.00/gal. for gas, and probably still refuse to develop our own oil reserves.

All our 'so called' leaders (and future so called leaders) keep talking about is "Wind and Solar" which are good future resources and should be employed to add to our future needs. However, my car does NOT run on Solar power and Doesn't have a Sail.

O.K. so I've gone on long enough. Hope it helps, for what its worth.

PD

Just to add another brief bit of information.

Once you find a new oil source (a new field), such as off the U.S. coast; it takes roughly 3 to 3 1/2 yrs. to bring that field into 'full production.' So, WE NEED to start drilling off the U.S. Coast NOW, TODAY; or the hole that we are in will grown deeper and deeper in the coming years. But, our elected leaders and the American public are just too stupid to realize the situation. It is just so easy to just blame those "Greedy Oil Companies" Its all their fault.

PD

 

[PCL_128]

I would like to know why there are supply concerns. Could someone explain this to me, besause my take is, if the oil producing countries are dialing back production then they are not running at 100% pumping capacity, right? So I'm taking that there isn't the demand for the Suadi's to pump 100%. I could see there being supply concerns if and only if they had every well head pumping and the ships were backing up in the harbour to get filled. but as I alreadey stated, if the current demand is x amount of barrels dailt, then why pump 2(x) amount of barrels. I don't here about refineries shutting down because they don't have the crude to process... Is it just me or is this whole run up based on crap and the traders not the oil co's taking us for a ride for them to get rich on furtures?

According to the oil producers, even with production scaled back, they still have several million barrels per day that they can't unload on the market. There is no supply problem. It's a myth. The problem is speculators, just like it was with the late-90s tech bubble, and just like it was with the recently-popped real estate bubble. The idiot lemmings always have to have some place to dump their money, and they're dumping it into oil right now. Eventually the institutional investors will notice that the money is drying up for oil speculation, and they'll start taking their profits. When that happens and billions of dollars of institutional investment money comes out of oil, the price of oil will drop 30% in a heartbeat, just like tech stocks, and just like real estate.

 

[Kugelblitz]

Not an expert, but pretty knowledgeable, so here goes.

The GS and Boone Pickins statements about $150-200/bbl. oil comes from the following FACTS.

-The world currently has the ability to produce somewhere around 85-86M bbls of oil a day; and the world currenly consumes about 83-84M bbls of oil a day. Meaning there is only about 2M bbls of spare capacity and any supply disruption (instability in Middle East, Nigeria, etc), and the market is in the Negative.

Current growth trends in the world economy (think China, India), call for an increase in demand for oil of about 4-5% per year, and current growth in supply (increase in production) of oil going forward is about 1% per year. So, the growth of oil being produced is very Very likely NOT going to keep up with the growth in Demand in the future years (at least 1-5yrs out).

The Saudis do have about 2M bbls of extra/spare capacity available; however, most of that crude is 'heavy sour crude' which is very expensive to refine, and further there are few refineries that have the capability to refine it.

Off the U.S. east coast (the outer continental shelf) there is an estimated 20-40 Billion Barrels of oil, and even more, there is Billions of cubic feet of 'clean burning' Natural Gas. WE, thanks to Congress and 'special interests' in the this Country, completely refuse to drill for it. ALL of the Oil Executives before congress yesterday, all said, open up these areas for us to drill for more oil here, Domestic Production. In the future, we will be paying $7-9.00/gal. for gas, and probably still refuse to develop our own oil reserves.

All our 'so called' leaders (and future so called leaders) keep talking about is "Wind and Solar" which are good future resources and should be employed to add to our future needs. However, my car does NOT run on Solar power and Doesn't have a Sail.

O.K. so I've gone on long enough. Hope it helps, for what its worth.

PD

At the end of the day, there are better alternatives to oil and we need to get off our butts and stop letting business interest tell us what we can and cannot develope as energy sources. As I said earlier, drilling for US based oil is fine but there is no gaurantee that the oil companies will sell 100% of that production to the US. In fact, they will come up with some half wit reason to sell the oil to more lucrative over-seas markets and the Glenn Becks of the world will back them all the way.

