Jet Fuel Prices WILL Be Climbing A LOT, and Soon

[blzr]

1. There is plenty of oil. Brazil has seveal offshore fields that will come on line in 2010.

http://www.reuters.com/article/marketsNews/idUSN2144574420080521

2. North sea discoveries. The higher prices go, the more oil we will find.
http://www.businesswire.com/portal/...d=news_view&newsId=20080522005490&newsLang=en

3. As for domestic oil, http://www.redorbit.com/news/business/1395678/opening_up_oil_drilling_makes_sense/

I'm not even going to bring up ANWR.

Our government is to blame for our current state of affairs. They pander to the Eco-terrorist, environmental wacko's. In 1996, Bill Clinton veto'd the ANWR drilling proposal claiming that it would take 10 years to get the oil to market. Well, we may not be in this situation had our politicians (on both sides of the isle) used some commons sence.

We have to start somewhere, take that first step. If it is going to take 3 months, 3 years, or even 10 years to get the iol to market, we have to get started now.

 

[jetflyer]

Blzr,
You realize depleting fields mean the world is losing about 3-4Mbd a year right now right?

Just to keep oil production level:
The world has to bring online between 3-4 ANWR's each year(each ANWR is 1Mbd).

To grow by 1mbd:
4-5 ANWR's have to be brought online each year.

The last couple years we've only been staying close to level which alone means a LOT of oil has been coming to market.

2008 and 2009 are supposed to have a LOT of new oil projects come online but they're only supposed to barely increase global production or keep it level.

Really the world is depending on Russia and Saudi continuing to grow but both have declining production which will mean more ANWR's will be needed to stay LEVEL!

Supply is going to have a hard time increasing in the years to come.

 

[PCL_128]

Oil prices are down about $5/bbl today. The analysts are taking it as a sign of profit-taking. Hitting $135/bbl might be a tipping point for some institutional investors to realize that things have had too big of a run. I think jetflyer's prediction of $100/bbl within the next few months is probably accurate. People will take profits and drive the cost down. There simply isn't any new money out there to dump into oil and other commodities.

 

[blzr]

Blzr,
You realize depleting fields mean the world is losing about 3-4Mbd a year right now right?

Just to keep oil production level:
The world has to bring online between 3-4 ANWR's each year(each ANWR is 1Mbd).

To grow by 1mbd:
4-5 ANWR's have to be brought online each year.

The last couple years we've only been staying close to level which alone means a LOT of oil has been coming to market.

2008 and 2009 are supposed to have a LOT of new oil projects come online but they're only supposed to barely increase global production or keep it level.

Really the world is depending on Russia and Saudi continuing to grow but both have declining production which will mean more ANWR's will be needed to stay LEVEL!

Supply is going to have a hard time increasing in the years to come.

Jet, you are absolutely right. Now, specifically, WHO (which political f.cked up party) WILL NOT LET US EXPLORE AND DRILL FOR OUR OWN OIL???

It is there...Lots of it. Not enough for FOREVER, but enough to ease the tranition to another fuel source somewhere in the future.

 

[PCL_128]

The problem is that it wouldn't ease the transition, it would delay it once again. As soon as we start drilling in more places for oil, the speculators will pull their money out of oil, gas prices will drop, and people will go right back to their old ways until we run out of domestic oil. Then everyone will panic again and we'll be no further along in developing alternatives. The Administration needs to show some leadership and put tons of federal money towards developing alternative energy. Waiting for the "free market" to take care of it isn't going to work.

 

[blzr]

The problem is that it wouldn't ease the transition, it would delay it once again. As soon as we start drilling in more places for oil, the speculators will pull their money out of oil, gas prices will drop, and people will go right back to their old ways until we run out of domestic oil. Then everyone will panic again and we'll be no further along in developing alternatives. The Administration needs to show some leadership and put tons of federal money towards developing alternative energy. Waiting for the "free market" to take care of it isn't going to work.

Ok. I'll take your word for it. But.....instead of begging Saudi Arabia and the other middle eastass countries to give us more, why don't we just get our own oil, try as best we can to conserve and transition to alternative recources, and let the RAGHEADS eat scorpions. I'm sick of our P ssy ass government acting like a bunch of dumbass hippies.

