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$300-$500 dollar a barrel oil? x posted in Green Living

post #1 of 33
Thread Starter 
I love my T.V. Ontario.

I am posting a link to a video with host Steve Pakin interviewing Matthew Simmons on the coming oil shock.

http://www.tvo.org/TVO/WebObjects/TV...90317_779455_0

I hope this video is available in the US as well as I would love to discuss this here.

April
post #2 of 33
Interesting. I liked the end part when he said we need to learn to stay home more, live in villages again.
post #3 of 33
That was interesting. I don't disagree with his reasoning at all. Not sure about the time line.

I like how the audio streamed when I didn't have the page up. I have DSL so its nice not to have breaks in interview
post #4 of 33
Thread Starter 
Quote:
Originally Posted by mama~to~my~bunch View Post
Interesting. I liked the end part when he said we need to learn to stay home more, live in villages again.
LOL! My husband makes fun of me because when I have to travel to the "big city" a 30min drive away I make sure I am doing all my shopping and visiting for the whole month in one or two days. I have stayed over in town instead of driving home and back. He laughs because he has to drive into the "big city" every day to work. It's not that far he says, but he drives a company vehicle and they pay for gas. For me I think of the $15 bucks saved on gas not having to drive back and forth.

What do you think about the theory that once consumer spending goes up again the price of oil is going to return to summer 2008 levels or more? Is the only reason oil/gas is cheaper right now because we are not spending?
post #5 of 33
I definitely think oil will go right back up (and higher) as the recession ends. Despite the low gas prices now, we are fully planning on them going way back up.
post #6 of 33
Quote:
Originally Posted by ParisApril View Post
LOL! My husband makes fun of me because when I have to travel to the "big city" a 30min drive away I make sure I am doing all my shopping and visiting for the whole month in one or two days. I have stayed over in town instead of driving home and back. He laughs because he has to drive into the "big city" every day to work. It's not that far he says, but he drives a company vehicle and they pay for gas. For me I think of the $15 bucks saved on gas not having to drive back and forth.

What do you think about the theory that once consumer spending goes up again the price of oil is going to return to summer 2008 levels or more? Is the only reason oil/gas is cheaper right now because we are not spending?
I think that is part of it. This "break" we've had from the high prices will not last forever.

I would LOVE to be able to stay home more, travel less. We're planning on ways to accomplish that.

Quote:
Originally Posted by SuzyLee View Post
I definitely think oil will go right back up (and higher) as the recession ends. Despite the low gas prices now, we are fully planning on them going way back up.
So are we.
post #7 of 33
The reason oil prices were so high to begin with is b/c of the stock market. When the real estate market tanked, investors turned to oil. The prices plummeted for a couple of reasons, the number one being an over supply. Yes, people were driving less, but we also had more oil.

I do not think the barrel of oil will ever reach as high as predicted. First of all, there is plenty of oil- we just need to drill for it. My dh works in the oil services industry and he looks at the reports all the time. There is oil there, but the price per barrel must be at a certain level or is doesn't pay to drill for it in this country. When oil was at $100.00 per barrel, lots of drilling was going on. Right now, many of the rigs have shut down. As supply dips, prices will rise and drilling will start again. If we have another major hurricane that shuts down the rigs and/or the refineries (as with Ike and Gustav) prices will go up again, quickly, because of speculation. If we have a quiet summer hurricane wise, prices should be fairly moderate.

In the 1970s, gas prices were very high when you figure inflation. People never believed they would be low again. However, gas was very cheap for 20 plus years.
post #8 of 33
I think we have had a time to catch our breath in this right now. This summer I think it will go way up and how could that not stagnate the economy or make it worse?
post #9 of 33
Thread Starter 
Quote:
Originally Posted by mar123 View Post
The reason oil prices were so high to begin with is b/c of the stock market. When the real estate market tanked, investors turned to oil. The prices plummeted for a couple of reasons, the number one being an over supply. Yes, people were driving less, but we also had more oil.

I do not think the barrel of oil will ever reach as high as predicted. First of all, there is plenty of oil- we just need to drill for it. My dh works in the oil services industry and he looks at the reports all the time. There is oil there, but the price per barrel must be at a certain level or is doesn't pay to drill for it in this country. When oil was at $100.00 per barrel, lots of drilling was going on. Right now, many of the rigs have shut down. As supply dips, prices will rise and drilling will start again. If we have another major hurricane that shuts down the rigs and/or the refineries (as with Ike and Gustav) prices will go up again, quickly, because of speculation. If we have a quiet summer hurricane wise, prices should be fairly moderate.

