Oil heading for the stratosphere....

[ATA73Pilot]

LONDON (Reuters) - U.S. oil prices have hit fresh record highs on fears of a disruption in supplies from world number two exporter Russia and doubts over oil cartel OPEC's ability to make up for any shortfalls.



OPEC is pumping at more than 95 percent of capacity, the highest for a quarter of a century, giving it little room for manoeuvre in an emergency.

U.S. light crude struck $43.34 a barrel on Friday, the highest in its 21-year history on the New York Mercantile Exchange. It was last trading at $43.18, up 43 cents.

In London, Brent crude scaled heights not seen since the Gulf War, peaking at $39.90, before trading at $39.68.

Oil staged its first assault on historic highs on Wednesday after news Russian oil giant YUKOS might face a ban on oil sales while courts try to enforce a multi-billion-dollar tax debt.

Prices retreated after Thursday's reprieve by the justice ministry allowed YUKOS to keep pumping, but the market remains on edge over the company's fate.

"There's a sense with YUKOS of postponing the inevitable. YUKOS's financial problems will get worse in the coming weeks and the market is very nervous that we will see some of its 1.7 million barrels a day shut in for some period," said Steve Turner, an oil analyst at Commerzbank Securities.

YUKOS has said the company could collapse by mid-August because of a freeze on its bank accounts and assets, adding that its rail shipments of oil, which make up a quarter of its total sales, could be affected soon. YUKOS, whose former CEO Mikhail Khodorkovsky is on trial for tax evasion and fraud, pumps a fifth of Russian oil.

 

[TriStar_drvr]

This is not good at all. I think ATA's projections were based on oil prices of around $35 a barrel.

 

[ASH]

What goes up, must come down....I hope.

 

[G4G5]

I had dinner with a close buddy of mine who has his own oil futures business on the floor of the NY Merc.

He predicts $50 a barrel is not that far off. "If it's another cold winter we will see $50 a barrel within 6 months"

 

[General Lee]

A lot of this recently is due to the Yukos oil company in Russia and the their debt to Russia. If Russia throws them into bankruptcy---their own people will also have a very cold Winter---and their economy will shut down. Unlikely.


Bye Bye---General Lee (If Lowecur can be an analyst----so can I)

 

[atpcliff]

Hi!
I read a lot about oil and alternatives to oil. About two months ago an analyst predicted that gasoline prices would go down to about $1.60 by XMas, but would be back up to about $3/gal by next summer.

While the oil prices may go up and down somewhat over the next year or so, the general trend is for them to go up, up, up.

A very knowledgable oil industry banker has been telling everyone in the industry that Saudi is already is at maximum capacity, and their oil production will only go down over time. The Saudis say they have lots of oil, but they're very vague and they won't let experts examine their fields in detail.

The big problem is that China's oil needs are growing exponentially, and India is starting to use oil. If I was in the airline industry, I would plan on oil staying above $40/barrel permanently, and be prepared for it to cost $50-$60/barrel within the next 3 years.

The US has the number one wind and solar energy potential of any country in the world. We should develop our natural resources, and not be dependent on foreigners for the security of our country, as we do now.

We currently import about 60% of our oil, and that percentage is increasing.

Cliff/YIP

PS-We have enough oil in Alaska to provide about 6 months worth of oil, so that is not a long-term solution.

 

[DLslug]

Hey...I have a great idea!!


Maybe we should raise ticket prices??...Nah, how stupid of me.

All for now,

DLslug

 

[General Lee]

I believe we get a majority of our oil from Mexico, Canada, and good ole Venezuela. The guy that is the dictator in Venezuela recently fired everyone that ran the state-run oil company. That has caused a large disruption in the 1 million or so barrels a day to the US. This is the "perfect storm" in the oil industry---terrorism, busy Summertime, Venezuela and Russia political problems, and extra needs from China and India. Talk about crazy! But, we all know who really is at fault here......right? Labor! (hey, raise the fares $10....)


