Oil, gas prices shoot up

[kalian]

http://www.gazettenet.com/story.cfm?id_no=1100094

Saturday, January 10, 2004 -- Oil and natural gas prices climbed to their highest levels in more than nine months Friday as traders responded to colder weather in the Northeast, tight supplies and rising demand.
The weak dollar is also pushing energy prices higher, analysts said.

''It gives OPEC countries less buying power and literally no incentive to make any increases in output,'' of crude, which is denominated in dollars, said Tom Bentz, an analyst at BNP Paribas Commodity Futures in New York.

This is why OPEC will eventually switch over to the Euro...no question
in my mind.

[Lefty48197]

1. The weak dollar is killing us

Now we're all going to pay an extra "tax" at the pump in order to fund Jr's latest tax give away.

[treepig]

2. don't worry, when the $1/bbl iraqi oil comes on line, prices will dive

on second thought, i don't believe the $1/bbl figure (compared to $10+ in the usa). i'm arbitrarily going to assume it will cost at least $2/bbl.

but that's still a bargain, right?

but perhaps we should factor in the $166,000,000,000 "capital costs" involved (i.e., the iraq war to date). let's say we get a 30 year 7% loan to pay it off - that adds $36,809,041 per day in costs to the price of oil we're getting.

and what about continued costs of occupation? i suspect that $3 billion per month will be needed (probably forever), that's another $100,000,000 per day to add to the price of oil.

apparently, daily production has just reached 2 million bbls. rumsfeld projects it will reach 6 million by 2009. other people think 4 million is optimistic. perhaps a realistic number is the present level of 2 million.

in any event, i've taken the liberty of summarizing these different scenarios in the following graph:



and it might be noted that halliburton's cut isn't even figured in - so get used to the high "real" cost of gasoline!!