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$60 a barrel for oil to arrive in the US soon?

1Perry said:
Do you expect the farmer to grow 15 more acres of corn than there is a market for? What are they supposed to do with all of this extra oil that isn't being used?
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Actually, I do expect farmers to grow more than there is a proper market for. As a result of farm subsidies, specifically the Counter Cyclical-Payments, farmers are subsidized when the price of their crops falls below a certain point. So if they can, they have an incentive to overproduce, so that they can make more money from a larger harvest, and also get the subsidy from the gov.

And this is not a very good analogy to the oil markets, because petroleum is the basis of so many industries. Fuel, plastics, waxes, the chemical industry . . . between all the different uses for petroleum, there is literally an insatiable thirst for oil in the modern world. OPEC need never worry about not finding a customer for as much oil as they want to pump.

1Perry said:
They are not restricting production.
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Ever heard of the "excess capacity" maintained by several countries, mostly Saudi Arabia? That is extra pumping capacity that they could bring online, but choose not to. Hence, they are by definition restricting their production.

1Perry said:
No, they are not. Oil is high because it's now not just a commodity but an investment vehicle. If you want to lower the price remove those who are only in it as an investment.
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I won't argue that investors and speculators don't influence the price of oil, but on the other hand, I don't think you can say either that it is a bigger influence than the fundamental law of supply and demand.
 
MOrion said:
Actually, I do expect farmers to grow more than there is a proper market for. As a result of farm subsidies, specifically the Counter Cyclical-Payments, farmers are subsidized when the price of their crops falls below a certain point. So if they can, they have an incentive to overproduce, so that they can make more money from a larger harvest, and also get the subsidy from the gov.
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Which is horrible policy.

And this is not a very good analogy to the oil markets, because petroleum is the basis of so many industries. Fuel, plastics, waxes, the chemical industry . . . between all the different uses for petroleum, there is literally an insatiable thirst for oil in the modern world. OPEC need never worry about not finding a customer for as much oil as they want to pump.
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As is corn. Maybe I should have used soy beans instead as they are used in many of the same applications as oil?

Ever heard of the "excess capacity" maintained by several countries, mostly Saudi Arabia? That is extra pumping capacity that they could bring online, but choose not to. Hence, they are by definition restricting their production.
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Wal Mart has the room to add 100 new employee's per store. But this is so stupid to argue that they should pump oil where there is no call for it. This is basic business 101. There is is no business that would do this. None. You produce to meet the demand. The demand is being met. I asked with no answer....What are they supposed to do with all of this excess oil? What difference does it make sitting in a tanker unused or in the ground unused?

I won't argue that investors and speculators don't influence the price of oil, but on the other hand, I don't think you can say either that it is a bigger influence than the fundamental law of supply and demand.
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One can not make an general statements. Demand is being supplied. As you note, it's being supplied even though there is still more room to supply even more.
 
1Perry said:
Which is horrible policy.



As is corn. Maybe I should have used soy beans instead as they are used in many of the same applications as oil?



Wal Mart has the room to add 100 new employee's per store. But this is so stupid to argue that they should pump oil where there is no call for it. This is basic business 101. There is is no business that would do this. None. You produce to meet the demand. The demand is being met. I asked with no answer....What are they supposed to do with all of this excess oil? What difference does it make sitting in a tanker unused or in the ground unused?



One can not make an general statements. Demand is being supplied. As you note, it's being supplied even though there is still more room to supply even more.
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Agricultural subsidy - Wikipedia, the free encyclopedia

Corn Subsidies** in the United States totaled $77.1 billion from 1995-2010.

United States Corn Subsidies || EWG Farm Subsidy Database
 
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JP Hochbaum said:
"What is now happening is the end game: an orchestrated wave of noise that is drawing in speculative money. This is enabling the producers who are actually in the know to hedge by selling production forward during what they confidently expect will be a temporary – and pre-planned – managed fall in the oil price.

But the US has been quite happy to let the EU – as useful idiots – take the economic hit. The high oil prices caused by all this noise and nonsense are actually a net benefit to Iran – which rattles its sabre loudly as elections approach.

The effect of a managed decline in oil prices to, and probably over-correcting well through, $60 a barrel – which is coming fairly soon – will be extremely beneficial to the US in two ways."

Chris Cook: The Oil End Game « naked capitalism
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It's not going to happen. Yes, there is still oil in the Earth's crust, but the sweet crude (the easily extracted crude) is mostly gone. What remains is a lot more expensive to obtain. At some point oil is going to run out. It will still be there, but if it takes more energy to extract it than the energy it yields, then it is no longer worth extracting. This condition is called a sink.

