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Oil at $250 a Barrel?

Discussion in 'Politics, Elections & Legislation' started by jimrich60, Jun 11, 2009.

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  1. jimrich60

    jimrich60 Member

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    Some UK economists and oil executives are saying that oil could reach as high as $250 per barrel within the next year or so. This is based on failing economies, huge deficits, and a collapsing dollar, as well as declining oil reserves available to be pumped. I note that oil had dropped from a high around $140 per barrel to a low of $30 per barrel at the end of 2008, after Bush announced that the U.S. would allow at least limited exploration and drilling of previously restricted areas off shore and within the continental U.S. However, within days of his inauguration, Obama rescinded all authorizations for expanded drilling and new refineries. As a direct result, in combination with the falling dollar, oil climbed back from $30/barrel to nearly $72 barrel at last bid on Wednesday and is expected to top $80 barrel before the end of June.

    Lets hear it for "hope and change"

    Jim R
     
  2. Setterman

    Setterman Well-Known Member

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    I "hope" there is a "change" of political power next November. Wake up America!
     
  3. daddiooo

    daddiooo TS Supporters TS Supporters

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    Drill here, drill now, pay less......



    That's a concept the Dumocrats just can't understand. They're afraid it'll usurp their power when in fact it would probably aid their sagging approval ratings.

    Oh well, you just can't fix stupid.
     
  4. Beretta687EELL

    Beretta687EELL Well-Known Member

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    IMHO ... In the long run, oil is like other commodities ... supply and demand. In the short term the jerks manipulate the market and gouge us. Bill Malcolm
     
  5. XP100

    XP100 Well-Known Member

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    We need to charge OPEC nations 250/bushell for wheat. That way we get some of the billions back we send them every week
     
  6. jimrich60

    jimrich60 Member

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    OPEC no longer has the clout in oil they had back in the 70s when the oil embargo had such an effect. U.S. oil companies only own/produce about 30 percent of the oil they sell. The rest is purchased not only from the Middle East (OPEC countries) but from Canada, Venezuela, and other sources. Oil producers also do not "set oil prices", although they can sometimes sway prices by upping or lowering production. But OPEC has not been very successful in the last 15-20 years in reducing production since even if a couple of the countries reduce pumping, others simply increase pumping to increase their income. OPEC has a very difficult time keeping its member countries in line this way. Prices are actually determined by all the middle men bidding on oil futures (the price today is actually for oil that will be produced in 3-6 months for the most part) and hoping they will be able to sell it to the oil companies for even more when the oil is actually pumped. These folks are betting on any given day/bid that when the oil is pumped, the demand at that time will exceed supply and so make them a profit. This usually works, although when the price of oil dropped steeply when Bush approved more U.S. drilling, many lost money in the short term. As for wheat prices, don't have any problem in selling it for more money, but there is no world wide shortage of wheat, so the Middle East would simply buy it elsewhere.

    Jim R
     
  7. Dahaub

    Dahaub Active Member

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    Jim ,

    Where do you get your information? We are drilling offshore and on the north slope and in Wyoming and the tar sands of Canada are going to get used as quicky as the refinerys can be built. The large addition at Conoco-Phillips refinery in the St Louis area is a several billion dollar addition to handle the heavy oil the tar sands will be refined down to to be pumped to America. There are refineries being built at Hammond Indiana and another in Joliet Illinois and they are coming out of the ground right now.Again where do you get your erroneous information? Dan
     
  8. jimrich60

    jimrich60 Member

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    Dahaub said:

    Jim ,

    Where do you get your information? We are drilling offshore and on the north slope and in Wyoming and the tar sands of Canada are going to get used as quicky as the refinerys can be built. The large addition at Conoco-Phillips refinery in the St Louis area is a several billion dollar addition to handle the heavy oil the tar sands will be refined down to to be pumped to America. There are refineries being built at Hammond Indiana and another in Joliet Illinois and they are coming out of the ground right now.Again where do you get your erroneous information? Dan

