Rising Oil Prices

[Cool Rythms!]

Will we ever see oil prices return to what they were 10 years ago? Is this a sign of the times? Will we ever get a break, or are these outrageous prices here to stay?

Share your thoughts and your frustrations...

CR

[valvelifter]

Don't think we will ever see those times again. The energy industry is changed forever. Back then we were the major consumers of oil and the supply was there, so we dictated what the price would be. Today, I see the huge demand from emerging countries as a major factor in setting gas prices, coupled with the claim that oil production has peaked already, or will soon be.

[Campanola]

I don't think we will see a return to oil prices near what it was 10 years ago. It will at least (a big minimum) follow the inflation (10 yrs inflation means +/- 20% from what it was). The increase in prices are due to a movement of capitals toward oil. If it's happening now, it's because of the crisis in the US and the way it was handle. By reducing the rate, and with the very large dept and deficit of the americains, the value of the USD have dropped. On top of that, OPEP and other countries exporting oil are moving from the USD to the Euro (stronger currency), reducing the demand for the USD and increasing the price and the safety for those investing in oil.

If the demand for oil go down because of the slow down, it will be of short duration. So if prices go down again, it will not last.

In my opinion, the solution to all that is in the diversification of energy sources . We must increase nuclear, tide, wind powerplants, etc and invest in electric cars and electric trains. In my opinion, a high speed electric train between Québec and Toronto is a very good idea. I also believe that Quebec and Ontario should work together to fight the energy problem and they should invest together in an electric car solution.

[Wacko]

Unless we nuke China/India there's no looking back... however I do believe you're going to start seeing your monthly expense on fuel go back to what it was 10 years ago as more efficient cars are being produced.

[piggy]

Jeff Rubin, chief economist and strategist at CIBC, is calling for $225/barrel by 2012. In a recent interview he said all the nice airports across canada that have been improved with AIF's will be like a mausoleum by 2012.
Scary, because Jeff always seems to get it right. My opinion: If oil gets to $225, get ready for a major correction at some point after that-probably to $40-50/barrel. Interest rates will go double digits before that of course, because inflation will incr. big time. And at a time when western country personal debt levels are the highest in history. Its a bearish viewpoint but not far from reality. IMHO

[valvelifter]

Maybe I am just naive about what's going on around me, but doesn't Canada have a sh&tload of gas somewhere? Shouldn't we be paying less because we are a net exporter (although small) of petroleum products? Is it b/c Canada has large stocks of nat. gas and not liquid petroleum? And we are paying 6$ a gallon now, compared with $0.17 in Venezuela? (jpeg was from an article June 2007 but still relevant I'm sure):





What about:
$2.44 in Beijing?
$2.08 in Pyongyang (North Korea..)
$2.50 in Karachi.

Sounds like the price of gas is cheaper in those areas where development is booming now. No wonder people will afford to tank up their $2500 TATAs for years to come.

It sounds to me that in order to get something going globally to curb oil consumption other countries have to start paying more for the liquid gold. Until then, we can buy more hybrids than everyone else and take public transport till we're blue in the face. It will only put a dent in the overall problem.

At least Caracas will probably become the hub city for most airlines just so that they can fuel up...

[synthpro]

Oil prices will soon go down.

The same thing happened back in the 70's. High prices in oil resulted in people using public transportation more and fuel economy cars being produced. The same will happen here.

And for all the proponents who say "yeah... well this time China and India are conumers as well".... well... this is true, but technology in extracting oil; has increased signifcantly since the 70's.... and their are also more producers... Russia, Venesualia, Mexico and Canada etc....

All of this is just a correction



synthpro

[Wacko]

What about:
$2.44 in Beijing?
$2.08 in Pyongyang (North Korea..)
$2.50 in Karachi.

Sounds like the price of gas is cheaper in those areas where development is booming now. No wonder people will afford to tank up their $2500 TATAs for years to come.

It sounds to me that in order to get something going globally to curb oil consumption other countries have to start paying more for the liquid gold. Until then, we can buy more hybrids than everyone else and take public transport till we're blue in the face. It will only put a dent in the overall problem.

At least Caracas will probably become the hub city for most airlines just so that they can fuel up...

It's cheaper because the government offsets the cost of fuel. If the Canadian government stopped charging taxes on fuel we'd be paying ~0.80/L...

The thing that boggles my mind is why did China invest so much into carbon fuels when they had an opportunity to go greener. I bet ya they are kicking themselves in the ars now!

[v6g]

Whilst the press has been engaging in endless discussion over who to blame for the current oil crisis, whether it's those nasty Arabs, the greedy politicians, the big bad oil companies or those evil speculators, one thing happened today that got surprisingly little attention - BP published their annual "Statistical Review of World Energy 2008". It's a rather dry document with very few words but lots of numbers. Published every year it's the closest thing the world has to an authoritative assessment of the state of the world energy market.

