Goldman Sachs warned oil could reach $105 a barrel

[h25b]

Just the other day I was nearly run over by the typical rich, blonde housewife in the mall parking lot who was the SOLE occupant of my personal favorite SUV. The Ford Excursion...

Really fuel efficient means of errand-running ...

 

[vclean]

$105 bbl, another self-fulfilling prophecy? Goldman-Sachs probably has some options to exercise.

 

[satpak77]

set by market

there were no additional shooters on the grassy knoll, no missile took down TWA 800, and OPEC does not conspire to raise crude prices, it can only influene prices via raising/killing production (supply). However, note production is in response to demand, therefore DEMAND drives prices. This is simply market econ 101.

Crude, the most actively traded commodity in the world.

Some do not know this, but USA itself (a non-OPEC nation) produces almost the same amount of crude that Saudi Arabia does. Throw in Russia (another non-OPEC nation) and Mexico who also produce huge volumes of crude.

It is believed that China is drinking crude as fast as it can get it (a problem we didn't have 10 years ago).

Oil prices responds to peoples PERCEIVED thoughts about oil supply and "stability of supply". This is why Goldman's report caused such a spike in oil prices. PEOPLE, human beings, respond to news, reports, etc.

Also, every time a pipeline is blown up in Iraq (undergoing "change", I suppose we are going to turn this into Scottsdale and then the troops can leave), oil prices respond.

Goldmans report came out at 7:45 AM CDT. At 7:43 AM, oil was stable, at 7:48 AM, it spiked higher. You gonna tell me that the world's oil reserves physically changed in those 5 minutes? Of course not

we COULD see $105 oil, we could also see $150 oil. The MARKET decides what we see, as determined by supply and demand.

High oil, rising interest rates, a weak dollar, are all the building blocks for a coming Bear market in the US stock markets

 

[C-150ETOPS]

Everything in the current world system is based on cheap energy. What happens when it isn't cheap anymore is anyone's guess, but most likely it won't be pretty. It could drastically affect the concept of shipping goods to the other side of the world versus local production (hello insourcing in the US).


The Excursion used for one person to go buy a bottle of water shipped from France is the perfect example of total waste. Another was on the LAX ramp a few years ago while preflighting. There was two large pallets of peppers from Chile that were shipped to LA with a stop at JFK. Last time I checked growing peppers wasn't too difficult in CA and can imagine the Jet-A that was needed to keep 2 tons of veggies at FL350 for 15 hours.

Please visit my buggywhip Ebay store

 

[R0NIN]

Bean Counters

If you think a bank like Goldman-Sachs are just some 'bean counters,' you have alot to learn. Those guys handle some of the most complex transations in the world (They're engaged in selling Neiman-Marcus at the moment... anyone... anyone?).

Good luck to us all!!!!!!

I would take this seriously........

 

[Corona]

If you think a bank like Goldman-Sachs are just some 'bean counters,' you have alot to learn. Those guys handle some of the most complex transations in the world (They're engaged in selling Neiman-Marcus at the moment... anyone... anyone?).

Good luck to us all!!!!!!

I would take this seriously........

Yes, GS is a very reputable company. That is, until they start making predictions about commodity prices. If you could predict commodities, by God, you'd be rich beyond belief.

I'd suggest Americans follow the lead of Warren Buffett. He got very wealthy by ignoring this type of "wisdom".

C

 

[Mudworm]

If oil hit that high, how much extra would it cost you to fly your people around? Double the cost of fuel. Could a regular corporate flight department afford that? I doubt it. They would send every mid level manger back to the airlines, and only the CEO would fly the corporate jet. Sad but probably true. And hey, this is only if oil doubled. Relax chief.


Bye Bye--General Lee

General,
If cost was an issue I am sure my boss would be rideing in the back of an Airbus with a Blue tail.

Worm

 

[Makesheepnervus]

Satpak77 I'm with you on this.

The reason we have so many SUV's on the road is because gas is still cheap! How many people realize that despite "Record high prices" the US consumer still pays less than half of what his European counterpart pays and that when adjusted for inflation gas prices are actually at record lows.

Governments can not mandate what people want, economics is what dictates what people buy. Facts show that people want big, flashy cars and they don't care what kind of gas mileage they get until it gets too expensive to fill them up. The only way consumers will stop buying gas guzzling vehicles is when they can no longer afford to put gas in them, at this point a smaller, less powerfull vehicle will have more appeal.

As far as developing alternate energy sources by means such as the "Manhattan project", do you really want your government spending billions of your tax dollars on a project that would most likely develop something no one wants and should be funded by the car makers anyway? Trust me, when the demand for SUV's goes away the big 3 will spend the money to develop an alternative, but I expect the Japanese will beat them to it. (Again)

 

[8vATE]

Just the other day I was nearly run over by the typical rich, blonde housewife in the mall parking lot who was the SOLE occupant of my personal favorite SUV. The Ford Excursion...

Really fuel efficient means of errand-running ...

Hey ..

