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200 plus oil

Maybe I'm overly cynical but the kinds of changes that make alternative fuels take market share from oil products do not take place overnight. The Oil companies can milk the market as much as they want. They can rape and pillage! And once the competitors get enough market share to be a blip on the radar? They can drop the prices. They can pull the strings on their puppet politicians to reduce the subsidies on alternative fuels. They can buy these competitors out.

You just have to make sure there's a (small) glut of oil by reducing consumption. It doesn't matter how you combine substitution, efficiency, less consumption or increase in oil production to make that happen. Too much oil is what brought it down to $10/barrel in 1998; but of course oil can't stay that low without consumption growing at a brisk pace.

There's no shortage of ways to do that. "Commuter towns" could convert to actual towns with businesses, schools and stores to provide some local jobs. People could use heat pumps instead of heating oil. People could buy more efficient vehicles(seen the price of SUVs lately?). There could be a recession and less people might afford to vaccation on the other side of the globe. Public transport might be privatized and start functioning smoothly for a change. Goods might increasingly be transported by rail instead of trucks. Canada might start using nuclear power to produce oil from tar sands instead of natural gas. Nuclear power might provide cheap and clean enough process heat to make syncrude from coal gasification acceptable(doesn't matter if it's in the US or China). Railroads might be electrified instead of continuing to use diesel. Increasing cost of transportation might encourage buying locally produced stuff to some extent(I'm not too hopeful; giant container ships are monstrously efficient).

I can keep listing ways in which petroleum consumption could be reduced all day, but it's way too complex and I have far too little data to actually guess which will really happen and when.
 
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Im going say 200 us dollar oil in the next 12 months(diggy's prediction).
Difficult predicting commodities . . .

oilchart.jpg
 
OPEC cut production yesterday to keep prices from dropping below $100 a barrel. It's holding today around $101. While I don't think we'll ever see it as cheap at 10 years ago I think consumer pressure can hold the price in the $100 to $150 range for quite a while.
 
OPEC cut production yesterday to keep prices from dropping below $100 a barrel. It's holding today around $101. While I don't think we'll ever see it as cheap at 10 years ago I think consumer pressure can hold the price in the $100 to $150 range for quite a while.

It didn't work, either. Oil is back down to a 2-digit number again. This on a day when the dollar lost big against other currencies.
 
And of course that fact is being headlined all over the media just as it was when it went over $100 for the first time because that magic figure represented the point at which the world started nose diving to Armageddon....
 
It is moderately amusing when some price is commentated on as "nosediving" and "plummeting to depths" that were far above and beyond the highest heights imaginable not too long ago.
 
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I think that the current trend (oil prices dropping despite cutbacks) is due in part to the perceived effort (at least in the media) of some glimmer of the USA being serious about going after alternative energies. Plus, we are using our reserves when needed, and not turning to the OPEC powers for every hiccup in the economy, or bump in the weather. Not to mention that right now, of the two presidential hopefuls, it's starting to look like the one that wants to drill here, drill now is showing signs of life.
 
And of course that fact is being headlined all over the media just as it was when it went over $100 for the first time because that magic figure represented the point at which the world started nose diving to Armageddon....

Psychologically, I guess, the change from two digits to three digits is significant.

It's like in Mario... you used to be able to only get up to 99 lives. That was pretty great, but in later games you could actually go over that and get 100 lives... or 120... or whatever.

Well, it's like a break-point. All of sudden, you're like "holy crap, I can have all these lives." It makes you feel really good about yourself.

It's like that, only with oil, and in reverse.

Also, OPEC represents Bowser and the princess is George Bush.
 
In economics, it´s (almost) all about perceptions and expectations. And I can still clearly remember the doom-and-gloom when, during Desert Shield/Desert Storm, analysts predicted that war in the Gulf might push oil beyond $25 per barrel!
 
JonnyFive: "Psychologically, I guess, the change from two digits to no digits is significant."

Lehman shareholder: BIFF, THUMP!! *stomps off* . . . .

Well, the change from two digits to no digits is pretty significant for non-psychological reasons too, I'd say. :)

That would be like when Bowser nails you with a fireball or something.

Oh wait, I'm using OPEC for Bowser. Uh... I think my analogy is breaking down.
 
I think $200 barrel oil within the next year is a safe bet. I have made that prediction elsewhere on this forum.

Actually I think it is a good thing because about the only things that can stop it are a downturn in USA, China or Japan.

Do I win a $1m? I predicted the only thing that can stop the price of oil going up is a downturn in a major economy back in May. Now the price is going down and so is the US economy.
 
92.06/barrel according to Bloomberg today. Seems to be falling almost as fast as it rose.

Not sure if it's a buy yet. There must be a bottom somewhere. Who knows if it's at 90 or 80 or 40 or 30 (I'd be surprised if it's as low as 30 though)
 
Do I win a $1m? I predicted the only thing that can stop the price of oil going up is a downturn in a major economy back in May. Now the price is going down and so is the US economy.
Thus continues the time-honoured tradition of punters to hedge their bets so that they are "always right".
 

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