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Oil Prices at record high - $145 a barrel

Discussion in 'transport' started by roryer, Apr 15, 2008.

  1. roryer

    roryer 道可道非常道,名可名非常名

    It's time to transition - Oil is running out, and biofuels can't replace it.

    Hydrogen production is energy negative, in that it takes more energy to make it than you get from burning it.

    Oil Shale is also energy negative.

    Would transitioning to a more energy effiecient transport system not be sensible?

    I would have thought now would be the time to start building high density mixed use walking and cycling suburbs linked together by efficient public transport, and fazing out the private car.

    The alternative is just to allow a systemic meltdown.
  2. mattie

    mattie missing in inaction

    Well done. All except the 'high-density suburbs'. That hasn't really worked so well. And also that we've tried and failed to construct efficient public transport networks for over a century. And we're seeing Population Ageing, with a greater proportion of our population being elderly and whose ability to ride bikes or walk may be restricted. Other than that, you're spot on.
  3. david dissadent

    david dissadent New Member

    Not entirely the USGS recently released a study to the effect that about 4.5 billion barrels of oil could be extracted from the Bakken oil shale. Far from the 400 billion barrels the cornucopians are claiming but some useable oil can be squeeked out.
  4. david dissadent

    david dissadent New Member

    It has been running out since the first day it was extracted. But the question of how much is left is a mindbending one. There are so many potential new sources that often turn out to be smoke and mirrors and a constant buzz of new fields found and being developed.

    The extraction of so calle crude and condisate is about 74 million barrels a day, but there are a host of massive new developments comming online soon, the so called megaprojects. These are estimated to bring about 15 million barrels a day online over the next two years. However how much comes online, when it comes online and so on is all hugely controversial. On the down side many of the big fields are now in depletion, Kuwaits burgan, the whole of the North Sea, Alaska and Cantrell in Mexico are all clearly depleating and producing less.

    The big scary bear is Russia which looks like it may head into depletion again this year. Some people are saying that Sahklin I is going to drop by 10-25% this year. Its all very very very confusing.

    Currently Chinese refinaries are not able to pass on the full cost of fuel due to price restriction, US airlines are making a loss holding back the full price from there customers and many poorer countries are simply not able to buy oil. It is possible or likely that demand destruction will set in once the full weight of $110 oil hits all down the consumer chain.

    Of course if demand destruction arrives as production increases then the producers are going to have to take a very cold shower in terms of revenue returns. This is what happened back in 1980 when consumers made massive changes to cut back on oil consumption. The price died for about 20 years.

    There are no simple answers as so many of the important facts seem to be deliberately clouded.
  5. Sunray

    Sunray Its sunny somewhere.

    I see diesel is 117 a litre which is about 60% more than they were complaining about when they 'blockaded' the refineries.
  6. roryer

    roryer 道可道非常道,名可名非常名

    Oil is $114.08 a barrel today

    One day, and already almost a $2 rise. This is gonna be fun.

    Credit crunch + Peak Oil + Climate Change + World Starvation = revolution??

    Well at least it should mean a transition to a more sensible system. Capitalism sucks!

    To think that it was at $10 a barrel at the turn of the decade, with articles in the Economist predicting, "low oil prices for foreseeable future" Mon, 8 Mar 1999

    Bloody capitalists!
  7. max_freakout

    max_freakout Nothing matters

    it's the end of the world as we know it.....
  8. max_freakout

    max_freakout Nothing matters


    i think it will be more like:

    Credit crunch + Peak Oil + Climate Change + World Starvation = more of the same
  9. cybertect

    cybertect Now up West

    Opinion from an 'expert' on Today this morning was that the current high prices are as much (if not more) due to investors piling into oil futures rather than a genuine mismatch between supply and demand.

    The price of gold is also at an all-time high and I've not heard anyone murmuring about 'peak gold' :)
  10. Roadkill

    Roadkill a clown's heart

    I don't think there's any question that demand - especially from India, China and other fast-growing economies - is pushing prices up over the longer term, although futures trading might be encouraging a shorter-term spike.

    Production-wise, it's as complex as david dissadent says - certainly not as simple as saying 'supply has peaked; it's all downhill from here.'
  11. max_freakout

    max_freakout Nothing matters

    supply has peaked, the price of crude is all uphill from here
  12. roryer

    roryer 道可道非常道,名可名非常名

    The Gold price bubble is similar in many respects to others of the past; the tulip mania (similar in my mind to buying gold i.e. no intrinsic value) and the Ostrich feathers bubbles (another asset of no intrisic value that went bust as soon as motor cars made Ostrich feathers impractical to wear and this unfashionable.)

