http://abcnews.go.com/Video/playerIndex?id=4776415
Printable View
He's right.
We need to drill in Alaska.
Even if we started drilling in Alaska in 2000, when he was elected, we still wouldn't be seeing a drop of that oil as it takes ten years to get it out here. Besides, there isn't even that much oil up there anyways. Not that I'm against drilling there, but it wouldn't make a lick of difference at this point.Quote:
Originally Posted by Phil D.
If Bush really wants to do something about it, change the rules in NYMEX to end oil speculation. The exact same thing happened with silver in the early 80's and they can do the same thing now if they really want to. But we all know nothing will happen. I mean, come on, has demand really increased that much in one year to justify doubling the price of oil?
It is a combination of many factors.Quote:
Originally Posted by bonanzabucks
Increased demand on the international market (rise of the spending power of the middle class in China & India)
OPEC is not pumping addition oil to the market
No new oil sites are being discovered.
Chaos from the oil producing nations (Iran, Nigeria, Venezuela)
There was a strike in the UK which shut down all oil production in the country for several days.
There is fear that Mexico will not be able to keep up with production & will stop being an oil production country & will become an oil importing country.
US has oil but will not drill for any oil.
Fear that Russian oil production may have peaked.
Back to drilling in the United States, there are some oil sites in the Alaska that are easy to get to, others will take time. There are also potential oil sites in Montana & off the Californian coast.
In Alaska, it does not take 10 years to access the oil in all areas of Alaska, & even it did, it would calm down the fears that there are no new oil sites being discovered.
Also, need to add in the weak dollar...
[quote=Midnight Mike]It is a combination of many factors.Quote:
Originally Posted by bonanzabucks
Increased demand on the international market (rise of the spending power of the middle class in China & India)
OPEC is not pumping addition oil to the market
No new oil sites are being discovered.
Chaos from the oil producing nations (Iran, Nigeria, Venezuela)
There was a strike in the UK which shut down all oil production in the country for several days.
There is fear that Mexico will not be able to keep up with production & will stop being an oil production country & will become an oil importing country.
US has oil but will not drill for any oil.
Fear that Russian oil production may have peaked.
Back to drilling in the United States, there are some oil sites in the Alaska that are easy to get to, others will take time. There are also potential oil sites in Montana & off the Californian coast.
In Alaska, it does not take 10 years to access the oil in all areas of Alaska, & even it did, it would calm down the fears that there are no new oil sites being discovered.
Also, need to add in the weak dollar...[/quote:f5d16]
Dude, I used to research commodity prices with my last job. I know my stuff. Your reasons sound exactly like something the API or a Peak Oil doomist would spout out. You don't mention anything about hedge fund and ibanking investment in oil futures, which is otherwise known as speculation. This investment has profoundly increased the last two years, which coincides neatly with the doubling of oil prices.
China and India have growing demand. India's is actually more or less stable, but even so, would it really amount to doubling the price? These guys are not importing or using twice the oil they used last year.
Also, although you're skeptical, Brazil discovered the third largest oil deposit ever off the coast of Rio de Janeiro. That should have affected the price, but nooo, a small strike in Scotland had more impact.
I will not deny that terrorism, growing demand from developing countries and political factors (like Chavez, Putin and OPEC deliberately limiting oil exports to keep the prices high, screw the US and maximize their profits), but does it really lead up to oil doubling up within 15 months? I'm not a conspiracy theorist either, but it's common knowledge that hedge funds and investors will put their money where they it will be maximized, which happens to be commodities at the moment. They've even recently started investing in food futures! Like I have said before, people I know who work in the industry and they all think oil is vastly overvalued and should be between $50-$60 a barrel based on those factors I (and you) mentioned. Anything more is speculation. And indeed, in January 2007, oil was about $55 a barrel. Since then, we've seen just about every excuse in the book to justify these ludicrous price increases (sometimes by more than $4 in a trading session). Once I saw this analyst on CNBC saying that oil shot up by a few bucks that day because of a small terrorist attack in Turkey, which has no oil at all. How the hell does Turkey fit into the equation?
Even today, oil went up by $3.80 because of US jobs data and Turks fighting the Kurds in Iraq. What does US jobs data, which still wasn't that great, have to do with supply and demand?
dude.
