Oil heading to $70 per barrel?

Voronwë · Post by **Voronwë** » August 12, 2005, 12:55 pm

I seem to recall an economist saying that $55 a barrel oil would lead to a recession if it was there for several months.

Right now it is at $67, up almost 50% on the year.

but others seem to say that nothing is going to stop the price from continueing to climb in the next year or two as there is increasing demand, and flat to declining capacity (refineries) to deal with that demand.

Fairweather Pure · Post by **Fairweather Pure** » August 12, 2005, 1:01 pm

I'm also happy to hear that the major oil companies all posted record profits this year. Several of them even doubled thier net earnings from last year.

Where's the outrage?

Kelshara · Post by **Kelshara** » August 12, 2005, 1:03 pm

heh friend of mine is a network admin for a company that buys and sells oil. Let's just say they all got nice raises and a lot of nice new toys...

Lynks · Post by **Lynks** » August 12, 2005, 1:34 pm

We just hit over a dollar a litre here

Voronwë · Post by **Voronwë** » August 12, 2005, 1:42 pm

worked well for my family. my father-in-law worked for a plastics company owned by a major petrochemical corporation and decided to retire this year. worked out well for him - though he deserved every penny he got - he worked his ass off. But always good to retire in a year when your corporate overlords are swimming in cash.

Also for perspective - adjusted for inflation, the "energy crisis" of the late 70s had a peak value of oil around $90 a barrel.

Funkmasterr · Post by **Funkmasterr** » August 12, 2005, 1:56 pm

I just paid $2.76/gallon for gas today.. Granted I always put 93 octane in my car but still.. Its getting a bit ridiculous, and if this steady increase continues its actually going to get to the point in the not so distant future that I am going to have to be a hermit other than work, cause gas for my car will be too spendy.

It doesn't help that minnesota doesn't have a viable mass transit system either. If I wanted to take a bus to where I work (a 25-35 minute drive from my house), after about 5 transfers, going way out of the way of where I need to go, and stopping at every single street on the way, it would probably take me 2.5 to 3 hours to get to work.

Marbus · Post by **Marbus** » August 12, 2005, 2:05 pm

I'm not sure what people expected when they voted Bush into office for a second term... his loyality is to the big oil companies not to the American public. The sad thing is the rest of us have to suffer for the stupidity of about half the voting public.

Marb

Nick · Post by **Nick** » August 12, 2005, 2:10 pm

2.76 a gallon? Cry more please.

In the UK here we pay like the equivalent of about 7 dollars per gallon.

Funkmasterr · Post by **Funkmasterr** » August 12, 2005, 2:17 pm

You are missing the point though Nick. I am guessing you have a viable alternative, IE: Mass transit. Lots of cities/states in the U.S. have decent to good mass transit options too, but Minnesota does not. Driving is my only option, and I put on around 30k miles a year. I'm guessing that this isnt the case for your average european paying 7 dollars per gallon.

Nick · Post by **Nick** » August 12, 2005, 2:22 pm

In all honesty I just wanted to use the phrase cry more please

Don't be too offended!

Public transport is fairly horrific over here tbh although I accept that if you have no other choice it is still sorta handy.

miir · Post by **miir** » August 12, 2005, 2:23 pm

Nick wrote:2.76 a gallon? Cry more please.

In the UK here we pay like the equivalent of about 7 dollars per gallon.

The reason diesel is so popular in the UK.

Aabidano · Post by **Aabidano** » August 12, 2005, 2:28 pm

Lots of cities/states in the U.S. have decent to good mass transit options..

NYC, Chicago, SF Bay area and where else? You're in for a long bus ride any area besides those three from what I've seen.

Europe developed much differently than the US, most of those countries had mass transit of some sort before autos existed. At a guess they all had it by the '50s when autos really took off here. By the time the need existed in the US other financial interests were firmly entrenched in the business of getting people from A>B.