Its efficient for her!!

She's talking on the phone..
Drinking her specialty water...
Filing her nails...
AND listening to NPR or Air America...

Now if she could only park that thing..

 

[General Lee]

Hey ..

Its efficient for her!!

She's talking on the phone..
Drinking her specialty water...
Filing her nails...
AND listening to NPR or Air America...

Now if she could only park that thing..

I guess I have to take the Excursion away from my wife then...... When did you see her? I guess she is a desperate housewife.....(I can already hear the slams)


Bye Bye--General Lee

 

[General Lee]

General,
If cost was an issue I am sure my boss would be rideing in the back of an Airbus with a Blue tail.

Worm

If oil prices double then your boss may think twice. Regardless, it won't be good for the middle management types who are now used to flying the corporate jet around. It will become twice as expensive with gas.... The owner of the company or someone who is insanely rich won't care.


Bye Bye--General Lee

 

[I.P. Freley]

Several posts on here place partial blame for our oil dependence upon the automakers... Silly, silly, silly. The automakers build what will sell, and until people REALLY want alternative fuel vehicles, there won't be a market for them. Not to mention that there aren't any mature technologies for alternative fuels at this point! Investments ARE being made by the automakers and the government, though as of yet no technology is ready for mass production that is a real improvement. Even if there were, I doubt that many people would want them until the price of gasoline rolls past the $3-$4 point. GM, for instance, isn't going to make something that they don't think will sell, especially after the debacle of the EV-1 (I might have the model name wrong).

I find it particularly head-scratching that people are falling over themselves to get at these hybrid vehicles when their efficiency is only realized in very specific circumstances (stop-and-go traffic for the most part). These yahoos that are smugly snatching up the Prius, thinking themselves to be all "enviro-conscious", don't seem to realize that they are saving exactly ZERO gasoline when cruising down the highway. I don't object to the technology itself (Toyota and Honda have done wonders with their hybrid powertrains, and Ford is coming up soon), just the perception that these cars are somehow vastly more "green" than straight combustion engines. For instance, what happens to them thar batteries when their life cycle is run?

 

[Dizel8]

While I cannot quote "regular" mileage of the Prius, I have no doubt it is slightly better than the Hummer.

As for what the consumers will buy, I think you are spot on, it all comes down to preference.

 

[C-150ETOPS]

Dizel8's Avatar got me thinking. What effect does this have on the silicone supply.

What's the latest price on cleavage futures? vbmenu_register("postmenu_575406", true);

 

[Dizel8]

They might be enviromentally friendly saline!

 

[FedExpert]

Quit Your B!tchin'

Nobody bothers to look at this, but the price of gasoline in North America is VERY suppressed as related to inflation. Since 1970 the price of milk has increased dramatically more than the price of oil. Per normal economic models, we should be paying over $4.00 per gallon for gasoline. But we've enjoyed suppressed oil prices for many years.
This won't change with "regime change" in oil-producing companies. Basically, the guys that set oil prices (in simple, read, OPEC) will decide what the prices should be. They have decided that they need to raise prices, which is total B.S. The supply has not changed. Venezuela is over its labor issues, and the Middle East has not suffered a major impedement to supply. Believe me, there is a corporate exec somewhere high up in his ivory tower deciding we should pay more for oil. It's amazing it has taken this long for it to happen, but rest assured, it will only get worse.

 

[NewBlue]

Personally, I think if someone could develop a modification kit for existing vehicles and market a very inexpensive fuel to power them, a lot of money could be made.
.

then again you might just "disappear" curtesy of the oil industry.

 

[Tooslow]

Yep....

 

[SkyWestCRJPilot]

OPEC's control over oil production isn't so cut and dry. Most OPEC countries are already producing very close to capacity. Capacity could be increased but that would take up to a decade to create more infrastructure to tap more oil. The US oil industry produces a lot of oil but is already at full capacity. There is more oil here in the US that could be pulled out (I'm not even talking Alaska here). It just costs more to pull it out than it could be sold for (verses the more flowing type in Saudi). They could do more but that won't happen till prices increase and stay high. Then it would still take years to build the infrastructure to do so. There may be some wild cards though. Russia isn't part of OPEC and could increase production. The wisest and longest lasting option is to seek alternative fuels. That can only come through government action the way California basically created the hybrid car market by mandating a certain percentage of vehicles sold in that state be hybrids. The same happened with unleaded gasoline and the same can happen with vehicles run on alternative fuels. Just imagine a world where cars and trucks don't run on petroleum, only airplanes. The price of crude would plummet, airlines would prosper, and the West wouldn't care about what happens in the Middle East any longer. Unfortunately that plan is contrary to the present administration's personal interests.

 

[jtf]

Believe me, there is a corporate exec somewhere high up in his ivory tower deciding we should pay more for oil. It's amazing it has taken this long for it to happen, but rest assured, it will only get worse.

Didn't most of the big oil companies make record profits last year? Hmmmm. How is that oil costs so much, yet the profits are so high?