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Topic: Oil Peaking - The End of the World as We Know It?
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| Author | Message |
| jmm | Posted – 4/29/2005 10:03:18 AM | show profile Ed When you hear a refinery has been shut down for maintenance, what is your first thought? My first thought is ''yeah, right. No way to know if that maintenance is necessary.'' |
| jmm | Posted – 4/29/2005 10:05:55 AM | show profile Also, Ed and others, After getting over being called a moron, and the sense that I was being hit with that ''it's the economy stupid'' rant again, I noticed you did mention market manipulation in relation to futures. Thank you. But, futures aside, what do you think of price-fixing in the industry? Any doubt that it is rampant? |
| canasta | Posted – 4/29/2005 10:38:29 AM | show profile China and India are starting to relax their demands. |
| angelo | Posted – 4/29/2005 3:31:38 PM | show profile >> ''Increased demand for oil in China and India is so large they have created a worrisome climate among the world's energy producers, THE CHIEF OF SAUDI ARABIA'S SERVICES COMPANY in the United States said on Monday.'' CAPS added for emphasis. Go on believing everything you read. << And I thought I was supposed to be the conspiracy theorist. Let me guess, the dark alliance of Saudi shieks have stashed away a bunch of oil in secret bunkers under the Sinai Peninsula, gouging poor, innocent Americans and pointing the finger at India and China? As I said before, there's some truth to your econo-babble in terms of short-term spikes in oil prices, which happens with any commodity, actually. But what about the gradual climb in a price of a barrel of oil over the longer term? Inflation is part of it, but oil prices have climbed faster than inflation for the past two decades. If crude was $18 per barrel less than 10 years ago, currency valuation and futures trading don't explain this rather sharp climb we've seen in the past decade. Your textbook explanation of currency valuation and how futures work sounds like you're exited over passing the Series 7 exam. To call any other factors in the price of crude ''conspiracies'' is kinda weird, IMO. It seems obvious that China's quickly becoming the world's maquiladora awash with cheap labor and, as such, is going head-to-head with the USA in the competition to see which country can be the most obcene consumer/polluter on the planet. Frankly, I don't see why this is a conspiracy theory. PS - What I don't understand is how we're getting by paying less than everyone else on the planet (except a few but not all of the primary oil exporters) for a commodity we have to import. If I recall, we import about 40% of our oil (or is it 60%? I can't recall) yet oil is cheaper in the USA than it is in Mexico which produces 100% of it's oil. And a gallon of gas in Europe is equivalent to $6 or $7. Imagine if we paid those prices here! I guess we don't pay those prices 'cause we're freer and more godly than everyone else or something... |
| hank | Posted – 4/29/2005 3:43:12 PM | show profile Huh? Why would anyone want my opinion on the price of oil? P'man's might be more insightful, but all I can do is not pretend I'm an expert. Too bad more of you don't give hankie-style a try, learn to crave it. |
| Ed-D | Posted – 4/29/2005 5:16:53 PM | show profile you guessed wrong ''Let me guess, the dark alliance of Saudi shieks have stashed away a bunch of oil in secret bunkers under the Sinai Peninsula, gouging poor, innocent Americans and pointing the finger at India and China?'' It's nowhere near that intricate. All I'm saying is that Saudi services company has a motive for saying things like that to the press. It's extremely simple: they want people to be worried about diminishing supplies of oil so there will be more demand for oil, which just so happens to be the first, last, and only Saudi Arabian export (other than terrorism). I mean duh. It's like the teacher's union releasing a report about how grossly underpaid teachers are or, if you prefer, George Bush talking during a Presidential campaign about how the situation in Iraq is ''improving''. Seriously, open your fucking eyes and realize that people in this world have AGENDAS and that these AGENDAS will determine what they say and when they say it. Especially when speaking to the press. |
| Ed-D | Posted – 4/29/2005 5:20:07 PM | show profile ''rampant'' price fixing in the industry what kind of price-fixing are you talking about? Who is doing it, how are they doing it, and what is their motive for doing it? And how is it rampant? |
| jmm | Posted – 4/29/2005 7:04:06 PM | show profile If the word rampant disturbs you, disregard it. Price-fixing in general, on any level of the industry, done in a myriad of ways. I really want to get your thoughts on it before moving on to my next point. Because I agree about agendas. corporate agendas and political agendas both influence gas prices. It is not some virginal industry driven by some pure autonomous economic force. |
| Ed-D | Posted – 4/29/2005 10:12:36 PM | show profile I don't know about price FIXING since it's virtually impossible to FIX the price of anything, even oil. But there is certainly something happening. Only a fool would think it's pure supply and demand. The Saudis obviously want to charge as much as they can and will do everything in their power to keep doing so. Traders on the futures market are also moving the price of oil, but I'm not sure there is a correlation (although it certainly wouldn't surprise me if there is. What I do know is that futures exchanges, most notably the NYMEX, are very loosely regulated, and oil companies and the Saudi royal family certainly have enough capital to either buy up futures contracts themselves, or what is more likely, hire hedge funds and others to do it for them. But that's just one individual's wild conspiracy theory) |
