$100 oil anyone?
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Topic: $100 oil anyone?
Posted By: IVNORD
Subject: $100 oil anyone?
Date Posted: January 03 2008 at 13:45
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The price of oil touched the $100 mark yesterday and briefly crossed it again today.
Just 9 years ago, in December 1998, it hit its multi-year low of $10.35. In April 2003 after the war began, it was as low as $25.
Just curious how people feel about it.
(In case you don't care a tiny bit, it will affect the price of CDs you buy too)
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Replies:
Posted By: Blacksword
Date Posted: January 03 2008 at 13:59
I'm no economist, but I imagine big increases in the price of oil will touch many areas of our lives we currently take for granted, or dont consider related to oil price.
Surely the price of oil will continue to increase as oil producing regions become ever more unstable, and the demand for oil increases the world over, but most notably in the US, India and China.
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Posted By: rushfan4
Date Posted: January 03 2008 at 14:05
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Probably a common known fact, but I was watching Jeopardy the other day and the question had to do with "Which two countries the US buys the most oil from?" The answer was Canada and Mexico.
The most annoying thing for me is that the US oil companies continue to rake in record profits every year even though the cost of their supplies keep increasing. Of course, the current administration sees nothing wrong with this given that their trust funds (which they have no control over) are raking in record funds too.
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Posted By: IVNORD
Date Posted: January 03 2008 at 14:23
 rushfan4 wrote:
Probably a common known fact, but I was watching Jeopardy the other day and the question had to do with "Which two countries the US buys the most oil from?" The answer was Canada and Mexico.
The most annoying thing for me is that the US oil companies continue to rake in record profits every year even though the cost of their supplies keep increasing. Of course, the current administration sees nothing wrong with this given that their trust funds (which they have no control over) are raking in record funds too. |
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Not commonly known, but true. Canada and Mexico are the closest (thus the cheapest) suppliers transportation-wise.
Why are you annoyed by the oil companies profits? Nobody cared when they were hit by the $10 priice in the late '90s. What annoys me most is my high heating and gas bills (immediate impact), my growing living expenses (perpetual impact) and my children's upcoming college bills (future impact). Believe it or not, it's all connected to the price of oil one way or the other
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Posted By: IVNORD
Date Posted: January 03 2008 at 14:28
Blacksword wrote:
I'm no economist, but I imagine big increases in the price of oil will touch many areas of our lives we currently take for granted, or dont consider related to oil price.
Surely the price of oil will continue to increase as oil producing regions become ever more unstable, and the demand for oil increases the world over, but most notably in the US, India and China. |
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It surely will continue to increase, but the war in Iraq certainly accelerated the process. It should have taken much longer for it to reach $100 otherwise
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Posted By: rushfan4
Date Posted: January 03 2008 at 14:30
IVNORD wrote:
rushfan4 wrote:
Probably a common known fact, but I was watching Jeopardy the other day and the question had to do with "Which two countries the US buys the most oil from?" The answer was Canada and Mexico.
The most annoying thing for me is that the US oil companies continue to rake in record profits every year even though the cost of their supplies keep increasing. Of course, the current administration sees nothing wrong with this given that their trust funds (which they have no control over) are raking in record funds too. |
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Not commonly known, but true. Canada and Mexico are the closest (thus the cheapest) suppliers transportation-wise.
Why are you annoyed by the oil companies profits? Nobody cared when they were hit by the $10 priice in the late '90s. What annoys me most is my high heating and gas bills (immediate impact), my growing living expenses (perpetual impact) and my children's upcoming college bills (future impact). Believe it or not, it's all connected to the price of oil one way or the other |
I'm annoyed because the price that we pay both directly and indirectly is related to the profit that the oil company's make. I don't know the exact numbers but when they were paying $50 a barrel, we were probably paying the equivalent of $75 a barrel (i.e. a $25 profit). Now that they are paying $100 a barrel we are paying the equivalent of $150 a barrel (i.e. a $50 profit). Both are 50% mark-ups on their cost, and yet the oil company is doubling their profit, instead of saying, hey we were happy with a $25 a barrel profit and therefore we will only charge our consumers $125 per barrel instead of our 50% mark-up of $150 a barrel. I just find it annoying that we are paying billions of dollars to supplement a war in the Middle East so that these same oil companies will be able to continue to make these profits for years to come. Not only are we paying through the nose directly and indirectly for oil, but we are also paying through the nose in current and future taxes or inflation caused by these oil executives greed.