Paid $2.48 for 93 octane yesterday, it was $2.40 the day before. Almost everyone in my group has 60-70 mile one way commutes and are working from home 1-2 days a week now. I'm only 10 miles from the office, gas is no big hit for me (yet).

Nick · Post by **Nick** » August 12, 2005, 2:31 pm

Right where I live I would say most people with cars put on around maybe 20k a year if they work in Belfast (the main city).

That and insurance cost like the equivalent of about 2/3000 dollars a year.

It's fucking ridiculous

Kilmoll the Sexy · Post by **Kilmoll the Sexy** » August 12, 2005, 2:53 pm

At some point the economy will suffer and then something will be done about it. Hopefully it is not too late at that time.

Aslanna · Post by **Aslanna** » August 12, 2005, 3:14 pm

D.C. has a fairly good system from what I remember. But that's only in a 10 mile radius or something. Once you get outside of that you're out of luck.

Kaldaur · Post by **Kaldaur** » August 12, 2005, 4:02 pm

Nick, I'm surprised. When I visited England, I found that the mass transit system was very well organized. Train companies (I think I saw at least 5) keep competition going by keeping prices down, and the bus systems in every major city I visited (Edinburgh, London) were much better than those I've seen in Chicago or New York. The only reason it sucked for me was the dollar exchange. I wish the US still employed a large scale train system similar to what is in the UK. I wasn't able to visit Ireland though, so I couldn't comment on your system.

Nick · Post by **Nick** » August 12, 2005, 4:12 pm

Oh well they are cheap enough and handy, but it's just horrible being crammed in a packed train or bus, at any time imo!

Kelshara · Post by **Kelshara** » August 12, 2005, 4:25 pm

I'd take mass transportation if I could. Not because of gas prices (only got a 17 miles commute so not a huge deal), but because it is so much more relaxing. Fucking moronic drivers will make me go crazy. Almost got hit twice by the same woman within a 2 minute time period! Older woman, in a minivan and talking on a cellphone..

Deward · Post by **Deward** » August 12, 2005, 5:07 pm

I am predicting that gas will $100 a barrel before the end of the year. That should be about $4 a gallon for us americans. THis will affect more than just gas prices too. The cost for everythign will rise just because of the shipping costs. I really need to get my greasecar built.

Kylere · Post by **Kylere** » August 12, 2005, 6:00 pm

Man, I am SICK of driving and and from work, years of 50 mile one way commutes wore me out, now I go 10 minutes doorway to doorway and I still hate it. In Italy I could catch bus, or rail to within a 5 minute walk of work either way.

Of course in my wonderful county, the MTA ( Mass Transit Authority) thinks minivans and specialized pick is more important than actual buslines.

Skogen · Post by **Skogen** » August 12, 2005, 7:39 pm

I hate mass transit. When I lived in SF, I had to catch Muni every fuckin day. ALWAYS late (usually WAY late), and when the fuckin' bus does show, it's PACKED. The only saving grace was BART. BART just rocked for getting to the East Bay.

Zaelath · Post by **Zaelath** » August 12, 2005, 7:55 pm

Voronwë wrote:I seem to recall an economist saying that $55 a barrel oil would lead to a recession if it was there for several months.

Right now it is at $67, up almost 50% on the year.

but others seem to say that nothing is going to stop the price from continueing to climb in the next year or two as there is increasing demand, and flat to declining capacity (refineries) to deal with that demand.

The world economic fallout from $60 a barrel was zero, the same chance that it will fall below that mark again. Maybe people are thinking it will drop again so it's not hitting consumer confidence as hard as it might have.

Oh, and cry me a fucking river about your non-existant mass transit system, you voted against it and for gas subsidies every time.

Metanis · Post by **Metanis** » August 14, 2005, 10:10 pm

I got 38mpg this weekend with my Neon. I just slowed down a bit from my normal 70mph...

