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Posted: 16 Aug 2006, 09:54
by Bozzio
I agree.
It's quite amazing to see how the daily course of events appears to mirror the expected consequences of higher oil prices - trouble in the Middle East, higher interest rates and inflation, etc, etc.
It's getting kind of weird living in a world that previously appeared only on the pages of a book.
Posted: 16 Aug 2006, 10:11
by hatchelt
with regards to the BBC story, I just got this comment on my journal:
Whilst I agree the US economic model is f***ed, I have doubts as to whether it's *this* economic cycle where the shit hits the fan. The Independent or Guardian online has articles in the last week or so showing that the house market here has avoided meltdown (and that the US one may do so too). The debt held by consumers is massive but, crucially, not unsustainable for the moment - in short, the economies have another boom in them yet. Of course, with each boom, more equity is withdrawn from houses etc and people become more sensitive to a given interest rate rise. Whilst we are far more sensitive to a 2% rise than say the 90s or 80s slumps, unless the biggie on the San Andreas fault or Tokyo happens, we could quite easily go through one more round of boom and bust before the US gets to live out the 1930s again.
I think I agree with this...basically they/we should hope it falls now, as another boom is only going to make it worse when it does eventually crash.
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Posted: 16 Aug 2006, 10:19
by isenhand
Ever had one of those experiences where you trip up but don?t quite fall over? You stager along for a bit and with each step you almost but not quite manage to stand up right then a few paces later the enviable happens and down you go.
I some times wonder if ?the collapse? would have that sort of feel to it.
Posted: 16 Aug 2006, 12:54
by Ballard
I wouldn't be too sure that BAU is finished quite yet...
http://www.bloomberg.com/apps/news?pid= ... UzduABKCDo
Did You Know There's a World Surplus of Crude Oil?: David Pauly
Aug. 16 (Bloomberg) -- Maybe the markets are lying. Crude oil keeps trading at $70 a barrel or more, where it's been pretty much since mid-April. U.S. gasoline costs on average about $3 a gallon, enough to make you think about walking. Still, there's a world surplus of crude oil.
Analysts say production of the low-sulfur crude refiners prefer now exceeds global demand by about 1 million barrels a day, equal to about 1.2 percent of consumption.
While basic economics suggest oil prices should be declining, Charles Maxwell, oil analyst at Weeden & Co. in Greenwich, Connecticut, says the surplus has done its work by keeping crude from soaring beyond the record $78.40 it hit last month.
Since last spring, when there was no surplus, he points out that Nigerian output has been reduced by civil unrest, Venezuela and Iran have both cut production and BP Plc has found a leak in its Alaska pipeline. If that had been foreseen, ``you would have predicted $90 oil,'' says Maxwell.
Oil prices per barrel may actually decline into the $60s next spring, when supplies usually become more abundant, if U.S. economic growth continues to abate, Maxwell says.
He says there is anecdotal evidence that industry and individuals are starting to conserve energy. Another reason why crude prices might fall: ``We're running out of bad things that can happen.''
Is the party over ?, there may well be one last bottle behind the sofa befor the drinks run out.
Posted: 16 Aug 2006, 13:10
by mikepepler
Ballard wrote:I wouldn't be too sure that BAU is finished quite yet...
http://www.bloomberg.com/apps/news?pid= ... UzduABKCDo
Did You Know There's a World Surplus of Crude Oil?: David Pauly
Aug. 16 (Bloomberg) -- Maybe the markets are lying. Crude oil keeps trading at $70 a barrel or more, where it's been pretty much since mid-April. U.S. gasoline costs on average about $3 a gallon, enough to make you think about walking. Still, there's a world surplus of crude oil.
Analysts say production of the low-sulfur crude refiners prefer now exceeds global demand by about 1 million barrels a day, equal to about 1.2 percent of consumption.
While basic economics suggest oil prices should be declining, Charles Maxwell, oil analyst at Weeden & Co. in Greenwich, Connecticut, says the surplus has done its work by keeping crude from soaring beyond the record $78.40 it hit last month.
Since last spring, when there was no surplus, he points out that Nigerian output has been reduced by civil unrest, Venezuela and Iran have both cut production and BP Plc has found a leak in its Alaska pipeline. If that had been foreseen, ``you would have predicted $90 oil,'' says Maxwell.
Oil prices per barrel may actually decline into the $60s next spring, when supplies usually become more abundant, if U.S. economic growth continues to abate, Maxwell says.
He says there is anecdotal evidence that industry and individuals are starting to conserve energy. Another reason why crude prices might fall: ``We're running out of bad things that can happen.''
Is the party over ?, there may well be one last bottle behind the sofa befor the drinks run out.
The problem is where they say "production of the low-sulfur crude refiners prefer now exceeds global demand". What do they mean by "demand"? Demand varies according to price. Right now, a whole load of developing countries can not afford oil they would like to use, so they just don't use it. If the price went back down to $50, "demand" would then be higher, and would outpace production again. These people in the news talking about supply and demand like this end up contradicting themselves - one moment they talk about the price causing demand destruction, then they say there is now spare supply! Has it not occured to them that maybe the price will rise until consumption is
lower than production, to give a surplus margin to cover accidents, etc.?
Posted: 16 Aug 2006, 17:59
by ianryder
It seems to me that there's a frantic effort going on at the moment to deny peak oil and anything that might push up prices even more. The rubbish that has just come out of CERA is enough proof of that for me...unless some very clever people are completely totally wrong, what they have been saying has no basis in reality.
It's starting to smell very much like the people who were paid to deny climate change to stop ANY action to prepare. It just seems like the same process being repeated to make sure the status quo continues as long as possible.
Will be interesting to see if things calm down a bit in the ME whether the lack of supply will keep prices high when there's no cover story!
Posted: 16 Aug 2006, 19:10
by john.rico
TPTB will use whatever means necessary to keep status quo as long as possible. No doubts about it.