The Price of Oil/Gas and why

[robwbright]

I'd suggest that everyone read this - nice article and graphs included - about the economy in general - not just oil:

http://www.lewrockwell.com/orig9/quinn4.html

 

[IndyMX]

I'd suggest that everyone read this - nice article and graphs included - about the economy in general - not just oil:

http://www.lewrockwell.com/orig9/quinn4.html

No bias in that article at all.. :yikes:

 

[JuliusPleaser]

No bias in this partial list of excuses for high oil prices, either:


(They stopped adding new ones last year.)

2007:
Fears new problems at US refineries will constrict gasoline supplies already at unusually low pre-summer levels (May 2007)
A refinery fire in Sweden
Nigerians running wild again this year
Trouble at many of the nation's refineries
US inventory stockpiles at lowest level since 1956
Extended planned refinery maintenance programs
Excuses given in the two previous years (2005-2006) mirror what we are hearing in 2007:
Concern a storm in the Caribbean will become a hurricane and hit petroleum installations in the Gulf of Mexico
Fresh worries Iran will miss a deadline to halt its nuclear program (8-18-06)
Oil fell $2 to below $75 a barrel today after Britain said it had thwarted a plot to blow up aircraft in trans-Atlantic flight. (8-10-06)
BP Plc said it's shutting the Prudhoe Bay oil field in Alaska (8-06-06)
Depletion at some of the world's largest fields including Mexico's Cantarell
Three Filipino oil and gas workers were abducted in southern Nigeria (8-04-06)
Fears that the Israeli-Lebanese conflict could spread to Middle East oil producers = $78.40 per barrel
Fear of Nigerian spies (7-31-06)
Explosions on Nigerian pipelines, Israel's military action, and tensions with Iran = $76 per barrel (7-13-06)
Tension over problems with North Korea cause record high prices (7-10-06)
Strong demand and worries about Iran; record high above $75 a barrel (7-05-06)
Momentum from strong demand and geopolitical worries
World oil prices advanced further as the market focused on tight supplies of US gasoline (6-22-06)
Congress has resisted accessing the billions of barrels' worth of oil and natural gas in our (U.S.) offshore continental shelf (added 6-17-06)
Mixed signals from Iran over a package of incentives offered by the West for it to give up uranium enrichment (added 6-16-06)
Militants kidnapped five Koreans at a natural gas plant operated by Royal Dutch Shell in Nigeria
Iran's supreme leader threatened to disrupt global supplies if the West punishes Tehran over its nuclear program
A refinery fire cut production at a Valero Energy Corp plant on June 1, 2006
An attack on a Nigerian oil rig which included kidnappings
Crude futures rose amid expectations of a spike in motor fuel demand during the summer driving season, and as forecasters warn of hurricane activity in the coming months. A barrel of light crude jumped $1.21 to $72.50 on the New York Mercantile Exchange on 30 May 2006.
President Bush's Blunders Add $15 to the price of each barrel of oil
Concern of new predictions of new hurricanes for 2006
A letter from Iran's president to President Bush failed to move the countries closer to an agreement
Rising resource nationalism in South America have added to oil-market worries
An expected decline in gasoline stocks (note that this excuse was reversed in 2 days as stocks increased)
Bullish buying by investors
A refinery outage in Italy
Supply disruptions in Africa
Tight petroleum supplies amid soaring demand could drive crude oil prices above $100 a barrel by this winter (2006-2007), energy experts warned yesterday.
Speculators and profit takers bid up the market
Bush stops filling oil reserves while experts say refining is the real issue
Changes from MTBE to Ethanol cause refining and delivery problems
Problems continue in Nigera
Concern about meeting demand for fuel as summer approaches (2006)
The Iranian government wants nuclear power, but purchased long range missiles while acting like loose cannons