Bye Bye--General Lee

 

[satpak77]

here ya go....

oil import stats

http://api-ec.api.org/filelibrary/ImportsApril.pdf


be advised Venezuela dictator Hugo Chavez is not really a "friend" of USA, however he is not an enemy either. He is a confirmed personal friend of Fidel Castro and is also aligned with Castro's ideas.

However as you can see, we do accept his oil

 

[General Lee]

Wow, I guess I was right (again) about Canada and Mexico being the two largest oil producers for us here in the States. You would think that we could use some more pressure on our buddies to the North and South with our NAFTA agreement---but then they might tighten the supply and hurt us back! We might then have to take them over with our military---and later that week we all could buy cheap land near Cancun!


Bye Bye--General Lee

 

[PCL_128]

PS-We have enough oil in Alaska to provide about 6 months worth of oil, so that is not a long-term solution.

This is a common myth perpetuated by the DNC. In truth, if we opened up the entire ANWR up for drilling we could have years and years of oil available.

 

[General Lee]

But, we might kill 3 deer, one moose, and a crazy chipmonk.


Bye Bye--General Lee

 

[freddriver]

Somewhere in my distant academic past I thought I heard where the US domestic oil production capabilities would become profitable once again once crude hit a certain price level. Can anyone tell me the approximate price level where this may occur? My uninformed understanding was that the other exporters i.e. Middle East/Russia wanted to keep US producers dormant since the bulk of the costs involved re-initiating production and the per unit cost would drop once the production facitities were on line. As a disclaimer, my wife worked for a Texas oil and gas company a few years back and I got the bulk of this information over a searing hot grill and a six pack of Shiner Bock.

 

[atpcliff]

Hi!

I don't know about any connections between the DNC and the estimates that ALL the oil in Alaska would supply the entire US for about 6 months. I have read a lot about the oil in Alaska-estimates range all over the place-the ones that I believe have the most credibility put it at about a 6-months supply.

However, drilling more in Alaska will do nothing for us as far as energy independence goes. Because of geography, if we were to open up all of Alaska, most of that oil would be sold to Asia-it wouldn't be used by us anyway.

Currently, US oil producers make money. Unfortunately, US oil production peaked in about 1973. The guy who predicted that (Hubble), also predicted a world-wide oil peak-which experts who study Hubble now believe will occur within the next 10 years-maybe in as little as 2 or 3.

When worldwide oil production peaks, the cost will start to continually rise, until it is no longer economically feasible to use oil as a transportation fuel.

Cliff
YIP

 

[satpak77]

Somewhere in my distant academic past I thought I heard where the US domestic oil production capabilities would become profitable once again once crude hit a certain price level

I don't know of that theory but I do know that "the market is always right" and that the market ITSELF determines price, not Phd's in Economics, not CNBC experts, not the CEO of Exxon. The MARKET decides the price, and we may not like it, but whatever xxx trades at, is WORTH that, period.

Example:

Say I just got my mom's Chevelle up to speed after being in the backyard under a tarp for years. I put new tires on it, painted it, refurbed the interior, and even got it running good. My green cash put out and my energy makes me conlcude that "$5000" is a fair price for this car. Some "experts" at the Hot Rod shop tell me the same thing.

I list it in the paper. It is now listed in the used car market.

Over the course of a month, I get multiple calls and offers, all in the 1800 to 2200 range. Nobody wants to pay me $5000, the price that I think, that I believe, is correct. Nope. Therefore, the MARKET will only offer me $2000
(+/-) for the car. Guess what? The car is worth just that, $2000.

Everything trades for what it is worth at the time.

So oil, at $44 a barrel, is indeed worth that price and that is indeed the "correct" price. Go to various websites and other TV shows and people can be found claiming OPEC is running a conspiracy or Big Oil is jacking up prices, etc etc. However, supply and demand is "guilty" of oil's rise.

And right now, oil is worth $44.