Buried in the numbers in the spreadsheet reveals that last year saw a decline of 0.2% in global oil production. Even juicy OPEC saw a decline of 1.2%. The only region to increase production was Russia (3.9%) but they've since admitted that they've hit their peak. Looking back at past years data (the document goes back to 1965) shows that never before has every region of the world showed either declines or negligibly-tiny growth.

Still, one point of data doth not a trend make, but there's no mistaking that 2006 was a peak in global oil production. Of course, only time will tell if this was "a peak" or "the peak" and besides, global production also showed declines in 2002, 2001, 1999, 1991, 1985, 1983, 1982, 1981, 1980 & 1975 - indeed some much larger than 2007's.

Comparing the global consumption vs production figures against the inflation-adjusted price reveals a more worrying trend: unlike during previous oil crises, consumption today is steadily greater than production and the divergence is increasing. This was not the case in previous crises when production rapidly increased to above consumption whereas today, production is flat (or slightly decreasing).

Oh well, on the upside, yesterday I passed my motorcycle knowledge test!

[invertedattitude]

You do realize that the Saudis control oil production by OPEC by the stroke of a pen?

they are making absolute raping profits by holding back the production of oil

the actual number of barrells produced is not tied to how many CAN be produced per day.

[Wacko]

Ironically OPEN is complaining that they don't have anywhere to send the oil No new oil refineries are getting built and the old ones are getting shut down for regular scheduled maintenance... (AND they are not working at anywhere near maximum capacity)... THAT is a FACT that was even reported on CNN... but somehow news on McCains wife is more important than this fact.

Oil prices are set by speculators and currently some estimate the price to be over-priced by as much as $50/bl.. there is a select few getting REALLY rich my friend.

[invertedattitude]

Exactly... the oil bubble will burst at some point, maybe after the summer? *Crosses fingers*

[Four1oh]

Inflation is getting out of hand in India. China just jacked up the price of fuel by 18%... it won't take long to see if it has any effect on the price of oil.

[piggy]

China has jacked the price of fuel because they have been subsidizing it until now, this has caused oil price to rise as demand outstrips supply-causing inflation that is now becoming worldwide. By reducing the subsidizing, they will effectively slow demand inside china because it costs more, and reduce inflation.

The saudis are pissed because the high oil price is causing inflation in their country, and devaluing their currency with respect to the us dollar which has reduced the money they get for each barrel of oil-they are paid in us dollars and which is now a weak currency. Because oil is traded in us dollars only, and the feds have taken a weak dollar policy, in effect reducing how much the saudis get for their oil, they reduce production which has helped oil spike up.
The us says, produce more oil...inflation is becoming a problem...the saudis say f*ck you, stop devaluing the dollar.
The saudis can have not much of an effect on oil price really, because their output is limited, and the demand from emerging economies is absolutely relentless.

[Four1oh]

China has jacked the price of fuel because they have been subsidizing it until now, this has caused oil price to rise as demand outstrips supply-causing inflation that is now becoming worldwide. By reducing the subsidizing, they will effectively slow demand inside china because it costs more, and reduce inflation.

doesn't matter that their gov't has been subsidizing them, gas just got a whole lot more expensive for the people there who buy it.

[KAG]

I say bring on hydrogen!!!!

I recently watched U tube videos of an american inventor named Stan meyer, who built a fully functioning Hydrogen car. I'm not talking about stored hydrogen fuel cell, I'm talking he poured tap water into a jug, and with his contraption was powering a dune buggy.
Funny, all those videos relating to him, and his death have been pulled. Along with alot of good hydrogen videos...WTF over?

A quick update...I've noticed utube has also pulled the videos on the HHO engine, and almost all videos pertaining to hydrogen cars...

[invertedattitude]

There are a lot of people who stand to lose a LOT of money on hydrogen technology...

[North Shore]

Oil prices will soon go down.

The same thing happened back in the 70's. High prices in oil resulted in people using public transportation more and fuel economy cars being produced. The same will happen here.

And for all the proponents who say "yeah... well this time China and India are conumers as well".... well... this is true, but technology in extracting oil; has increased signifcantly since the 70's.... and their are also more producers... Russia, Venesualia, Mexico and Canada etc....

I don't recall the early '70's particularly well, but in addition to people getting efficient, exploration also boomed - leading to the North Sea, and Alaska fields. Doubtful as to whether we can pull another rabbit out of that hat... IIRC, Russia and Mexico are in decline wrt production. I'd be really pessimistic about ever seeing $100/bbl again.