-- Beginning of excuses for 2005 --

U.S. government reported in November an unexpected decline in oil supplies
Concern about meeting demand for fuel as winter approaches
Concern US refineries aren't recovering fast enough from the hurricane season
Tropical Storm Wilma - Oct 17 2005 - could move in to the Gulf of Mexico
Almost 19 percent of the U.S. total refining capacity is idle
French refiners might sit on the sidelines due to strikes
Fears of inadequate heating oil supplies this winter
Speculation about natural gas shortages
Debate about trade and budget deficits as US buys more fuel overseas
Are they stretching it with this one?
"Natural gas yesterday surged to a record on concern that a tropical storm system developing in the Caribbean Sea may develop into another hurricane that could cut production that has been crippled by two storms in the last month." - from September 28, 2005
And we continue...
Storms have exposed the soft underbelly of the U.S. energy system
U.S. Gulf of Mexico production remained completely shut because of Hurricane Rita
Four refineries remain shut because of damage caused by Katrina
Tropical Storm Rita will impede efforts to restore production in the Gulf of Mexico
Department of Energy said energy costs in the United States for the upcoming winter would be the highest in a decade
Gasoline futures on the New York Mercantile Exchange sent prices 25 percent higher in less than a week - Sep 1, 2005
US production recovered more slowly than expected after Katrina
Eight major refineries are shut down squeezing U.S. refining capacity
Hurricane Katrina appears to be gathering power, causing big problems
Hurricane Katrina damaged platforms and ports
A fire broke out at a Tesoro refinery in Martinez, California
Oil is effected by a superhot, panic-ridden California market
Iran parliament rejects president's choice of oil minister
Tropical Storm Katrina could threaten oil production in the Gulf of Mexico
A fire at a massive refining complex in Venezuela
In Nigeria villagers closed down a pumping facility
A 2 percent slump in US supplies signaled a thirsty market
In Ecuador protesters forced a halt to production
The oil market has not fully convinced itself that more than $60 is sustainable
US stockpile data expected to show a drop in gasoline inventories
Events in the oil-rich Middle East conspire to keep prices high
Nippon Oil Corp. suspended operations after a strong earthquake in Japan
Chevron Corp.'s refinery in El Segundo, California, shutdown for 25 days following a fire
The hot summer helped keep natural gas inventories at worrisomely low levels
ConocoPhillips' Wood River, Ill., refinery, was shut after a thunderstorm caused a power failure
Premcor Inc.'s refinery in Memphis, Tenn., was closed due to a power outage
If sanctioned by the U.S. and U.N., Iran would cut back on oil producing
The hot Chinese economy
Fear of a supply disruption
Rumours of terrorist threats to Saudi refineries
US embassy in Saudi Arabia closed for two days
Iran's decision to restart its nuclear program
Summer is the peak driving season in the US
Bombings in London
Diplomatic showdown over Iran's nuclear program
The recent death of King Fahd
Refinery outages in the United States
It is a product of trading strategies
Dicey conditions in oil producing nations
Weather related problems
Continued worldwide high demand
Strong economic growth in the US, which consumes a quarter of the world's fuel
Excessive fuel use by the US military, which use a third of US supplies
An explosion at the BP plant in Texas City, near Houston
Aging plants that are having difficulty maintaining output at high levels
Major oil reserves are becoming harder to find
Major oil reserves are more expensive to exploit
Strong demand from India
Lack of OPEC to increase oil production
Canada, which supplies oil to the US, recently signed a deal with China
Insurgents have not halted their attacks against the US military in Iraq
Insurgents have not halted their attacks against the new government in Baghdad
Anxiety over terrorism and the Iraq war
Some refineries have had to cut back production because they've been running so hard
Decreasing production in the North Sea
There are only about 1.5 million barrels of spare daily production that can be used in case of emergency
Rebel attacks on pipelines in India
A Sunoco refinery fire in Philadelphia
The threat of hurricanes
A provision in the energy bill signed by President Bush removes protections relative to MTBE
Without MTBE refiners have less flexibility in reformulating gasoline, which could drive prices up
The dollar is declining in relation to other benchmark currencies
No giant new oil fields have been found in twenty years
Critical items such as steel casing and tubing are now in short supply and expensive
Drilling and operating costs have soared
Hurricane Dennis, July 11, 2005
Hurricane Emily
Concerns that demand was straining the world's capacity to pump and refine crude oil
Nigerian rebels have warned oil companies to shut down production in the Niger delta
If Chinese demand were comparable to US demand China would consume more than what is currently being produced
Yukos bankruptcy where Yukos is a major supplier of upwards of 2% of the world's oil supply
Chavez recall vote in unstable Venezuela
Darfur's rebels and supposedly Khartoum backed militias, where the real prize is the oil wealth of the Sudan
Fear of lower US petroleum reserves
OPEC's lack of spare capacity means they can no longer control the market
Sabotaged pipelines in Iraq have added to the escalating price of oil
Fear of cold weather in the winter of 2005 - 2006
Fear that global oil reserves will be entirely depleted by 2038
Concerns over Iran’s decision to resume uranium-conversion activities

