More oil news from Houston, and it's all bad. - Mercedes-Benz Forum

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post #1 of 18 (permalink) Old 04-01-2005, 12:43 PM Thread Starter
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More oil news from Houston, and it's all bad.

Hey guys, remember who told you oil was going to $60 a barrell? Well, you better listen up. It seems projections on the oil consumption of India, China and Japan have been based on faulty thinking, and the new conceptions are causing a total rethinking of our price models. China and Japan have been on a big binge of making their industries more energy efficient, and the success they are having now means that they can continue to import even more oil at higher prices because the increases in efficiency make the price hikes meaningless to them. Meanwhile, India is projecting a rise in personal incomes as it's middle class fattens up on all the jobs the US is bleeding off to them. What does this all mean? At the very least, we see a ten dollar rise over the next six to twelve months to about 78$ a barrell. But we have other anaylsts projecting it to over $100 a barrell, a figure that would be catastrophic to the US economy, which in the logic of oil consumption, would be a good thing, since it would put our fleet of SUVs and hummers in the junkyard, and people won't need that much gas anyway, seeing how they will have no job to go to anyway. So this is what has happened - the US has built an energy model built on waste, where most of our gasoline consumption goes to haul mom's fat ass around in a truck made to climb mountains that gets 11 with a tailwind. Our industrial base, what's left of it, is just as inefficient. Our competitor nations have instituted policies aimed at decreasing the amount of energy required to produce a product, and taxed wasteful use of energy. Guess which ones of those economies are going to better withstand the shock of high oil prices? We will be shipping billions over seas to pay for mom's fat ass ride, while China continues to churn out the products we used to make.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

-President Barack Obama, 1st Inaugural address
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post #2 of 18 (permalink) Old 04-01-2005, 12:54 PM Thread Starter
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RE: More oil news from Houston, and it's all bad.


Oil trading hits all time high

Gasoline supply triggers record for futures; refiners worry they may not meet summer demand.
April 1, 2005: 2:32 PM EST


NEW YORK (Reuters) - Oil prices surged to $57.70 a barrel Friday, a record trading high. Oil's meteoric climb began on Thursday, powered by a forecast that the market could spike above $100 a barrel due to robust global demand and tight spare capacity.

Prices have climbed around 30 percent this year, with big-money speculative funds buying heavily on signs that rapid demand growth in Asia's emerging economies and the United States would strain world supply.

U.S. light crude for May delivery rose $2.40 to $57.70 a barrel, 10 cents above the former all-time high hit March 17. London's Brent crude climbed $2.22 to $56.51.

U.S. gasoline futures for May hit a record $1.7270 a gallon on worries that a national stockpile surplus could dwindle ahead of driving season, while heating oil futures struck a peak of $1.6730 a gallon.

Top energy derivatives trader Goldman Sachs said in a report on Thursday the oil markets might have entered a "super spike" period, which could eventually drive prices toward $105.

"That was a pretty big call by them and the market is just assessing where supply and demand really sits," said David de Garis, senior economist at ANZ Investment Bank in Melbourne.

"In a very interesting report, Goldman talked about how we might see a longer cycle and a higher cycle than we have seen in a very long time," said Deborah White, senior economist at SG Commodities.

Goldman Sachs raised its 2005 and 2006 price forecasts for U.S. light crude to $50 and $55, respectively, from $41 and $40, citing resilient oil demand growth.

Prices rallied 2.6 percent Thursday on the back of the report and also on concerns about the adequacy of U.S. gasoline stocks ahead of the peak summer demand season.

Gasoline supply anxiety
Production problems over the past week have deepened concerns over whether refiners will be able meet gasoline demand this summer.

A 485,000-barrel-per-day (bpd) refinery in Venezuela -- the world's fifth-biggest oil exporter and a top supplier of crude and oil products to the United States -- was shut down on Thursday by a power failure.

State oil company PDVSA said it aimed to resume full operations at the Amuay refinery in seven days at the latest and that supply to local and international markets was guaranteed.

