mpkirby

Is Oil a Bubble? Part 3

Many of the comments here describe the issue in terms of win/loss. It isn't a sporting event.

It isn't "Greens' versus "Hummer-driving, anorexic soccer mom's"

The reason we have no reasonable energy policy is because no one is able to be reasonable.

We need:

- More drilling
- More conservation
- More nuclear
- Higher CAFE standards
- Tax structures that encourage investment and conservation.

We don't need:
- Whining conservatives bemoaning the environment for preventing them from driving their SUV's to Starbucks to get a latte.
- Whining liberals complaining that Oil kills otters, Nuclear radiates all, coal dirties snow, wind kills birds, solar ruins their "view of the valley".

Get over your pathetic selves, and sit down and negotiate!

Mike

Peak Oil, Crude Price and Equity Correlation

He's saying that unless oil gets down to 50 dollars, people still can't afford it, and there will continue to be a move towards conservation, and a drag on the economy. At 25-50, it's a stimulus.

He's also saying that crude oil inventories are going down at the same time as refined product inventories, so that's real bad.

Mike

Is Oil a Bubble? Part Two

I think the "blame the speculators" crowd is missing the point.

While the "future" price of oil might be high due to speculation, ultimately when the speculators roll the contracts forward, they sell their soon to expire contracts to someone that actually wants to get the oil.

If it is a speculative bubble, that oil ends up being purchased at a loss to the speculator. Or a speculator actually takes delivery of the oil and stores it, pushing up oil inventories.

Inventories are not up, and there isn't a significant loss being taken by speculators.

Therefore, we can assume the demand is real at this price.

Mike

IEA Warns of Potential Supply Shortage

Followed by a recovery, and then another spike.

Is Oil a Bubble? Part One

For those of you promoting "peak oil" as justification for sustained high prices, don't forget that while the oil market is inelastic (explaining the sustained price right now), it isn't totally rigid.

Peak oil is about production curves, not price. It is totally reasonable to go through peak oil with very high prices, followed by crashes, followed by a resumption of high prices.

Peak oil says nothing about price. It only speaks to production.

Mike