Moonwynd · Post by **Moonwynd** » August 14, 2005, 11:50 pm

I got 90 MPG from my Stella...and that was doing 65 MPH

Drolgin Steingrinder · August 15, 2005, 7:48 am

miir wrote:
Nick wrote:2.76 a gallon? Cry more please.

In the UK here we pay like the equivalent of about 7 dollars per gallon.
The reason diesel is so popular in the UK.

Danish gas prices: just around $6.80/gallon
Danish diesel prices: just around $6/gallon

The argument that diesel fuel is cheaper doesn't really ring that much anymore ><

Narmgarf · Post by **Narmgarf** » August 15, 2005, 8:10 am

I didn't think the argument was just that it was cheaper...I thought deisel burned more efficiently as well.

Narmgarf

Aabidano · Post by **Aabidano** » August 15, 2005, 8:29 am

Modern diesels, especially turbo diesels put out less horsepower and much more torque for a given displacement as a gas engine, and use 1/2 to 2/3 the fuel. If you look at the Mazda UK site, the diesel listed for the wagon gets 68 mpg highway. Not too shabby. A guy in the office just bought a Jeep Liberty with the diesel, he's getting 27 mpg around town.

My VW has a note in the manual that says if you're getting less than 44 mpg it needs maintenance. Contrasted to the gas motor in the same vehicle getting about 26 mpg.

Diesel fuel is more expensive than regular unleaded around here, but the economy improvement more than makes up for it.

Animalor · Post by **Animalor** » August 15, 2005, 8:30 am

Isn't this nice? The year I buy a house and havta start commuting 60 miles a day( 30 each way ) gas prices soar to stupid levels.

laneela · Post by **laneela** » August 15, 2005, 8:49 am

At close to 60 mpg, hybrids are a good choice. Prices are still decent on them...

http://www.fueleconomy.gov/feg/hybrid_news.shtml

I know that in CA, you're able to drive on the HOV lanes as a single passanger in a hybrid as well, so that's another nice little perk.

Kylere · Post by **Kylere** » August 15, 2005, 9:08 am

Modded Hybrid Cars Get Up to 250 MPG
http://slashdot.org/articles/05/08/14/0 ... ml?tid=126

Weee tech, here is a sample

artemis67 writes "Politicians and automakers say a car that can both reduce greenhouse gases and free America from its reliance on foreign oil is years or even decades away. Ron Gremban says such a car is parked in his garage. It looks like a typical Toyota Prius hybrid, but in the trunk sits an 80-miles-per-gallon secret -- a stack of 18 brick-sized batteries that boosts the car's high mileage with an extra electrical charge so it can burn even less fuel. Gremban, an electrical engineer and committed environmentalist, spent several months and $3,000 tinkering with his car."

Zaelath · Post by **Zaelath** » August 15, 2005, 10:55 am

Kylere wrote:Modded Hybrid Cars Get Up to 250 MPG
http://slashdot.org/articles/05/08/14/0 ... ml?tid=126

Weee tech, here is a sample

artemis67 writes "Politicians and automakers say a car that can both reduce greenhouse gases and free America from its reliance on foreign oil is years or even decades away. Ron Gremban says such a car is parked in his garage. It looks like a typical Toyota Prius hybrid, but in the trunk sits an 80-miles-per-gallon secret -- a stack of 18 brick-sized batteries that boosts the car's high mileage with an extra electrical charge so it can burn even less fuel. Gremban, an electrical engineer and committed environmentalist, spent several months and $3,000 tinkering with his car."

Yeah, but you have to plug it in... and the extra weight it carries means it's over-all less efficient than not lugging around "18 brick-sized batteries". Now, if you can invent a viable fusion reactor that runs on waste, you might be on to something.. though, at that point you might have a use for hydrogen fuel cell technology.

