Hey, what's the prob? Oil dropped to $91 today! The threat has passed.....

 

Actually heard some dolt say that today.

Is this the peak??

 

From the International Energy Agency:

Great. I filled up for $3.10 just yesterday and it drops to $2.94 tonight.

^if you have a 20 gallon tank you just overpaid by $3.20, deal with it. a ten gallon tank is $1.60.

Great. I filled up for $3.10 just yesterday and it drops to $2.94 tonight.

 

It pays to watch NYMEX. I checked NYMEX before I left work yesterday, saw the RBOB futures price fell, so I didn't get gas on my way home from work even though I was on fumes. Most gas stations I passed listed $3.199. I'm waiting until after 10 a.m. before I get gas, since most gas stations get their price instructions from corporate or the wholesaler by then.

 

It works the other way too. If you watch NYMEX, and see the futures price going up (and the price closes higher), get your gas before 10 a.m. This is especially true at midweek when many gas station get their deliveries. In other words, if the NYMEX price closes up at the end of the day Friday, it may not show up at the gas stations until sometime the next week since gas stations already have been delivered their gas for the weekend.

 

BTW, check the RBOB price at http://www.nymex.com/

 

Update:  I paid $2.999 this morning. I passed another station that was just changing its price from $3.289 (I assume he was changing it downward!).

Hey, what's the prob? Oil dropped to $91 today! The threat has passed.....

 

 

 

Whew! Thank God, all that worrying for nothing. I'm headin out to buy that full-size 4x4 pick-up I've always wanted right now. :wave:

I might go upgrade my RAV4 for a Toyota Land Cruiser now. I've always wanted to go off-roading once a year.

I might go upgrade my RAV4 for a Toyota Land Cruiser now. I've always wanted to go off-roading once a year.

 

I remember during last summers spike, SUV sales dropped like 80%, then as soon as the spike "broke" (mid septmember maybe?) SUV sales spiked back up like 100%.

 

 

Some people have the memory of a ...what was I saying?

Some people have the memory of a ...what was I saying?

 

you're buying me a new car.

You do know I was referring to the people who bought SUVs after gas prices temporarily dipped, right?

 

I'll buy you a new car as soon as you give me your sister's phone number.  :-D

Some terrific data graphs based on IEA data were posted today at The Oil Drum....

 

http://www.theoildrum.com/node/3233

 

Definitely worth checking out, especially the explanatory text.

I remember during last summers spike, SUV sales dropped like 80%, then as soon as the spike "broke" (mid septmember maybe?) SUV sales spiked back up like 100%.

 

True. Except that SUV sales haven't exactly rebounded nearly that amount. While large SUV sales have fallen considerably (e.g. Ford Explorer), small SUV sales have gone up by considerable amounts (e.g. my Toyota RAV4 has seen double and triple digit gains). Small car sales have also risen -- but those aren't large money makers to automakers.

i was talking about month over month, but point taken (i also made up those numbers)

A site called "EnergyTechStocks .com" has two articles predicting oil prices-- one says $50/barrel oil could be right around the corner, the other says $150/barrel. 

 

Both articles ignore soaring demand in China, India, and many oil producing nations and basic petroleum geology.  I would have to say that, IMHO, this isn't a site to go to for tips on investing, especially in the energy markets:

 

Why $50 oil is just around the corner:

  http://energytechstocks.com/wp/?p=523

(reason given, traders have made the price artifically high)

 

Why $150 oil is just around the corner:

http://energytechstocks.com/wp/?p=522 

(reason:  oil producing countries aren't investing enough to keep production up-- no mention of the fact that production in any oil field eventually peaks, then declines).

 

 

I love articles like those....not really. Everybody is looking for the answer they can understand or which makes them feel better. What that doesn't do is help them make their own small contribution to the solution and/or prepare for the future. Pulling the covers over one's head doesn't count as a preparation or make the peak oil boogeyman go away.