    I think the term "erroneous" is better applied your misleading information. Of course we are drilling offshore and elsewhere. These areas have been exploited for some time. But in 2008, approval was given to negotiate new expanded (the keyword here is expanded) offshore and other drilling, which was cancelled or now delayed in 2009. Further, the last time I checked, Canada is still not a state or province of the United States, and I don't think they have surrendered sovereignty over their oil fields to the U.S. just yet. Nor are we exploiting our own vast shale oil fields in Montana, Idaho, and elsewhere in the U.S. In addition, the refineries you refer to were approved and being built long before the current administration, which was my point.

    Jim R
     
  9. Dahaub

    Dahaub Active Member

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    I know it takes time and planning to build those refineries. Also the movement of one of those colossal off shore platforms is a very expensive and time comsuming task. The areas in Alaska that were offshore that had been given to promoters to exploit were given back and the oil people said they didn't want to explore there. What gives with that? I guess you can whine all you want about exploration when in reality I would rather use the other countries oil up then start after ours. What do you other guys think? It's all the democrats fault anyway isn't it? They are always "Tax and spend" , "Tax and spend" if there was anything to spend it would get spent. George spent us into a trillion dollar deficite and now you complain that the oil explorers can't get the ok to destroy the environment when they have a chance to collect more millions of the taxpayers natural resources and leave us with a pittance. I think all those contracts should be rewritten. Dan
     
  10. white rattler

    white rattler Member

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    Why not $500 a barrel. Trevor Dawe.
     
  11. jimrich60

    jimrich60 Member

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    There is not enough oil offshore in Alaska to be economically viable, unlike say in ANWAR. It was a shell game by Congress knowing that it would not be drilled. The areas approved in 2008 were further out in the Gulf, and offshore California. Now delayed or cancelled. The reason we need to drill our own oil is to control costs and not have to rely upon OPEC, et al. New drilling techniques and processes developed in the last 20 years can ensure minimal impact on the environment (which has always been overstated in any case by the greenies) Even by low estimates, the U.S. has enough oil resources to last 100 years at use levels as of 2008. Beyond that, oil is not a one time resource. It is being created every day by the same geophysical forces that created the known sources today. While I would not call it "renewable" (would depend on rate of use) I suspect that oil will be around for a couple of hundred years yet.

    So, for Dahaub, all I can say is "drink, drink, drink that kool-aid"

    Jim R
     
  12. Bisi

    Bisi TS Member

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    Oil is traded and sold in the dollar. Look what is happening to the dollar, they are becoming worthless. Good ole Ojackass is printing money faster than anyone in the history of the world. So it is going to take a whole lot of dollars to buy a barrel of oil.

    Remember reading about the Weimar Republic and how it took a wheelbarrow full of money to buy a loaf of bread. It will probably end up that way here also, but first it will take a wheelbarrow full of dollars to buy a barrel of oil.

    Iran has plenty of oil and Ojackass says it is okay for them to develop nuclear energy. We are short on oil so what is Ojackass's solution for us - wind mills, and no nukes.
     
  13. oz

    oz Active Member

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    the reason that oil/gas prices go up as they do is the US stock market (futures) they fill their pockets and break everyone else. Then they cry when no one has any money to buy anything and the stock market crashes. THEN the president and congress bails them out with our money and they go right ahead and do it again until we are ALL broke. oz
     
  14. grnberetcj

    grnberetcj Active Member

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    I bought into oil futures at $38.00 per.......

    Let it roll.