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Posted By: The T
Date Posted: January 03 2008 at 14:31
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What's more disgusting is that that ridiculous price only favors those who don't want western democracy: muslims (via their holy land Saudi Arabia and all other jihad centers) and my dear old friend Hugo Chavez in Venezuela, who, by the way, already has a little puppet governing my country so I "love" him even more.....
...Oh! I forgot... a few pro-western-democracy people will benefit from this... all of those who defend democracy while working in Exxon, Chevron, BP, etc....
Which in the end also means we're helping the GOP.....
.... which means we're helping western democracy!!!
Oh the irony!  
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Posted By: stonebeard
Date Posted: January 03 2008 at 15:46
I was just watching Chain Reaction last night. It certainly makes you think about cleaner energy.
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http://soundcloud.com/drewagler" rel="nofollow - My soundcloud. Please give feedback if you want!
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Posted By: magnus
Date Posted: January 03 2008 at 18:10
I suppose my country will earn even more money now! Not that it matters since they don't spend it on anything useful anyway...
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The scattered jigsaw of my redemption laid out before my eyes
Each piece as amorphous as the other - Each piece in its lack of shape a lie
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Posted By: Ghandi 2
Date Posted: January 03 2008 at 18:53
rushfan4 wrote:
IVNORD wrote:
rushfan4 wrote:
Probably a common known fact, but I was watching Jeopardy the other day and the question had to do with "Which two countries the US buys the most oil from?" The answer was Canada and Mexico.
The most annoying thing for me is that the US oil companies continue to rake in record profits every year even though the cost of their supplies keep increasing. Of course, the current administration sees nothing wrong with this given that their trust funds (which they have no control over) are raking in record funds too. |
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Not commonly known, but true. Canada and Mexico are the closest (thus the cheapest) suppliers transportation-wise.
Why are you annoyed by the oil companies profits? Nobody cared when they were hit by the $10 priice in the late '90s. What annoys me most is my high heating and gas bills (immediate impact), my growing living expenses (perpetual impact) and my children's upcoming college bills (future impact). Believe it or not, it's all connected to the price of oil one way or the other |
I'm annoyed because the price that we pay both directly and indirectly is related to the profit that the oil company's make. I don't know the exact numbers but when they were paying $50 a barrel, we were probably paying the equivalent of $75 a barrel (i.e. a $25 profit). Now that they are paying $100 a barrel we are paying the equivalent of $150 a barrel (i.e. a $50 profit). Both are 50% mark-ups on their cost, and yet the oil company is doubling their profit, instead of saying, hey we were happy with a $25 a barrel profit and therefore we will only charge our consumers $125 per barrel instead of our 50% mark-up of $150 a barrel. I just find it annoying that we are paying billions of dollars to supplement a war in the Middle East so that these same oil companies will be able to continue to make these profits for years to come. Not only are we paying through the nose directly and indirectly for oil, but we are also paying through the nose in current and future taxes or inflation caused by these oil executives greed. |
If it were possible to survive without those mark-ups, (assuming that that's even true, which I doubt--not a shot at you personally, but the internet is extremely unreliable), why wouldn't a company reduce their prices and double their business? If you give me conspiracy crap I'm going to scream. Drilling new oil wells and all of the other things related to it (some oil companies invest heavily in alternative fuels as well, altough that could be a PR move) is expensive. Criticism of the free market aside (damn commies!), it's very, very efficient at making prices lower. If that is actually true/possible to be lower, they wouldn't survive.
This sucks, but everyone saw it coming eventually. Peak oil might f**k is in a few years anyway, so this isn't that big of a deal...yet.
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"Never forget that the human race with technology is like an alcoholic with a barrel of wine."
Sleepytime Gorilla Museum: Because in their hearts, everyone secretly loves the Unabomber.
