I don't know if this has been covered before in the lenghty threads discussing fuel costs, but I have not seen it before. It's the first thing I've heard that makes sense of what is happening at the pumps. Came from a pundant In Washington...at one of the independant think tanks.
His main points were.....
-Crude oil is a commodity...traded as such in the market place.
-Available oil, in the ground, is in the 30 Billion Barrel range...more than ever, due to better technology being able to pull more out.
-Pricing follows a predictably 20 yr cycle
-Every 20 yrs+/-, comsumption catches up to, and passes production and the price soars.
-Last time this happened was in the 1980's
- When this happens, producers kick into high gear...resulting in over production...within 1-2 yrs.
-Than prices fall...till comsumption catches up to production again....20 yrs later.

If all this is true, there will be lower prices down the road!
This possibility is reinforced by Merrill Lynch's forcasts that crude oil will stabilize at $43-46 dollars a barrel, thru 2015, not corrected for inflation. It's now $65.00 a barrel.

Still doe not explain why diesel has been higher than gas..but it is hopeful info, if accurate.

RJ

This theory is crazy enough, it just might work.

Thanks for the info rjohnson

Diesel is 10-12 cents a liter cheaper then gas here...or about 45 cents a gallon lower.

[eyecrazy]

Crude oil is a commodity...traded as such in the market place. This is part of the problem, speculators are bidding up the price of crude since there is little money to be made trading US dollars or gold nowadays.
I think prices may come down for awhile but will go right back up and stay there.
Several things are different now than they were in the '80s mainly China didn't have a rapidly growing demand and there was still easy oil to be found. About all the oil left now is much more expensive to extract.

Supply and demand...

Demand has gone way up in the past 10-15 years due to economic growth all over the world, especially south east Asia.

Production capacity is roughly the same as it has been since the 70's.

Blame the EPA.

Spot on..... China and India, have both got massive growing economies, China will overtake the US as the worlds largest economy in 10-15 years
.
Demand is out stripping supply, Opec have suffered low increases in oil revenue since the 80's, due to various world ressessions.

No more major oil deposits have been discovered since then either, our North Sea oil has all but gone.

In 10-15 years time the US and China will take more than 50% of the worlds oil production between them and Europe 50% of the rest, that leaves the rest of the world to fight for the remaining 25%. Law dictates, that who ever gives you the highest price for your resourse, gets it. As everyone else has said, " supply and demand " sets the price we pay for an ever dwindling supply of oil. We here in the UK are paying 2 pence under £1 per litre foe diesel, it will fall abit and then go up twice as much as it has fallen, like taking one step forwards and two back

The only solution is to find an alternative, in what ever shape or form. It makes you wonder if any one is bothering, or are they waiting till they to can charge an exhorbitant price for their energy because oil has got so expensive, and has almost been exhausted.

I question this presented logic here.
Since 2001 the value of the US dollar has rapidly fallen compared to the most actively traded currencies on the global exchanges. It has also fallen compared to many other global comedies such as gold, silver, copper, cattle, etc.

I wonder, has the price of these comedies increased so much in the European countries as it has here in the USA, I don’t think so. It appears that their currencies have at least pretty much kept pace with the oil prices. Yes they have slipped some, but not nearly as much as here at home.
This leads me to believe that the value of US Dollar is slipping out of control in the world market. Our dollars simply won’t buy as much of anything, let alone oil, now as they would in 2000 – 2001 when the slide began.

The only comedies that the dollar has stayed strong (since 2000-2001) against are the local, non-global ones, i.e. hogs, cotton etc. (US produced)
Just another 2 cents worth, that won’t buy much either. ;)
Ken

Originally posted by akghound
Since 2001 the value of the US dollar has rapidly fallen compared to the most actively traded currencies on the global exchanges. ...... This leads me to believe that the value of US Dollar is slipping out of control in the world market. Our dollars simply won’t buy as much of anything, let alone oil, now as they would in 2000 – 2001 when the slide began.

Ken

The rising value of the Euro is a large reason US oil per barrel as skyrocketed (adds about $15 per barrel) Refining capacity in the US is maxed out. (adds another $10 per barrel). Demand for crude due to China's buying spree (adds another $10 per barrel). Don't be surprised we see $100 oil if another huricane hits the gulf or a terrorist attack on US soil happens again.

