Oil discussion - split from tropics discussion

[gtalum]

As this news has spread in the oil market I just saw at CNBC that oil is up over $1:50.

This is why everyone knows oil and gas pricing are screwy. The price of oil went up a significant percenmtage because an oil rig on an as-yet unproductive oil field is currently listing? Gimme a break!

This is why I'm doing my best to move off of the oil grid.

[rtd2]

As this news has spread in the oil market I just saw at CNBC that oil is up over $1:50.

This is why everyone knows oil and gas pricing are screwy. The price of oil went up a significant percenmtage because an oil rig on an as-yet unproductive oil field is currently listing? Gimme a break!

This is why I'm doing my best to move off of the oil grid.

Absolutly~ People dont realize this! ..Heck Chevron Pascagoula about 20 miles east of me(One of chevrons largest refinery's) COMPLETELY shut down operations for 3 days prior to Dennis! and when Georges hit in 1997 (Direct hit on Pascagoula) Chevron was CLOSED with NO Production for 7 Months while repairs were made!...Gas was like $.99 back then! FACT is... this is Another Excuse! to Hike the price! this rig wasnt EVEN working yet!

[storm4u]

payback for raising gas prices sucks doesnt it!!

[jimvb]

I can see where the price of oil would go up with the damage to the Thunder Horse. The reason why it affects the price of oil so much is that the world is running out of cheap oil. Demand has grown and just about hit supply capacity, meaning the oil market is stretched so thin that a minor event (50,000 barrels out of 84 million a day worldwide) will cause major rises in the price of oil. This is discussed more on the Peak Oil Forum, at

http://www.peakoil.com

and go to Forums. Also they have a thread on this event

http://www.peakoil.com/fortopic9807.html

and at least one on these recent hurricanes and tropical storms.

Now with Emily coming, that is going to cause oil to go even higher, and gasoline too.

[InimanaChoogamaga]

I can see where the price of oil would go up with the damage to the Thunder Horse. The reason why it affects the price of oil so much is that the world is running out of cheap oil. Demand has grown and just about hit supply capacity, meaning the oil market is stretched so thin that a minor event (50,000 barrels out of 84 million a day worldwide) will cause major rises in the price of oil. This is discussed more on the Peak Oil Forum, at

http://www.peakoil.com

and go to Forums. Also they have a thread on this event

http://www.peakoil.com/fortopic9807.html

and at least one on these recent hurricanes and tropical storms.

Now with Emily coming, that is going to cause oil to go even higher, and gasoline too.

A Texan oil analyst says we could be at $100 a barrel by the winter. That wouldn't be good.

http://www.driversdrive.com/cgi-bin/ddblog.pl?ddblog=6678051

[feederband]

Now with Emily coming, that is going to cause oil to go even higher, and gasoline too.[/quote]

A Texan oil analyst says we could be at $100 a barrel by the winter. That wouldn't be good.

http://www.driversdrive.com/cgi-bin/ddblog.pl?ddblog=6678051[/quote]


Good for the oil companys......

[InimanaChoogamaga]

Good for the oil companys......

true

[corpusbreeze]

As this news has spread in the oil market I just saw at CNBC that oil is up over $1:50.

It wasnt even production yet. They will raise the price of gas on any bad news.$$$

[digitaldahling]

As this news has spread in the oil market I just saw at CNBC that oil is up over $1:50.

This is why everyone knows oil and gas pricing are screwy. The price of oil went up a significant percenmtage because an oil rig on an as-yet unproductive oil field is currently listing? Gimme a break!

This is why I'm doing my best to move off of the oil grid.

Absolutly~ People dont realize this! ..Heck Chevron Pascagoula about 20 miles east of me(One of chevrons largest refinery's) COMPLETELY shut down operations for 3 days prior to Dennis! and when Georges hit in 1997 (Direct hit on Pascagoula) Chevron was CLOSED with NO Production for 7 Months while repairs were made!...Gas was like $.99 back then! FACT is... this is Another Excuse! to Hike the price! this rig wasnt EVEN working yet!

It's SOP for refineries along the coast to start shutting down and be completely offline 36-48 hours before a storm is predicted to make landfall. As soon as the system has passed out of the area (sometimes even sooner) plants are put back online and into production. You cannot have a refinery/chemical plant fully operational with a hurricane headed for the area. Think for just a second or two about the potential disaster that could occur. As for Chevron being down so long, they had a fire and damage. And, by the way, people were injured. It's not like they wanted the refinery down so they wouldn't produce and make money. Many people also don't realize that Ivan caused underwater mudslides that damaged many miles of pipelines and moved platforms 70 miles away from their original locations. Some are still not operational because of the difficulty of location the lines.

