$110 per barrel and counting...

[StrongTurd]

Oil just went through $110 pb for the first time in history. Prices are now at all-time inflation adjusted highs.

http://www.bloomberg.com/energy/

IMHO we are in for a really, really rough ride in the years ahead. Here's just a few of the ingredients that are conspiring to create the perfect storm:

• The dollar is in free fall
• Global conventional oil production has not increased since May 2005
• The effects of the US sub-prime fiasco still needs to manifest themselves in the months ahead
• Dubya seems determined to invade Iran before the end of his term
• The US Fed says that the chances of a major recession are now "probable"
• Russian energy supplies to Europe are being used as a political weapon
• Saudi Arabia seems unable to ramp up oil production, even at Dubya's personal behest

Imagine what the oil price will do if/when the US invades Iran. Within hours of that happening no insurance company will cover any oil tanker passing through the Strait of Hormuz. Considering that one-fifth of the world's daily oil shipments pass through that very narrow passage and if we assume that Iran will be able to blockade the Strait for at least one week before the US gains military dominance, the oil price can literally go ballistic. $200? $300? Who knows?

Now, if we were to add another Kartina to the mix during the upcoming hurricane season in the Gulf of Mexico, things will just become exponentially worse.

On top of this, suppose some extremist Muslim group was to blow up a major Saudi refinery at the same time. Now THAT will be the perfect storm. It will, in all likelihood, cause profound changes to the world's political and social landscapes.

I'm no economist but I do reckon that, if none of my doomsday prophecies come true, that the oil price will shortly have to start dropping rapidly as demand destruction starts setting in. This should then put us on a up-down roller-coaster ride as prices drop and then increase again as demand rises due to lower prices. In a way, the current US recession is a blessing in disguise because the reduced demand from the largest consumer on earth is keeping a lid on even higher prices.

 

[vespax]

No mention of China or India above. They are experiencing large growth in demand for natural resources (particularly oil) and that is going to push the price up even more.

I hope for my own selfish reasons that the cost of all goods related to oil prices (ie: plane tickets) remains stable for the next few months and one of those stable federal gov't jobs in the USA is looking more and more promising in the face of a "major recession". Here's hoping I get the job... and the "cheapish" plane tickets.

 

[StrongTurd]

Yeah, of course, China and India are driving up demand. But the largest part of that demand goes towards satisfying the USA's insatiable appetite for cheap consumer goods.

 

[Phenom]

It seems just do unfair that people are paid trillions for doing nearly nothing, , i mean look at Qutar, it has an average IQ of 78, and it is one of the worlds highest earning($ 75,900) countries. while super-hard working, smart(IQ: 100), China($ 5,300), earns less than a tenth what they do. this is unfair and sick!


https://www.cia.gov/library/publications/the-world-factbook/fields/2046.html
http://en.wikipedia.org/wiki/IQ_and_the_Wealth_of_Nations

 

[Phenom]

Yeah, of course, China and India are driving up demand. But the largest part of that demand goes towards satisfying the USA's insatiable appetite for cheap consumer goods.

what has that got to do with anything, that is a good thing, now hard-working china earns more, and the world is more productive. Would you rather prefer the chinese starve, and not get any income from USA?

 

[DragonLogos]

food prices are going up which is going to cause unrest - people are getting into bio fuel and there is also less in the way of food crops - the sooner Bush is out of office the better

 

[Phenom]

oil will always cause conflict, too, and bio-fuel is a work in progress much improvements have already been made, and lots more to come, with genetic modified plants and new ways to turn these into energy. Even if they do heighten food prices, they will lower oil, and that should lower food prices too.

Many new battery developments and research is also going on right now, and alternative energy cars are gaining ground. GM wants 50% of their new cars to be hybird or battery by 2012, toyota is also gaining ground fast

Bush also wanted to build more refineries, and mine for more oil with in his own country, and the hippies democrats objected as they may drill and disturb their weed or two deer nearby. he also wanted to build more refineries on old military bases, and those plans got rejected by hippies too.

the saudi's should start caring a bit with all that oil, and let more on the market.

 

[bb_matt]

The only thing we have to fear is the sky falling on our heads.

IMHO we are in for a really, really rough ride in the years ahead.

We always have been and probably always will.
The reality is that the world economy has "lucked out" over the last decade or so and we're entering another downward trend.
It's a scary roller-coaster ride - organised chaos masquerading as logic.

I love it - bring it on!

 

[Moederloos]

What is the oil price in Euros?
60Euro a barrel?
How does that compare to the past few years?

 

[Piepalook]

What is the oil price in Euros?
60Euro a barrel?
How does that compare to the past few years?

I have no idea.

What i do know is that R 10 a litre would still be cheap by the end of this year.

 

[icyrus]

Dubya seems determined to invade Iran before the end of his term

There is absolutely zero chance of that happening.

 

[StrongTurd]

There is absolutely zero chance of that happening.

I sincerely hope you're right, Dude.

 

[vespax]

There is absolutely zero chance of that happening.

We've got 9 months to find out if you are right.

If McCain is doing well in the general elections I think there is a higher chance of Iran invasion.

 

[noxibox]

Saudi Arabia seems unable to ramp up oil production

Who says they're unable to do so?

 

[BobbyMac]

strongturd: most of your posting is based on "what ifs" Perhaps some factual evidence to support your speculation is in order?

 

[Moederloos]

There is absolutely zero chance of that happening.

How long did it take between 9/11 and the Afghan invasion? Iraq?

While I also feel there is virtually no chance, I would not put it out of [-]Archangel Gabriel[/-] Bush's reach to do so.

 

[icyrus]

How long did it take between 9/11 and the Afghan invasion? Iraq?

While I also feel there is virtually no chance, I would not put it out of [-]Archangel Gabriel[/-] Bush's reach to do so.

Even if he wants to (really really wants to) he needs congressional approval and there is zero chance of that happening.

Thats just the tip of the iceberg as well.

 

[DragonLogos]

Hemp was used over 100 years ago for bio fuel and other things (paper, chemicals etc) - Bush might have let slip with his remark about fuel from grass - but a paper baron put pay to that with tales of reefer madness

 

[Moederloos]

Even if he wants to (really really wants to) he needs congressional approval and there is zero chance of that happening.

Thats just the tip of the iceberg as well.

Fly a plane into a building, blame it on Iran, approval granted.

 

[StrongTurd]

strongturd: most of your posting is based on "what ifs" Perhaps some factual evidence to support your speculation is in order?

OK, so let's see:

The dollar is in free fall

Fact.

Global conventional oil production has not increased since May 2005

Fact.

The effects of the US sub-prime fiasco still needs to manifest themselves in the months ahead

Fact.

Dubya seems determined to invade Iran before the end of his term

Debatable.

The US Fed says that the chances of a major recession are now "probable"

Fact.

Russian energy supplies to Europe are being used as a political weapon

Fact.

Saudi Arabia seems unable to ramp up oil production, even at Dubya's personal behest

Debatable.

I'm happy with the factuality of my statements. I'll give you the benefit of the doubt on SA's ability to ramp up oil production if they so wanted.

ITO what Dubya is going to do about Iran: I'm speculating. Just yesterday a very high-ranking US military manager was fired for his views against a possible US invasion of Iraq. There are now very few voices in the US military command structure that opposes military action.