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Subdivisions Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 10:09 AM
Original message
Oil prices breaking records
Edited on Mon Jul-16-07 10:12 AM by Texas Explorer
For the past several weeks I've been watching the price of oil and in that time I've seen it go from $65/barrel to the up-to-the-minute current price of $80.10/barrel.

Dated Brent Spot is considered by many to be a bellwhether indicator of the overall state of oil prices, which is also the indicator I actively track. The graph below shows the current price and comes from Bloomberg.com:



Just a few weeks ago, the price ceiling for oil, according to industry pundits and investors, was $70/barrel. It's taken less than three weeks for the price to not only sail past that figure, but to reach all time highs (without a single hurricane or terrorist attack) for almost all grades.

Foriegn media outlets cite the reason for this amazing rally as being a result of supply concerns in the US (I'm working on a separate article about that). In the US, last week at least, the media (including CNN) say the reason for the record price of oil is due to the flooding that occured which shut down the refinery in Coffeyville, Kansas. I see this as complete and total bullshit spewed with the knowledge that the general public knows nothing about such things, and really they don't. The problem with our media on this issue is that fact that a shut down refinery means a surplus in oil, which doesn't usually cause a spike upward in price. I believe the reason for the high price of oil is one of two things:

1. The price of oil is skyrocketing because the best (sweetest) oil is all gone and we're down to the dregs.

2. The market has noticed that despite higher gas and oil prices, demand continues to increase. This has encouraged investors to test how high they can push the price before demand destruction dictates a ceiling price.

Now, a disclaimer. I'm not a petroleum expert nor am I an investor or commodities market expert. So, if I have gotten anything wrong, please feel free to call me on it. I'm always willing to learn, and be schooled :)

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fasttense Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 10:16 AM
Response to Original message
1. It is the game ENRON played.
Cause artificial shortages and reap the increased price reward. Only this time, it is not just California who gets to play. It is the whole world. Except for the suicide of one man, nothing really bad happened to the ENRON criminals. A few went to jail, were fined, but in the end the dancing supremes protected their masters.
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Love Bug Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 10:23 AM
Response to Original message
2. "Oil Profits Breaking Records"
That'll be the next headline.
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Subdivisions Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 10:36 AM
Response to Reply #2
5. I have no doubt. And I have another prediction. The headlines
Edited on Mon Jul-16-07 10:37 AM by Texas Explorer
running simultaneously with yours will be along the lines of:

"Consumer spending down as inflation rises"

"Companies report dismal quarters"

"Price at pump pounding people's pocketbook"

"As food and fuel prices skyrocket, "core" inflation exposed"

"President Bush's declaration of martial law sends markets crashing"

"Riots in DC test police"

Ok, so I went a little further into the future but...ain't this fun?
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OmmmSweetOmmm Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 10:28 AM
Response to Original message
3. And this is why I think a big reason for the war in Iraq is for oil. By not getting it on
Edited on Mon Jul-16-07 10:29 AM by OmmmSweetOmmm
the market, the price of oil goes up.
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Hubert Flottz Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 10:32 AM
Response to Original message
4. Somebody has to pay for the GOP's campaigns and it might as
well be you...by way of your friendly gas station.
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snappyturtle Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 10:36 AM
Response to Original message
6. And remember where oil was 1/20/2000: $26.79 a barrel! I think
that's very close if not right on. If we had taken the money we've put into the war on alternative fuels we would be getting somewhere....and the agony of many families losing loved ones would have been avoided.
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bananas Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 12:35 PM
Response to Original message
7. "Opec countries agreed in Doha, Qatar, last autumn to slash production"
"Opec tightens its grip as oil prices hit the roof"
"Emboldened by global growth, the cartel believes it can squeeze supply - and control the market - for years to come"
"Opec countries agreed in Doha, Qatar, last autumn to slash production by 1.2 million barrels a day; and by another 0.5 million in the spring."
http://observer.guardian.co.uk/business/story/0,,212644...

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Subdivisions Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 01:01 PM
Response to Reply #7
9. Yes, admittedly, there is the possibility that OPEC is
Edited on Mon Jul-16-07 01:05 PM by Texas Explorer
holding back. But the only obvious reason for doing so is that they realize their's is a finite resource. Most OPEC countries keep their reserves secret so there's no real way of knowing how much OPEC has in reserve. So, are they witholding in order to drive the price up or are they witholding because they are forced to conserve what's left? If they had no cares about running out of oil anytime soon, why would they forego the profits to be made now? Besides, the article you reference (though I do rely on the Guardian for truth moreso than any American MSM outlet) bases its conclusions on the opinions of the several persons cited therein, which doesn't amount to a statement by OPEC that indeed they are squeezing the supply and, by the way, whatcha gonna do 'bout it?

There's too many options and so if I'm choosing, I'm choosing oil and oil depletion as the primary factor snaking through current world events.
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LeftCoast Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-16-07 12:41 PM
Response to Original message
8. Walmart's going to go out of business
It's going to start costing a LOT of money to ship all that stuff from China.
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