Closed today @ $54.00 per barrel[:(]
You think that’s bad. I heard that someday just might go up to $90 a barrel.
BNSFrailfan.
Nothing is impossible, but that is unlikely.
Believe it or not, there is a substantial upside to oil being as continuously high as it has for such a long period. Because oil has been so cheap in the past, American–and other countries–industry had little economic incentive to explore and develop fuel alternatives. With every dollar that oil moves higher, the more likely we are to see alternatives come in and lower the price.
In the short term, you may notice that ethenol plants are going up all over the place and they are even talking about developing synthetic diesel fuel from coal. Once these alternatives start moving in, the supply of fuel will go up and the price of oil (and foreign dependence) will go down. If oil continues to stay up, things like hydrogen power might become a realistic alternative.
Gabe
gabe mabe we should think about converting over to bio-diesel for those that have a usage for it.
I beleive it was in 2004 sometime I saw that the price for oil went to $55 a barrel once, so the $54 doesn’t suprise me at all. I just wonder will we ever see oil prices jump to $70 or more a barrel?? That would be something to scream about. lol.
Bio-diesel is another good example. I don’t know the exact numbers, but I know that the average price of diesel is getting close to the point where biodiesel would be economically feasible. If that happens, for every barrel of biodiesel produced, there would be more oil supply and the price of oil would go down.
Also, although $70 a barrell would be hard on everyone, it still wouldn’t be where it was during the embargo.
Gabe
It is gona only get worse. It’s only a matter of time,trust me.
And besides…America burns way too much oil in the first place.
Oil gouging pigs is what I call it. Sorry for the bad mouth.
BNSFrailfan.
…Sure as soon as OPEC allows oil to escalate higher and higher the alternative developments will spring back in action…and then oil prices will soften a bit and development will wither again just like they did back during the other two price escalations in the 70’s. We {collectively}, have to make up our mind if we really want to spend the money to develop an alternative energy supply and if so, stick with it and get it done…
Hmmm…perhaps I should hang around Estes Park, and find me a Standley Steamer someplace (Estes Park was the home of Standley Steamer Automobiles, and I’ve seen a couple of them buzzing around town on occasion). Sure, it would take a lot more than a key turn to start the car in the morning, but how cool would it be to drive a live steamer! [:P]
…They are cool to watch operate…They can sneak up on one very quietly…Have seen several operate in the last few years at a major Classic Car meet at Mt. Dora in Florida…They are a great piece of machinery. Jay Leno has at least one of them, probably more than just one. In running order too.
I wish I could be Jay Leno…he seems to have at least one of ANYTHING that’s cool!
He sure does have a bunch of various transportation stuff…
“Oh I wi***hat I could be Richard Cory.”
Hmmmm…there may be much truth spoken in jest here…but its still fun to dream of a really cool car collection now and again…
While I’ve never been in Mr. Leno’s shoes, the possibility of a Richard Cory parallel could most certainly be in place.
Lets just hope Mr. Leno doesn’t go home and follow the last line of Richard Cory.
Pre-80’s oil in Canada were talking $60.00 to $80.00 and even about $100.00/bbl, then along came 1981 and that was the end of the oil business in Canada, Alberta was a ghost town, now we are right back in the middle of this lunacy, did we forget 1981??? because, folks it’s coming back again, only bigger.
Pre-80’s oil in Canada were talking $60.00 to $80.00 and even about $100.00/bbl, then along came 1981 and that was the end of the oil business in Canada, Alberta was a ghost town, now we are right back in the middle of this lunacy, did we forget 1981??? because, folks it’s coming back again, only bigger.
As a professional engineer in the upstream oil and gas end of the business i believe that I can speak from a perspective of knowledge. Oil has historically been a bargain. but that is all changed. In the late '50s oil was selling for about $5.00 per barrel. Since then inflation has increased the costs of goods by approximately 7.25% or oil should have been $36 per barrel. It was about this one year ago, but then things changed. Oil is now about $55 per barrel. What caused this? Supply and demand. During World War 2 the US could produce about 15 million barrels per day. The domestic demand was about 1/3 of that or about 5 million barrels per day. Several states had proration of oil production to maintain production near to demand. Some think this was a thinly veiled attempt at government price fixing. During WW2 the United States essentially supplied the Allied powers with the fuel as other producing regions were in axis hands or the axis controlled the shipping lanes. Yes, we had gasoline rationing in the US during the war. This was not the result of lack of supply, but the lack of means of transport to the east coast. At that time the big and little inch pipelines did not exist and oil was shipped by tankers. The German U-boats had a shooting gallery with the tankers. People used to sit on the balconies of hotels in Miami and watch the tankers burn nightly. Hence we had a shortage of refined product reaching the New York area.
Back to the present day. We now produce 6.5 million barrels per day and consume 17 million barrels per day. The middle east and Venezuela are now our main suppliers and do they really care about our needs? Twenty five years ago China was a bicycle transit based economy. Every city would have bikes parked five deep along the streets. Today the Chinese economy is exploding with cars replacing the bicycles along the street. 25 years ago China was producing 2.5 million barrels of oil per day and consuming the same amount. Today they are still producing 2.5
Comments on wrwatkins excellent synopsis:
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Although you are correct that an inflation adjusted price for oil based on 1950’s prices would be around $35 a barrel, even at $55 a barrel we are still paying less for oil on an inflation adjusted scale than during the first Gulf War. Most oil analyst are pegging these current oil prices on speculators, who apparently envision more market inhibiting turmoil in the Middle East. It doesn’t take much analysis to know that some of these speculators are going to get burned if such Middle East chaos does not occur, and frankly they’ll deserve to lose their wads.
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The reason we have a severe lack of refining capacity is due primarily to our overly burdensome environmental laws. Until we can revise the “guilty until proven innocent (and even then you’re still guilty)” structure of such laws, they will continue to drag down our economic security. It has been said that even if ANWR drilling was approved, it would take 6 to 10 years for that oil to get to the refineries, yet if ANWR were located in any other country, they could start getting that oil out in a matter of months, not years. It’s not that there isn’t oil and gas located within our boundaries within reasonable reach, it’s that the artificial costs (from environmental laws) leveled on oil firms to get to those reserves are a huge disincentive to actually risk the financing for such ventures, even at $50 or $100 a barrel. Even the environmental laws in “green” Europe are not as draconian as ours. It’s time these environmental extremists be held financially accountable for every frivolous lawsuit they’ve filed over the last two decades.
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Be very careful when advocating “reduced consumption” aka conservation. When such is done on an individual basis, it makes economic sense, as it is a part of the freedom of individual choice process. However, when such policies are enacted on a public basis (wether government mandate or socio-political pressure on large private firm
How would you guys feel if someday gas went up to $10.00 a gallon?
having fuel over $10.00 a gallon would suck !!![banghead] so lets hope it doesn’t get that high [#dots]
wrwatkins: A question, perhaps you sound like someone with the background to answer: In my part of the country(corn country) everyone is going crazy over ethenol. That’s O.K. However, it’s common belief that using ethanol in gasoline is cutting “dependance on foreign oil”. Is that true? To the logical mind, it would seem that a gallon of ethanol that replaces a gallon of gasoline will replace the highest priced gallon of gasoline, regardless of where it came from. If gasoline refined from Saudi oil costs less than say gasoline refined from Texas, or Wyoming for example,wouldn’t we be defeating the purpose? Your thoughts please? Thanks