    Oil on the other hand is currently essential for our transport, and important for heating, electricity and industry. The fact it has peaked and prices are escalating is therefore considerably more important as the price mechanism is being used in this case to limit supply.

    Gold has an entirely different purpose, being a unit of exchange to buy things of value, like food, shelter or energy for light, heat, travel etc.
    Whether gold is at £100 an ounce or £900 it still serves the same basic purpose.

    The one thing that is certain is that any object that is used as units of value, whether they be bank notes, precious metals or sticks, will be in short supply in relative terms when being used to buy oil.
  13. cybertect

    cybertect Now up West

    :confused:
  14. dylanredefined

    dylanredefined Not a house elf a tiger

    but isnt the dollar plummeting in value?
  15. cybertect

    cybertect Now up West

    e2a: Yes! I've just been working on that :)

    Put this into the context of a falling US dollar.

    Today, 1 US Dollar is worth €0.62.
    One year ago it was worth €0.74.
    Five years ago it was worth €0.92.

    1. Oil, like gold is a commodity that investors will use to hedge against the fall in the dollar and a risk of rising inflation. Those holding dollars will sell them or use them to buy things like gold or, indeed, oil futures, thus driving up the price.

    2. Oil is traded in dollars. If the dollar itself is falling relative to other currencies (which it has been) the price of oil must rise (as quoted in dollars) to retain its value.

    A volume of oil that was worth $100 (€92) in 2003 would now cost $148.39 just to keep in line with the fall in the value of the Dollar vs the Euro.
  16. roryer

    roryer 道可道非常道,名可名非常名

    The Chinese Yuan is also pegged to the dollar, as are many of the main trading blocks that are consuming the majority of oil.
  17. Jessiedog

    Jessiedog Keeping the faith.

    Except that it has gained @ 12% against the dollar over the last three years (and will likely appreciate faster now that raising interest rates (in China,) is no longer viable as a method to manage inflation - the Yuan will take up the slack,) and will continue to rise.

    :)


    Woof
  18. roryer

    roryer 道可道非常道,名可名非常名

    The Oil price has risen by 300% in the last 3 years.
  19. muckypup

    muckypup yes

    I'm speculating that the dollar is rapidly being devalued owing to America's vast and unrepayable debts. Bieng the global currency used to buy commodities means those who trade in dollars, ie China and Middle east regimes, have stacks of a currency thats plummeting in value and one which many predict will collapse in the near future.

    If that happens it effectively means that the US will have obtained crude oil for free! Nice trick if it turns out to be the case.
  20. roryer

    roryer 道可道非常道,名可名非常名

    Oil hits new high - $117.76 as Scotish strike looms

    One week on and almost 5% price rise, and with a planned strike by workers at the Grangemouth oil refinery which supplies more than 10% of the UK's petrol, and even mumurings of another truckers embargo on all refineries, car dependent folk would be best advised to buy a bicycle, and start practicing now.

    Hooray!
  21. jusali

    jusali Back from the brink!

    Some scarey shit indeed just hope chain oil doesn't go up I get through at least 30ml a year :eek:
  22. david dissadent

    david dissadent New Member

    For years the bully rally in the price of oil was put down to a 'security premium' about worries about international issues. That was for most of the rally from $20 up to about $80 when that idea sort of died off. It stems from the fact that there can be short term spikes in the price of oil over concerns and bets that oil supplies will be cut by political factors. This argument falls on its arse after about 3 months of the price hike as then the three month futures contracts come due and if you have bought $65 oil you now have to sell it. If no one wants oil at that price you because there is enough on the markets you take a loss.

    Then after about December everyone started saying that the spike in oil (from $90 and up) was all due to 'invstors' and hedgefunds enetering the market. Since then the $100 oil has reached the three month future delivary date. The price of oil has continued to go up and Ive not heard of too many people losing money when it came time to pass on the future contract.

    The consumers are still paying very high prices and willing to do so. So that kind of means that the price of oil is pretty close to ok, there are buyers for this high priced oil.

    The whole speculator argument I think has weaknesses.
  23. roryer

    roryer 道可道非常道,名可名非常名

    Oil hits $119.90
  24. jonH

    jonH New Member

    I remember I posted a thread "oil reaches $66.66"

    only a couple of miles back
  25. roryer

    roryer 道可道非常道,名可名非常名

    Good-Bye, Cheap Oil. So Long, Suburbia?

    http://www.businessweek.com/magazine/content/08_18/b4082056979063.htm?chan=magazine+channel_what%27s+next
    Author James Kunstler says the Automotive Age is almost history and deconstructs McMansion living.

