Oil on track to touch the 140 target by June/July. Gas should reach 4.25-4.75 nation wide with in the same time frame. Geo-Pollitical concerns, Supply concerns and speculation are the key factors. IMHO, US will not announce a recession during the 'Elections". They will come up with some Majical number between .4 and .2 for GDP growth. They need to keep the sheepole looking towards a bright future. They Middle Class has very little choice but to "Step" up and make more money to enter into a "Wealther" income bracket or fall into Proverty. This will be a decade the middle class disapear.
I think we should all buy a horse and carriage. Look at the Amish. If they can do it, so can we. Beats getting ripped off at the pump just to visit ole Aunt Gertrude. http://flickr.com/photos/kitty-cats-corner/504114431/sizes/l/ Great thing is that there are no car payments, no worries about keeping up with those damn Joneses, no auto mechanics ripping you off, and no insurance required. You also don't have to worry about dui's and speeding tickets.
Peak oil is a sham. Oil consumption is growing at 3%. Production is now beginning to increase beyond that 3% figure, and will ramp up with new fields coming on line. The world is awash in crude oil. Oh, wait....breaking news... 'Nigerian media sources are reporting that local rebels have come out of the brush and have thrown rocks at a Royal Dutch Shell pipeline in the Nigerian Delta. Many rocks hit the cast iron pipeline, and bounced off, harmlessly. Royal Dutch Shell doesn't know how to deal with the rock throwing crisis, because hiring security forces to secure the multi-billion dollar profit mill that is the Delta field is....it's soooo haaaaaaard.' 'Consequently, oil has spiked $10 per barrel on the supply disruption concerns caused by the rock throwing Nigerians.'
Why do so many ETers have trouble understanding the concept of peak oil. Pleanty of new oil is scheduled to come online and vast oil reserve finds are being found everyyear. Enough to power the world for many many years. However there are MORE oil reserves being depleted than are coming online. Plus the newer locations were oil is being extracted are far more difficult than the ones cuttently being drpleted. Right now oil production is limited to about 3% a year. Whatever new supply must first replace supply lost from depletion. Go back to Econ 101 If a maximim of 80 million barrels of crude oil was being produced and 80 million plus 1 was being demanded, and the product is perfectly inelastic, there would be no upper limit on price. Oil is not perfectly inelastic, but it's very close.
I'm gonna make a bet if they increase the margin requirement for oil like they did to wheat, it's gonna go down to $80-ish. But Bush doesn't want that and we already know why.
In Vancouver, Canada the price at the nearest gas station is $1.34CAD per litre. That works out to $5.05USD per American gallon. You think you have it bad.
This is for the Peak Oil alarmists (pekelo, etc.) Fire In The Ice: Gas Hydrate Project Could Unlock Vast Energy Resource In Alaska ScienceDaily.com â Drilling is complete on an Alaskan North Slope well, cofunded by the Department of Energy, that could prove to be an important milestone in assessing America's largest potential fossil energy resource: gas hydrate. Gas hydrate is an ice-like solid that results from the trapping of methane molecules - the main component of natural gas - within a lattice-like cage of water molecules. Dubbed the "ice that burns," this substance releases gaseous methane when it melts. The size of the global gas hydrate resource is staggering, holding more ultimate energy potential than all other fossil fuels combined, according to the U.S. Geological Survey (USGS). In the United States, where gas hydrate occurs beneath the permafrost of Alaska's arctic north and below the seabed offshore, the volume of this resource is massive. USGS estimates that the Nation's gas hydrate deposits contain 200,000 trillion cubic feet (Tcf) of natural gas. Compare this with a known recoverable natural gas resource of approximately 1,500 Tcf. If just one percent of the gas hydrate resource could be rendered producible, our Nation's natural gas resource base would more than double.
May 14, 2008 The Real Culprit Behind High Gasoline Prices The real reason behind the high gasoline prices may come as a surprise to many. That surprise is ethanol, the controversial biofuel making headlines for causing a global food crisis. When our government decided to phase out MTBE and replace it with ethanol, they did the âunthinkableâ (pun intended), and did not analyze the ramifications of this change. When a barrel of oil is cracked (refined), it results in approximately 2/3rds gasoline and 1/3rd distillate products, such as diesel, jet fuel and heating oil. While the refining process can be adjusted to make more of one product than the other, the amount is very minute and usually requires expensive and time consuming changes to be made. The new blend-stock gasoline is comprised of 10% ethanol by volume, replacing an estimated nationwide average of 2% MTBE by volume in the old blend. This has automatically dropped gasoline demand at the refinery level by 8%. This loss of demand has allowed stockpiles of gasoline to build to 15-year highs on a very low (sub 88%) refinery utilization. Gasoline does not store well for any length of time and thus is why we have never implemented a strategic reserve for it. The loss of demand and subsequent downward adjustments in refining runs has however, reduced the production of distillates by roughly the same 8%. The problem is that jet fuel and diesel do not have a new additive to make up for the lost 8% like gasoline does. The result is a continued drawdown of these stocks to low levels, with no end in site. The refiners are stuck between a rock and a hard place. If they choose to increase refining runs to keep up with distillate demand, they wind up adding more stocks to an already oversupplied gasoline market. If they focus on keeping the gasoline runs in line with demand, they are undersupplying the distillates. At this point, they are choosing what is fiscally responsible for them, which is to keep from stockpiling any more gasoline. With such high supplies of gasoline, why is the price continuing to increase? The answer to that is in the higher prices of the distillate products. The price spike in diesel is leading the crack spread (the price difference in buying oil and refining it into gasoline and distillates). As diesel prices keep moving higher, gasoline prices will have to increase as well to offer the refiner an incentive to run. If gasoline prices did not keep up with distillate prices, the refiner would choose to cut refining runs rather than take large losses on 2/3rds of what is produced (gasoline). From a fundamental standpoint, it is easy to see that falling stockpiles of distillates are leading the entire crude complex higher, with no end in sight. On top of this, global food inflation is running at extreme levels not only from higher energy and related production cost, but also from the drawdown in global grains because of our ethanol mandate. In conclusion, the only plausible solution in the short-term, is to greatly reduce or eliminate the ethanol requirement in our gasoline blends until a more prudent lasting solution can be defined. The increased refining utilization would start providing relief to the dwindling stocks of diesel, jet fuel and heating oil. Without a change, the next major problem will be astronomical heating oil prices for the coming winter and a continuation of food shortages globally. -Jason Tidwell All rights reserved.