Oil Price Watch

[Chip Haynes]

Apparently that "adjusted for inflation" thing is not a hard and fast number. The high end number I've seen the most often is "$101"; that is, oil would have to hit $101 now to be equal in market value to whatever it was way back when. Of course, if the price of gas refuses to budge- for whatever the reason, then the price of oil hardly matters to the Lumpenprole. They aren't buying crude oil by the barrel.

But they will, eventually, be paying for it.

[REDREAMER]

one of the things i noticed too the adjusted for inflation number seems to keep changing... i guess i just dont understand it...

but the comparisons seem to be being manipulated...

[Chip Haynes]

Mark Twain, as always, said it best:

"There are lies, damn lies, and statistics."

The "inflation-adjusted" crap doesn't matter. It's just a way for a reporter to fill the required word-count in an article. The price is the price, right now, today.

And that price is getting mighty close to $92.00, by the way.

[suburban_junkscape]

We're really getting a parabolic rise this year in oil prices. I kind of expected it to level off and rise at a slower pace. I expected housing prices to not fall quite this fast. I still think the stock market will take out its old highs due to interest rate cuts but the party could be coming to an end real soon. We're definitely looking at a recession next year or even this year and even with the massaged official statistics. And this is a recession that will essentially never end.

[Chip Haynes]

Well, I think we do see the ocassional shock retreat after a particularly quick spike- a sort of, "Oh my, what have we done?" drop in the price, but then that never brings the price lower than it was. It always stays a bit higher- ready for the next spike. Stair-stepping, as it were. And if the overall price gains as it has been lately, hundred dollar oil is not that far away.

And neither is five dollar gas.

[willow]

Who cares what oil costs compared to what it cost in the '80's? We are living in a different world. The fact is that everything else has gone up dramatically, as well, making any increase harder to absorb. The most  notable difference is that the increase in the 80's was temporary, whereas increases today are not only permanent, but are only going to get worse before our eyes.

[Coyflyte]

Right on, willow!  Who cares?  What we pay now, is what we pay now.  Those who try to adjust the price of oil for inflation and compare it to way back when are just trying to down play the sharp price increase.  They're floating on a barge down the River Denial.

[BeefSupreme]

Its a leveling effect.  Americans buy oil to waste in SUVs, the Asians spend their money to build their countries.  So I guess that they get a better bang for their buck and can afford to bid it up to +90. 

[Renegade Rumble]

"Crude Oil May Fall as OPEC Production Increases, Survey Shows"
http://www.bloomberg.com/apps/news?pid=20602099&sid=aij4ymjSQHYs&refer=energy

That's what the mystical "survey" showed for this week too. 

[Chip Haynes]

Shouldn't that read, "Crude Oil May Fall IF OPEC Production Increases..."?

[1234]

49%? Impressive consensus.
Any reason to put a headline out like that the MSM will take.

[1234]

91.86 add another 1.40$ to the barrel. 8.14 dollars to go.

[Bionic_Oil_Gut]

The falling greenback is going to be the nail in the coffin on pump prices, coupled with peak you guys are the first in line to feel it hard. Not a bad indicative tool actually.

[Chip Haynes]

At some point, OPEC will switch to the Euro if only to make the price look cheaper.

Also, at some point, US retailers will switch to selling gas by the liter- again, to make it look cheaper.

You heard it here first.

 

[bkwillia]

The only countries that will stop trading oil in the US$ are those aligned with terrorism who are facing sanctions or may be in the future.  Those holding massive US$ reserves are far better off trading oil for USD since the oil trade itself boosts the value of the dollar.  Rising oil prices, due to demand, I suspect will support the dollar.

 I suspect the decline in the dollar that we have seen in recent months, is partially caused by investments being shifted into Asian markets out of American ones.  When the Asian bubble pops due to lack of oil and coal at reasonable prices, money will flow out of emerging Asia markets into the Yen.  The Yen will spike, and as traders take profits, the money will flow back into US bonds which yield far more than the Japanese bonds; assuming Bernanke doesn't cut rates down to sub 1%.

Anyway... I think that as oil crosses $100/bbl, we will see the US$ stabilize, possibly rise.  There are trillions of dollars of oil derivatives leading years into the future.  If the price of oil doubles, the value of these derivatives rises too.  Due to the risks involved, these derivatives cant be leveraged heavily, so real money will need be converted to US$ for funds to keep buying up oil futures.  People might even sell gold to buy oil... gold has been under performing oil.