Price fix and oil

[coffeeman]

I seem to remember; Standard oil in early 1900s was not allowed to fix and control pricing of oil. I don't know if I have the name right but I think the idea is correct. What is the difference between Standard and the oil producers of today fixing prices. The big users of oil should file suit against those countries that fix prices just like the US or US companies sometime get sued by out of the country folks.

I predict; in the next 10 years some new tech process to extract energy in a real cheap way. Most likely an idea out of left field. I think idea may come from some backyard person tinkering with a pet idea he has had for years. At this point in time we still have people who can do things. If any thing is going to be downfall of this country it's the outsourcing of everything; including computer developing.

I also predict; by Jan. 09 gasoline will be in the low $2 range. Not cheap but better than now. I don't know why I think this. It's just over the years all big changes always seem to boom then bust. Why wouldn't the same thing happen for oil.

One last prediction; if my predictions are right we all will be a lot happier.

Just a couple rambling thoughts from Coffeeman.

 

[Alan L.]

I hope you're right about the $2 gas. However I am pretty sure the price of oil has more to do with world demand, and also the speculators running the price up.

 

[MikePA]

Suing the oil producing countries will accomplish nothing.

 

[Western]

I agree with Mike,
All they would have to do is cut us off, then see where the prices go.

We need to drill OUR oil fields and work on other sources of energy, in a smart way. I don't think "Corn" ethynol is the answer unless higher prices are the objective. I don't think a food product is a smart choice unless your a senetor with a corn growing constiuancy

 

[coffeeman]

Suing the oil producing countries will accomplish nothing.

Mike

Your right on the money. I wrote that sort of 1/2 joking, but there ways to enhance our position. It starts with right folks in congress etc. and goes from there. On that price in the low to mid $2 range, I do believe it's possible. Look at history and the booms and busts. The wild card is the foreign price fixing. The age old supply and demand doesn't work here when countries limit production.

Cheers

 

[N80]

I've tried to understand the whole process. It is hard to understand and hard to explain. It is extremely complex and I'm pretty sure there is a lot I don't understand. Here are my thoughts in regard to high prices:

1) It is traded on the futures markets. This leads to speculation. I read where one speculator says it is out of control and that if there were some control over the rules by which speculators are governed, the price per barrel would easily drop by $10-20 per barrel. It is also seems that the rules by which speculators buying oil and selling it in the US are different from other types of futures and is far less regulated than those. The regulations are more along the lines of the much more lax international rules. This is wrong.

2) Demand is high. I don't understand why this causes high prices. There is enough oil and OPEC is no where near peak production. In other free markets when demand is high, prices go down. The more iPods we buy the lower the price. I could understand that prices would go up for a rare commodity, and oil may be just that one of these days, but it isn't rare now. There is plenty. The markets are just being manipulated by foreigners. Nothing wrong with them doing that, they own it. It is wrong that we've allowed them so much control over our economy.

3) We have oil that we won't get. That's just plain sick and shows that we've become soft and stupid. There are no free rides. You want wheat to make bread? Well, you have to cut down trees and till the ground. You want paper? You cut down pine trees. You want oil? Then you drill it. We've let people convince us that polar bears, penguins and snail darters are more important than our own independence.....and even worse, worth more than our boys and girls lives fighting in the middle east. We are sick indeed.

4) We use too much. I'm not a greenie but I am a conservative. Conservatives believe in conserving resources. We aren't doing that. Yes, my full size truck gets 12 mpg. Guilty as charged.

I believe in free markets. I don't believe in intrusive government intervention in commerce. I don't believe punishing the successful with taxes is correct. BUT when a country is going down the tubes largely due to oil prices and all other markets and indicators are heading south and yet the big two are three oil companies have, in the last 4 quarters made the most money that any group or company has ever made in the history of mankind, (each consecutive quarter!!!)...something is wrong with the picture. No matter what Rush says, that is not a free market.

And a couple of other observations/questions. Why does the oil that Exxon pumps out of the ground go on the futures market? Why don't they pump it, refine it, then sell it? They do all three of these things already? And did you know that these mysterious speculators never take possession of any oil? They buy it and sell it without ever 'touching' it. Some may say this is a characteristic of a free market. I think its weird and twisted. They add nothing to the intrinsic value of the oil but add tremendous cost to the consumers and thus the economy.

So what is the solution:

1) Regulate the speculation. At least as tightly as our domestic futures markets. In other words, level the playing field.

2) Find and pump our own oil. Do it wisely, safely and with reasonable protections for the environment.

3) Improve our reliance on other energy sources. Nuke is the only reasonable answer. Corn, wind and solar sound nice but are still not sufficient and never will be.

4) Our politicians and economists have got to wake up and smell the crude. Oil is wrecking us and they're just now acting like they're starting to understand what everyone else knows from intuition and daily experience.

 

[mjarrels]

I have been on many Navy ships powered by Nuke reactors without any problem... By product was hot showers. Look at what powered San Francisco during their last large earthquake... Yep Navy ships.

mark

 

[N80]

Here is another thing I don't understand. All the folks that say we shouldn't drill in ANWAR, off the Pacific coast and in the Gulf of Mexico claim that all this oil would only account for a small percentage of what we need and use and is thus insignificant and not worth the trouble.

And yet, when someone throws a rock at someone else in Nigeria, which accounts for only a tiny percentage of what we use, speculators panic and we see prices go up AT THE PUMP within days.

So if such a tiny amount can have a big impact, securing even small amount of OUR OWN OIL, should help insulate us from such non sense.

I'm tired of hearing that pumping our own oil is too little and too late. It quite clearly is not.

 

[dmccarty]

And besides the speculation there is the supposedly the low value for the dollar. Low dollars are supposed to push money into commodities like oil, precious metals, etc. Don't know if its true but it seems like in the last week or so the dollar strengthened and the oil price dropped. Then then we had a bad report on the economy and dollar dropped and oil rose. So maybe there is truth in that as well.

And I too am tired of hearing that drilling in ANWAR won't help because its too little. Its just not true. We have very real possiblities of large amounts of oil off the coasts but the oil companies can't even look for oil much less drill. If Kennedy has a fit because of Greenie Wind Farms ruining his view from his mansion there oil drilling on the coasts won't happen until oil prices really has impacted the econonmy in a very major way.

The data on offshore oil seems to indicate large fields. But the data is old and new searches supposedly are prohibited. The world got real excited about the amount of oil found off Brazil. The oil the data suggests is off the coasts is far more than what is down in Brazil.

But people worring about the view and oil spills so until things get much worse... Like another big hurricane in the gulf....

The thing about oil spills I have never understood, is that during WWII large number of ships where sunk right off the east coast. Lots of the ships were tankers. Where did the oil go? These ships ran right up close to shore to try to get away from the UBOATS. So where is the oil? I never heard of massive oil spill clean ups. There was a war on so what happen to the oil?

Now I don't mean we should go find it to put in the tractor. But we hear OIL SPILL and its sold as a huge disaster. And it is. For now. But then it goes away. Given that the oil companies now adays would rightfully force to clean up the spill why aren't we drilling?

I guess it ruins the view from the rentals and mansions...

Another tid bit of info. A factoid as CNN would call it.

During the 70s and early 80s, 8% of a family income went to transportation cost. During the 90s and early 2000s it was 4%. Now we are at 6%.

Later,
Dan

 

[IH3444]

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