This comment by v6g is worth re-reading:

Whilst the press has been engaging in endless discussion over who to blame for the current oil crisis, whether it's those nasty Arabs, the greedy politicians, the big bad oil companies or those evil speculators, one thing happened today that got surprisingly little attention - BP published their annual "Statistical Review of World Energy 2008". It's a rather dry document with very few words but lots of numbers. Published every year it's the closest thing the world has to an authoritative assessment of the state of the world energy market.

Buried in the numbers in the spreadsheet reveals that last year saw a decline of 0.2% in global oil production. Even juicy OPEC saw a decline of 1.2%. The only region to increase production was Russia (3.9%) but they've since admitted that they've hit their peak. Looking back at past years data (the document goes back to 1965) shows that never before has every region of the world showed either declines or negligibly-tiny growth

It will be very interesting to see what the long-term depletion rate is...

[Four1oh]

I say bring on hydrogen!!!!

I recently watched U tube videos of an american inventor named Stan meyer, who built a fully functioning Hydrogen car. I'm not talking about stored hydrogen fuel cell, I'm talking he poured tap water into a jug, and with his contraption was powering a dune buggy.
Funny, all those videos relating to him, and his death have been pulled. Along with alot of good hydrogen videos...WTF over?

A quick update...I've noticed utube has also pulled the videos on the HHO engine, and almost all videos pertaining to hydrogen cars...

the issue isn't about using hydrogen so much as to where you'd get it from. I don't think the process is all that environmentally sound.

[KAG]

What this Stan Meyer had a version of electrolysis that produced 1700% gains from conventional means. Basically run an electric current through water and it starts to break down to hydrogen and Oxygen. Gather up the hydrogen and burn it. It was very enviromentally friendly.
Modern techniques require a lot of power input with minimal hydrogen release, not very efficient. His was, or so he claimed. U tube showed an older version working and it actually looked very basic, and required tap water and 1 amp of power, and the water foamed hydrogen, it looked like it was boiling. Anyway, it looked very promising. He’s dead now, died eating a restaurant, sounds like natural causes. I’d show you the video, but they have been pulled.

[Kelowna Pilot]

The 70's oil crisis was brought on largely by politics.

The current oil crisis is brought on largely by rising demand from India, Asia and the Middle East itself, a sinking US currency, and other factors.

If it's due to speculators, that depends who you ask. You can get 6 experts together and 3 will say it is driven by speculators and 3 will say it's not. What the truth is only the historians will know.

The production of oil and rate of oil discovery over the last couple decades has not kept up with new demand, not even close.

Peak-oil is turning out to be real I'm afraid; it's not just a fringe theory for the doomsday crowd. It's unfortunate because it's going to disrupt a lot of people's lives, including mine and yours. Unless an alternative source of energy is found very quickly, aviation is in for a blood-bath on an unprecedented scale.

The only good news is that it will force us to turn to alternative energies, that are hopefully cleaner and will rid of any need to stick our noses in the Middle East.

[Wacko]

from India, Asia and the Middle East itself, a sinking US currency, and other factors.

Isn't India and the middle east in Asia?

I was watching this documentary on Brazil... BRAZIL of all the places... and how they have converted (I believe it was) sugar cane into e85 which is something like 10 times more efficient than corn... apparently they are the only country on the planet (other than those that don't use oil at all ) which is self sustaining.

I think it was ford or GM that was part of this.. they said something to the effect of... we're ready with alternative fuel vehicles... we're just waiting for the fuel pumps to be built... as I look at numerous new gas stations getting renovated with carbon based pumps only... I'm so confused.

[Kelowna Pilot]

Isn't India and the middle east in Asia?

Yes, technically, but most westerners don't associate India and the Middle East with Asia, so they split them up.

When we think of Asia, we think of Hello Kitty, not some Bedouin tribesman from Jordan.


I saw the CNN documentary about the sugar cane in Brazil too.

The question is can you grow enough sugar cane to meet the world's demand.

That's a heck of a lot of sugar cane.

[Four1oh]

Sugar cane is indeed the best way to make ethanol, hands down. Far better than corn, anyways.

So KAG, use electricity(lots of it, i'm assuming) to make Hydrogen, right? So, will it be coal or nuclear based electricity? Probably coal, so where's the gain?

[Wacko]

Well, the difference between corn and sugar is that the sugar cane is more ?combustible? making it more efficient. I regret not saving all the things I read recently as my memory rivals a squirrels but if I understood the article correct;

Corn Ethanol 1 (unit) = x distance
Carbon fuel 1 (unit) = x(1.5) distance

So event though you're paying less for ethanol and it has "some" environmental gain, you end up burning 0.5 times more per unit making it probably even out in the long run.... so if you can get 600KM on a full tank of oil based fuel... you only get 400 on ethanol... now again.. I don't remember the exact numbers but there was a matrix that compares the two and it was pretty close to even.

In the article they were comparing corn ethanol... I wonder how sugar ethanol would compare.