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Posted By: IVNORD
Date Posted: January 03 2008 at 19:03
rushfan4 wrote:
IVNORD wrote:
rushfan4 wrote:
Probably a common known fact, but I was watching Jeopardy the other day and the question had to do with "Which two countries the US buys the most oil from?" The answer was Canada and Mexico.
The most annoying thing for me is that the US oil companies continue to rake in record profits every year even though the cost of their supplies keep increasing. Of course, the current administration sees nothing wrong with this given that their trust funds (which they have no control over) are raking in record funds too. |
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Not commonly known, but true. Canada and Mexico are the closest (thus the cheapest) suppliers transportation-wise.
Why are you annoyed by the oil companies profits? Nobody cared when they were hit by the $10 priice in the late '90s. What annoys me most is my high heating and gas bills (immediate impact), my growing living expenses (perpetual impact) and my children's upcoming college bills (future impact). Believe it or not, it's all connected to the price of oil one way or the other |
I'm annoyed because the price that we pay both directly and indirectly is related to the profit that the oil company's make. I don't know the exact numbers but when they were paying $50 a barrel, we were probably paying the equivalent of $75 a barrel (i.e. a $25 profit). Now that they are paying $100 a barrel we are paying the equivalent of $150 a barrel (i.e. a $50 profit). Both are 50% mark-ups on their cost, and yet the oil company is doubling their profit, instead of saying, hey we were happy with a $25 a barrel profit and therefore we will only charge our consumers $125 per barrel instead of our 50% mark-up of $150 a barrel. I just find it annoying that we are paying billions of dollars to supplement a war in the Middle East so that these same oil companies will be able to continue to make these profits for years to come. Not only are we paying through the nose directly and indirectly for oil, but we are also paying through the nose in current and future taxes or inflation caused by these oil executives greed. |
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It's a common misperception to blame the oil compaies for the high price. Not trying to defend them as they are certainly opportunistic and may occasionally engage in price fixing, but the market dictates the price more than oil executives would like it. THey may derive their profits from currency exchange, hedging, labor costs, you name it. Of course, they use the situation to their advantage with a markup, maybe not as dramatic as you describe, but even adding a few pennies to a $1 price move would fetch millions of dollars in extra revenues. Still the culprit is the government with their lack of fiscal discipline and responsibility. The plumetting value of the dollar added some $35-$40 to the price
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Posted By: IVNORD
Date Posted: January 03 2008 at 19:11
The T wrote:
What's more disgusting is that that ridiculous price only favors those who don't want western democracy: muslims (via their holy land Saudi Arabia and all other jihad centers) and my dear old friend Hugo Chavez in Venezuela, who, by the way, already has a little puppet governing my country so I "love" him even more.....
...Oh! I forgot... a few pro-western-democracy people will benefit from this... all of those who defend democracy while working in Exxon, Chevron, BP, etc....
Which in the end also means we're helping the GOP.....
.... which means we're helping western democracy!!!
Oh the irony! |
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Chavez and Co will enjoy the ride for a while, but eventually inflation will level all prices, and his advantage will disappear. Before the 1973 oil embargo a barrel of oil cost some $3, then it shot to $10, both laughable numbers by today's standards; but when oil hit $10 in '98, Venezuela was facing bankrupcy and Russia declared moratorium on its debt as the cost of production was already around $8 (at least in Venezuela).
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Posted By: IVNORD
Date Posted: January 03 2008 at 19:12
magnus wrote:
I suppose my country will earn even more money now! Not that it matters since they don't spend it on anything useful anyway... |
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I was in Norway nearly 2 years ago and the price of gasoline was over $8 per gallon. How do you people survive there?
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Posted By: 1800iareyay
Date Posted: January 03 2008 at 19:17
Ghandi 2 wrote:
If it were possible to survive without those mark-ups, (assuming that that's even true, which I doubt--not a shot at you personally, but the internet is extremely unreliable), why wouldn't a company reduce their prices and double their business? |
How would they gain or lose any significant business? More than just cars run on oil. Regardless of price everyone will use them until someone manages to both introduce alternative energy AND get it in the market (which will be difficult what with all the oil lobbyists out there). These businesses can double their price and people will still pay because they have to. It's not like Exxon makes iPods.
