$140 Oil going to $170

[kwagar]

CNN-Oil hits new record high today at $140 with OPEC indicating it could go to $170 this summer.

That's not likely to slow down smart car reservations in the short term.

These gas prices aren't good for anyone but they sure make us look "smart"

[bottlerocket]

Like I told the gas station attendant on Monday before I paid his $5.05/gallon premium price (before the Grapevine climb, don't wanna get stuck with no gas):

Him: "How's the gas mileage?"

Me: "Let's just say I'm not too worried about filling up, even with your $5 gas"

$37 tab, and off I went...

[diegosilang]

That is some sad development for a lot of us who barely make enough to make ends meet. I wonder what $170 would translate into terms of price per gallon. I can't help but wonder if the price increase really reflects the supply versus demand or is it due to speculation. Case in point is about a week ago after the OPEC meeting, Saudi Arabia agreed to increase production by about 10 million barrels a day (not sure of the amount) to help lower the price of gas. After the news broke out, the price per barrel of oil went up instead of coming down , because the speculators were disappointed with the amount of the oil production increase. Go figure, is it really supply versus demand driven or is it price gouging? I guess that should be worth another thread to debate on.


:MachineGun: Take that you xxxxx speculators!

(sorry cant help it).

[bottlerocket]

Originally Posted by diegosilang

That is some sad development for a lot of us who barely make enough to make ends meet. I wonder what $170 would translate into terms of price per gallon. I can't help but wonder if the price increase really reflects the supply versus demand or is it due to speculation. Case in point is about a week ago after the OPEC meeting, Saudi Arabia agreed to increase production by about 10 million barrels a day (not sure of the amount) to help lower the price of gas. After the news broke out, the price per barrel of oil went up instead of coming down , because the speculators were disappointed with the amount of the oil production increase. Go figure, is it really supply versus demand driven or is it price gouging? I guess that should be worth another thread to debate on.


:MachineGun: Take that you mtf ing speculators!

(sorry cant help it).

Speculators (who, by the way, include a lot of our retirement pension funds)

[SmartCard]

I just don't understand this.....there's no freaking justification for the prices where they are, and where they are heading!

[rotate]

I agree 100% I can't help but think its due to speculation.

[diegosilang]

Originally Posted by bottlerocket

Speculators (who, by the way, include a lot of our retirement pension funds)

There are two possible culprits here;

1. The speculators (Pension funds, Wall Street banks and other large investors) that have no intention of taking delivery of fuel have increasingly pumped money into contracts for oil and other commodities as a hedge against inflation. Oil prices have gone up, as more and more investors/speculators pour billions of dollars into the commodities futures markets, speculating prices will continue to rise.
2. The World Economy and current events. Some say soaring oil prices are a reflection of larger economic factors, including the falling dollar, unrest in the Middle East and increased demand from countries like China and India.

The bottom line: Supply is up, relative demand is down, and yet the price of oil is soaring. Go figure.

It also reminds me alot of the Internet bubble of the late 1990s. I am hoping that just as dot-com stocks crashed, oil, too hopefully is headed for a fall.

[kwagar]

I don't want to set myself up as an expert because I am not but for the last 6 months I have been working with a large multinational company that tracks and advises companies on commodity markets. They do not speculate or trade. They are economists who track the fundementals and advise producers, users and yes speculators on where the markets are likely to go.

No one is sure of the impact of the speculators and hedge funds. If you get 100 of the top economists in a room half will tell you the speculators are a big part of the problem and the other half will say they have very little impact.

What they all tend to agree with is that the fundementals of suipply and demand will never get us back to $60 barrel oil. Maybe $80 or $90 but unlikely to ever be below that again so we are in for some of this for the long term.

A simple strengthening of the dollar would cause some decline in oil but that doesn't look likely in the short term either.

I suspect there will be a bust in the energy bubble at some time but I also suspect it won't drop nearly as far as housing or the internet bubbles, it will fall dramatically from where it is but still stay above historical levels of a year or so ago.

[saskdiesel]

I really feel for those who heat their homes with oil.
Its going to be a costly winter.

[Old smart]

The really big worldwide demand isn't for gasoline, but for #1 and #2 distillates (#1 - kerosene, jet fuels, etc.; #2 - diesel, heating oil, etc.).