RowJ

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

nirion

This theory is crazy enough, it just might work.

walexa

Thanks for the info rjohnson

Scotty

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

infidel

Quote:

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.

displacedtexan

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.

ade's ram

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.

akghound

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

Geico266

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.

bama

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

Geico266

Bama,

.............................never mind, not worth the trouble.

bama

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

MikeyB

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

MikeyB

Mopar1973man

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?!

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.