A fatal explosion last week at BP Plc's Texas City refinery, the third-largest in the U.S., also unnerved the market, along with problems at several gasoline-producing units.

For the past month, U.S. gasoline demand has been 2 percent higher than the same time a year ago, despite record pump prices


Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

-President Barack Obama, 1st Inaugural address
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post #3 of 18 (permalink) Old 04-01-2005, 01:05 PM
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RE: More oil news from Houston, and it's all bad.

does this mean that $1.00/gal reg. unleaded is never coming back? Guess I should sold the SUV two years ago!

Seriously though, I don't mind when fuel cost goes up if eventually it stabilizes long enough for the economy to "catch up". If reg. unleaded is 3,4,5 or 50 dollars a gal, it's fine if the econ. can support the expense.

I believe it won't stabilize any time soon. There are too many variables and there is too much demand. I guess you heard that the feds gave some great wads of cash to one of the US auto manufacturers to finish developement on H-cell fueled vehicles. Exxon has commited to supporting the effort with convienient supply location. We'll see.

It would be nice though. The idea of being free from pollution and despotic regimes with the resorces upon which the world turns (or turd Whirles), is hypnotic. hope it works. Prolly won't.

I gotta go.

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post #4 of 18 (permalink) Old 04-01-2005, 02:08 PM Thread Starter
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RE: More oil news from Houston, and it's all bad.

Gasoline is actually cheap. The ratio of the cost of gas to income rise and other costs is really what is actually coming into balance. If the cost of gas in real dollars goes back to say, 1989-90 levels, it should peak at around $3.00 a gallon, and that would reflect a cost-of-oil price at around $75 a barrel. After that point, it begins to act as a severe brake on the economy, because once the price of fuel goes past real-dollar adjustment, it becomes an extremely inflationary force in the economy.

Right now the real thing missing is government action in the energy consumption arena. Just doing something would cool the most dangerous force in the oil markets - rampant speculation. We should be smoothly transitioning the economy towards permenant higher energy costs by discouraging waste, as the Chinese and Europeans are doing - instead we are going to let the free market do it - but the free market will be the equivilent of driving your truck into a brick wall so that you now realize you need to buy a new truck. You may have to ride the bus on crutches for a while before you get it.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

-President Barack Obama, 1st Inaugural address
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post #5 of 18 (permalink) Old 04-01-2005, 02:10 PM
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RE: More oil news from Houston, and it's all bad.

This is kind of a two edged sword. If oil goes sky
high and it wrecks our econ here and we lose all these jobs what happens to the other countries that
import their goods here, will they not slow down
too or well they keep producing their products in which the prices would drop so us out of work living off the govt people can buy it. are we not one of the largest consumers of goods in the world?

If gas & oil prices to go sky high well not the people of the U.S. find other more viable resources to use? alternative

say it so that this is all the republicans and pres bush's fault?
I’m going to move to Mexico and become a Mexican citizen and probably live a southern gentleman’s life
post #6 of 18 (permalink) Old 04-01-2005, 02:29 PM Thread Starter
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RE: More oil news from Houston, and it's all bad.

There is a fundemental shift taking place in the world. India is becoming the intellectual center of the world - it has an enormous number of truly brilliant people and most of its intelligensia speak English. China is becoming the heavy industry and repititive manufacturing capital of the world - it is simply an enormous source of cheap labor. Europe is becoming the high tech and applied robotics capital of the world - it's businesses and governments have been doing an excellent job of investing in the industries of the future and providing free higher education and health care. The US is becoming the financial and banking capital of the world, because our financial systems are not riddled with fraud like the rest of the world. We are also the world's bread basket. The problem with that, is that none of those industries produce much in the way of low-income jobs. Meanwhile, we are importing an enormous under-class and our endemic underclass is going nowhere financially while our middleclass loses ground. None of this bodes well for the future stability of the United States.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

-President Barack Obama, 1st Inaugural address
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post #7 of 18 (permalink) Old 04-01-2005, 07:09 PM
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RE: More oil news from Houston, and it's all bad.