However, I disagree with the doomsayers, who predict a total collapse when the oil runs dry. Cars can run on ammonia. The Belgians did exactly that when the Nazis invaded and took all their oil from them. Ammonia can be extracted from seawater. Yes, it will be much more expensive than oil is now, but it will be less expensive than the future price of oil. And ammonia is decent fertilizer too. Plastics will be made from materials other than oil, and they will be biodegradable. Electricity will no longer be in a national grid, but confined to regions, where transmission line losses will be greatly reduced. The output of factory smokestacks will be used to heat water that drives turbines, which will generate yet more electricity. People will be less wasteful, and all of our manufacturing will be done "smarter", with nothing left to waste.

Here is the deal - At some point in the future, gasoline is going to reach 20 bucks a gallon. When it does, some companies will collapse, but will be replaced by other companies which will be using new technology to overcome the sparsity of oil. Our life styles will change too, but it will all be for the better. It will also be a good thing that, in being forced to wean ourselves from oil, our carbon footprint on this planet will be drastically reduced, thus alleviating the worst effects of climate change.

Rather than looking at the year 2050 with fear, we should embrace it, and look forward to this new era of human history with excitement and anticipation. The human race will still be here, despite what the doomsday predictors say, and we as a species will thrive, rather than become extinct.
 
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ChuckBerry said:
"sweet" refers to the amount of sulfur that the petroleum has, not its ease of extraction.
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The crude containing the lowest amount of sulfur is typically located in the places where it is easiest to extract. The deeper in the Earth oil is, the more sulfur it generally has. Therefore, there is a direct relationship between the "sweetness" of crude and it's ease of extraction.
 
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Let me add one more thing too. Farming will once again be regional, and that means that a tomato will no longer be picked green and shipped to the far ends of the earth in refrigerated trucks. Instead, a tomato will once again taste like a tomato.
 
johnny_rebson said:
Agreed.

It would be a huge mistake for the oil executives to drop oil prices prior to election day.
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Why? The left side of the ticket, especially their envirmental stance has been the largest money maker for a longtime now. Also, it was Clinton who continued to let oil companies combine reducing competition and thus raising prices. The EPA has been good to oil, under the table. It has allowed them to continue to dump high cost American production. Oil companies don't really want back into America where the hourly cost of a worker is more than the monthly cost for one in third world countries. Take a look at the history of our imports, the more inviromental laws, the more of the production has been outsourced. Also, due to EPA regulation, the number of refineries has dropped drastically, and only recently did a company start work on a new refinery, the first since 1970. What this means is that everytime one of the refineries goes off-line, they get to increase prices. Also, take a look back over the last 20+ years. If you can find old copies of Road and Track or another publication that printed charts of fuel economy, you will see that the average fuel economy for every common class has dropped with every new Emissions regulation. Even the Hybrids of today do not get the same fuel mileage as some cars 15+ years ago despite a large increase in technology that should of made cars more efficient. A rough estimate from people who do computer tuning is that cars in 2005 were able to get 35% or greater better fuel mileage after removing tuning specs required by Emissions standards. And we've had, what, 2 Emissions updates since then?

No, big oil might publicaly condemn EPA and liberals, but behind our backs, they are laughing all the way to bank everytime the Dems get control.
 
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DVSentinel said:
Why? The left side of the ticket, especially their envirmental stance has been the largest money maker for a longtime now. Also, it was Clinton who continued to let oil companies combine reducing competition and thus raising prices. The EPA has been good to oil, under the table. It has allowed them to continue to dump high cost American production. Oil companies don't really want back into America where the hourly cost of a worker is more than the monthly cost for one in third world countries. Take a look at the history of our imports, the more inviromental laws, the more of the production has been outsourced. Also, due to EPA regulation, the number of refineries has dropped drastically, and only recently did a company start work on a new refinery, the first since 1970. What this means is that everytime one of the refineries goes off-line, they get to increase prices. Also, take a look back over the last 20+ years. If you can find old copies of Road and Track or another publication that printed charts of fuel economy, you will see that the average fuel economy for every common class has dropped with every new Emissions regulation. Even the Hybrids of today do not get the same fuel mileage as some cars 15+ years ago despite a large increase in technology that should of made cars more efficient. A rough estimate from people who do computer tuning is that cars in 2005 were able to get 35% or greater better fuel mileage after removing tuning specs required by Emissions standards. And we've had, what, 2 Emissions updates since then?

No, big oil might publicaly condemn EPA and liberals, but behind our backs, they are laughing all the way to bank everytime the Dems get control.
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I would like any links you might have on this, but on the surface, what you are saying makes sense. I just want to see the hard data.
 
danarhea said:
The crude containing the lowest amount of sulfur is typically located in the places where it is easiest to extract. The deeper in the Earth oil is, the more sulfur it generally has. Therefore, there is a direct relationship between the "sweetness" of crude and it's ease of extraction.
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There are plenty of shallow, easy to extract heavy sour crude deposits around the world. The extra expense of drilling for light, sweet crude in deeper and deeper sources is beginning to offset the refining cost penalty of heavy, sour crude, making these sources more attractive.
 