Listening to Paul Harvey's daily broadcast the other day, he announced with childish glee a major oil strike in Brazil.  I'm suspicious of all these press releases about oil strikes, because short of cosmic incompetence on the part of oil companies, there's no reason to expect that any new strikes approaching the size of the massive Saudi fields will happen.  Whatever the size of this newly discovered field in Brazil, it's surely just a fraction of Saudi Arabia's fields. 

 

In the theme song to Beverly Hillbillies, an errant rifle shot caused oil to start bubbling out of the ground.  Oil was apparently literally bubling out of the ground in the case of many of the early oil fields.  Whatever this new strike was in Brazil, it was miles bellow the floor of the ocean.  Obviously oil that requires such Herculean effort to extract can't be sold at the same price as oil that bubbled out of the ground by itself.  But the popular media continues to advertise a simplistic description of the situation.  Impressive press images of gulf oil rigs insinuate that massive amounts of oil are being extracted when again it's only a fraction of what's coming out of the more traditional oil fields.     

 

^it's 5-8 billion barrels and will likely yield closer to 5 billion.  8 billion is 400 days of US consumption at 20 mbd. 

 

We need a Saudi Arabia about every 10 years to keep pace.  It isn't going to happen. 

Listening to Paul Harvey's daily broadcast the other day, he announced with childish glee a major oil strike in Brazil.  I'm suspicious of all these press releases about oil strikes, because short of cosmic incompetence on the part of oil companies, there's no reason to expect that any new strikes approaching the size of the massive Saudi fields will happen.  Whatever the size of this newly discovered field in Brazil, it's surely just a fraction of Saudi Arabia's fields. 

 

In the theme song to Beverly Hillbillies, an errant rifle shot caused oil to start bubbling out of the ground.  Oil was apparently litteraly bubling out of the ground in the case of many of the early oil fields.  Whatever this new strike was in Brazil, it was miles bellow the floor of the ocean.  Obviously oil that requires such Herculean effort to extract can't be sold at the same price as oil that bubbled out of the ground by itself.  But the popular media continues to advertise a simplistic description of the situation.  Impressive press images of gulf oil rigs insinuate that massive amounts of oil are being extracted when again it's only a fraction of what's coming out of the more traditional oil fields.     

 

Listening to Paul Harvey's daily broadcast the other day, he announced with childish glee a major oil strike in Brazil.  I'm suspicious of all these press releases about oil strikes, because short of cosmic incompetence on the part of oil companies, there's no reason to expect that any new strikes approaching the size of the massive Saudi fields will happen.  Whatever the size of this newly discovered field in Brazil, it's surely just a fraction of Saudi Arabia's fields. 

 

In the theme song to Beverly Hillbillies, an errant rifle shot caused oil to start bubbling out of the ground.  Oil was apparently litteraly bubling out of the ground in the case of many of the early oil fields.  Whatever this new strike was in Brazil, it was miles bellow the floor of the ocean.  Obviously oil that requires such Herculean effort to extract can't be sold at the same price as oil that bubbled out of the ground by itself.  But the popular media continues to advertise a simplistic description of the situation.  Impressive press images of gulf oil rigs insinuate that massive amounts of oil are being extracted when again it's only a fraction of what's coming out of the more traditional oil fields.     

 

 

and if it take you half a barrell of oil of energy to get one barrell of oil out of the ground, you need to pump a heck of a lot more

Try this one on for size. This is not a pretty picture....

 

http://www.theoildrum.com/files/plateau_price_nov07.png

you are going to have to translate the acronyms for me

IEA: International Energy Agency, which tracks global oil production, supplies, etc.

MA: not sure, but probably Median Average (or something like that).

WTI: West Texas Intermediate, which is one of two benchmark crude oil price measures (Brent crude is the other).

We have a new oil price record -- $99.05 per barrel! Less than $1 to go to reach the magical $100 mark. Who knows.... it could happen in overnight trading in Asia, Middle East and Europe.