| jmm | Posted – 4/30/2005 12:56:14 AM | show profile My experience is limited but enough to know that we shouldn't feel bad: No one seems to know. The experts don't seem to know. The AGs and federal agents who investigate specific allegations of price-fixing or market manipulation or bogus refinery shutdowns seem to get defeated as often as they manage to make a case. Investigations into oil prices seem to be an exercise in getting lost in a hall of mirrors. Look how easily power marketers raped California a few years ago. That wasn't about the pure driven snow of free market forces. I never ever doubt that politics and corporate greed have great influence in the marketplace. And no commodity may represent power like oil and gas do. Price-fixing at the pump is constant. Price fixing at the rack, at the refinery, at the well. Price-fixing in industry in general is really common. At any given time there are bunches of price-fixing investigations going on on state, regional and international levels in many industries. It happens in a myriad of ways, but the classic image, the model or paradigm I guess, overly simplified perhaps, is a bunch of guys and gals sitting around a table divying up customers and setting the price for their product. Price-fixing is one of the most obvious -- let's be thankful for that -- but unnerving, because although it is often really obvious, it is hard to prove. Let's look at say the synthetic rubber market. Something like eight or nine manufacturers, producing virtually all the synthetic rubber in the world, raised the price per pound exactly 4 cents on the same day. (This is a real example from just a few years ago. They got away with this repeatedly for at least a decade) Everyone knows it. How can you not? Production problems? Shortage of a certain ingredient pushed world prices up? Nope. They all met at association meetings. They all sat in the same room. They shared info. They allocated customers. They eliminated competition. The same thing recently happened with global chemical tanker shipping and some of those involved are under indictment. They colluded and conspired to allocate customers and inflate shipping prices. Right now, I think some of the defendants who make synthetic rubber at the same time are plaintiffs in the totally unrelated global shipping case, because some other devision of theirs happened to ship petro and other chemicals by tanker ship. No joke. Torts clogging the courts? I think corporate wrongdoing; and divorce, custody and family cases are clogging the courts. It usually takes a whistle blower though to catch price fixing. It is very hard to prove even when you know it is going on. With oil and natural gas -- forget about it. I wonder if there is a market as influenced by politics and wheeling dealing as it, especially now with the Bush administration's obvious bias for the private interests of big energy. The whole world is dependant on these fuels. I doubt much of what I read as the reason for this or that crisis --supply problem, refining capacity, cold winter, growth of manufaturing in China, whatever. In the sliver of the industry I used to know somewhat, reasons for this or that sometimes came off as laughable obvious misinformation, some plausible and some, who could know. I don't think we should fall for this idea that these industry titans are at the mercy of the 'weather' to anything like the degree they would like us to believe from their public statements and press releases. They can see for miles. |
| jmm | Posted – 4/30/2005 1:13:15 AM | show profile it just occurred to me. It might be helpful to take a known price-fixing case, and track the bogus reasons that were given to justify the prices at the time. What the wall street analysts said, what the pundits said, what the stock price did, what the company press releases said, during the time of the price-fixing. Most interesting might be to see how investors, consumers or business customers, and the public fell for it. |
| jmm | Posted – 4/30/2005 10:46:12 AM | show profile Regarding the Saudi comment about china demand being disinformation, I would tend to agree with you. Hate to say it, but spin is so rampant, their credibility is shot. It is more reasonable to assume thowaway statements like that to the press are empty spin than to bother ''assuming they are true without evidence to the contrary.'' But I tend to think these days that no Saudi/OPEC oil pricing is done without a great deal of sensitivity to US geopolitical needs -- outside of necessities determined by supply or by currency/debt economics of course. It just can't be 1970s style OPEC retaliation against US. That's not the politics anymore. I assume all OPEC pricing these days is done hand and glove with US. Any haggling would be minor in my best guess. Personally, I think it is considered imperative to lie about strategies and motives. The United States now IS a major, the most major, MidEast oil power. OPEC isn't independant of the US anymore, because we have Iraq and we have weighed in heavily with one of those big pipelines going through those former soviet states -- can't remember the name of it. This is a good ol Texas showdown. |
| UGoGirl | Posted – 6/4/2005 1:54:09 PM | show profile Made in China It used to be just cheap plastic toys were all made in China. Now EVERYTHING seems to be made in China. Here are a couple of examples I found this week: fish and shelled pumpkin seeds. Why are we importing pumpkin seeds from China? |
