Is the The Price of Oil that high?

[No more BS]

Something to think about, here it is:

In 1981 there was a big spike in Oil prices, it went up to about $65/barrel.

In 2005 dollars, that's a whopping $145/barrel when the dollar inflation is factored in.

Inversely, at the current 2005 price of $67/barel, it would have cost $30/barrel in 1980 dollars.

We are still WAAAAYYYY far from $145/barrel @ $67/barrel, don't you think? ($78 difference to be precise)

The current price increase is seen by some analysts as the adjustment in price due to the loss of value of the dollar.

In other words: we had it easy for the last 25years or so. It's now back to reality.

That and the fact that everybody foresees current world oil reserves getting depleted. (just type "peak oil" in Google)
http://www.peakoil.com/

The dollar infation calculator:
http://www.westegg.com/inflation/

The Prices of Oil in History:


Cheers

[JigglyBus]

You say "In 2005 dollars, that's a whopping $145/barrel when the dollar inflation is factored in. "

But that chart you just posted says that it peaked at $65 in 2004 dollars (which accounts for inflation up to 2004).

2004 Dollars inflated to 2005 can't be that much.

[monkeyspankmasterflex]

He's talking about the relative price in 1981 dollars.

[sdraw]

Inflation is already factored in on that chart. See "2004 $"
It will be interesting to see how far it keeps climbing. It looks pretty steady

[wallypilot]

what is severely criminal is the fact that fuel prices in canada, despite the rise of the canadian dollar, have risen more even than the price of crude. the oil companies are exploiting us big time, using the excuse of "high crude prices" and shortage of refining capacity to convince us that the current prices are justified. Now, those factors may be true, but canadian fuel prices have risen faster than US fuel prices despite the appreciation of our cdn $$. i have no problem with the fuel prices rising as I think we were paying to little for fuel previously anyways. It's good economic incentive for long term solutions. It just pisses me off that it is the oil companies that are lying through their teeth and fudging numbers to justify high fuel prices. I'm switchin my Golf TDI to bio diesel as soon as it is available out here! then we can support canadian canola farmers! maybe even those new piston diesel aircraft engines will be able to burn bio diesel as well one day!

[SplitS]

The oil companies will buy up those canola farmers. Come on - you hadn't thought of that??

[Always Moving]

How much is a liter of milk again?

[LostinRotation]

How many litres of milk do you buy in a day ?

-=0=LIR=0=-

[monkeyspankmasterflex]

Inflation is already factored in on that chart. See "2004 $"

Check.

[scubasteve]

hey wally - you should have watched Trucks today on Spike - they showed how to make your own biodiesel from old restaurant deep fryer oil. You do have to by a small still type rig but they figured it came out to 70 cents a gallon (US of course) and the only byproduct is glycerine which can be used to make soap. The other thing to note is that performance is actually a little better and emissions are less. I think it makes up to 40 gallons at a time max.

as for bio diesel aircraft, I believe Diamonds new twin will be able to run off of it but my memory is a little foggy at the moment.

[pilotbzh]

100$ a baril for 2006 should be a conservative figure, by mid week it will cross the 70$ especially if rigs are hit by the storm.... get use to it given the demand I don't think the oil will ever see less than 50 a baril unless everybody stop burning underground oil...

[xsbank]

um, barrel, I think. Consider this part of your education.

[Kosiw]

Wonder if the high price of oil will "fuel" a resurgance in demand for turboprop aircraft with their lower fuel burns...

[Localizer]

Im pretty sure there is still lots of oil left on Earth .. it just might not be as easy to get to .. but there is still more than enough that none of us will ever see the day it "runs dry". They're just raking in the bucks .. plain and simple, they got what we need and we'll pay what they want to get it. I just hope it doesn't lead us into another recession. The industry is just starting to roll .. we don't need anymore bull$hit getting in the way .. ie sars, some jack-ass flying a plane into a building .. yada yada yada .. Its bad enough having what 5 a/c accidents in a month??? .. yikes!

2 cents is spent .. cha-ching ..

[tsgas]

North Americans are the biggest fuel wasters on the planet. If they want to drive their big ass SUV's at 150km per hour, well let em pay the fuel bill.
And I agree that flying Dash-8-400's on short hauls would save fuel.

[Ryan Coke]

So, you're saying that the one really big spike is the norm, and the rest of the time we were just really lucky?