Best way to save fuel? Plan your trips wisely and air up your tires.

why not just blame it on jimmy carter?thats all you used to hear from conservatives ..i remember when clinton ran for office,evrybody was saying gas would be 2 bucks a gallon with him.....but now that it is,its supply demand,president doesnt have anything to do with it.and with inflation adjustments,now they say it was highest with reagan....and what of the windfall profits tax?infidel, i believe it was, posted on that some.im sure the president cant set the prices,but he can and should at the very least address the problem........if he were to dip into reserves to help stabalize the price here,and later down the road,we needed that oil,if it were to that point,you couldnt afford it anyway.....all i would like to know is how much of w`s money has been put into oil in the last 5 years...........................bama

Bama,

.............................never mind, not worth the trouble. [eyecrazy]

if you want to follow somebody off a cliff because of their political party,,then go ahead......as for me,ill just look at what has happened in the past few years and what they have done for me....i didnt vote for gore,didnt like anything about him,and i didnt vote for kerry either.im not a conservative,or a liberal,,im an american,and ill do whats best for me and my people..................and i wouldnt want to put you to any "trouble",so dont bother.......................bama

Bama,
The best thing Americans can do right now is 'conserve'. And forget the days of cheap fuel, it's long gone.

MikeyB

They should reduce the speed limits back down to 55 MPH like back in the dayz... That would help save fuel! What there to be in a hurry for these dayz?! :rolleyes:

You'll never see the Republicans bring back the windfall profits tax, it would come out of their own oil soaked pockets.

It's just not right the the oil companies should be reaping record profits and larger government handouts while the masses suffer.

The windfall profit tax is one of the biggest government boondoggles ever. That money was to fund the newly formed Department of Energy (DOE). And what have they done??

MikeyB

Let's take over Kuwait

I'll second the windfall profit tax as being another government screwup. A lot of the time the oil companies didn't pay the tax. It was paid by the land owners where the oil deposits were located.

I think what we're experiencing now is temporary bump because everything is being driven by supply and demand.

The increased cost of fuel can't be explained by the increased cost of crude alone. Fuel, itself, has become a tradable commodity and therefore the cost is subject to the markets (supply and demand), just like crude itself.

As I understand it, this country recieves no middle east oil but because of the world market, what happens there affects us here. The mountain west, as an example, gets most of its oil from Canada. Fuel, here, is just as expensive as any where else.

One bright spot for this country is the vast deposits of oil shale in western Colorado and eastern Utah. There is estimated to be enough reserves there to run this country for another 200 years at current consumption levels.

Problem with shale is it has to be heated to 800 or 900* to extract the crude. Back in the '80s they had to burn half of the extraction just get the heat for the process, which doubled the cost. When oil prices dropped back down, oil shale became economically not viable.

Now they've come up with another extraction process which heats using gas from the gasification of coal, something which supposedly makes the tree huggers happier and significantly drops the costs. There are vast deposites of coal in Utah and Colorado, also. This process doesn't require any newly designed equipment and uses off the shelf equipment which drops the cost further. If I remeber correctly, the cost will be in the low $30's per barrel with this process and still show a good profit.

The University of Utah has done quite a bit of research on this and a pilot plant is being constructed in eastern Utah right now.

As I understand it, the down sides are, the process uses quite a bit of water, and it's not known what will have to be done in the refining process to get the finished product to levels to make the EPA happy. But in theory, this oil shale thing could make the US oil independent.

There are several pilot plants being built for making GTL. One is in Alaska using wasted gas from oil production and another is in PA using coal tailings. With the vast amount of coal reserves in the US I wonder why we don't build more of these plants.

MikeyB

Originally posted by MikeyB
With the vast amount of coal reserves in the US I wonder why we don't build more of these plants.Because these plants weren't economically viable when crude oil was cheap. This is a free market system at work - as the price of crude oil rises, other technologies (e.g., coal-to-oil) and sources (e.g., biodiesel) become economically viable. Of course, as these new higher-cost sources come on line, their owners hope that the additional supply they bring to the market doesn't cause the product price to tank - if it does, they're left with a plant that can't make a profit. :(

Rusty

Originally posted by infidel
You'll never see the Republicans bring back the windfall profits tax, it would come out of their own oil soaked pockets.