In the 1970s, gas prices were very high when you figure inflation. People never believed they would be low again. However, gas was very cheap for 20 plus years.

However the oil we have left now is not spewing from the ground like it once use to all around the world. It is growing harder and harder to access the usable crude. The price has to go up.

Rigs on the sea are going to get damaged from storms forever that won't change. Just imagine how expensive oil would have to be to even attempt to drill for it in the Arctic! Yet here we are fighting about who owns it.

One barrel of oil from the Alberta Oil Sands costs around $75 dollars to produce. So we have a lot of unemployed Canadians sitting around right now in Alberta. (A good thing. IMO.) Add into that the fact that there is way too much pollution resulting from there and Obama and Harper are under a great deal of pressure to come up with ways to reduce the carbon output. Carbon capture is not going to be cheap.

I think gas prices are going to go up. I think they will because no one really knows exactly just how much oil there is in this world. No one knows for sure so there will always be speculations. I know gas prices will go up because the oil companies would never pass up an opportunity to make some money on those speculations.

I think in the end it will come down to, how much will we pay for it? How much can we afford to pay for it? How much environmental damage will we allow?
post #10 of 33
Last year when gas was 4.00 a gallon, I kept reading that gas would never go below 2.00 a gallon. Here we sit with gas being 1.90 a gallon. Much of what is put out there is inflammatory for a reason- to suit someone's objective. I have a dh who works with the people looking for it and who are paying to look for it, drill it, and produce it. These are the same people who told him Katrina would hit us dead on 16 hours before anyone else said anything; they were right then.

My point was that gas prices will go up and they will go down- it is cyclical like everything else. There are many variables that control the cost. Most people don't realize that up to a dollar of what they pay at the pump is tax. .

You are correct in that it is not spewing out of the ground- but it is there. As long as there is profit to be made, there will be drilling. I don't think that is a bad thing either.
post #11 of 33
We are in a deflationary period right now, but it is only a matter of time before EVERYTHING goes up. Plus, add in the trillions of dollars in bailout money being created by the Fed.

We only have a small window of deflation. I am using it to my advantage to make needed purchases, like appliances, that have dropped in price. Also, food and gardening supplies. Really, I am trying to plan and buy anything our family might need over the next few years.

Imagine the cost of a loaf of bread when oil is $150 or $200 a barrel and the dollar is worthless?!
post #12 of 33
Quote:
Originally Posted by Usually Curious View Post
We are in a deflationary period right now, but it is only a matter of time before EVERYTHING goes up. Plus, add in the trillions of dollars in bailout money being created by the Fed.

We only have a small window of deflation. I am using it to my advantage to make needed purchases, like appliances, that have dropped in price. Also, food and gardening supplies. Really, I am trying to plan and buy anything our family might need over the next few years.

Imagine the cost of a loaf of bread when oil is $150 or $200 a barrel and the dollar is worthless?!
:

Tankers are being used to stock up on oil right now and output is being lowered...with demand around the world increasing.
post #13 of 33
Bumping this.

I don't think people realize what is going on. We are in a deflationary window. A LOT of people are barely making it - imagine how bad it will be when inflation takes over. If you have ANY disposable income buy for the future now. The tighter your budget is now, the more you will need to buy before inflation kicks in. If you have a well stocked pantry - lots of beans, grains, basics - you will be in a much better position in the future. Plant as large a garden as you can and put up all the extra that you can.

If I did not have a solid plan of action I would be very frightened. As it is, I still get skittish thinking about feeding 8 people on an ever shrinking food budget.
post #14 of 33
If gas gets as high as it was last summer or higher, we will be screwed. With gas down like it is, we can breathe again, but just barely. I'd like to say that we've been saving the difference in an account, but instead we've only just been able to catch up on bills.
post #15 of 33
Quote:
Originally Posted by PenelopeJune View Post
If gas gets as high as it was last summer or higher, we will be screwed. With gas down like it is, we can breathe again, but just barely. I'd like to say that we've been saving the difference in an account, but instead we've only just been able to catch up on bills.
You, us and everyone else! That's what is so frightening about it - so many live on the brink. Already, people have shifted from steaks and roasts to hamburger and chicken. We have shifted to meatless meals (we eat kosher and man, that's expensive meat).