When you consider the damage and lost production caused by Ivan and couple it with Cindy and Dennis, back to back, you must know that production will be down. When demand is high (summer vacations) and supply is low (pick a storm, any storm), prices will climb.

[JenBayles]

It's SOP for refineries along the coast to start shutting down and be completely offline 36-48 hours before a storm is predicted to make landfall. As soon as the system has passed out of the area (sometimes even sooner) plants are put back online and into production. You cannot have a refinery/chemical plant fully operational with a hurricane headed for the area. Think for just a second or two about the potential disaster that could occur. As for Chevron being down so long, they had a fire and damage. And, by the way, people were injured. It's not like they wanted the refinery down so they wouldn't produce and make money. Many people also don't realize that Ivan caused underwater mudslides that damaged many miles of pipelines and moved platforms 70 miles away from their original locations. Some are still not operational because of the difficulty of location the lines.

When you consider the damage and lost production caused by Ivan and couple it with Cindy and Dennis, back to back, you must know that production will be down. When demand is high (summer vacations) and supply is low (pick a storm, any storm), prices will climb.

Thank you! I'm getting really tired of hearing all the demonizing of the industry that provides my income. Most of the Gulf production as well as refineries were shut down for Dennis so of COURSE that's going to impact availability and pricing. Oil pricing has never been stable in it's entire history if anyone cares to read up on it. If paying for fuel so upsets you, I suggest you ride a bicycle, purchase no manufactured goods, use no plastics, turn off your heaters and air conditioners, pull the plugs on all appliances, turn in your cell phones, wear only homespun cotton and linen that you grow and harvest yourself, grow and harvest your own food, and forget about those disposable diapers. Like your current standard of living? Thank the oil industry.

[Cape Verde]

There is a common misconception that the oil industry sets prices. If that were so, oil wouldn't have been under $10 per barrel is 1999 sending many companies belly up.<P>Oil prices are set the same way the price of gold, pork bellies, and corn is set -- in the commodity pits of the NYMEX.<P>Perceived supply and demand.<P>Can speculators drive up the price of oil and gasoline further than justified? Of course. But that can only be a temporary phenomenon because market forces always prevail in the long run.<P>If anyone is to blame for the current high oil prices, it is China. They were a net exporter of crude oil 10 years ago. But now their citizens are trading in their bicycles for cars, and they have a billion citizens. They now import oil, and we are competing with them for those barrels. That drives the price up.

[HurriCat]

(I know the Mod-clamp-down is coming to this thread)

Anyways, Every time even a seagull poops on a platform or maybe a rat runs across a refinery floor somewhere, then it's "To da moon, Alice" at the pumps.

The old supply-n-demand "dog" isn't just beyond "hunting" - I'd say it's PETRIFIED by now. If I'm wrong, then how come every time they cite production or supply or WHATEVER - I can still go anywhere in the country and buy all of the gas I want?

At the HIGHER prices, of course. (Cha-ching, Bay-bee!)

[Trader Ron]

China and India are importers of Oil, and it will only get worse. There hasn't been a large Oil Discovery in the last THIRTY YEARS. When was the last refinery built? Everyone say's. NIMBY !
I told everyone to buy Energy stocks 6 years ago, but everyone said...give me tech and more tech.

Oil is still cheap commodity compared to Inflation. Have you bought a Steak recently? How about College Tuition at a private university. That's REAL money.

[Mac]

There is a common misconception that the oil industry sets prices. If that were so, oil wouldn't have been under $10 per barrel is 1999 sending many companies belly up.<P>Oil prices are set the same way the price of gold, pork bellies, and corn is set -- in the commodity pits of the NYMEX.<P>Perceived supply and demand.<P>Can speculators drive up the price of oil and gasoline further than justified? Of course. But that can only be a temporary phenomenon because market forces always prevail in the long run.<P>If anyone is to blame for the current high oil prices, it is China. They were a net exporter of crude oil 10 years ago. But now their citizens are trading in their bicycles for cars, and they have a billion citizens. They now import oil, and we are competing with them for those barrels. That drives the price up.

You’re right on the money, Cape Verde.

I extensively researched this topic last year while pursuing undergraduate coursework in international relations/economics.

What I was able to determine through my study of this problem is that the rising petroleum prices we are currently experiencing are not a trend, but a pattern—brought about in large part by China’s rapid industrialization. It is unlikely that prices will greatly fluctuate, as they did in the 70s, but rather continue to escalate as supplies dwindle.