Anti oil people like to say we are running out of easy oil but in reality oil extraction has never been easy it only appears so looking back with todays technology framing your opinion. Not long ago I hiked into an old oil well site in Glacier NP that was the first oil extracted in the far west. It was bubbling out of the ground and people now would call it "easy oil". The truth is they had to build miles of road through tough country to get to this oil and then ship it in wagons 70 miles to Kallispell Montana, not so easy after all. When these surface deposits were gone so was "easy oil" and the drilling rigs started which pushed technology to the limit. First they drilled 50 feet then that easy oil was gone then they drilled 100 then a 1000 etc etc. We are always chasing the next oil deposits and it always challenges our current technology.
 
danarhea said:
The crude containing the lowest amount of sulfur is typically located in the places where it is easiest to extract. The deeper in the Earth oil is, the more sulfur it generally has. Therefore, there is a direct relationship between the "sweetness" of crude and it's ease of extraction.
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Dude, let it go. You're wrong.

Sweet crude oil - Wikipedia, the free encyclopedia

"Sweet" has nothing to do with how easy it is to extract, so there is absolutely no correlation, much less a direct one, between ease of extraction and whether it's sweet or sour.
 
danarhea said:
I would like any links you might have on this, but on the surface, what you are saying makes sense. I just want to see the hard data.
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Here is a link where you can check mileage per make/model of vehicle by year. 1992 Gas Mileage - Fuel Economy Database Use the pull down option to change years. Since the estimates are adjusted for a 2008 standard not the original, you may see some vehicles not listed at the mileage they were originally released as, example, the Geo Metro was originally rated at 57 mpg, but this chart shows it at 53 mpg, however, if you look at the different models for different years, the trend still holds.

I started at 1992 because by 1993 the 2006 standards had been released and some models were already changing over in 1993. Also by that time fuel economy had risen drastically from many earlier models with fuel injection systems completely replacing carburetors by then and many more multi-point fuel injection models and less throttle body injection models. Key years to focus on, 2006, new standards and the mandatory use of OBD II (On Board Diagnostics II). 2000 was also a new standard as was 2004 unfortunately, the table ends at 2008 and we cannot compare 2009 and later models, however, if you check just from 2004 to 2008, you will see a decrease in mpg. Yes, you will see a few models jump in at higher than previous mpgs, but also take not of type of vehicle, for example the 2004 Honda Insight was rated at 60 mpg, but it was only a two seater model vs a car like the Metro which was a four/five passenger vehicle.

If you look at the year prior to the mandatory change vs the year of or after the mandatory change, they trend becomes fairly obvious. Example, look at the 1999 model year vs the 2000 model year, sadly in one model year, all the top performers at the time were taken off the market as they could not longer meet EPA requirements and DOT requirements.

I hope this is some of what you were looking for. I will try to find retunning data from reliable sources (I read it in a magazine somewhere and cannot now remember which one or what year it was published), but because it actually violates the law in some states, data from more reliable sources may be hard to come by.
 
sawyerloggingon said:
Anti oil people like to say we are running out of easy oil but in reality oil extraction has never been easy it only appears so looking back with todays technology framing your opinion. Not long ago I hiked into an old oil well site in Glacier NP that was the first oil extracted in the far west. It was bubbling out of the ground and people now would call it "easy oil". The truth is they had to build miles of road through tough country to get to this oil and then ship it in wagons 70 miles to Kallispell Montana, not so easy after all. When these surface deposits were gone so was "easy oil" and the drilling rigs started which pushed technology to the limit. First they drilled 50 feet then that easy oil was gone then they drilled 100 then a 1000 etc etc. We are always chasing the next oil deposits and it always challenges our current technology.
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It is still objectively harder to extract, and more expensive.
 
Re: Chris Cook: The Oil End Game « naked capitalism

Top right corner of the above mentioned website has the slogan "I support the occupy movement". Bias I can get every where. But thanks anyway, I'm just cutting back on these sites.
 
Billy the Kid said:
Re: Chris Cook: The Oil End Game « naked capitalism

Top right corner of the above mentioned website has the slogan "I support the occupy movement". Bias I can get every where. But thanks anyway, I'm just cutting back on these sites.
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So anyone that supports Occupy has a biased opinion?
 
Of COURSE speculators look to make profits off of crisis and benefit from higher gas prices. I can think of at least 2 others that said they wanted US oil and gas process to be higher way back about 4 years ago. Wonder who those two might be...
 
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