It's just not right the the oil companies should be reaping record profits and larger government handouts while the masses suffer.
\
Keen Observation.

Repubican party looking out for the upper class minority & corpropate America, while the working man gets shafted? Naaaah, you must be mistaken?[laugh] [duhhh] [tapdshut]

Originally posted by RustyJC
Because these plants weren't economically viable when crude oil was cheap. This is a free market system at work - as the price of crude oil rises, other technologies (e.g., coal-to-oil) and sources (e.g., biodiesel) become economically viable. Of course, as these new higher-cost sources come on line, their owners hope that the additional supply they bring to the market doesn't cause the product price to tank - if it does, they're left with a plant that can't make a profit. :(

Rusty


I think Sasol or Royal Dutch Shell published info on the GTL and the breakeven point is around $35 a barrel.

MikeyB

Originally posted by MikeyB
I think Sasol or Royal Dutch Shell published info on the GTL and the breakeven point is around $35 a barrel.Which, of course, is quite a bit higher than production and refining of conventional crude oil. As I said, if prices stay up (and the investors are convinced they're going to stay up for awhile), we'll see alternate technologies and sources come on stream.

Rusty

Indonesia has a Tsunami, US sends aid.
Kuwait has an invasion, US sends their sons and daughters, tanks and aircraft.
Iraq has a tyrant, US sends their sons and daughters, tanks and aircraft.

OPEC is made up of mostly muslim countries that danced in the streets on 9-11, yet defend their borders with american technology.

It is time for america to abandon the free trade/global economy and take care of us (U.S.). The three countrie listed above (and really all OPEC) owe us , big time!!

What would happen if the US said "humanitariun aid?? [laugh] [laugh] "
Call china and see what the price of their aid is....

Originally posted by Cyborrg
Indonesia has a Tsunami, US sends aid.
Kuwait has an invasion, US sends their sons and daughters, tanks and aircraft.
Iraq has a tyrant, US sends their sons and daughters, tanks and aircraft.

OPEC is made up of mostly muslim countries that danced in the streets on 9-11, yet defend their borders with american technology.

It is time for america to abandon the free trade/global economy and take care of us (U.S.). The three countrie listed above (and really all OPEC) owe us , big time!!

What would happen if the US said "humanitariun aid?? [laugh] [laugh] "
Call china and see what the price of their aid is....

I agree with you... Supprising thing is no one is sending us aid now or anytime... Or we're not hearing about it because someone is pocketing the aid...:rolleyes:

Yes... We should be taking care of the US first and not the foreign countries... They should be last on the list!

You won't see the president son's and daughters going to war... You see then riding mountain bikes... [tapdshut]

I'm done venting... Thanx all....;)

Montana's governor is pushing for large coal gasification projects to go in on state and Indian lands in the SE part of the state. The method is done entirely underground and the result is clean burning diesel fuel. Montana has the largest coal deposits in the US, if developed they could provide the US diesel needs for at least 200 years.
It won't make fuel prices any lower though, the only reason it's even feasable is if prices stay up.

I just did a search on Oil-Tech Inc which has been working on oil shale for 15 years. They claim to be able to turn shale into oil for $10 to $22 a barrel depending on market conditions. Their secret to low cost is using gasified coal as the external heat source. As I said before, the University of Utah has done quite a bit of research on this. There is more oil shale in the US than all the other proven oil deposits in the world, combined. http://resourcescommittee.house.gov/archives/109/testimony/2005/jacksavage.htm

Maybe with GTL technology the vast coal reserve just north of Houston can be utilized. The coal has high levels of mercury and makes it unsuitable for normal consumption.

MikeyB

OOPS!!! The web link in my last post was to another competing oil shale technology from the one I discussed. It, too, looks very promising. Oil-Tech doesn't use gasified coal.

Originally posted by MikeyB
Bama,
The best thing Americans can do right now is 'conserve'. And forget the days of cheap fuel, it's long gone.