 

[ignition retard]

No bias in that article at all..

I also noted a bias. It appears to be biased against the lending institutions in this country. I would like to hear any of the points in that article refuted.

 

[Patman]

Anybody been to say the UK in the past 20 years? Does the petrol there come from a different and thus more expensive source? Nope. Why is Brazil able to detach from the supply line? Commitment. We've had cheap fuel for a long time and a lack of commitment. Now everyone is lathered up because they didn't do anything to address this before it became a pain in the paycheck. Some folks figure it's easier to blame others for the problem than to actually take action... :think: sounds like a lot of problems from riding areas to Fanny & Freddy.

 

[Vic]

Some folks figure it's easier to blame others for the problem than to actually take action

It has ever been thus, and ever more shall be. :nod:

 

[2-Strokes 4-ever]

Heard on the news a couple weeks about a slight drop in the price of a barrel of oil. Here in the Midwest we've seen gas drop by about 35 cents per/gal since then ($3.65 yesterday.) But diesel hasn't moved much... isn't there less labor in refining oil to diesel fuel?

 

[bsmith]

I'm sure the fabrication of Global warming didn't help!

Run, run, the sky is falling ;)

 

[Patman]

Heard on the news a couple weeks about a slight drop in the price of a barrel of oil. Here in the Midwest we've seen gas drop by about 35 cents per/gal since then ($3.65 yesterday.) But diesel hasn't moved much... isn't there less labor in refining oil to diesel fuel?

Strange but true in Europe diesel is still less expensive than gasoline by a fair margin. Also consider in the Netherlands gasoline is just under $9.00 USD per gallon :yikes: Can you imagine how much THEIR oil companies are ripping THEM off?! On the flip side Venezuela is the home of $0.12 USD per gallon gas! So I guess their company is doing something really wrong or maybe it is because their fuel "company" is government owned.

 

[JuliusPleaser]

Some folks figure it's easier to blame others for the problem than to actually take action.

Is that why so many people blame Democrats, liberals, hippies, and space aliens for high gas prices?

 

[JuliusPleaser]

Heard on the news a couple weeks about a slight drop in the price of a barrel of oil. Here in the Midwest we've seen gas drop by about 35 cents per/gal since then ($3.65 yesterday.) But diesel hasn't moved much... isn't there less labor in refining oil to diesel fuel?

The "Democratic Congess" has been working hard for two years to keep the price of gas (and big oil's profits) at a record high.

You can't expect them to just drop the price of everything overnight.

 

[2-Strokes 4-ever]

We all choose an attitude.

 

[robwbright]

Look at this graph:

http://research.stlouisfed.org/fred2/data/BORROW_Max_630_378.png

 

[Patman]

Is that why so many people blame Democrats, liberals, hippies, and space aliens for high gas prices?

Nope. I blame Democrats, liberals & hippies because generally they all are one in the same. I don't blame the space aliens because they have alternative power sources and are not afraid to use their power. Of course they might also leave some smoke up your butt when they probe you but not having any practical experience I couldn't say for sure.

 

[whenfoxforks-ruled]

Rob, the last graph is a little scary! When the banks go bye bye chaos will rule?

 

[BSWIFT]

Is that why so many people blame Democrats, liberals, hippies, and space aliens for high gas prices?

If the shoe fits.....

 

[kschilk]

I was traveling between home and work when a tire blew out. Checking my spare, I found that it too, was flat. My only option was to flag down a passing motorist and get a ride to the next town.

The first vehicle to stop was an old man in a van. He yelled out the window, 'Need a lift?'

