lucidone

Crude Reality: Big Oil's Purposely Restricting Supply

Any facts, or is this just another liberal rant. If anything, you are completely wrong, the oil companies and OPEC benefit from lower prices more than highe rprices. Yes, they could charge 100+ for a barrel, but for how long. We are already seeing demand destruction after only a couple months. If they had a grand scheme its obviously failing. Both producer countries and companies want a stable price that allows them to make a nice margin, while maintaining the fundamentals of supply and demand. The last thing OPEC and the oil corporations want is for us to resort to alternative energy.

How Big a Contribution Comes from Oil Speculation?

Excellent points, unfortunately commodity trading, and the financial industry in general is rarely governed by ethics. The contemporary free market is the most cutthroat and shrewd system every created by man.

World Oil Reserves: Russia's on the Map

This map is dated. It does not reflect reserves in Brazil. Also, ultimately, its not how much is in the ground, but the rate at which you can extract. This is why, despite Russia's potentially massive deposits, they are not as efficient as the Gulf states.

Really, Really Bad News About Oil

Really?? Take a look at this recent development


Senate witness today described the chairman of the U.S. Commodity Futures Trading Commission (CFTC), which is allowing U.S. oil futures market speculation to be "regulated" by British and Dubai, instead of American, authorities. In a hearing on manipulation of the skyrocketing oil price, the expert witness, University of Maryland law professor Michael Greenberger, told seven angry members of the Senate Commerce Committee that 35% of U.S.-based trading in West Texas Intermediate Crude oil futures has shifted to "dark markets," completely unregulated, by agreement with Britain. On these markets in particular, Greenberger said, a few hedge funds and three investment houses--Goldman Sachs, Morgan Stanley, and JP Morgan Chase--are controlling 70% of the speculative buying of U.S. oil futures and driving the price of oil steadily upward, while "ironically, issuing `predictions' that it's going to $200/barrel." This London-Wall Street speculative manipulation of oil and energy prices, with the knowing wink of the CFTC and its chairmanWalter Lukken, was also targetted by Consumer Federation of America witness Dr. Mark Cooper, and by the Senators themselves, as "the London Loophole" accounting for anywhere from 35-50% of the current price of a barrel of crude oil. Cooper told the Senators, "Roll up your sleeves, assert the national authority of the United States, and regulate these markets." On May 25, Sen. Maria Cantwell and 22 other Senators had released a letter to the CFTC demanding that the "London Loophole" be closed. Lukken had responded on May 29 promising action "by Fall." That exchange alone was enough, said Greenberger, to brake the dizzying oil price rise at about $135-going-on-$200, and pull it back down to around $125/barrel. Senator Cantwell said after today's hearing, "Now there will be a lot more signers; and I believe CFTC will take the action required by the economy, and by the morality of the American people, now." If not, she believes the Senate will legislate to force CFTC's hand. Greenberger and Cooper laid out in detail, how 35% of West Texas crude futures are traded on a market headquartered in Atlanta, Georgia--the Intercontinental Commodity Exchange, or ICE--which by CFTC staff actions, is juridically a London offshore market overseen only by the British Financial Services Authority! And oil futures trading on the New York Mercantile Exchange (NYMEX) is now "regulated" only by the London-controlled financial authority of Dubai, under another CFTC staff agreement. On what are effectively British offshore markets, Greenberger said, the above-cited banks and hedge funds are simply "continuing and repeating the `subprime' crash of the securities markets, and all their derivatives, on the commodities markets." Adding a sobering note, Gerry Ramm of the Petroleum Marketers Association of America told the Committee that gasoline/diesel/propan... dealers all over the country were facing bankruptcy and would start closing their stations, because "we can't get the credit to buy our receivables" which have doubled in price.

Really, Really Bad News About Oil

correct link: www.radford.edu/~wkovarik/oil/

Really, Really Bad News About Oil

maximax- to repond: oil reserves: let me qualify that as the America's : www.radford.edu/~wkovarik/oil/index.h...

Also, China and India will only be able to subsidize prices for so long.

And yes, I do believe in abiogenic oil, especially considering that hydrogen and carbon are the 1st and 4th most plentiful elements in the universe.

Really, Really Bad News About Oil

MMarrkk is correct, new reserves are expensive to develop, this is why a higher price motivates companies to invest in the extraction. However, once the initial capital costs of establishing the infrastructure are accounted for, the extraction costs will drop preciptiously. Improved technologies will also contribute to this decline, this may take years, and would partially be offset by demand increases. Two other components which have not been discussed are: the absence of spare refinery capacity in the US, and the fact that technology exists to produce synthetic oil at about $80/bl. If the US gov./oil companies invested in these infrastructure improvements we would see additional declines.

Really, Really Bad News About Oil

It is exactly this type of fear mongering that fuels the price of oil. Tell everyone it is running out, and they will buy buy buy. With the recent discovery of a massive field off the coast of Brazil, proven untapped reserves in the US that may exceed Saudi reserves, untapped Russian/Central Asian and African sources, and unknown but potentially staggering reserves in the Arctic and Antarctic, oil is far from exhausted. This fact compounded with the actually renewable nature of oil, makes most of this articles assertions baseless. However, the author does have a good point, in that oil producing countries have a motivation to keep supply capacity tight, to keep the price up of course. They offer government subsidized oil to their citizens, which keeps them calm. They then make a killing on the open market. The only problem with this strategy is that it will motivate the exploration and exploitation of new and existing fields. Eventually, spare capacity will come up, and the price will plummet, mush as it did during the 80's and 90's. While some would argue that the growth of China and India will continually put pressure on the price, everyone knows that they cannot grow at the current rate forever. Something will happen which will curb growth, it always does. If anything, with the current psuedo recession in the US, there will be a delayed ripple effect in China and India which will curb growth. A higher price of oil will also serve to curb growth, since the newly minted middle class of those countries have much less disposable income to absorb oil/gas price shocks. This combined with an increase in the usage of natural gas and "green" technologies in the west, will put additional downward pressures on oil. This article mainly parrots the discredited Hubbert's Peak predictions. Its main impact will be to fuel additional speculation and misunderstanding. It is not the supply of oil, global demand, or hurricanes that are responsible for oil's metoric rise, it is the reactive, and potentially biased influence of the media and energy analysts. Just like the silver, .com, real estate bubbles, this one will collapse to, its just a matter of when.