| keltoi | Posted – 6/4/2005 3:34:22 PM | show profile This is excerpted from an article by the editors of Edmunds, the authoritative automobile guides: ''Beyond Oil, the View from Hubbert's Peak, by Kenneth S. Deffeyes, looks at an often cited study by a renowned geophysicist, M. King Hubbert. In 1956 Hubbert predicted that U.S. oil production would peak in 1970. When that prediction was proved accurate, people began paying attention to Hubbert's studies. In 1969 Hubbert predicted that world oil production would peak in 2000. ''In his book, Deffeyes suggests that the peak is occurring now (he says official USGS studies have placed the peak in 2036). The oil companies aren't saying much one way or the other. But for circumstantial evidence, Deffeyes points out that no new oil refineries have been built since 1970 and giant oil tankers are being retired without replacement. Perhaps the oil companies know more than they are letting on; they won't invest in refineries and ships they won't need. ''Certainly, Hubbert's prediction will be challenged. And the general public probably feels that the world is so vast there must be more oil somewhere. The point is that oil is a finite resource that will run out some time. If we are prepared for the change to another form of energy, that transition will be smooth. If we are unprepared it is likely that what has been described as ''resource wars'' will break out as countries fight for the final oil fields to prolong the inevitable. ''Bringing this discussion down to a practical and personal level, it seems that Americans need to make several important realizations: Oil is not an infinite resource. Remaining supplies of oil should be used wisely. Alternative sources of energy need to be brought on line soon.'' http://aolsvc.edmunds.com/ownership/driving/articles/105512/article.html |
| canasta | Posted – 6/4/2005 4:17:14 PM | show profile Chinese pumpkin seeds are a rare and tasty delicacy. No, really. |
| j.hodl | Posted – 6/4/2005 4:42:30 PM | show profile I've noticed that when gasoline skyrocketed this spring, the oil companies made windfall profits. Exxon/Mobil execs were openly wondering what to invest all the extra money in. How about new and more modern refineries! Because I also noticed that when at-the-pump gas prices began to dip just before Memorial Day, several oil industry experts said part of the reason was that oil companies traditionally take refineries out of use for maintenance during the spring, and now with all the refineries running full, enough gasoline was being produced to push down market prices. Right! Gasoline peaked at $2.40 a gallon at my local station. It dropped to $2.17 on 5/27/05, but is today back up to $2.20 a gallon. Why? Even the price of a barrel of oil is down from $58 a barrel. Why? Methinks the oil company execs have a lot of explaining to do. Shame nobody in Congress has the guts to propose hearings. |
| UGoGirl | Posted – 6/4/2005 11:52:46 PM | show profile Oil is a finite resource, but the last thing the oil companies want us to do is panic, and start investing heavily in alternative sources or conserving. Don't count on the oil industry to let us know what's going on. This country is incredibly tied up in oil. One example, our transportation systems depends on petroleum products to support 97 percent of its energy needs. And that isn't going to change quickly. We're in for some hurting. |
| UGoGirl | Posted – 6/5/2005 2:04:13 PM | show profile America's decline A profound quote: From Richard Heinberg’s 'The Likely Impact of Global Oil Peak on the United States': “In summary: if the 20th century saw America’s economic and geopolitical ascendancy, one way or another the 21st will almost certainly see its decline. The problems created for the US by peak oil will no doubt eventually be resolved; however, and especially if current policies continue, there will probably be many casualties along the way. The process will entail profound changes at every level of American society, and the political and economic institutions that emerge from the transition may hardly resemble those of today.” |
| Ed-D | Posted – 6/6/2005 9:30:30 AM | show profile | email poster I wouldn't exactly call that ''profound'' < “In summary: if the 20th century saw America’s economic and geopolitical ascendancy, one way or another the 21st will almost certainly see its decline. The problems created for the US by peak oil will no doubt eventually be resolved; however, and especially if current policies continue, there will probably be many casualties along the way. The process will entail profound changes at every level of American society, and the political and economic institutions that emerge from the transition may hardly resemble those of today.”> sounds more like an undergraduate term paper to me. Not to mention nothing that hasn't been said before. Then again, whoever posted this probably is an undergraduate, which would explain her (his?) fascination with this stuff. |
| keltoi | Posted – 6/6/2005 9:50:55 AM | show profile Perhaps the all-wise and all-knowing Eddy will enlighten the unwashed masses with the reasons he feels the topic of declining oil supply's impact is unworthy of discussion. |
| UGoGirl | Posted – 6/6/2005 9:55:40 AM | show profile Yeah, Ed_D, I'm an undergraduate writing my first theme, er I mean term paper. You sure got me there!!! |
| hank | Posted – 6/6/2005 10:11:16 AM | show profile Ed-D! Ed-D! He is right. While not unappreciated, UGG's post basically says: America, have fear. It's a recurring liberal theme. |
| UGoGirl | Posted – 6/6/2005 10:42:10 AM | show profile And Ed-D, I think I’m far from the only person interested in this issue. BBC recently did a little poll asking readers what “big story” they’d like to see more coverage of. http://newsvote.bbc.co.uk/1/hi/magazine/4566079.stm?dynamic_vote=ON#vote_4533949 Guess which “big story” was picked by the greatest number of readers. Yes, that’s right, the peak in oil production. Just because you’re not interested, doesn’t mean others don’t find it important. |
| jmm | Posted – 6/6/2005 8:10:00 PM | show profile In case anyone is wondering, because I sidestepped the issue in my posts, I believe peak oil and finite oil is real. I can't believe anyone is chasing Ugo with an argument about it. Methinks someone is brainwashed. |
| hank | Posted – 6/6/2005 11:44:38 PM | show profile Think what you must, just spare your reader 'methinks'. |
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