Lets just TRY the "drill you own" Oil thing and see what happens.

 

[jetflyer]

I want to start out by saying I really appreciate you blzr and PCL.

I can't even stand to read some of the other threads on oil on these boards. I want to puke seeing the lack of knowledge on this topic being spewed out of their mouths.

Blzr,
The back and forth bickering between the Dems and Repubs is why nothing gets done to make us more energy independent. They're both to blame.

Divided, we all fail.

In the 3 years I've been researching peak oil NOTHING has gotten done because of these idiots.

Let's hope they can pull their heads out of their asses and help us ease the pain that's here....I doubt it though..

Jet

 

[Negative Prist]

jetflyer,

Last week I happened to fly one of the authors you mentioned in your very first post on this thread. During another conversation with him a few years ago, he predicted $4 a gallon gas in two years.

I asked him again last week what he saw for the next two years. His answer was somewhat surprising. He said, "Ten to twelve dollars a gallon in two years. But that's hard to predict. It could happen in four months."

He also confirmed your comment in your previous post about ANWR. I asked him his opinion on drilling there, and he said that it is too late for ANWR to help us.

He also said that he doesn't see many airlines surviving the oil price increases in the next few years. If you currently fly for an airline, I suspect his advice to you would very likely be to find a fractional job now. He predicted fractionals would fare much better.

 

[Soverytired]

Lovely. I agree with all of it.

ANWR and off shore drilling will happen, and are necessary. But they'll take at least a decade to develop, and won't save us from high gas prices. Too late for that.

What's even worse is meaningful switches to alternative fuels will take a GENERATION. Kinda sobering. If true.

Course, there's been gloom and doom talk about things like this before. So, think happy thoughts, I guess.

 

[PCL_128]

Ridiculous. I've been saying it for a long time: $5/gallon gas is a breaking point. When we get there, people will change their habits. Demand will drop like a brick and oil prices will fall. The chances of seeing $10/gallon gas are just about non-existent, IMO.

 

[Lear70]

People are already changing their habits.

SUV and truck sales are down by over 60%. One of the major manufacturers just completely just down their truck and SUV line for the rest of the year and is retooling for smaller vehicles.

It's just a matter of time, and I don't believe gas prices will retreat anywhere less than $3.50 a gallon, nor will oil go much below $100 a brl once the bubble bursts.

Put a c-note on it?

 

[Skank]

1. There is plenty of oil. Brazil has seveal offshore fields that will come on line in 2010.

http://www.reuters.com/article/marketsNews/idUSN2144574420080521

2. North sea discoveries. The higher prices go, the more oil we will find.
http://www.businesswire.com/portal/...d=news_view&newsId=20080522005490&newsLang=en

3. As for domestic oil, http://www.redorbit.com/news/business/1395678/opening_up_oil_drilling_makes_sense/

I'm not even going to bring up ANWR.

Our government is to blame for our current state of affairs. They pander to the Eco-terrorist, environmental wacko's. In 1996, Bill Clinton veto'd the ANWR drilling proposal claiming that it would take 10 years to get the oil to market. Well, we may not be in this situation had our politicians (on both sides of the isle) used some commons sence.

We have to start somewhere, take that first step. If it is going to take 3 months, 3 years, or even 10 years to get the iol to market, we have to get started now.

If we focus on where to find oil, rather than not using oil, things will never change. We haven't spent much on an alternative to oil, even though our entire economy runs on it. Not smart. Drilling in Alaska will not save our bacon, and it wouldn't have 10 years ago.

 

[Lear70]

The flightinfo server sucks, won't refresh, won't reload, and you have no idea when you're posting multiple times or not.

Wonder why they can't get a real server with as much money as they make from all this advertising?

 

[jetflyer]

Negative Prist,
I'd love to know who you flew that predicted $10-$12/gallon in two years?
Tertzakian? Hirsch?

I know the author of the study on peak oil for the Department of Energy is now saying those in the know are predicting $12-15/gallon in the next couple years.

PCL,
The tipping point is not even close. We in the U.S. have reduced our usage 1%. What's it going to take to reduce the usage 5%? 10%? 20%? Unfortunately we're going to find out the answer to 20% demand destruction in the next 5-10 years in my opinion because the oil simply won't be there in the quantities desired.