Siji · Post by **Siji** » August 15, 2005, 11:04 am

As long as Hummers and Escalade type tanks are so popular in this country, we deserve high gas prices. Maybe when it hits $8.00 a gallon more people will start being a bit more conscious about it.

Aabidano · Post by **Aabidano** » August 15, 2005, 11:27 am

Hybrids are a cool idea but I wonder if the impact of extra resources required to create and dispose of one outweigh the operational savings.

Drasta · Post by **Drasta** » August 15, 2005, 12:17 pm

it took me 27.75 to fill up my car .... used to cost me 12 bucks back when i was 16 ... im now 19

Aslanna · Post by **Aslanna** » August 15, 2005, 1:02 pm

Siji wrote:As long as Hummers and Escalade type tanks are so popular in this country, we deserve high gas prices. Maybe when it hits $8.00 a gallon more people will start being a bit more conscious about it.

I don't drive a SUV. I don't think I deserve to pay for them. They need an extra tax for that.

Chidoro · Post by **Chidoro** » August 15, 2005, 4:39 pm

Drasta wrote:it took me 27.75 to fill up my car .... used to cost me 12 bucks back when i was 16 ... im now 19

Ohh well, you missed out on all of the fun years when gas prices barely moved. I remember regular being about $.80ish back in the day but it then hovered for quite a long time at the $1.15-$1.35 range (in NJ). Summer's always were a tad more expensive because of higher demand but this upturn is rather startling.

Gas basically has gone up about $.20 these past two weeks. It seems to change on every single delivery. This just makes the new energy bill that much more of a joke.

Boogahz · Post by **Boogahz** » August 15, 2005, 4:44 pm

I thought it was shocking enough at the start of the 1st gulf war when I was filling up my families 3 vehicles on a weekend. The first two were around $0.89 per gallon, and the third was at $1.09 per gallon. That was all at the same place and on the same day. I gave up even being shocked by the prices. For me, it is a necessary evil that I must pay for, and the most I can do where I am living/working is own a vehicle which uses less. I had been tempted to buy a new truck last year, and fuel prices were the main thing that got me into a gas friendly sedan instead.

Nick · Post by **Nick** » August 15, 2005, 5:07 pm

Who is making money off this situation?

Why is it being allowed to happen?

nobody · Post by **nobody** » August 16, 2005, 12:27 pm

Nick wrote:Who is making money off this situation?

Why is it being allowed to happen?

oil companies and the oil rich nations of the middle east

b/c we are too stupid to learn our lesson from about 30 years ago

Kelshara · Post by **Kelshara** » August 16, 2005, 1:07 pm

Actually oil companies aren't making a fortune on it either. More money yes, but not to the extreme.

Of course.. supply and demand..

Neroon · Post by **Neroon** » August 16, 2005, 1:16 pm

Exxon Mobile made $7.5 billion in the first 6 months of this year. A 34% increase over the same timeframe last year.

If that's not a fortune, I don't know what is.

Siji · Post by **Siji** » August 16, 2005, 2:19 pm

Aslanna wrote:
Siji wrote:As long as Hummers and Escalade type tanks are so popular in this country, we deserve high gas prices. Maybe when it hits $8.00 a gallon more people will start being a bit more conscious about it.
I don't drive a SUV. I don't think I deserve to pay for them. They need an extra tax for that.

You're right.. however, a tax wouldn't end up going back to anything doing with the environment, alternative fuel research, etc. It would simply go into someone's pocket. But you are right, it's not fair and there should be an environmental impact tax on vehicles with gas MPG ratings below a certain number; which should increase over time.

Voronwë · Post by **Voronwë** » August 16, 2005, 3:12 pm

Kelshara wrote:Actually oil companies aren't making a fortune on it either. More money yes, but not to the extreme.

Of course.. supply and demand..

if you overlook the fact that EVERY major petrochemical company posted record earnings each of the last couple of quarters, then i guess your statement would be accurate.

supply of oil isnt the problem with gas prices, it is a drop in refining capacity over the last few weeks that has contributed to the spike.