'Yes, I sure do,' I replied.

'You a Republican or Democrat,' asked the old man.

'Republican,' I replied.

'Well, you can just go to Hell,' yelled the old man as he sped off. Another guy stopped, rolled down the window, and asked me the same question. Again, I gave the same answer, ' Republican.' The driver gave me the finger and drove off.

I thought it over and decided that maybe I should change my strategy, since this area seemed to be overly political and there appeared to be few Republicans. The next car to stop was a red convertible driven by a beautiful blonde.
She smiled seductively and asked if I was a Republican or Democrat. 'Democrat', I shouted!

'Hop in!', replied the blonde. Driving down the road, I couldn't help but stare at the gorgeous woman in the seat next to me, the wind blowing through her hair, perfect breasts and a short skirt that continued to ride higher and higher up her thighs. Finally, I yelled, 'Please stop the car!'

She immediately slammed on the brakes and as soon as the car stopped, I jumped out. 'What's the matter?', she asked.

'I can't take it anymore,' I replied. 'I've only been a Democrat for five minutes and already, I want to screw somebody!

 

[Patman]

Interesting little tidbit today. It seems this year will be the largest recorded year ever for corn and soybean production. So it seems the fear of $12 tacos might have been a bit misplaced. Of course the Ag Dept. decided to NOT let farmers pull some land back in from conservation status either... heaven forbid there might have been even more corn & beans! :laugh:

 

[Patman]

After floating right around the $4 mark I saw some ease in the price to the $3.75ish range last week. I thought it wasn't bad until I got gas for $3.53 when we were in Boerne, Tx this weekend! That was a nice feeling but made me wonder when I'll see it locally :)

 

[whenfoxforks-ruled]

That is one that really does not figure. Same brand of gas station, same city, as much as .25 cent difference? Cheapest gas around, go to the poverty stricken areas. Again, .25 cent difference. Many moons ago, while asking a gas station about such things, he claimed no control over the price. It is controlled via satellite link! Now maybe a quarter does not seem like much. Each tank holds what, 10,000~20,000 gallons. 4~6 gas stations per 80,000 people. Nooooo, they are not MAKING money, they are stealing it! Or, more commonly referred to as politics.

 

[Patman]

There was a Chevron with the $3.53 and across the street there was a Shell with $3.65 and a Valero at $3.69 go figure.

 

[truespode]

$3.35 this morning in SC.

Ivan

 

[Jaybird]

If the supply can meet the demand, then prices will be what the market will make them.
When the supply is short of the demand, the prices will be what the market will make them.
Unless of course gov sticks it's greedy hand in the till. The gov upsets the perfect balance that the magic of the free market creates.

Oil companies don't need any excuses. It's really none of the Democrats business what they charge. The free market dictates this all. And as a proven enemy of the free market, the Democrats (it's Democrat not democratic for those who are so phony they feel a name change will help to heal their ills) always want to bust the balls of anything free market related. Gov control is the goal of the Democrat leadership, as their constituencies really have no clue one way or the other, and only follow the absurd talking points of their illustrious leaders. (or is it Democratics?)

It is truly amazing, and saddening, how ignorant today's leftist is on just about any given topic.

 

[Solid State]

It's more maddening than saddening. I respect their right to be wrong and they NEVER disappoint me.

 

[robwbright]

"Rightists" probably aren't going to like the analysis in the following article, but I have always found Gary North to be a reasonable and very accurate historian and economist.

Before I link the article, BTW, for those who don't know, I'm, a strict constructionist Constitutionalist/Libertarian who believes there is very little actual difference in practice between the two major parties. Brief example:

BTW, do you know who Dem VP Candidate Joe Biden supported as VP candidate for Kerry?

JOHN MCCAIN - and McCain initially said he would consider it.

http://www.worldnetdaily.com/?pageId=73322

Anyway, below is the article about the price of oil. Were you aware of the very recent rather large naval buildup in the Gulf? 5 carrier groups? What is the purpose and possible consequences of that? How does it potentially relate to the price of oil? See the article for Mr. North's analysis.

http://www.lewrockwell.com/north/north648.html