Marcus Aurelius

OPEC: Too Little, Too Late

Ishortyou, you represent only you. I am not buying a car because we have the two we need, I buy used, and grew up in a household that runs the wheels off of their cars. When the wheels fall of one of our cars we will buy another gasoline powered vehicle, unless the alternative is both practical and affordable. Right now, alternatives are neither.

I believe the oil rally of summer '08 was a tech/speculative rally. The situation was like a spring with a lot of tension, when it lets go it recoils and does not stop until it is way past its natural point of equilibrium.

Where are we in relation to the equilibrium point? Well US oil stocks are high in relation to the five year average and dropped only by a little bit in the last week or so and we have Thunder Horse ramping up to be in full production within two years. However, we do have the economic downturn going on. My wife's nephew is a sailor and tells us six of his company's ships are docked - not enough material coming from China to the US.

Right now we are still above equilibrium, but when economies starting recovering watch out.

OPEC Cuts, Oil Falls: Something's Not Sustainable

BTW, I clarify the article was good up to the last paragraph. What did happen in Iraq? May we use our brawn in '10?

OPEC Cuts, Oil Falls: Something's Not Sustainable

Good article.

Hey everyone, he is not saying going to war with India, China, or Russia to plunder their oil, he is saying unless we come up with an alternative to oil we will be waring against them (and they against us) for what oil is left, no matter who is on top of it.

Booba, I must say you done good today, your boss at the KGB or whatever it is called today spent a few good rubles.

There is a third option and that is we curtail (at our option or otherwise) oil dependent activities and never ever forget, oil is about more than energy and serves as the raw material for medicines, plastics, fertilizers, etc etc etc.

I think those who say we didn't go to war in Iraq or wherever on account of oil are just as barmy as those who say it was the sole reason (or any one of a number of other kooky ideas - e.g. to avenge the foiled assassination plot against HW). Oil elevates what would otherwise be a wasteland to vital importance, as I say above, so much of our modern lives depend on it. The difference is there are a whole set of reasons oil being one of them.

How Low Can Crude Oil and Gas Go?

I too suspect CL has overshot its sustainable low. I saw some data the other day giving figures for what petroleum producing nations need to make producing oil pay or pay for the nation. Saudia Arabia's threshold was about $50.00/barrel. The UAE was at $20.00/barrel and other nations (e.g. Russia and Iran don't recall seeing Venezuela on the list) were up at $70 and even higher.

Ex-Patriates in the Middle East are now worried their host nations will start taxing their incomes. Two events would typically trigger such thoughts in the governments of the Middle East weak dollar & low oil prices.

I expect CL to go sideways for a month maybe two months and then rise again to meet the summer driving season. However, I do not expect prices to approach last summer's highs, unless of course, some sort of major disaster (natural or otherwise) hits the energy production chain.

How Does the Financial Crisis Affect the Peak Oil Thesis?

Dabu, good analysis. Over the last four months or so I felt oil was in its normal routine of rising over the summer and it would pull back, the only surprise was it held its peak longer than what I expected. In years past I would see the peak hit in late May early June and subside from there (absent any system shocks). No doubt about it, oil is headed upward but between Point Now and Point Years from now there are bound to be ups and downs in between. Friends were expecting $5.00 gas this last summer and I told them it wasn't happening this summer, but I believe gas will make a serious run for $5.00/gallon next summer.

'Pickens Plan' Comes in the Nick of Time

AlexS,

The plan is to replace traditional gasoline sourced overseas with domestically sourced natural gas that is how we would staunch the flow of wealth outside the US.

'Pickens Plan' Comes in the Nick of Time

As long as the wind farms are widely dispersed they should be able (as a whole) be able to maintain an average output and remember they can tune each station to the particular condition each station faces. I agree it would be great to come up with a practical way to store output in excess of current needs.

The one concern I have is a whole lot of us use natural gas to power our home heating, cooking, and the like. Diverting significant amounts of natural gas to transport would hit those people hard.

Investor612 is spot on about speed. When gas prices are topping out like they are now, I drive the speed limits and watch my brake usage as well as my acceleration and when I do all of that the mileage on my Impala is noticeably higher.

As far as jobs go, my father notices tons of tubes being built in a town on Lake Michigan. He thought it was oil pipeline but it turns out to be wind turbine towers.

At least Pickens is doing something and not just yapping. Some pols, one in particular, are nothing but Jimmy Swaggarts of the global warming faith.