Interesting thread. Question: are you guys not aware that only 18% of a barrel of oil actually goes to the manufacture of fuel and home heating. What I understand is all rest goes to manufacturing of PLASTIC. If you quite purchasing products made from PLASTIC the price just might drop (stubid me) it will actually increase. As the shareholders need their cap return on their investments. I could give up driving but damm if I'm going to give up my PLASTIC possessions. LOOK around you? Think about it?
I suppose you think China needs fuel? think again! What would you do if your PLASTIC credit card was cancelled due to fuel shortage? We live in a PLASTIC world accept and enjoy it, our time is limited but PLASTIC is here forever. ANY COMMENTS

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post #8 of 18 (permalink) Old 04-01-2005, 10:54 PM
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RE: More oil news from Houston, and it's all bad.

Man, take a pill, whatever you need to stop the conspiracy theory. Where exactly to you get your news from? NEW YORK (Reuters)? If they told you that Christ had appeared, would you believe them? I work for a major oil company in Houston and I doubt it will hit $100 a barrel. Nor do I believe that our economy will go into shock and why will all be waiting in the food line. My company is out sourcing overseas. Everyone in my department either kept a job with the company or has gotten a job that paid as much as they currently make now. You know, it was about 25 years ago that we all heard how the loss of manufacturing jobs to robots was going to kill our economy and cause another depression. Glum and doom. Didn't happen. You know, I am the first generation in my family to not know how to pick cotton in I don't know how long. Bother's me a little bit because I have missed the experience. Does it bother me that there are a few corp. farms and I don't own acres of land and work the farm all day like my ancestor’s, no. Fact of the matter is that manual labor jobs will pay less and you need more education to earn middle class wages, now and more so in the future. A bacholor's degree is now about the level of the high school deploma of the 40's-50's. Anyhow, enough rambling. I will listen but don't agree with the shock and awe.
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post #9 of 18 (permalink) Old 04-04-2005, 07:39 AM Thread Starter
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RE: More oil news from Houston, and it's all bad.

Quote:
Robschaef - 4/2/2005 12:54 AM

Man, take a pill, whatever you need to stop the conspiracy theory. Where exactly to you get your news from? NEW YORK (Reuters)? If they told you that Christ had appeared, would you believe them? I work for a major oil company in Houston and I doubt it will hit $100 a barrel. Nor do I believe that our economy will go into shock and why will all be waiting in the food line. My company is out sourcing overseas. Everyone in my department either kept a job with the company or has gotten a job that paid as much as they currently make now. You know, it was about 25 years ago that we all heard how the loss of manufacturing jobs to robots was going to kill our economy and cause another depression. Glum and doom. Didn't happen. You know, I am the first generation in my family to not know how to pick cotton in I don't know how long. Bother's me a little bit because I have missed the experience. Does it bother me that there are a few corp. farms and I don't own acres of land and work the farm all day like my ancestor’s, no. Fact of the matter is that manual labor jobs will pay less and you need more education to earn middle class wages, now and more so in the future. A bacholor's degree is now about the level of the high school deploma of the 40's-50's. Anyhow, enough rambling. I will listen but don't agree with the shock and awe.
Like I said in the other thread, I think oil will top out at $75 a barrel, at which point the slowing of world economies will dampen the rise in price.

I don't know if your farm analogy serves your arguments - those familly farmers were driven off their farms by the Great Depression. Seems to me an economic shock of the same magnitude is a distinct possibility, based on the experience of your ancestors, who probably saw a food line or two.




Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

-President Barack Obama, 1st Inaugural address
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post #10 of 18 (permalink) Old 04-04-2005, 03:14 PM
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RE: More oil news from Houston, and it's all bad.

My point or opinion was that oil prices and outsourcing are not going to cripple our economy. My family still owns most of our original farms but they are leased out to large farms, corp. farms, etc. The depression did not create that situation, the industrialization area created it. No food lines here. Later, factory jobs went to robots and again the economy did not collapse. Out sourcing, in my opinion, will not cause the economy to collapse. I do not believe oil prices will either.
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