    Curt
     
  15. bigdogtx

    bigdogtx Well-Known Member

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    Curt,,,,we are wise!!!! :D
     
  16. jimrich60

    jimrich60 Member

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    "Big Oil" is not the cause of high crude prices. They simply buy from a host of "middlemen" who have bid on oil futures, and then sell for what they can get for that oil when it is pumped from the ground. These middlemen are the "speculators the media and left love to hate (or actually love to shift the blame to, which is why speculator has become a pejorative term). In fact they are doing nothing more than what everyone who owns stock, mutual funds, etc is doing. That is, buying at a price today in the hope that demand, and hence the price, will increase in the future giving them a profit. That is simple capitalism, the very basis of America's prosperity. The answer to low prices for a product is simple-increase the supply far beyond the demand. That is what my point has been. When we merely authorized expanded drilling in 2008, prices fell dramtically. When this future drilling was put on hold in 2009, prices started back up. That, coupled with the falling value of the dollar keeps driving oil prices higher and will continue to do so. That, of course, is the desire of the current administration (often stated in various ways) since only when gasoline reaches the $4-5 range will Americans be willing to buy the little tin cars they want us to drive. That this is true is shown by the last time gas reached the $4 mark- Sales of little cars jumped. There were long waiting times for Toyotas Prius hybrid, and you often had to pay a premium to get one at all. Now, with gas prices back under $3 (a short time ago as low as $2 gallon), dealers can't sell the Prius. A few weeks back I went by a local Toyota dealer who had sixty (60) Prius hybrids on the lot and they were not selling. But sales of SUVs went back, if not skyrocketing, at least back to best sellers for many dealers. The administrations problem is that they don't dare raise gas taxes (as Europe does) to get the price up for fear of a tax revolt, so they have adopted the policy of driving the price of gas up through a controlled market (by withholding drilling etc). That way they shift the "blame" to someone else and point fingers when actually it is government action (actually deliberate inaction) driving this. The average European (and I have lived there) does not want a small car anymore than Americans do. But they simply cannot afford to drive bigger cars for the most part. But check out any European who has the money, and you will find him driving a big Mercedes or other larger car, not little Fiats. The price of gas drives the move to small tin cars there and will soon do so here.

    Jim R
     
  17. texasaggie2000

    texasaggie2000 Member

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    Jim,

    I agree with you that "big oil" is not the problem, if anything, they don't get enough credit for holding certain development expenses down. I don't think folks realize the capital necessary to develop many of these larger plays, especially offshore, sands, shales, etc. and if not for "big oil" it would cost a lot more to do it, and that would be reflected in the price. It is analogous to the way that Wal-Mart can keep prices down due to their big company practices.

    I am always amused when folks argue for "free markets" and "capitalism" when it comes to something like insurance companies or auto companies, saying let them fail, free markets, etc. but when a Company is maximizing profits for its shareholders, then it is making too much money. Just seems counter-intuitive to me, but what do I know?

    And, being in the business, it never ceases to amaze me the amount of misinformation exists, but I guess it is that way with many things.
     
  18. jimrich60

    jimrich60 Member

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    Texasaggie2000:

    Unfortunately, the Kool-Aid drinkers will never accept the simple truth, and far too many others have been brainwashed by the media and the government (federal, state, and even local) to blame everything on "big oil". But then government always finds someone else to blame for their total mismanagement of the country, deficit spending, unsustainable budgets, etc. Government at all levels has become a sink of corruption, cronyism, and elitism. A far cry from what our Founding Fathers envisioned, but one they feared and tried to prevent through the Constitution and the Bill of Rights.

    Jim R
     
  19. Lead Man

    Lead Man TS Member

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    Seems to me a couple of guys know what they are talking about. Jim and Tex hats off if for no other reason than shutting dahaub up and spreading a little truth.

    The only part of the oil market that makes me mad is that I don't have enough expendable cash to play with the big boys. Therefore profits are not what I would like.

    Again thanks for setting a few folks straight.
     
  20. over the hill

    over the hill Active Member

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    A friend of mine who is an oil person, says that there is a large shale drilling operation going on in Pennsylvania. His elaboration...."Expensive".



    Regards....Gerald
     
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