If things are tight now, how tight will they be when a loaf bread is $5 or $10 (it's already $3.50 for the sawdust stuff at the store)?! What if WIC or FS programs run out of money?
post #16 of 33
Quote:
Analysts have struggled to explain the recent surge in energy prices, especially as reports continue to pour out from the federal government showing that the U.S. economy is shrinking and its oil inventories are bloated with surplus crude.

Investors seem to have shrugged off the government data and have been bidding up prices on the expectation of a future shortage of crude oil, analysts said.

Stephen Schork, an analyst and trader, said a lot of investors are getting swept into a new run on oil stocks even though there is little to support rising prices.

“With global demand in the doldrums and the world swimming in oil, the current price run in oil is an aberration,” Schork said in his daily oil report. “We do not think it will last ... in a logical world.”

Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, said the traders are jumping to oil now, but it won’t be like last year.

“This is not the beginning of the next great oil price shock,” Kloza said.

The price of gasoline, however, is traveling along more traditional lines.

Gas prices usually increase in the spring as refiners slow down production to get ready for a summer gas blends, and gas is actually cheaper now than it was at the same point in the previous four years. Kloza said the recession will keep prices low as manufacturers retrench and millions of laid off people no longer commute to work.

“We’re on the trajectory where prices will top out between $2 and $2.25 a gallon in most markets,” he said.
This reflects what I am in hearing from people who are in the business and really know this stuff- not alarmists out to scare people.
post #17 of 33
Quote:
Originally Posted by mar123 View Post
This reflects what I am in hearing from people who are in the business and really know this stuff- not alarmists out to scare people.
It's not only about the price of oil, though. This administration is hell bent on pushing us into hyperinflation. EVERYTHING will rise in price, not just petroleum products. It's really about the fall of the value of the dollar and how it affects every aspect of our lives in the next few years.

Think Weimar Republic ...
post #18 of 33
Believe me, I am not happy about what the administration is doing. My point is that the price oil will not be going up because of low supply nor do I think it will go nearly as high as people seem to think. I do think gas prices will go up this summer, but to about 2.25, not 4.00 or higher.

I also remember reading a lot of things similair that were written in the 1960s/1970s- much of what was predicted never came to pass. Kind of like the second ice age predicted in Time magazine in the 1970s. A great book that discusses these types of things is State of Fear by Michael Chriton.
post #19 of 33
Quote:
Originally Posted by mar123 View Post
The reason oil prices were so high to begin with is b/c of the stock market. When the real estate market tanked, investors turned to oil. The prices plummeted for a couple of reasons, the number one being an over supply. Yes, people were driving less, but we also had more oil.

I do not think the barrel of oil will ever reach as high as predicted. First of all, there is plenty of oil- we just need to drill for it. My dh works in the oil services industry and he looks at the reports all the time. There is oil there, but the price per barrel must be at a certain level or is doesn't pay to drill for it in this country. When oil was at $100.00 per barrel, lots of drilling was going on. Right now, many of the rigs have shut down. As supply dips, prices will rise and drilling will start again. If we have another major hurricane that shuts down the rigs and/or the refineries (as with Ike and Gustav) prices will go up again, quickly, because of speculation. If we have a quiet summer hurricane wise, prices should be fairly moderate.

In the 1970s, gas prices were very high when you figure inflation. People never believed they would be low again. However, gas was very cheap for 20 plus years.
This is kind of the definition of Peak Oil. When price point dictates whether or not we drill, that implies peak. If oil were readily available, we would not be having this conversation.

In the 1970s gas prices were high because US oil production peaked AND we were relying more and more on foreign oil.

We are not running out of oil, we are running out of cheap, easy oil.

Regardless of what happens or doesn't happen with oil production and price, inflation will cause us problems.

V
post #20 of 33
Quote:
Originally Posted by Usually Curious View Post
It's not only about the price of oil, though. This administration is hell bent on pushing us into hyperinflation. EVERYTHING will rise in price, not just petroleum products. It's really about the fall of the value of the dollar and how it affects every aspect of our lives in the next few years.

Think Weimar Republic ...
So, a related question: What should I be buying NOW with my dollars to prepare for this? (I know this might be different for everyone, but help me out with some ideas.) And, would you go into debt to buy things now, since the dollar is stronger now than it will be in the future?
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Mothering › Mothering Forums › Natural Living › The Mindful Home › Frugality & Finances › $300-$500 dollar a barrel oil? x posted in Green Living