The chaotic market is certainly making an opening for the oil speculators to impact the price of a barrel of oil, so, I would not discount the effect that oil speculation is having on the price of a barrel of oil.Quote:
Originally Posted by bonanzabucks
You mentioned about the oil potentially discovered Rio de Janeiro, well, the oil market will react to that when they start drilling & yes you are right, people reacted more more to the negative news of a strike that shut down UK oil production rather than a potential huge find of oil in Rio.
I am not arguing, I am just saying that oil speculators, are not the main problem with rising oil prices.
http://www.guardian.co.uk/business/2008 ... oil.brazilQuote:
Excitement about the potential of Brazil as a massive new source of oil and gas intensified yesterday after a senior energy ministry official declared that the newly found Carioca field could have 33bn barrels in place.
And I disagree with you and have seen that speculators hijacked the whole process the last two years. It's exactly the same thing we saw in the lat 70's with the silver trade when the Hunt brothers horded it all up. The government got involved there and the Hunt brothers deservingly went bankrupt. I really, really hope the same thing happens here.
One of the reasons people are buying into oil is to hedge against a weak dollar. Don't tell me that's not speculation. It has nothing to do with supply and demand. Supply and demand should and normally dictate the price of oil or any other commodity. It hasn't been doing that for the last two years, especially since demand in the EU and US (the two biggest oil users) has gone down. Any upturn in India, China or the developing countries can't justify the increase we're seeing now.
Ten (even five) years ago, oil was not as large a traded commodity and we never saw the aggressive spikes or volatility that we've been seeing recently. Now because all these investment banks have put money in commodities, fundamentals are not dictating the market anymore. You can criticize OPEC all you want, but their head was spot on when he said that oil supplies were adequately (if not tightly) supplied, but the prices are rising because of speculation.
So, how much differently will the oil market react when drilling starts in Alaska as opposed to Brazil? You seem to think the market will react quicker in Alaska. How so?
When I read through your post, I am not sure that we are actually disagreeing with each other on everything, we both agree there is a weak dollar, which is creating on opening for oil speculators, I think we are just disagreeing with how much impact the speculators are having on the market.Quote:
Originally Posted by bonanzabucks
As for the impact of drilling in Alaska, it will give a positive sign that the United States will start drilling for oil, there are other potential drilling sites in the United States & the market would react favorably if we were to tap these as well.
15-20 years ago the United States used to supply more than 60% of their own oil, now we supply less than 50% of our own oil.
China is the 3rd largest importer of oil behind the United States & Japan
http://www.eia.doe.gov/emeu/cabs/China/Background.html
Quote:
Global oil demand for 2008 is now projected to be 87.2 million barrels per day, the IEA said. Meanwhile, global oil supply for March 2008 totaled 87.3 million barrels per day, due to lower supplies last month from OPEC, the North Sea region, and non-OPEC Africa.
Let's think logically for a second. Can anything other than speculation justify oil doubling in 15 months? It brings me back to the same point that demand has not doubled, but prices have. And even by the figures you give me, there is enough supply to meet the global demand. Even more supply, if slightly so.
You still never said how Alaska is more a positive sign on the global market than Brazil. Even at the highest estimates, ANWAR has about 11 billion barrels. Brazil's is over three times that amount.
I said the EU was the second largest importer. As individual countries, they don't import a lot, but as the EU (or Eurozone), they import more than China and Japan.
Looks like China's oil growth is starting to ebb. Yet Goldman Sachs brashly still predicts oil will reach $200 within the next two years, in spite of slowing demand.
http://www.ibtimes.com/articles/2008041 ... na-oil.htm
http://www.iht.com/articles/2008/02/12/ ... chioil.php
Guess who's heavily invested in oil hedge funds???Quote:
Originally Posted by bonanzabucks
They might also have some less-than-public insight as to whether we're going to blow anything up in Iran. :)Quote:
Originally Posted by lijk604
I heard russia found some new oil recently
Venezuela just increased their proven oil reserves by a lot too. Yes, I know, it's Venezuela and they're run by a lunatic who purposely limits oil exports to screw the US over, but still, news of a massive oil find should decrease the price if fundamentals were in use here.
http://www.breitbart.com/article.php?id ... _article=1