Oil/gas prices...opinions

BARCHASER · 10-03-2005, 01:10 PM

I'm curious about the board's general opinion on oil/gas prices. I've never been associated with the industry. But I believe the price rise is justified and probably isnt over.

Econ 101:

Supply: Constrained, we are not running out but we have gone through the cheap oil/gas sources; future sources are more expensive to exploit due to scarcity of the resource, environmental issues and politics.

Demand: Changed a lot; China, India and others used to ride bikes now they want cars; impact is pretty obvious; we are competing with them for the resource.

History: You can make a good case that the price of the resource has not gone up that much. A suburban house in Seattle cost 20-30K in 1970, now 400-600K, a 20-30x increase. In 1970 a new car/truck cost 3-4K, big sales at present but generally they cost 30-40k now, a 10x increase. In 1970, a gal of gas cost around .50, now 3.00, a 6x increase. I'm told that the price of a gal of gas has about kept pace with the price of a gal of milk. I dont hear folks whining about milk prices!

Maybe I'm not objective because I've been buying oil/gas stocks for about a year and a half. Opinions anybody, let me have it and tell me I'm nuts.

Wreckless · 10-03-2005, 01:48 PM

I don't like it, but I agree.

As gas prices soar the demand is INCREASING. It's gunna go higher

I also have noticed that a high percentage of the ads for automobiles talk about perfomance and horsepower, never mentioning fuel economy.
I only commute 3 miles (yeah right, commute

) or I'd look at hybrids but for now, I'll just dig a little deeper as I fill my truck & boat

JustCallMeDave · 10-03-2005, 02:36 PM

While I am certainly not against a company making a profit on their product or service, I have a considerable issue with the SIZE of profit that the oil companies are making on their product. Oil is in all of our daily lives, from the plastic on the keyboard that I am typing on right now to anything in my home which was transported to the store.

Oil is a life blood in our society, and the oil company's continued over-profiting (check out their quarterly reports) is going to drive our already fragile economy into a heavy nose-dive.

Chrome Bumper · 10-03-2005, 02:58 PM

Electricity, natural gas and now motor fuel. The market is being manipulated by big oil to get rich.

There are no forces applied now to get the prices lower or even level out. And where is the U.S. energy program? Drill ANWR is the best we have, pathetic.

Hope every one enjoy's their gas hogs with big engines and big shiny wheels. It a 'right' of every american to drive one isn't it?

The oil producing countries will spend this windfall money for nifty gifts for the U.S., I am so sure. All the while the deficit is going no where but up with money borrowed from foreign countries.

El-Kabong · 10-03-2005, 03:02 PM

"no forces applied now to get the prices lower or even level out"

AMEN.

I'd go as far to state that there are forces in play right now to keep the price inflated. What better way to repay friends and contributors then to allow them to reap record profits on the backs of others.

EK

TheKing · 10-03-2005, 03:14 PM

Sure the oil companies control the inventory and they have effect oin the price. All companies do. If you think the govt. should step in and take over the industry or regualte prices where do you draw the line? I think Microsoft makes more profit on windows software than the oil companies do on a equal $ volume of oil should we regulate MS products or have the Govt sieze MS? Beer is much more expensive per gallon and cheaper to maunfacture should the govt. sieze Budweizer?

Chrome Bumper · 10-03-2005, 03:21 PM

Tax Microsoft, regulate the energy Co.s and balance the budget.

I don't drink Budweiser.

El-Kabong · 10-03-2005, 03:33 PM

given that oil is hardly a free market commodity and requires t remendous subsidies from US tax payers the line between when the govt. should step in and when it should not is pretty easy to see IMO.

EK

baltz526 · 10-03-2005, 03:41 PM

two points, the oil companys are not putting nearly enough of their profits back into their companys, by developing new oil sources or using new technology to improve the old sources, or infrastructure to produce more barrels of fuel from crude. the government has been restricting the importation of refined oil products like unleaded gasoline, untill just in the last month, with the emergency lifting of the restrictions, due to the hurricanes in the gulf.the deal is, the same people who own the refineries shut down by the hurricanes, i'm shure own part of this new supply of imported refined fuel.

TheKing · 10-03-2005, 03:44 PM

They use grain to make beer and that is one of the most heavily subsidised industies in the world. The dairy industry is subsidised as well. Maybe we should all use govt. gas to go drink Govt. beer and eat Govt cheese:-) Sounds like China?

duckcall · 10-03-2005, 03:49 PM

Gasoline in Norway is 6-6.25 a gallon. And they are a producer. We have cheap gas and are a bit spoiled. I wish they would standardize fuel grades to gasoline and diesel. Period.