MikeyB

With thinking like this "they" will keep the oil prices high, because "they" convinced you it would never come back down


BTW they is defined as all the fat pockets getting rich off this ****.

Originally posted by cdwmotorsports
With thinking like this "they" will keep the oil prices high, because "they" convinced you it would never come back down


BTW they is defined as all the fat pockets getting rich off this ****. Another conspiracy theorist! :rolleyes:

If "they" set the prices, why didn't "they" do something in the late 1990s when, during the last worldwide recession, crude oil prices dropped to $10/bbl and oil and gas-related companies were closing facilities and laying people off left and right? The market establishes the price of commodities, and prices will drop again - if not because of new supplies and technologies coming to market (increased supply), then during the NEXT recession (decreased demand).

Rusty

This was the local news editorial on TV this evening... think I agree with him..
Cap The Gas Prices In Kansas
Jon S. Janes, News Director 8/26/05


Congratulations to Hawaii, the first state to put a cap on the wholesale price of gas. Starting September 1st, you cannot pay more than $2.74 per gallon…including tax…for gas on the islands.

Every day countless stories about people adversely affected by outrageous gas prices.

Kansas got an increase in school funding, but the increase is now devalued because some of the money goes to put gas in school buses.

It’s a national frustration and no exaggeration to say…nobody, and I mean nobody…can present a rational reason why we are paying huge prices at the pump. My scenario is…it’s a marketing scam I call terror followed by relief. Here’s how it works…we are first terrorized as prices soar up past $3.00 a gallon. Then something happens, we don’t know what, to cause the price to fall back to $2.50 a gallon. We all breathe a sigh of relief. We’re so relieved to only pay $2.50 we forget it’s still much more than we should be paying. We’ve been tricked by master marketers into accepting a slight of hand price increase that shouldn’t have happened in the first place.

The answer, until we find a better way, let’s follow the state of Hawaii’s lead…let’s lobby our Kansas Legislature to pass a law that puts a cap on gas prices in Kansas.

Be interesting to see if Hawaii starts having shortages.

MikeyB

Well at least I'm not the only conspiracy theorist....

No one seems to have noticed that oil went on the stock marked in 1998. That is the big problem, speculation. Also EPA shut down some refineries and not have been built to replace them. We have less production capability then we had 20 years ago.

It is not currently a shortage of crude, just refined oil. So far as the dropping dollar, I posted one of the major reasons for this in another post and it was poop-pooed. The main leader of it is Soros. Incidentally he is totally against the President and will do anything to slander him. He is also well involved in the oil markets. Soros is pushing the Euro against the dollar and pound. He is known as the man who defeated the English Bank. He also was the main cause of the 2003 devaluation of the dollar.

Spend some time, look it up....

As long as the stock market is involved the pricing is on speculation of the future, not on the bases of cost of production. This current hurricane will cause another rise in prices.... just in case they speculate that there may be a loss of a gulf oil well. Our prices will keep going up and the stock owners will keep making more money, they have a monopoly.

Good God, anyone that encourages the return of 55 nation wide is a pure idoit. More accidents, higher transportation costs and so on. In the cities ok, but not out on the road. You should try to keep awake going across Arizona at 55. It also raises the amount of traffic on our overburdened roads by 20 percent or so. How so? On a 70 hour trip, vehicles are on the road 15 hours more. I could even go to 65 and drive that mostly, but there is not much savings on a large vehicle below 60 to 65. That is regardless of what the Safety people say. Instead of topping a hill at 60, it breaks you down to 40 or so. It takes 20% more time to move a load the same distance at 55. That's a lot.

There is a big difference between losing five minutes going to work and losing 20 percent of your work time on the road where that is your living. Also you will pay the difference, no question about it. From a truck point of view, my costs are your costs. That will never change.

I hate to say this but coming tomorrow there's going to be a big spike in crude prices on the NyMex. Hurricane Katrina in the gulf has force shutdowns of offshore rigs along the coast of Louisiana. Catagory 4 and possibly a 5 later today the hurricane could damage these rigs and will be awhile before coming back online.

MikeyB

I haven't heard of anyone promoting a return to 55 mph speed limits.
It may have worked in the '70s with the guzzlers we had then but with modern engines slowing down doesn't give the savings like it did back then.