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Posted By: magnus
Date Posted: January 03 2008 at 19:33
IVNORD wrote:
magnus wrote:
I suppose my country will earn even more money now! Not that it matters since they don't spend it on anything useful anyway... |
_popupControl(); I was in Norway nearly 2 years ago and the price of gasoline was over $8 per gallon. How do you people survive there? |
Well, average salary around here is more than $60000/year, I think, so eventhough we have extremely high prices, most of us Norwegians have more than enough money to live a ver comfortable life. The gasoline is now more than $8,5 per gallon(or more than 12 NOK per liter), I think.
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The scattered jigsaw of my redemption laid out before my eyes
Each piece as amorphous as the other - Each piece in its lack of shape a lie
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Posted By: IVNORD
Date Posted: January 03 2008 at 19:36
Ghandi 2 wrote:
rushfan4 wrote:
IVNORD wrote:
rushfan4 wrote:
Probably a common known fact, but I was watching Jeopardy the other day and the question had to do with "Which two countries the US buys the most oil from?" The answer was Canada and Mexico.
The most annoying thing for me is that the US oil companies continue to rake in record profits every year even though the cost of their supplies keep increasing. Of course, the current administration sees nothing wrong with this given that their trust funds (which they have no control over) are raking in record funds too. |
_popupControl();
Not commonly known, but true. Canada and Mexico are the closest (thus the cheapest) suppliers transportation-wise.
Why are you annoyed by the oil companies profits? Nobody cared when they were hit by the $10 priice in the late '90s. What annoys me most is my high heating and gas bills (immediate impact), my growing living expenses (perpetual impact) and my children's upcoming college bills (future impact). Believe it or not, it's all connected to the price of oil one way or the other |
I'm annoyed because the price that we pay both directly and indirectly is related to the profit that the oil company's make. I don't know the exact numbers but when they were paying $50 a barrel, we were probably paying the equivalent of $75 a barrel (i.e. a $25 profit). Now that they are paying $100 a barrel we are paying the equivalent of $150 a barrel (i.e. a $50 profit). Both are 50% mark-ups on their cost, and yet the oil company is doubling their profit, instead of saying, hey we were happy with a $25 a barrel profit and therefore we will only charge our consumers $125 per barrel instead of our 50% mark-up of $150 a barrel. I just find it annoying that we are paying billions of dollars to supplement a war in the Middle East so that these same oil companies will be able to continue to make these profits for years to come. Not only are we paying through the nose directly and indirectly for oil, but we are also paying through the nose in current and future taxes or inflation caused by these oil executives greed. |
If it were possible to survive without those mark-ups, (assuming that that's even true, which I doubt--not a shot at you personally, but the internet is extremely unreliable), why wouldn't a company reduce their prices and double their business? If you give me conspiracy crap I'm going to scream. Drilling new oil wells and all of the other things related to it (some oil companies invest heavily in alternative fuels as well, altough that could be a PR move) is expensive. Criticism of the free market aside (damn commies!), it's very, very efficient at making prices lower. If that is actually true/possible to be lower, they wouldn't survive.
This sucks, but everyone saw it coming eventually. Peak oil might f**k is in a few years anyway, so this isn't that big of a deal...yet. |
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Funny, you posted it while I was typing my post... as a confirmation of your words, we normally had a 50-60 cent markup on gas in New Jersey, but lately I noticed it shrank to 35-40 cents. And I think we have a fixed 17 cent tax on fuel which is included in the spread. So the market really regulates it better than anyone else does. I can't figure it out how they are able to make up the difference, but they definitely don't lose money here (maybe hedging?)
Peak oil may be a distant problem. I did some research on it a few years ago and came across an article about the Russians drilling for oil above the arctic circle back in the '70s. They were forced to drill 40,000 feet wells (if I'm not mistaken) and were able to pump oil there. Aside from high initial costs and cold weather, production was normal. So it's possible that we still have huge oil reserves, theu're just too deep down there.