One of the main problems right now? The Oil exporters are using more of their oil and exporting less. That screws the importers like the U.S.A.

The governments of many countries also absorb the cost of oil and don't pass it on to their people. China does this. The government subsidizes the oil price so much that it's going to be hard to get demand destruction there.

Even Mexico is not supposed to be exporting oil in 10 years because their fields are in such bad decline(Cantarell especially).

Mexico not being an exporter alone would take 3 ANWR's off the world market in 10 years.....

Jet

 

[JetFumes]

Why doesn't anyone talk about the need to drill more AND conserve more. We need to drill more and also conserve, plus switch to alternatives all at the same time, if we are to preserve our future.

 

[jetflyer]

Jetfumes,

Good point. Matthew Simmons says the greatest way to help with this problem is conservation. He says that's the best oil field one could ever find....

Trains for transport of goods will help with this a lot. So will cutting back on driving and smaller/hybrid/electric cars.

Oh yea and using less plastic/carpet/paint/etc....

 

[Dizel8]

It would be nice if the goverment supported buying more hybrids with great tax incentives, ie, take away the sales tax on them, give tax rebates etc, etc. They could even allow the owner to write of the interest on the loan, just like we do with mortgages.

There were tax incentives on hybrids, but I think they expired and they were less than on a 6K truck. Plus, I think in many cases, the tax incentive didn't cover the higher cost of the hybrid.

Here is an article about the 6K lbs+ tax incentive, not sure if the rpogram still exist:
For 2002, a qualified buyer can take an immediate deduction of $24,000.
:http://seattlepi.nwsource.com/local/104601_hummer17.shtml
"


Looked at a few hybrids and what I found very interesting, is that many are only available in a few states.

 

[Lear70]

It would be nice if the goverment supported buying more hybrids with great tax incentives, ie, take away the sales tax on them, give tax rebates etc, etc. They could even allow the owner to write of the interest on the loan, just like we do with mortgages.

There were tax incentives on hybrids, but I think they expired and they were less than on a 6K truck. Plus, I think in many cases, the tax incentive didn't cover the higher cost of the hybrid.

Here is an article about the 6K lbs+ tax incentive, not sure if the rpogram still exist:
For 2002, a qualified buyer can take an immediate deduction of $24,000.
:http://seattlepi.nwsource.com/local/104601_hummer17.shtml
"


Looked at a few hybrids and what I found very interesting, is that many are only available in a few states.

Good post!

For me, I would be happy if there were a 4x4 crew cab truck that was a hybrid with better than 18 mpg fuel efficiency, able to use the gas engine for the torque when pulling a load, but when roaming around town daily, could benefit from the hybrid gas/electric savings.

Unfortunately, there doesn't seem to be one with enough torque to pull my boat AND get 25-30+ mpg when not towing anything, which sucks, and even if there was, it would be so expensive so as to offset any fuel savings you'd get from having a hybrid.

The tax credit equal to the price inflation is a great idea; we should all write our Senators and Congressmen. Seriously.

 

[PCL_128]

PCL,
The tipping point is not even close.

I think you're wrong. I think there's a psychological barrier at $5/gallon for most Americans and you'll see consumption take a dive once we reach that level. Time will tell, however, since I think $5/gallon is likely within the next year thanks to ridiculous speculators.

 

[Two Feathers]

I think there's a psychological barrier at $5/gallon for most Americans...

That might be true for most Americans, even though I bet it will be a higher number. What's becoming more and more appearant though is that it is no longer American demand alone setting the market price. The rest of the world is gobbling the stuff up at exponetially increasing rates and many of those nations have the money to stay in the bid-up with us. Even a major weakening of demand in the USA may not necessarily lower oil prices significantly.

As far as the price of gasoline, consider that Londoners pay something to the tune of $9/gal and seem to get along just fine. Energy costs have been very highly subsidised in the USA for a very long time. Most of our development and planning has been made with cheap energy as a fixture in our future vision. I feel reality is going to hit hard!

 

[Soverytired]

Why doesn't anyone talk about the need to drill more AND conserve more. We need to drill more and also conserve, plus switch to alternatives all at the same time, if we are to preserve our future.