LuckySteelhead · 10-03-2005, 03:51 PM

I'm glad I'm still driving a 2.7l and not a big V8. I don't expect prices to go much lower, before going higher again next summer.

BARCHASER · 10-03-2005, 03:53 PM

Remember we import 65% of our oil. Our main foreign suppliers are Saudi Arabia, Venezuela, Nigeria and Mexico. Most of the oil in the world comes not from "companies" but "countries" who have nationalized their oil.

Big oil actually owns and supplys a small percentage of the crude oil used world wide. World wide, they have little impact on the price because they dont control much of the oil. We used to have a good deal on oil because we were by far the biggest user of oil and thus had a lot of control over price. Not any more since there are a lot of growing economies in the world: China, India and a lot of other third world conuntries.

They all became capitalist countries. Now they have better economies and compete with us because they tossed out communism and the rest of it.

wannacatchem · 10-03-2005, 06:17 PM

Quote:

I dont hear folks whining about milk prices!

nobody buys 100 gals of milk a month for personal use, either!

And yes, thats about how much gas I buy a month, and I drive an economy car

duckboy · 10-03-2005, 06:28 PM

Buy a new car to save a few $$ on fuel?

Oil is cheaper than steel.

I will buy a more efficient vehicle to be sure when the one I am driving now is dead.

I wish/hope/pray for the day when we can use ethanol that we make here in the US of A, grown in the heartland, Refined by a zillion distillers, and burned clean in our american made cars.

BIGALSURF · 10-03-2005, 06:29 PM

Iraq has the second largest oil reserves on the planet. We invaded and their production tanked. If we pull out there will be a civil war and it will be ten years before they reach pre war production levels. I wonder who benefite financially from that invasion? Soldiers, nope, they get killed and wounded and don't get much help when they get home. Families. ditto, no, Saudi's OPEC, Oil well owners around the world including Exxon, Mobil, Shell, by golly, they've got smiles on their faces!

baltz526 · 10-03-2005, 07:09 PM

Quote:

Iraq has the second largest oil reserves on the planet. We invaded and their production tanked

as of a few days ago, iraqs oil was flowing at near 100% of pre war capacity. and their fields are being developed to more modern technology, with new wells being drilled, right this second.and the iraq government is selling this oil to pay for rebuilding after, saddam, ran the country into the ground, by building a war machine and letting his sons and military terrorize his own people.

El-Kabong · 10-03-2005, 07:28 PM

"as of a few days ago, iraqs oil was flowing at near 100% of pre war capacity."

actually they are pumping about half of there pre-war capacity.

baltz526 · 10-03-2005, 09:09 PM

according to fox news, it was nearly 100%. but we all know how reliable the news is.since i'm not an oil production analist for the government of iraq, i just repeat what a normally reliable news source reports.

BIGALSURF · 10-04-2005, 04:41 AM

I don't know who has the right news! San Francisco Chronicle article of 10/2/2005 says it is down substantially, industry falling apart. The story sounds believable, do you have a link to the Fox article? They say in the SF article that the Rumaili oil field needed purified water pumped to it to push the oil out and when they tried it, the pipes burst, and then they found a farmer who has been somehow using the water to irrigate his tomato crop!

This country sounds crazy!Sunni vs. Shiite vs. Kurd! I just pray daily that our boys come home safe! I pray for my friend who is there now. I'm not smart enough to know if we should be there or not. I'm just smart enough to know I want them home!

Anyway, go to the link below and let me know your opinion.

Thanks!

Oh, and I'm an OHA member too. Isn't it the best organization? I'm hoping when I retire to be able to volunteer for some of their projects. I sure enjoy their dinners, a buddy of mine went as my guest one year and won a rifle! I kind of embarassed him into joining, and now he's glad he did.

http://www.sfgate.com/cgi-bin/articl...NG9PF0E5L1.DTL

baltz526 · 10-04-2005, 05:57 AM

rather than rely on biased news organizations

Quote:

http://www.eia.doe.gov/emeu/cabs/iraq.html

Quote:

web page

iraq oil production

baltz526 · 10-04-2005, 06:15 AM

going through some of this information, and it may take a person all day just to get an overview of the basics,politics/oil situation in iraq.