Note: This applies to the stock market also. Some people bought Enron when it went from $80 to $40 because it was "half price", a "steal". LOAD UP on Enron the CNBC experts said. Why? It is "worth more". Look at the company, its future potential, its future growth. Buy more now.

Enron went from $80 to $40 (or lost 50%) because it was no longer worth 80 bucks a share. Later, as Ken Lay and others unloaded more, and the SEC case began, it was worth less. As more and more shares were offloaded, the price went down more.

Soon Enron was worth .05 cents, and wiped out many Americans retirements who trusted the experts on CNBC.


going to bed, sorry to ramble

later




(still on flightinfo----> something is wrong with me...)

 

[lowecur]

Canada's 1.6 Trillion barrels of oil reserve, are the largest behind Saudi Arabia. It comes from tar/oil sands, and at $25. per barrel it will return about 10% to the investors. One doesn't have to be a rocket scientist to see with oil in the $50 barrel range, this will become a major focus for further development.

They are producing around 1 million barrel per day at the present. I don't think it's too unreasonable to expect a doubling of that number to occur in the near future.

With the unreliable sources of today and the growth of China, I think the push will go forth to bring this resource up to full potential.

 

[FlyChicaga]

...over a searing hot grill and a six pack of Shiner Bock.

I don't know what this thread is about... I saw this and immediately went into dream sequence!

 

[freddriver]

If only you were a 21 year old FEMALE UTSA student...man, I need to stop typing...

 

[414Flyer]

Well you have groups like GreenPeace who are for the ending of domestic oil exploration and production.

And then left wing/eco groups who say "well if a field wont supply all our oil needs, we shoudnt drill there" etc etc or similar statements.

Heck then we shouldnt drill any wells then with that logic, no petroluem field will take care of the whole country. But several of those fields together, would greatly increase domestic oil production.

Open up ANWR, open up some of those offshore areas, and it would be a big help.

I think the left just assumes gasoline just appears magically from a gas station pump. They seem to have no idea what it takes to get it there, for they always oppose any new areas of production.

 

[GogglesPisano]

I don't know of that theory but I do know that "the market is always right" and that the market ITSELF determines price, not Phd's in Economics, not CNBC experts, not the CEO of Exxon. The MARKET decides the price, and we may not like it, but whatever xxx trades at, is WORTH that, period.

Example:

Say I just got my mom's Chevelle up to speed after being in the backyard under a tarp for years. I put new tires on it, painted it, refurbed the interior, and even got it running good. My green cash put out and my energy makes me conlcude that "$5000" is a fair price for this car. Some "experts" at the Hot Rod shop tell me the same thing.

I list it in the paper. It is now listed in the used car market.

Over the course of a month, I get multiple calls and offers, all in the 1800 to 2200 range. Nobody wants to pay me $5000, the price that I think, that I believe, is correct. Nope. Therefore, the MARKET will only offer me $2000
(+/-) for the car. Guess what? The car is worth just that, $2000.

Everything trades for what it is worth at the time.

So oil, at $44 a barrel, is indeed worth that price and that is indeed the "correct" price. Go to various websites and other TV shows and people can be found claiming OPEC is running a conspiracy or Big Oil is jacking up prices, etc etc. However, supply and demand is "guilty" of oil's rise.

And right now, oil is worth $44.

Note: This applies to the stock market also. Some people bought Enron when it went from $80 to $40 because it was "half price", a "steal". LOAD UP on Enron the CNBC experts said. Why? It is "worth more". Look at the company, its future potential, its future growth. Buy more now.

Enron went from $80 to $40 (or lost 50%) because it was no longer worth 80 bucks a share. Later, as Ken Lay and others unloaded more, and the SEC case began, it was worth less. As more and more shares were offloaded, the price went down more.

Soon Enron was worth .05 cents, and wiped out many Americans retirements who trusted the experts on CNBC.


going to bed, sorry to ramble

later




(still on flightinfo----> something is wrong with me...)

You very wise man.

BTW: How big is OPEC? I hope it does not include Russia.