THANK YOU!

That's what I'm talking about. The reason no one talks about it though is all the competing interests start screaming and drown each other out. You can't drill for oil, install solar/wind, process tar sands/oil sands, build nuclear, rationally grow ethanol (non this corn ethanol cripe), etc. without some do-gooder group screaming bloody murder.

 

[Soverytired]

T
As far as the price of gasoline, consider that Londoners pay something to the tune of $9/gal and seem to get along just fine. Energy costs have been very highly subsidised in the USA for a very long time. Most of our development and planning has been made with cheap energy as a fixture in our future vision. I feel reality is going to hit hard!

True. They don't really NEED to use much gas though. If you've ever ridden the Tube in London, you know their public transport is first rate. But it took 100 years to build, so don't expect it here. Most European countries are like this.

Actually, major cities here do ok in that regard (NYC, the BART in SFN). Problem is, unlike Europe, Americans have fully embraced the suburban lifestyle. Public transportation simply isn't feasible to our large cities with gigantic footprints (or "sprawl", which is too pejorative).

Ultimately, one of two things will have to happen. An alternate fuel that is affordable will be introduced, or suburbia will disappear and we'll return to a mix of heavily urbanized or highly rural areas. That's a bit down the road, but I'm not sure how else a nation built on cheap oil can endure.

 

[Lear70]

I think you're wrong. I think there's a psychological barrier at $5/gallon for most Americans and you'll see consumption take a dive once we reach that level. Time will tell, however, since I think $5/gallon is likely within the next year thanks to ridiculous speculators.

At the rate we're going, you're going to have $5 gas by the 4th of July...

That's going to kill summer vacations by car or by air, and a lot of angst is going to start, but I don't think people will suddenly stop buying gas. They still have to go to work, go to the grocery store, take the kids to little league, Sunday Church, etc., and they will...

 

[Soverytired]

Although I'd like to reach though the TV and punch whatever talking head is saying stupid things like "don't by gas from Company X to teach them a lesson", there is a VERY easy way Americans could put a huge dent in gasoline usage.

It's so simple . . . .drive 5 mph under the posted speed limit.

Most, if not all cars, perform better at constant slower speeds. Especially for anything over 65mph. I suspect the conservation impact of 100 million cars doing this immediately would be huge.

Never happen, of course. Nor should it, I guess. Those who can afford to fill up $75 dollar tanks shouldn't be denied their fun.

 

[spitfire1500]

My wifes company is looking at a 4 day work week at 10 hrs a day to cut a day of driving. This isn't some small mom and pop company she works for the state of NC.

 

[PCL_128]

What's becoming more and more appearant though is that it is no longer American demand alone setting the market price.

Irrelevant. The supply/demand curve has absolutely nothing to do with the absurd price that oil has risen to. It's all about speculators. The OPEC countries are currently producing an extra 2 million barrels of oil per day that they can't find buyers for. There simply isn't an excess in demand. Most experts put the non-speculation-induced price of a barrel of oil at around $75/bbl or less. This is all speculation, just like the real estate bubble and the tech bubble before that. Eventually the speculator dollars will come out, and it will all come crashing down. It's taking longer than I thought it would, but it'll still happen. Bubbles always pop. Only a matter of time.

 

[ATRCAPT]

Irrelevant. The supply/demand curve has absolutely nothing to do with the absurd price that oil has risen to. It's all about speculators. The OPEC countries are currently producing an extra 2 million barrels of oil per day that they can't find buyers for. There simply isn't an excess in demand. Most experts put the non-speculation-induced price of a barrel of oil at around $75/bbl or less. This is all speculation, just like the real estate bubble and the tech bubble before that. Eventually the speculator dollars will come out, and it will all come crashing down. It's taking longer than I thought it would, but it'll still happen. Bubbles always pop. Only a matter of time.

I think you're absolutely right. I just read an article that talked extensively about the oil bubble. The author figured that oil can sustain a price (minus the speculator factor) of 65 to 75 bucks a barrel. Not as good as 25 a barell in 2000, but a heck of a lot better than 135 plus!

If I can find the article online I'll post a link.

Fly safe

 

[JumpJetter]

The OPEC countries are currently producing an extra 2 million barrels of oil per day that they can't find buyers for.