This situation is the result of a bi-partisan sell out of the American people that dates back to St. R. Reagans 'policies'. There needs to be a complete floor to cieling overhaul, a referendum if you will, on our government and all the lobbyist organizations need to go.

 

[Soverytired]

At the end of the day, there are better alternatives to oil and we need to get off our butts and stop letting business interest tell us what we can and cannot develope as energy sources. As I said earlier, drilling for US based oil is fine but there is no gaurantee that the oil companies will sell 100% of that production to the US.

Actually, it's a 100% certainty they'll sell it to the global market. That's how oil is traded. As a global commodity at a set price worldwide.

However, increasing production and therefore supply should depress global oil prices. In the short term, anyway, because the stuff is running out.

Developing US supplies will lend stability to the global market. Places like the Middle East (blown up pipelines), South America (Venezuelan nationalization), etc. cause price spikes due to continual uncertainty about their ability to produce on schedule.

Who give a rats where cheaper oil comes from or goes to? The point is the price, not the vendor or the recipient.

 

[ultrarunner]

One thing is or certain, there are going to be a lot less airlines by the end of the year or early next. Massively bloated operations like UAL and AA can't tolerate 150 bucks a barrel for 2 months, let alone 2 years. These big outfits just don't have the cost structure to pay that much for oil.

The problem is the darn right refusal for all these outfits to collectively raise the price of travel. Fifteen bucks for a checked bag? Give me a break...the airlines would rather take massive delays at the gate while the overheads are stuffed....

It's tough to feel sorry for the once that close up when something can actually be done about it...

High oil is here to stay...and we're not going to work for fee, so get your $hit together!

 

[Dizel8]

Here is a solution.

Allow more drilling in the US, with a caveat though, and it is a bit different: The oil in the ground is a national asset that belongs to the American people and is to be used by the US.

Now, I don't want the goverment drilling for oil, clearly they are not suited for the task, so approach the Oil companies and allow them to bid for the contract. Not the usual way though, I don't want to allow them to reap the profits of the oil, nor allow them to set the price of said oil. Instead, I want them to be given the contract, based upon what they are willing to extract it for per barrel. An auction if you will, Exxon says they will extract if for $20 a barrel, Chevron for $15, hence the contract goes to Chevron. Numbers of course are made up, no idea what they truly would be.

Now of course, the oil companies are allowed to do their own due diligence, seismic testing, test drilling etc.

Whatever comes out of the ground, belongs to the US goverment, that is, it belongs to us, the American people. Congress, yep the clueless ones, will now set the price for a barrel of oil to the refineries, however, to prevent the refineries from making huge profits, we need to have some oversight or we could even make them bid on, how much they want to refine the oil into gasoline.

I don't want to socialize the oil companies, don't want to be like Venezuela, and I think my proposal, at least as far as extraction is concerned, is very capitalistic. I have no doubt, that the oil companies
would bid for the contracts, after all, there is money to be made, but at the same time, they cannot divert the profits of rising prices to themselves.

Obviously, I am not that smart, am a avia..., avai...., pilot after all, but I am sure there is reasons why this wouldn't work and to solutions how to make it work.

What y'all think?

 

[atrdriver]

Like I said in another thread, we are fighting a war in the middle east for American sovereignty against middle eastern forces that we have already handed over control of our economy too. After many years of bi-partisan efforts to block alternative energy research and initiatives - at the bribed expense of the oil industry - we now find ourselves in a position where the only answer to our problems is to give big oil whatever it needs.

Let them drill in Montana, Alaska, wherever and then they (the US oil companies) can sell that oil to southeast Asia at a higher profit just like they do right now with the extant Alaskan pipeline.

Like I said in another thread, if we

1) announced new drilling in all the prohibited areas
2) announced new refinery construction
3) announced resumption of nuke plants

I would bet that the price of oil would drop by at least a third within a week. That would obviously help the current price, but it would also slam the speculators, which would be a good thing. But the enviromentalists are still blocking everything that would help this situation. And I guarantee that they don't care a bit what happens to the average American, or all those evil corporations.

