Oil Price Watch

[Chip Haynes]

Every time I see that line about a tanking dollar, I'm reminded of Firesign Theater's classic line, "The sun's not going down- the horizon is moving up!"

   It hardly matters which it, is it still gets dark. As for the dollar, the result is also the same. The average American sees no difference between a tanking dollar and rising prices. It's the same thing- especially when you consider that the price of oil is tied to the price of just about everything it makes and touches. And they will cry just as loudly- and just as long- when these new price levels make their way to their local gas pumps.

I can hardly wait.

 

[feelingweird]

Every time I see that line about a tanking dollar, I'm reminded of Firesign Theater's classic line, "The sun's not going down- the horizon is moving up!"

   It hardly matters which it, is it still gets dark. As for the dollar, the result is also the same. The average American sees no difference between a tanking dollar and rising prices. It's the same thing- especially when you consider that the price of oil is tied to the price of just about everything it makes and touches. And they will cry just as loudly- and just as long- when these new price levels make their way to their local gas pumps.

I can hardly wait.

 

I disagree. If the price is moving up because a hurricane has wiped out production somewhere, or Nigerian Militants have knocked out some production, that's one thing. The Federal Reserve BAILING OUT BANKS AND CAUSING THE PRICE OF EVERYTHING TO GO UP is something entirely different.

This should not be lumped in with peak oil per se. This is market action. Sure the result is more expensive oil, but it's not being caused (at least all of it) on a disruption or removal of supplies. It's being caused by purely above ground forces. This is the result of Ben "helicopter" Bernanke pouring BILLIONS of dollars into the markets several weeks ago, and as I stated then, this is the ultimate result. Prices MUST go up somewhere. Well here it is manifesting itself FIRST in the most basic of commodities. It will take another 2 - 4 months for it to show up on the grocery store shelves where milk will start costing 4 bucks a gallon and meat prices start to sky rocket.

There is a very big difference.

Robert

[Chip Haynes]

The reasons might be different, but the result is the same: Things cost more. To the average American, it doesn't matter WHY they cost more, only that they do. There is no difference in paying $4.00 for gas bacause Hurricane Zelda just wiped out the Gulf of Mexico and paying $4.00 for gas because the US dollar is worth less against the Euro, Yen or Rupee.

The average American couldn't care less WHY.

[MiccyNarc]

And the effect is the same.   If the dollar tanks and I end up paying $10 a gallon for gas, that's just as bad if not worse than if the price actually went up.  The problem lies in the fact that I wouldn't be earning enough money to compensate. So I'll demand a raise, I get one, but that results in goods being made more expensive in order to pay me, now I need more money because the goods got more expensive, etc. etc. etc. 

And there goes our economy. 

[Chip Haynes]

Exactly my point.

Thank you.

[DuckHunter]

Now that the price is back in record territory, the MSM is paying attention again.  Won't be long until everyone starts catching on now.

[SaveThePlanet]

Now that the price is back in record territory, the MSM is paying attention again.  Won't be long until everyone starts catching on now.

Didn't we say that when the price broke $40/BBL? And $50/BBL? And $60/BBL? And $70/BBL?

I'd say everyone has been catching on for YEARS, the problem is, there isn't enough of a problem. Now, if someone would actually cut off SUPPLY, THEN we could have some fun.

[BlueOwl]

Yeah, I don't think anyone will be catching on...just pointing fingers.

And really, unless the price of a gallon of gas goes up it won't matter.  Most people don't pay attention to the price of a barrel of oil.  I know, in general, I have no use for knowing that number.

[Lowblow]

I see USA gasoline prices steadily or maybe more accurately JERKING towards $4.50 gl. by 3Q 2008 and $6.00 gl. by early 2009.

[SaveThePlanet]

I see USA gasoline prices steadily or maybe more accurately JERKING towards $4.50 gl. by 3Q 2008 and $6.00 gl. by early 2009.

Maybe. And maybe the 4th Quarter recession generated by the idiot lending crisis tanks the economy to the point where everyone sells their Hummers, and people stop driving randomly much, and the price crashes because no one is buying any. Just as likely I suppose.

[Coyflyte]

I'll say it yet again - it's just like boiling a frog.  You plop it in a pot of cold water and put it on the stove and turn up the heat.  The frog will just sit there and cook to death not noticing the slow rise in temperature.  Consumers aren't all that different when it comes to gas prices.  They'll bitch as prices slowly go up but that gives them time to adjust.  There's no immediate crisis.  We either need a immediate jump or a long, sustained increase with no seasonal regressions in price to get the everyone's attention.

[Emmy]

For those of you who don't understand how the generally-reported "price of oil" is derived, I'd highly recommend the book "Oil On the Brain" by Lisa Margonelli.  I really loved this book.  For me, every chapter contained at least one "no sh*t!?" revelation of some sort.
 
The author basically follows the oil "process", starting from a convenience store and working back to several countries that produce oil.  I've heard the book described as a "travel book" about oil, because Margonelli literally goes to every place that she discusses, then, as a talented journalist, she writes about it with much humor and some pathos.  (The chapter on Chad is really quite heartbreaking.)

Along the way to Chad, Venezuela, Iran, etc., she stops in at the NYMEX.  Oil contract bids are for as far as 6 *years* in the future, and, according to Margonelli, only 5% of the contracts are actually ever exchanged for oil.  The rest are just continually bought and sold.  There's also a chapter on how the price of gas is set.  There's not much direct connection between these two processes...other than the fact that, IMHO, the people involved in setting either are all going to die young of stress-related illnesses.

If this sound boring (though it shouldn't to the people on this forum), it's not, because she's really a talented writer.  I don't think she ever uses the term "peak oil", but the concept runs, matter-of-factly, through everything she writes.

[goanna]

The oil price, tht's why the EUR is stronger now than the dollar, because they are less dependent on oil.
As many people can't afford to drive anymore you should now really react and ask for a better public transport.
How do they all get to work for shopping?
Better do it now, if oil prces are up buses and trains are more expensive as well.
Buy good bikes now I think prices will raise.

When does the winter heating season begin? October? How much will the oil be then?

[DuckHunter]

Now that the price is back in record territory, the MSM is paying attention again.  Won't be long until everyone starts catching on now.

Didn't we say that when the price broke $40/BBL? And $50/BBL? And $60/BBL? And $70/BBL?

I'd say everyone has been catching on for YEARS, the problem is, there isn't enough of a problem. Now, if someone would actually cut off SUPPLY, THEN we could have some fun.

I should have put a wink or rolling eye face next to that statement...I was being sarcastic.

[Chip Haynes]

In the real world, the frog actually does crawl out of the pot when the water gets too warm. Really.

   We, on the other hand, go blithely along, driving to Starbucks and Wal-Mart and The Big Game. We are not as smart as frogs, who can at least sense when things are warming up. If you ask ten co-workers today what the price of oil might be, I'd be amazed if any one of them gave you the right answer, or anything even close. We- we here being people other than you and I- watch the price of gas, not the price of oil; and the price of gas has remained virtually unchanged as the price of oil has gone up to dance on the roof. Save The Planet got it right: Cut off the supply and watch the fun.

Until then, it'll be same ol' same ol'.

No matter what the price.