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Posted By: IVNORD
Date Posted: January 03 2008 at 19:41
1800iareyay wrote:
Ghandi 2 wrote:
If it were possible to survive without those mark-ups, (assuming that that's even true, which I doubt--not a shot at you personally, but the internet is extremely unreliable), why wouldn't a company reduce their prices and double their business? |
How would they gain or lose any significant business? More than just cars run on oil. Regardless of price everyone will use them until someone manages to both introduce alternative energy AND get it in the market (which will be difficult what with all the oil lobbyists out there). These businesses can double their price and people will still pay because they have to. It's not like Exxon makes iPods.
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Not so. If the price is too high, people will do less driving, more car-pooling, etc. They may lose a lot of business on lower consumption. Why do you think the price went down to $10 in '98?
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Posted By: Philéas
Date Posted: January 03 2008 at 19:55
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If higher oil price means my Exxon shares will increase in value, I'm happy.
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Posted By: KoS
Date Posted: January 03 2008 at 20:36
Phil�as wrote:
If higher oil price means my Exxon shares will increase in value, I'm happy.
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Ah, that's the good 'ole capitalist spirit.
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Posted By: Ghandi 2
Date Posted: January 03 2008 at 22:48
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Well that's the problem, IVNORD, not that there's no oil, that it will become extremely expensive to produce because we have to drill down so deep. And the economy would die with $300 oil.
It is true that oil often is much less affected by price increases and instead other things are affected, but if your gas was cheaper, people would switch to your brand and stop using Exxon.
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"Never forget that the human race with technology is like an alcoholic with a barrel of wine."
Sleepytime Gorilla Museum: Because in their hearts, everyone secretly loves the Unabomber.
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Posted By: IVNORD
Date Posted: January 03 2008 at 23:16
Ghandi 2 wrote:
Well that's the problem, IVNORD, not that there's no oil, that it will become extremely expensive to produce because we have to drill down so deep. And the economy would die with $300 oil.
It is true that oil often is much less affected by price increases and instead other things are affected, but if your gas was cheaper, people would switch to your brand and stop using Exxon. |
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The Russian experiment showed that it was as profitable to pump oil from the deep wells as from normal ones. THe drilling was more expensive, but final cost of production was averaged down quite nicely. Of course, because of the higher initial costs that oil was more expensive but marginally so. They stopped drilling deep wells only because there's no need to do so now - there's still enough oil.
The $300 may be high today but in 50 years it could be the same as $100 today ($100 was an unthinkable number just some 20 years ago). So it's only money. Peak oil refers to a situation when in order to produce a barrel of oil you would have to spend a barrel of oil worth of energy. That's when electric cars could become a reality.
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Posted By: KoS
Date Posted: January 03 2008 at 23:55
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Electric cars will be a reality once battery technology is improved. From my understanding that might take a while.
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Posted By: Equality 7-2521
Date Posted: January 04 2008 at 00:03
IVNORD wrote:
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The price of oil touched the $100 mark yesterday and briefly crossed it again today.
Just 9 years ago, in December 1998, it hit its multi-year low of $10.35. In April 2003 after the war began, it was as low as $25.
Just curious how people feel about it.
(In case you don't care a tiny bit, it will affect the price of CDs you buy too) |
I don't mean to take this offtrack as this has nothing to do with oil, but IVNORD what's your opinion on a gold/silver backed currency vs what we have in place now?
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"One had to be a Newton to notice that the moon is falling, when everyone sees that it doesn't fall. "
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Posted By: Slartibartfast
Date Posted: January 04 2008 at 05:19
king of Siam wrote:
Electric cars will be a reality once battery technology is improved. From my understanding that might take a while.
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You need to check out a movie called Who Killed The Electric Car? Actually it's the hydrogen fuel cell technology that still needs a lot of work. It's really kind of foolish to use up all the oil resources as we'll still be needing for some things like lubrication.
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Released date are often when it it impacted you but recorded dates are when it really happened...
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Posted By: IVNORD
Date Posted: January 04 2008 at 09:33
Equality 7-2521 wrote:
IVNORD wrote:
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The price of oil touched the $100 mark yesterday and briefly crossed it again today.
Just 9 years ago, in December 1998, it hit its multi-year low of $10.35. In April 2003 after the war began, it was as low as $25.
Just curious how people feel about it.