 

Today I bought shares in a mutual fund based on a mix of commodity index prices (ie: oil, gas, gold, copper, grain, etc). I'm looking to buy more when I can afford to. I figure it's a good hedge against inflation driven by higher energy and food prices, and a declining dollar. The rising price indexes allowed me to recoup all of my fees in just one day.

when is the oil market open? i realise that in reality all commodity and security markets are for all intents and purpose pretty much open at any time, but is there a 'trading day' for WTI?

Today I bought shares in a mutual fund based on a mix of commodity index prices (ie: oil, gas, gold, copper, grain, etc). I'm looking to buy more when I can afford to. I figure it's a good hedge against inflation driven by higher energy and food prices, and a declining dollar. The rising price indexes allowed me to recoup all of my fees in just one day.

I see the "rising price of oil" as an artifact of the falling dollar. 

 

I have been managing the risk by putting 55% of my 401k into the "International Fund" that our 401k offers.  As Kiplinger's Magazine phrased it last year: "if you only have a quarter of your investments in international funds, you are taking a big bet against the rest of the world". 

 

Your hedge makes a lot of sense, though.  Wish I had bought gold five years ago!

Lets make some predictions for the new year and see who was closest this time next year.

 

1) highest price of a gallon of gas for one week in 2007 (US average)

2) highest price for a barrell of light sweet crude for 2007

3) lowest price of a gallon of gas 2007

4) the exact price of gas on december 13, 2007

 

all prices are in US$, all gas prices are for 87 octane (whatever is cheapest at a legitimate gas station, don't count Costco, Sams Club or Kroger Fuels or whoever offers discount shopper rates)

 

Winner of #2

 

2) highest price for a barrell of light sweet crude for 2007

 

$95

 

 

no one else went above 95

There are no winners here.

Oh yes there are. They just aren't as prevalent in the U.S. because of our adherence to a transportation and land use model that was conjured up in the 1930s when the U.S. was the world's largest oil producer. That model, including Shell Oil's City of Tomorrow proposed in 1937 and General Motors' Futurama exhibit at the New York World's Fair in 1939, was a blip in the 5,000 years of human history of how cities were developed -- as dense, walkable places. And while we dabble in solar, wind, hydro, geothermal, cellulosic ethanol, European, South American and Asian nations are far ahead of us. Companies involved in those technologies and practices will win. Freight railroads in this country are winning and will continue to win. And there are others.

 

when is the oil market open? i realise that in reality all commodity and security markets are for all intents and purpose pretty much open at any time, but is there a 'trading day' for WTI?

 

The New York Mercantile Exchange, where WTI contracts and futures are bought and sold, trades from 6:00 P.M. to 5:15 P.M. Sunday through Friday.

 

  ^---"Freight railroads in this country are winning and will continue to win."

 

    Freight railroads carry a lot of:

 

    Car Parts

    Finished Cars

    Scrap Metal from old cars

    Road Building Materials

 

    In the short term, some business may switch from highways to railroads. What if business in general declines? How long will it be until we are talking about freight railroads going out of business?

 

   

    By the way, Congratulations Neville for winning #2.

 

   

   ^---"Freight railroads in this country are winning and will continue to win."

 

    Freight railroads carry a lot of:

 

    Car Parts

    Finished Cars

    Scrap Metal from old cars

    Road Building Materials

 

    In the short term, some business may switch from highways to railroads. What if business in general declines? How long will it be until we are talking about freight railroads going out of business?

 

They also carry a lot of coal, ethanol, grain/corn, oil, recyclables, trash, plastic, iron ore, steel, copper, chemicals and even radioactive waste.

 

The point isn't so much what they carry, but what their market share is and will be. If the nation's economy shrinks a large 5-10 percent, but rail freight's ton-miles market share rises from 40 percent to 50 percent or even 60 percent because they offer a less-expensive, less energy-intensive product, they're still doing better.