There are many factors which contribute to our current problem. To begin with, there have been no major discoveries of oil reserves in the U.S. since the 1970s, and very few major discoveries worldwide since that time. Last year, the world hit “peak” oil production—the production point at which one half of the world’s oil reserves have been depleted. Meanwhile, consumption continues to escalate. For years, the U.S. has been the largest consumer of petroleum, with Japan being the second largest consumer. Last year, China—who had previously been a net exporter of petroleum products—surpassed Japan and became the second largest consumer of petroleum products in the world.

China is, quite obviously, going through a period of rapid industrialization, much as the U.S. did in the 19th century. What makes China’s industrialization different than our own is that China’s industrialization is taking place after heavy population has already taken place. All other industrialization has occurred in rather sparsely populated nations, where the population gradually increased as industrialization occurred.

Think about this—agricultural communities are only able to support “x” number of people, because they can only produce enough commodities to support “x” number of people. But industry—and specifically export industry—can support far more people per square mile of production than can agriculture. Industrial goods are traded for food goods, with profit left over for continued economic/industrial expansion and other needs.

Because China is already heavily populated, its industrial expansion is causing some rather unique problems. Whereas U.S. industrialization resulted in gradual population increases as industry’s demand for labor increased, China’s industrialization is occurring much more rapidly. Because industry is far more profitable than agriculture, farmers are abandoning their land in droves to seek employment in industrial areas. And industry is beginning to swallow up this abandoned farmland to support its continued expansion. What you end up with is more heavily populated urban areas being supported by more sparsely farmed rural areas.

Basically, a nation needs three things in order to support rapid industrialization—petroleum, food, and people. China already has the manpower (people), and we are already seeing the increased demand for petroleum. But in the very near future we will begin to see China’s increased demand for food. Because, simply put, China cannot support its population with its own food production capabilities.

If anybody is interested, there is a very interesting book on this topic by Lester R. Brown—a noted environmental economist—called “Who Will Feed China?: Wake-Up Call for a Small Planet.” Mr. Brown has extensively studied the effects of industrialization upon food consumption. What he discovered is that dietary changes occur right along with industrialization. Whereas China’s population previously consumed rice and fish as its staple foods, industrial wealth brings about an increased demand for poultry, pork, and beef. Of course, in order to raise poultry, pork, and beef you need grain—and lots of it. Mr. Brown theorizes—and quite accurately I think—that, as China’s industrialization unfolds, we will see a dramatic increase in demand for grain. In the not-so-distant future, this demand will begin to outstrip world supplies. Just as oil prices are now, food prices will begin to spiral out of control. Ultimately, this global competition over petroleum and food products could lead to WWIII.

I’m not trying to be a fatalist here—just making you all aware of the results of my research in this area.

As has been said, this all boils down to supply and demand—or, at least, perceived supply and demand. But rising oil prices are just the beginning. There are more serious problems for the world looming just over the horizon. And unless we begin addressing these problems now, all hell is going to break loose in the next couple of decades.

[Comanche]

good post Mac. I have actually been looking at the whole grain scenario as the next bull market to explode. there is one thing though that has to be watched, it could send everything into an economic spiral, BIRD FLU. stay tuned.

[Mac]

good post Mac. I have actually been looking at the whole grain scenario as the next bull market to explode. there is one thing though that has to be watched, it could send everything into an economic spiral, BIRD FLU. stay tuned.

Hey, Commanche! I grew up in Seabrook--graduated from Clear Lake High.

Yes, the bird flu is a very serious problem looming over the immediate horizon. I work at Vanderbilt Children's Hospital and I was disturbed when we were recently told that all health care workers in the U.S. would either need to get a flu shot this fall or sign a release stating they refused the flu shot. In other words, they are saying "Don't say we didn't warn you."

The bird flu is not in itself the issue. Up until now it has only infected poultry and those who came into direct contact with infected poultry. The fear is that it will mutate by the time it hits the U.S. later this year. If it mutates into an airborne virus, it could lead to a pandemic crisis. And if it mutates later, rather than sooner, we won't have time to come up with an effective immunization. The elderly and the young will be at greatest risk, but this is a rather deadly bug--moreso than SARS.

[Comanche]

mac,

grew up in el lago, also clear lake high class of 90. small world.

[GalvestonDuck]

(I know the Mod-clamp-down is coming to this thread)

Yup!

[Mac]

(I know the Mod-clamp-down is coming to this thread)

Yup!

What's this "Off Topic" nonsense? Perhaps you should create a "Socio-economic/Political Ramifications of Weather Anomolies" forum.

[gtalum]

I'm not sure I buy "peak oil", but I'm not sure it's untrue, either. Either way, I hope it spurs development of far more nuclear power in the USA, and ultimately more research into nuclear fusion.