(In case you don't care a tiny bit, it will affect the price of CDs you buy too) |
I don't mean to take this offtrack as this has nothing to do with oil, but IVNORD what's your opinion on a gold/silver backed currency vs what we have in place now? |
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Don't be so modest. It's absolutely on-topic. If we had a stable currency, this $100 thread wouldn't exist.
The gold standard is heavily promoted by the Austrian school and the libertarians (Ron Paul talks about it too). To date I haven't heard or read about a single viable explanation how a monetary system based on the gold standard could be successfully implemented in a modern economy.
The gold standard is impossible unfortunately. Having been a currency of choice for as long as human civilization exists, gold cannot satisfy global economy requirements. The gold standard gradually but noticeably deteriorated for the past 200 years. Here's a simple math. MOney is a means of economic exchange. There must be enough money to buy/sell all goods/services produced, i.e. the money supply should be adequate. Let's assume US production of gold is 1,000 tons annually (I don't know the exact number). It means that the government can print only so much money (assume 1 ton of gold is an equivalent of $1M). It would be fine if the economy grew at a steady pace of $1B a year. When the growth is explosive as it was in the mid- late-90s, $1B may not be enough. Lets assume you manufacture PCs at $1,000 each. So $1B would be enough to sell 1M PCss. If the demand for pcs is higher, you would love to produce more of them to satisfy the demand, but then your increased production, say 1,5M Pcs, should be sold at the same total price of $1B as there's no more additional money in the system. It means that you would have to reduce the unit price to get rid of your inventory. It's called deflation. No sound business model can use the work-more-get-less principal. It's an extremely simlified explanation, of course, it's much more complex.
So the gold standard would be a drag on the economy. THat's why the strict adherence to gold has been abandoned way too often. HIstory shows that people could find a way around it at all times, be that ancient Rome, the United States from its independence to this day, or West European welfare states.
With that in mind, I am a proponent of a stable currency thru fiscal discipline and responsibility, which in its pure form is practically impossible, although some restriction to free use of the money printing press should be in place as it was in the early- mid-80s.
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Posted By: IVNORD
Date Posted: January 04 2008 at 09:39
king of Siam wrote:
Electric cars will be a reality once battery technology is improved. From my understanding that might take a while. |
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The battery technology could have been improved years ago if not for the oil companies and car manufacturers. With all the investment in present technological infrastructure they've made, it's only logical to expect them to squeeze every penny out of it before abandoning it and switching to a new technology. Electric car advance will be slow and painful.
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Posted By: Padraic
Date Posted: January 04 2008 at 10:07
Slartibartfast wrote:
Actually it's the hydrogen fuel cell technology that still needs a lot of work.
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I don't think fuel cells are the way to go. I'd rather see continued development in ultra-capacitors so our cars can be completely electric, yet be able to travel fairly long distances. Furthermore, make electric power cheap and green through use of nuclear primarily and supplement with solar, wind, hydro in areas where it's appropriate. Save oil for plastics and other uses, as you noted.
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Posted By: Slartibartfast
Date Posted: January 05 2008 at 07:30
 
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Released date are often when it it impacted you but recorded dates are when it really happened...
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Posted By: progaeopteryx
Date Posted: January 05 2008 at 12:27
Does anyone know if the rumored Gull Island oil field in Alaska really has as much oil in it as the entire Saudi Arabia field? Or is this just another conspiracy theory?
USGS only seems to have info on Prudhoe Bay and ANWR, which seems to suggest Gull Island is just nonsense. But I'm still curious if anyone out there knows anything about it.
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Posted By: Slartibartfast
Date Posted: January 05 2008 at 14:54
I've been reading bits about how the greedheads area looking to get their grubby mitts on all the resources that will become available and exploitatable as the polar ice melts in the arctic. Can't recall reading anything specific regarding the above...
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Released date are often when it it impacted you but recorded dates are when it really happened...
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Posted By: Ghandi 2
Date Posted: January 05 2008 at 17:00
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"Never forget that the human race with technology is like an alcoholic with a barrel of wine."
Sleepytime Gorilla Museum: Because in their hearts, everyone secretly loves the Unabomber.
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