 

    If the nation's economy shrinks a large 5 to 10%, I think everyone is going to feel it, including railroads. 

 

 

 

 

In the absence of rising oil prices, yes you're probably right. But shippers will still have to ship stuff, even if at reduced levels. If they can't afford trucks but can afford rail, that's where the market share shift will go. Your assumption seems to be that traffic will decrease across the board as oil prices keep rising. I don't see that. I think shippers, even if they're making less 5-10 percent fewer shipments, shift 20 percent of their traffic to rail, then rail will benefit.

 

Let's look at the experience of the last few years -- rail traffic has soared until the past year while trucking has flattened out. Why did rail traffic stop soaring a year ago? Because rail carriers were close to capacity and couldn't handle much more traffic, so they increased their rates and are now making substantial investments to expand their traffic-handling capacities. Most of the Class 1 carriers are, for the first time in more than 60 years, are earning at or above their cost of capital -- even with the soaring energy prices.

 

I don't know if railroad company officials are aware of peak oil, but they are acting as if they are. In general, I've been very impressed with their decision-making in recent years to position themselves to be the go-to freight transportation resource for the future.

Here's the stat of the century....

 

It would take six Earths to provide the resources required to support every person on earth today if they lived and consumed like the average US citizen.

http://www.fcnp.com/index.php?option=com_content&task=view&id=2123&Itemid=35

 

The Peak Oil Crisis: Wall Street Comes To Reality     

Written by Tom Whipple   

Thursday, 22 November 2007 

 

The day was a long time in coming. For many months now, world oil production has remained essentially flat and world oil exports have fallen while world oil prices just climbed and climbed. Poor country after poor country was priced out of the market and world oil stockpiles started to melt. Yet as the world lurched towards the mother of all economic crises, the major media of the country led by Wall Street’s own Journal remained strangely silent.

 

From time to time they would report some good news such as “billions of barrels found 25,000 ft under the Gulf” or “steaming out sticky oil will save us.” However, they never got around to asking what is involved in extracting oil from deepwater wells or just where all that tar-melting steam was coming from. Anyone who questioned that oil production could keep on growing for the foreseeable future was castigated as lunatic fringe.

I have seen the WSJ criticized for "editorializing" in their news reporting in other articles, too.  The WSJ has "invested" a lot in their image of impartial reporting.  Makes it hard to believe when the paper has such a frothing, prowar editorial page.

 

Outside of that, that was a very good article.  Nice style.  Who is Tom Whipple, anyway?

^Tom Whipple is a reporter for the Falls Church News-Press in Falls Church, Va.  He's also a member of the Association for the Study of Peak Oil and Gas-- USA chapter. 

He is also a recovering government researcher.

Uh-oh....

 

http://energytechstocks.com.previewmysite.com/wp/?p=540

 

Bad News from Canada May Raise Short & Long Term Commodity Prices of Oil and Natural Gas

Posted: November 21, 2007

 

A new report from Canada’s National Energy Board says the U.S. should expect exports of Canadian natural gas to the U.S. to fall approximately 30% between now and 2015. The report from Canada’s energy regulator further warns that, due to rising costs, the U.S. should expect to import less oil from the Alberta oil sands region than previously forecast.

 

This double dose of bad news could have a major impact on both the short- and long-term prices of both commodities. The U.S. is counting heavily on increased imports of Canadian oil, specifically to offset an expected decline in Mexican oil, and generally to counter the greater competition for oil among net importing countries as global demand continues its precipitous rise. After Saudi Arabia, Alberta’s tar-sands region is believed to contain the largest oil reserves in the world.

KJP,

 

"But shippers will still have to ship stuff, even if at reduced levels."

 

I guess the question is how much stuff will need to be shipped. Some say that peak oil will basicly correspond with peak everything; some say that that coal will make up the shortfall, until sometime later this century when coal peaks.