Aabidano · Post by **Aabidano** » August 16, 2005, 3:50 pm

Siji wrote:...there should be an environmental impact tax on vehicles with gas MPG ratings below a certain number; which should increase over time.

There already is. Any vehicle classed as a truck, including ones that will never be used as a truck (like Escalades, Hummers, Excursions, etc..) are exempt. Rollover protection and most other safety features aren't required either IIRC.

*Edit -
Don't know what the distinction is, at a guess the extra large ones are trucks, the smaller ones SUVs.

passenger cars are required to meet a fleet average of 27.5 miles per gallon, the DOT's National Highway Traffic Safety Administration is raising SUV standards by just 1.5 mpg -- to a 22.2-mpg fleet average -- by 2007. The Bush administration touted the increase as proof of its commitment to improving fuel economy.

Winnow · Post by **Winnow** » August 16, 2005, 4:04 pm

Neroon wrote:Exxon Mobile made $7.5 billion in the first 6 months of this year. A 34% increase over the same timeframe last year.

If that's not a fortune, I don't know what is.

Microsoft has announced revenue of US$10.16 billion for the quarter that ended June 30, 2005, a 9 nine increase over the results in the same period of the prior year.

7.5 B over six months is chump change! Imagine Microsoft's revenues in 2006 with Xbox 360 game royalties, MS Vista and a new MS Office.

Microsoft has 3x the cash it needs to survive, no long term debt, no inventory to worry about, and extremely strong current and quick ratios. Its working capital per dollar of sales is 112%, excessive by any standard (especially compared to its competitors. Adobe Software had a ratio of 36%, while Oracle Systems came in at 46.5%). The main question an investor should ask when looking at the balance sheet is, "why so much cash?". None of the company's top management has given any clues as to the plans for the growing pile of greenbacks.

Kelshara · Post by **Kelshara** » August 16, 2005, 4:53 pm

Voronwë wrote:
Kelshara wrote:Actually oil companies aren't making a fortune on it either. More money yes, but not to the extreme.

Of course.. supply and demand..
if you overlook the fact that EVERY major petrochemical company posted record earnings each of the last couple of quarters, then i guess your statement would be accurate.

supply of oil isnt the problem with gas prices, it is a drop in refining capacity over the last few weeks that has contributed to the spike.

I did say more. However, it is not a fortune compared to many other companies. And the refineries limit the supply while the demand for gas is at an all-time high and rising.

Voronwë · Post by **Voronwë** » August 16, 2005, 5:20 pm

leave it to Winnow to set the earnings benchmark at beating the largest corporation in the world.

Kylere · Post by **Kylere** » August 16, 2005, 5:44 pm

I have always hated SUV's and the inconsiderate slobs who buy them, saw a guy today spend 66 bucks filling his Expedition.

Payback is a bitch.

Aabidano · Post by **Aabidano** » August 16, 2005, 6:49 pm

Winnow didn't mention MS's 85% gross margins as least

I don't know of any other company that does that year after year. Can you say monopoly?

Chmee · Post by **Chmee** » August 16, 2005, 7:10 pm

Winnow wrote:7.5 B over six months is chump change! Imagine Microsoft's revenues in 2006 with Xbox 360 game royalties, MS Vista and a new MS Office.

I think you are trying to compare profit to revenue. According to Fortune's list of largest companies Exxon Mobile's profits were 25 billion and their revenue was 270 billion (I believe all the numbers are for 2004, but I can't get to most of the article since I don't have a subscription). Microsoft is in very good financial shape though with tons of cash stocked up, but they are quite a bit smaller revenue wise than Exxon.

http://www.fortune.com/fortune/global50 ... ,1,00.html

VeeshanVault

Oil heading to $70 per barrel?

Oil heading to $70 per barrel?

Re: Oil heading to $70 per barrel?