 

[skywiz]

Start Drilling Now

Just to add another brief bit of information.

Once you find a new oil source (a new field), such as off the U.S. coast; it takes roughly 3 to 3 1/2 yrs. to bring that field into 'full production.' So, WE NEED to start drilling off the U.S. Coast NOW, TODAY; or the hole that we are in will grown deeper and deeper in the coming years. But, our elected leaders and the American public are just too stupid to realize the situation. It is just so easy to just blame those "Greedy Oil Companies" Its all their fault.

PD

I agree. Start writing your congressmen to START DRILLING NOW!!! Although it will take ~10 years to see that oil, the price will drop immediately!! Speculators will then stop betting that the price of oil will keep going up because they will know that we will have alot more oil from our own country.

Write your congressman to start drilling now!!

Thats all WE can do.

 

[Soverytired]

Here is a solution.

Whatever comes out of the ground, belongs to the US goverment, that is, it belongs to us, the American people.

I don't want to socialize the oil companies, don't want to be like Venezuela, and I think my proposal, at least as far as extraction is concerned, is very capitalistic.

I think Hugo Chavez and Joesph Stalin would be proud.

Look, I don't mean to be insulting, but this is anti-capitalistic, anti-consumer, anti-free trade, anti-business, and anti-American (to name a few).

How about Congress repealing the 100 or so laws that forbid anyone from exploring for and developing oil over 90% of the places in the US that might have it?

This proposal is the absolute definition of "nationalization" of industry. Free countries and free markets generally don't truck in this sort of thing.

 

[PCL_128]

I think Hugo Chavez and Joesph Stalin would be proud.

Look, I don't mean to be insulting, but this is anti-capitalistic, anti-consumer, anti-free trade, anti-business, and anti-American (to name a few).

Melodramatic much? All he's describing is basically a highly regulated oil exploration and refinement industry. I think it's a valid idea. It would certainly need to be studied a lot more by economists and oil experts, but it's a valid idea on the surface. The almighty "free market" isn't the answer to everything. A little regulation can be a good thing in certain industries (our own included).

 

[Redmeat]

Write your congressman to start drilling now!!

Thats all WE can do.

I would rather we go back to farming and start riding bicycles like they do in Europe.

Expensive oil is the best thing that has happened to this country in a a long time. It will FORCE change.

No more soccer moms in a F250 extended cab that gets 10 miles to the gallon driving to the store for a gallon of milk.

 

[PCL_128]

I'm still seeing idiots driving around tha ATL in their Hummers. Saw three of them just yesterday while driving to dinner. How the hell can these idiots afford 10 mpg at $4/gallon?

 

[Rez O. Lewshun]

Is It Time To Tap U.S. Oil Reserves?

WASHINGTON, May 22, 2008 (CBS/AP) With gas hitting a new high almost daily, some members of Congress pleaded with the energy secretary to release the nation's 700 million barrel emergency stockpile, reports CBS News correspondent Nancy Cordes.

His response - that's not what it's for.

"The strategic petroleum reserve is meant to be there as a protection for the American people," said Energy Secretary Samuel Bodman.

"The American people right now are being tipped upside down at the pumps and having money taken out of their pockets," responded Rep. Edward Markey, D-Mass.

Bodman also told a House of Representatives hearing that he does not believe that rampant market speculation is causing record high oil prices that reached a record $135 a barrel. He said it is a matter of supply and demand that can be traced to essentially flat global production over the last three years.

Markey said he did not understand why President Bush is not releasing oil from the Strategic Petroleum Reserve to force down prices. "We have 700 million barrels ... that are ready to be deployed," said Markey.

Mr. Bush recently stopped putting oil into the reserve after Congress passed legislation to halt deliveries.

The stockpile, now 701 million barrels, "is meant to deal with ... the physical interruption of the flow of oil to our country. We don't have that issue today," he told the House Committee on Global Warming.

Markey said the release of government oil is justified because "we're in an economic crisis" as high oil costs are driving gasoline to $4 a gallon and increasing other costs.