And the price is skyrocketing because people see the world reserves getting depleted? People have known this forever, that eventually it will run out--that doesn't mean it's about to happen anytime soon, and certainly doesn't justify the recent and sudden jump in prices.

Not to mention inventories also continue to climb to record levels, but nobody cares right now.

Remember the tech bubble of the late 90's, and how so many people said that it would never burst because it was a 'new economy'?

This is an entertaining article from a bit ago in the Grope and Flail.
http://www.theglobeandmail.com/servlet/ ... PBusiness/

[LostinRotation]

Hello ! ?

Oil demand hasn't doubled in less than 3 years like the cost has.
Oil companies were sick and tired of selling at $25.oo a barrel...so they decided to screw us over....period. Production costs for oil have actually decreased in the past decade due to new technology.... Demand is as predicted and oil reserves are far from empty. Why is it so hard for people to understand they are getting screwed due to greed, not weather or anything else ! It's whatever excuse they feel like using that day and no one seems to call " Shenanigans " ! Hasn't anyone else noticed that after the " excuse of the day " has passed, oil prices remain high, only to get pushed higher by the next lie as if the previous problem only compounded and never went away ?

-=0=LIR=0=-

[Localizer]

I've noticed! .. .. but who am I? ..

September 1st .. don't buy any gas .. as per the email getting circulated on the net.

Lets see if our voices can make a difference .. its worth a try ..

[Ryan Coke]

LIR,

We agree that the price increase is basically BS, and not rooted in fundamental supply demand principles, but I don't actually blame the oil companies. I see the investment community and the speculators driving the artificially high price. I think the Oil companies at some point actually get a little worried, because they don't want to get to the point where demand actually drops significantly, and we are getting dangerously close to that. As it is, high energy prices could push economies, particularly the North American one, into an economic slowdown/recession. Energy consumption decreasing significantly would be bad for the oil companies.

All IMO of course.

[Lommer]

Ok, so has anyone heard of a solar-powered GA airplane? The weather minima would suck, but would it even be practical on clear sunny day? I bet there'd be quite a market for it (electrical motors are way cheaper to maintain and we all know the dent gas makes in our wallets). I think batteries are too heavy to be practical. But there's a lot of fair-weather pilots who own their own planes, and there'd be a lot more if planes were cheaper...

[oldncold]

If that hurricane Katrina does a impact on new orleans 90 $ by a week
friday. OH MR BUSH -YOU MIGHT want to solve the softwood lumber
dispute and live up to the freetrade agreement before us canucks
get really po'd and turn off that oil or tax the hell out of it crossing the 49th. say another 5 bucks export tax 3bucks to alberta to pay for the
layoffs and 1or so to bc. etc.
:shock:

[cedar tree]

Will or can OPEC place a ceiling price on oil like they did back in 1981 @ $38 usd/ barrel? Does anyone think the Arab's have the supply to put their foot down and reverse this supply/demand issue? Refining production is the problem. Should we be bullish on oil stocks?

[North Shore]

C'mon, Localizer, you don't actually believe everything that you read on the net do you? If we all stopped buying gas for a day, or maybe even a week, then all that would do is create an artificially high demand the few days before and after the big day, and nothing would change - I believe that Snopes.com has a piece on this...If you want to spend less on gas, then use less..

Big Cedar: As I recall, back in the 80's, OPEC, or at least Saudi Arabia, had a fair amount of 'headroom' - that is, excess pumping capacity. So, as the price rose, then they could open the taps a little, the supply would increase, and the price correspondingly drop. Nowadays, there isn't that headroom, and demand is reaching the worldwide pumping capacity (I read somewhere that Saudi has about 1.5% headroom left.) Thus the definition of Peak Oil - the point at which crude oil supply reaches its maximum flow rate. As soon as there's a small supply disruption, or even the threat of that, then the price of crude rises. The way around this is to use less oil, and to start aggressively developing alternatives.

[LostinRotation]

They've been using the " supply disruption " excuse over and over again ! As for peak oil, the Saudi's did a study 3 years ago that determined their " Peak Oil " capacity is 15 mbd (mill barrels/day) with current outputs peged around 10 mbd. Current " proven " reserves are calculated at 260 billion barrels.

-=0=LIR=0=-

[Localizer]

I didn't say it would work .. i said give it a try .. what do you have to loose? .. natta .. Who knows how much of a difference it could make .. the only sure thing is that nothing equals .. nothing ..