 

Highways and railroads each have their own advantages, and they complement each other. Yes, the availability of oil will change the rules of the game. But the availability of oil will also change the rules of the game in the overall economy. I hear that there are fuel shortages in North Dakota, for example. If North Dakota farmers can't get fuel for their combines, will railroads need to haul grain from North Dakota?

 

 

 

Only if there's no other way to harvest the grain.

Here's a small, but important article...

 

http://www.forbes.com/markets/feeds/afx/2007/11/23/afx4367849.html

 

Western oil companies doomed to become 'niche players' - IEA economist

11.23.07, 3:53 AM ET

 

FRANKFURT (Thomson Financial) - Western oil companies are doomed to become minor players in the sector, the head economist of the International Energy Agency (IEA), Fatih Birol, predicted.

 

'Western oil companies are going through an identity crisis,' Birol said in the German daily Die Welt today.

Watch NYMEX. Oil is making a push toward breaking the $100 mark again. It's just shy of $99 and rising. Stay tuned.

 

Edit: False alarm. It slipped back below $97 after rumors spread that OPEC will pump more black crack to the addicted.

 

 

    Somehow I feel like KJP was going to have a party when oil hit $100 a barrel.  :-D

I prefer to call it "tough love." ;)

 

To learn something at the school of hard knocks, you've got to get there first. That's why I have the new avatar -- as my little encouragement to Americans to keep doing the destructive behavior that is putting them on a collision course with reality. But they really don't need my encouragement!

Pretty doom and gloom scenarios.  I guess I'm not understanding when some people are saying that people are driving just as much as before and thats why the price keeps going up.  Are people really driving much more efficient vehicles the past year?  Because then the state says people aren't buying as much gas as before and thats why coffers are going down dramatically.  There should be some elasticity in supply and demand.  I would wonder how much it has to do with the power of the dollar.  As the dollar gets weaker it costs more per barrel.  Which makes me wonder why the Texas oil fields aren't going crazy now that we have a price thats higher than its ever been and a weak dollar. 

  Personally I expect to be driving a non-hybrid with around 55+mpg next year.  Plus I expect to be far closer to work, 7 miles.  So perhaps stop at a station once a month.  I really don't see high oil prices being that bad of a thing except for truckers.  It makes people focus on more intelligent choices in buying vehicles besides how big the rims are and how high off the ground they can get.  It should eliminate oil as a source for power plants.  It gets people focused on ways to save money and think, which actually is a good thing. 

  So if anything, this is helpful for the downtown core of cities.  Cheap oil is the elixir of exurbia.

I guess I'm not understanding when some people are saying that people are driving just as much as before and thats why the price keeps going up.  Are people really driving much more efficient vehicles the past year?

 

There's lots of reasons why the price is going up, but some of them wouldn't be influencing the price if supply wasn't having a hard time keeping demand satisfied.

From the Onion:

 

http://www.theonion.com/content/files/images/Public-Transportion.jpg

Peak Oil -- the cartoon!

 

 

  ^---- That's a pretty dramatic cartoon.

 

  In all fairness, they are looking at an assymetric curve, which may or may not happen, and they seemed to emphasize the crash by speeding the film on the downslope side.

 

    I like the Volkswagon Beetle at 1975.

Dec 12, 1:04 PM EST

http://hosted.ap.org/dynamic/stories/N/NEW_ENERGY_SOURCE?SITE=OHCOL

 

Gas Quickly Produced From Old Wells

 

By SETH BORENSTEIN

AP Science Writer

 

WASHINGTON (AP) -- A vast new energy supply in hard-to-tap older oil fields may be generated simply by feeding fertilizer to some deep-dwelling, gas-making microbes, new research suggests.

 

Canadian and English researchers were able to convert oil into usable methane in small glass tubes during two years of lab research, instead of a process that takes tens of thousands of years underground. The next step is to do it in real oil fields.