Oil from the Strategic Petroleum Reserve, three underground salt domes in the states of Texas and Louisiana, has been used twice to respond to supply disruptions or the threat of such interruptions: Just before and during the first Gulf War in the early 1990s and in response to the loss of Gulf of Mexico oil after Hurricane Katrina in 2005. President Bill Clinton in 2000 made emergency oil available to relieve prices and Markey said prices then dropped 18 percent.

A series of dire reports about the world supply of oil are driving investors to buy, buy, buy. Just today, the Wall Street Journal reported that the international energy agency is set to predict a massive supply crunch if producers don't significantly boost their capacity within five years.

"There'd be a rapid sell off if at some point somebody believes that the assumptions underlying this speculative investment are wrong," Edward Morse of Lehman Brothers told Cordes.

Until then, Americans are left holding the bill.

"A barrel of oil has more impact on our everyday lives than any other product in America," said Jack Gillis of the Consumer Federation of America. "Almost everything we buy is going to be dependent on the price of oil in some way."

One example: After American Airlines announced a $15 fee for passengers to check their first bag, United Airlines said it might follow suit. While Southwest Airlines says - no way.

"This is just going to irritate your customers," Peter Goelz, an airline industry analyst told Cordes. "And I think with the airlines satisfaction at almost its lowest level there are some airlines that are going to think twice about this."

But with big airline fees and gas reaching $4 a gallon, a lot of travelers might think twice about leaving home.

Meanwhile, the top executives of the country's five largest oil companies made a repeat appearance in Congress.

After being pummeled by senators over high oil and gasoline prices at a Senate hearing on Wednesday, they were summoned before the House Judiciary Committee on Thursday.

The executives reiterated much of what they had told the senators: The primary cause for high oil prices is tight supplies and growing demand, and that their profits - $36 billion during the first three months of the year - are not excessive given the size of their companies and the need for reinvestment to find more oil.

The executives urged more domestic oil and gas production by opening areas now off limits including large areas of federal offshore waters and a wildlife refuge in Alaska, where billions of barrels of oil are located. "This persistent denial of access is costing American consumers right out of their pocket books," said John Hofmeister, president of Shell Oil Co.

The other executives represented Exxon Mobil Corp., Chevron Corp., ConocoPhillips Co., and BPAmerica Inc.

Bodman, appearing at a separate hearing down the hall from the oilmen, also viewed the problem as essentially one of production not keeping up with demand.

Asked if he believed there was "rampant" speculation driving up oil prices, Bodman replied: "No. I don't."

The biggest problem, he said, is flat oil production and growing demand. Up to 2004, he said the world's producers pumped about 1 million barrels more oil each year, then production increased and so did demand. Demand continued to grow, but beginning in 2005 "there has been no change in global production" and "demand has outstripped supply."

"We have sopped up all the available spare (oil production) capacity in the system," said Bodman.

The world uses about 87 million barrels of oil a day, about a quarter of it in the United States.

Energy experts have acknowledged that most producers have little ability to pump more oil. The exception is Saudi Arabia, which is producing about 9.4 million barrels a day and has the ability to increase that by about 2 million barrels a day but have declined to do so.

Last week, the Saudis said they were boosting production by 300,000 barrels a day in June, but that was only to make up a decline in production by other OPEC countries.



[FONT=Arial, Helvetica, Sans]© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report. [/FONT]

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[Redmeat]

I'm still seeing idiots driving around tha ATL in their Hummers. Saw three of them just yesterday while driving to dinner. How the hell can these idiots afford 10 mpg at $4/gallon?

I hear ya.

We are pilots so we have one eye on fuel and price all the time. I think for the basic consumer it doesn't really hit home until they see their bottom line at the end of every month.

At some point that bottom line will effect even the most stubborn consumers habits regarding petroleum.

 

[Rez O. Lewshun]

Cheney not releasing the SPR to lower oil prices but stock piling it.... further increasing oil...

http://www.youtube.com/swf/l.swf?vi...efault.jpg&t=OEgsToPDskIWW92q1NUPlUlsV922pdxh