Can you provide a source for this?


Cause there are reasonable arguments against it.

http://www.dallasnews.com/sharedcon...gy/stories/050508dnbusoilsidebar.3b519e7.html

Veteran oilman T. Boone Pickens has been beating
the drum about the supply and demand disconnect in the worlds oil supply for quite a while.
According to Pickens, “All the world can produce is 85 million barrels of oil per day, but the
world demand is nearer 87 million barrels of oil per day. Something has to give. It's the price.”

Supporting Pickens view about oil is a new report by the chief economist of the International
Energy Agency, Fatih Birol. Birol stated that the supply and demand disconnect “is a dangerous
situation”. His staff just finished a study of about 400 oil fields across the world, and as a result
he announced that the IEA will lower its oil supply forecast in its next annual report. This has
never happened before.

"We are entering a new world energy order,” Birol continued. “The prices are very high, and
demand did not respond in the last few years as much as one would have expected. The growth
in terms of production was not great. We did not see enough investment… The oil investments
required [to meet future demand] may be much, much higher than what people assume.”

In the past we have stated that the although there is rampant speculation in the oil markets
because of the supply and demand disconnect the current rally in the price of oil (priced in
dollars) has been caused by the government cheapening our currency thus making all things more
expensive. Consider the following the next time you have to pay $4.00 for a gallon of gasoline,
“since 2002, the U.S. dollar has lost 50% of its purchasing power”. 2002 was only 6 years ago!
So when you hear politicians screaming about what they perceive are predatory prices by the oil
companies, just remember that we have no one to blame but our free spending politicians and
the Federal Reserve for destroying the value of our currency.

 

[Two Feathers]

Is $130 oil a bubble?

Some say no. They say unlike the tech and real estate bubbles, there's no overabundance of supply. Others say these high prices are not sustainable.

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By Steve Hargreaves, CNNMoney.com staff writer
Last Updated: May 23, 2008: 12:35 PM EDT

Profiting from the gas crisis

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Quick Vote

What is to blame for high oil prices?

• OPEC
• Big oil companies
• Supply and demand
• They are unavoidable

or View results

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NEW YORK (CNNMoney.com) -- Oil prices have doubled in the past 12 months, surging nearly $8 a barrel in the past four days alone.
Big investment funds are putting money into oil futures as if Saudi Arabia's spigots will run dry tomorrow. At the same time, the supply of oil and the demand for it hasn't changed much in the last year.
So it raises the question: Is $130 oil nothing more than one big bubble?
The answer depends on who you ask.
"A bubble is where supply overwhelms demand," said Stephen Leeb, an investment manager who has authored two books on oil scarcity.
Leeb pointed to previous bubbles - like the tech bubble in the late 1990s where companies with zero earnings issued massive amounts of stock, and the real estate market a decade later where home builders went on a frenzy, overshooting the number of homes the market could absorb.
"But unless I'm missing something here, I don't see any massive increase in the supply of oil," he said.
Like many in the not-a-bubble camp, Leeb pointed to surging demand from places like China - some estimates see auto ownership there surging 30-fold in the next few decades - coupled with dwindling supplies as the main reasons behind pricey oil.
Thursday, the International Energy Agency gave advance warning that its previous forecast for supply and demand remaining in pleasant equilibrium over the next two decades was flawed. Its new projections, due in November, will say supplies may fall 10 percent short of demand, according to a report in the Wall Street Journal.
Leeb said Russia was already seeing a drop in production, and there's little evidence Saudi Arabia could increase production even if it wanted to.
"If the two biggest oil producers in the world can no longer increase production, that's a catastrophe, not a bubble," he said.


I sure hope that I'm wrong on this whole issue as does everyone else in the "Peak Oil" awarness camp. But I don't think that is the case. If you are interested in further research I recommend getting ahold of "A Crude Awakening". It's a well made documentary on the subject and everyone interviewed minus one lawyer has some serious credentials in related fields. It's a good starter kit.

 

[PCL_128]

Can you provide a source for this?

Just read it in a couple of articles within the last week or so. I'm sure you could find a reference with a thorough google search. I'm about to go fly, so I don't have the time to dig it up.