Cool Texan · 10-04-2005, 07:42 AM

Quote:

This country sounds crazy!Sunni vs. Shiite vs. Kurd!

Why does that sound crazy? Sounds no crazier than Republican vs Democrat vs Libertarian. Sounds pretty normal to me.

TheRogue · 10-04-2005, 08:02 AM

Except of course, we dont' shoot each other!!!

(in most cases)

TR

ryser · 10-04-2005, 08:16 AM

Well I don't remember the price of gass going up to .50 in 1970!! Not to say it didn't but I do remember dad making a comment about how expensive gas was whin it was .18 - .25 in the early 70's, and even during the suposed GAS shortage in 73, 74 I don't remember gas going much over .40 a gal, but that was then this is now.

I do think that the demand has gone up because of china and india and the question is how much has the demand increased, releative to the amount being refined?? and weather the refineries were at full capacity?? I know they say they were but how do we know for certin, all we have are there (BIG OIL) word on that.

Something else to consider is the fact that the US hasn't built any new refineres for 25 yr are they now out dated?? or is this a ploy to relax some of the regs on the industry, so they (BIG OIL) will build some more refineries while making HUGE profits to get the regs relaxed. And maybe they want more land opened up so they can look for more oil in places that are protected, and arn't allowed to explore.
Just some more food for thought

BIGALSURF · 10-04-2005, 09:42 AM

Baltz, from the website you gave me, it says that production now is lower than before the war, agrees with the SF Chronicle, not the FOX news story, so I'm betting that it is lower now than before,

"Iraqi monthly oil output increased in the last few months of 2002 and into early 2003, peaking at around 2.58 million bbl/d in January 2003, just before the war.

As of May 2005, Iraqi production (net of reinjection) had reached perhaps 1.9 million bbl/d, with "gross" production (including reinjection, water cut, and "unaccounted for" oil due in part to problems with metering) of around 2.1 million bbl/d."

Also in that report, before the first war, they peaked at 3.7 million barrels a day. Remember why Sadaam invaded Kuwait the first time? He said the Kuwaiti's were slant drilling into his country's fields and stealing the oil. And didn't a lady ambassador of ours tell him to go ahead and invade? I seem to remember something like that. He'd been our ally up til then and I guess he thought if we said it was ok, it was ok? But maybe I'm remembering that wrong? Anyone help me out here?

Oh, and you are right cool texan, Dems Vs. Libs Vs Rep's like the factions in Iraq, but we are definitely more refined in our discussions and disagreements, like no shooting! We have common beliefs. Why, I bet even those PETA guys like football and hot dogs! Or at least the tailgaters before the games! GO OSU!!!

Irish Pennant · 10-04-2005, 12:23 PM

Lets not forget that a computer in the 70's cost a 1000 times more than one one cost today. Technology and demand has driven the cost of a computer down. The tech for extracting oil and getting it to market has increased dramaticly sence the 70's. The ability to get more out of each barrel of oil has also increased. The price of oil isn't driven by a free market demand but is controlled by a cartel. OPEC decides what a barrel of oil will sell for not the market.

TundraIII · 10-04-2005, 01:08 PM

Thanks you...that comment is closer to the truth than any of the others I've read. I spend approximately $650 a month on diesel alone....It comes right out of my profit margin and it hurts real bad for people like me who run a small business. I personally do not believe the current fuel prices are justified....but I dont have any other choices right now and so I bend over every day at the pump.

baltz526 · 10-04-2005, 04:09 PM

http://mediamatters.org/items/200509220009 here is a reference to the story i watched, and the oil production is about 75% to 80% of pre war, not 98%

BIGALSURF · 10-04-2005, 07:21 PM

Yikes! that's 4,000 miles a month of driving?

cade · 10-04-2005, 08:19 PM

I work at a full service gas station in battleground, i get to hear people whine about gas prices 6 days a week... I hear they are gonna stay around the same for awhile maybe go down a little. i dont think that they will get much high for awhile.

PapaHog · 10-04-2005, 08:45 PM

As long as the demand out paces the supply the prices will continue to go up.

We worry abut ANWAR and not the big red elephant in the living room. China ever increasing need for oil will drive the prices up world wide. If we were to drill in ANWAR we would have to sell the higher price oil to Japan and China and buy cheaper oil from OPEC.

What is the answer? Pay the price at the pump.

Someone stole gas out of my car last night. I guess that maybe is the answer. I just hope he used it to go fishing or something fun.

papa