    Within five years, Kunstler says, the "very serious trouble" begins Jason Grow

    The suburban landscape has been marred by foreclosures and half-built communities abandoned in the subprime aftermath. But James Howard Kunstler, author of a dozen books, including The Geography of Nowhere: The Rise and Decline of America's Man-Made Landscape, thinks there's a bigger threat to those far-flung neighborhoods: the scarcity of oil. As Kunstler sees it, oil wells are running dry and the era of cheap fuel is over. Given the supply constraints, he says the U.S. will have to rethink suburban sprawl, bringing an end to strip malls, big-box stores, and other trappings of the automotive era. Kunstler, 59, predicts a return to towns and cities centered around a retail hub—not unlike his hometown of Saratoga Springs, N.Y. But the shift to this new paradigm, he says, will be painful. (Kunstler could be off the mark; he predicted technological Armageddon after Y2K.) BusinessWeek writer Mara Der Hovanesian spoke with Kunstler about suburbia, which he calls "the greatest misallocation of resources the world has ever known."

    Why has suburban life flourished?
    The suburbs were largely products of industrialism. We had a huge supply of oil and cheap undeveloped land, and we decided to become a happy, motoring utopia. It had many practical benefits. The trouble is after a while it became a cartoon of country living.

    Why is suburbia now threatened?
    Cheap oil is what made suburbia possible. But we'll run into problems with spot shortages. As we get into trouble with these supplies, our economy will suffer. Major instabilities in the system will present themselves much sooner than we are led to believe. And by that I mean the way we produce food, the way we conduct commerce, and the way we move around.

    When will all that happen?
    The rise and fall of oil production is asymmetrical. In other words, it'll be a steeper, rockier tumble down than the steady increase going up. My own sense of things is that we will be in very serious trouble inside of five years.

    Won't it help to cut back on gas?
    I get people who come up to the podium after a speaking engagement to tell me they've just gotten a Prius, expecting brownie points. It's not that we're driving the wrong cars. It's that we're driving cars of any size, incessantly.

    What about biofuels?
    We will use all of them, probably. But we will be greatly disappointed by what they can do for us. We certainly aren't going to run Wal-Mart (WMT), Disney World (DIS), and the highway system on any combination of solar, wind, nuclear, ethanol, biodiesel, or used french-fry oil.

    Isn't it a bit radical to declare game over for Wal-Mart?
    It is part and parcel of the suburban predicament. How long can they maintain their warehouse-on-wheels as the price of motor fuels goes up?

    How will the U.S. have to adapt?
    Virtually anything organized on a grand scale is liable to fall into trouble—government, finance, corporate enterprise, agribusiness, schools. Our gigantic metroplex cities will prove to be inconsistent with the energy diet of our future. I think our smaller cities and towns will be reactivated. We are going to be a far less affluent society.

    Does your lifestyle reflect all this?
    I live in a classic Main Street town. I've always had a garden. It certainly doesn't provide for all my needs, but for all of my salad and salsa fresca needs, in season. I'm not a survival nut. I'm not squirreling away wheat berries in plastic tubs in the basement. I don't have an arsenal of firearms. I lead a pretty normal American small-town life. Of course, I'm a self-employed author and don't have to commute to work.

    Links
    Down on the Minifarm
    Small vegetable and herb farms are sprouting in suburbia, reported The Wall Street Journal on Apr. 22. A one-eighth acre plot costs $5,500 to start plus $2,000 more each year, but it can yield $10,000 to $20,000 in annual sales. Environmentalists applaud the practice, which cuts the carbon cost of bringing food to consumers. But some neighbors of minifarms are complaining about bad smells from manure, the article notes.
  26. rover07

    rover07 has a shining car.

    Im going to invest in oil. I reckon if i stack them high i can get 200 barrels in my back garden.
  27. david dissadent

    david dissadent New Member

    $120.53 with the dollar falling of off its highs of $1.60 to the Euro down to $1.54 so this spike is even with a falling dollar value, i.e. its a biggie.

    MEND in Nigeria are blowing up alot of pipes and pumps, Nigerian oil is really nice stuff loved by the yanks to refine, there refinaries are well short of sufficient stocks of unleaded summer blended products so will have to start buying and refining and buying whatever oil they can get.

    Expect petrol to go up alot.

    I dont think we have seen the top of oil this year. I used to think we had but now with the billions being given for free by congress and people have money for 'gas'. The oil refinaries are going to need everything they can get.
  28. roryer

    roryer 道可道非常道,名可名非常名

    When even the Saudis are telling us to expect $200 oil by Christmas, then I think £10 a gallon is likely sometime next year.
  29. zoltan

    zoltan Transnistria festishist

    I wouldnt rule out $200 a barrell - $150 seems a significant level ansd Im sure once thatn has been breached, the psycological limits are boundless
  30. corporate whore

    corporate whore oh, thought you were dead

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