Oil's Rapid Rise Stirs Talk of $200 a Barrel This Year

[Newsjock]

Source: Wall Street Journal

Oil's historic ascent from $100 to nearly $150 a barrel in just six months is lending weight to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year.

Oil at that price would wreak deeper havoc on the world's airlines and automobile industries.

In the U.S., $200 crude would push the price of gasoline to well over $6 a gallon, causing commuters to alter their driving habits more sharply than they have already, while putting extreme strains on large sectors of the U.S. economy. In Europe, it would stir more political unrest and increase the clamor to cut the continent's stiff petrol taxes. In Asia, governments would be under pressure to cut fuel subsidies and risk a popular backlash.

... Oil ministers and top petroleum executives have added to the alarm. Paolo Scaroni, head of Italy's biggest oil-and-gas company, Eni SpA, told an Italian newspaper last week that he could see prices hitting $200 a barrel this year. Chakib Khelil, president of the Organization of Petroleum Exporting Countries, predicts that crude could go as high as $170 a barrel this summer.

Read more: http://online.wsj.com/article/SB121538739112131075.html?mod=hpp_us_whats_news

[DJ13]

1. Amazon's Rapid Rise Stirs Talk of $200 Per Share This Year

Im having a flashback to the tech bubble, wonder why?

[spag68]

2. 200$ oil

This is just the last gasp of the oil investors to get the last drop of money they can before they drop the hammer on investors. Someone at some point is going to lose a lot of money when it busts, and it will for sure. I only hope that some of the creeps get caught in their own game and do the window jump thing, or the perp walk. I'll settle for either.

[MJJP21]

11. No bust

There will be no bust in the oil situation as you suggest unless somehow someone finds a way to replace petroleum products with something cheaper in very short order. In other words they have a captive audience. There are two things which you are not counting in. One and this is only if there is indeed some kind of collusion in pricing is that pricing will stabilize in the fall due to the reality of heating demand. If there is indeed some kind of price fixing the oil companies risk sinking the economy and some kind of social upheaval. I don't think they are willing to do that. If there is no fixing then all hell can break loose. Second there is an awful lot of nothing getting done. Construction projects have been put on hold, manufacturing is and has slowed down, the consumer has diverted an awful lot of disposable income and disposed of it in the gas tank. That being said means that there is an awful lot of things that will have to be done that will eventually boil over into an awful lot of activity needing to be done raising inflation and creating a new "shortage" of oil again. We really need to get serious about alternative energy and includes everything. We are wasting a huge amount of money in Iraq that could have been better spent by replacing inefficient autos, retrofitting buildings for better inflation, replacing diesel only buses with hybrid or all electric , etc. I don't really care if these suggestions seem like socialism and I don't worry if someone may get something I don't. The bigger picture is getting the US to use less petroleum. We always have one more dollar to bomb a building or bridge and then rebuild it but somehow we can't find the money to make us more energy independent.

[shanti]

24. the oilmen

know their day in the sun with * in charge is almost over, so they're going for the gusto. :mad:

[OneBlueSky]

3. some very amoral and unscrupulous individuals are getting VERY rich . . .

on this so-called oil crisis . . . oh, I don't doubt that peak oil is a reality or anything, but if there's a demand/supply gap that warrants $200 a barrel, why are there no gas lines? . . . trading, hoarding, manipulating, and all other sorts of things are at work here, the bottom line being HUGE profits for the select few who have the position, the connections, the capacity, and the know-how to play this immoral and unethical game at its sleaziest levels . . .

meanwhile, we all get screwed . .

[mahatmakanejeeves]

15. Pension funds

Pension fund managers are investing in commodities on behalf of their investors.

Pension Funds Boosted By Oil

Pension Funds Boosted By Oil
While Stocks Fall, Commodity Bets Are Paying Off

By David Cho
Washington Post Staff Writer
Monday, July 7, 2008; Page A01

Soaring fuel prices that are burning a hole in the wallets of consumers are not only benefiting oil companies and Middle Eastern producers. They are also lighting up the investment returns of pensions funds, which millions of ordinary Americans are counting on for their retirement.

California's public employees' pension fund, the world's largest, made its first investment of $1.1 billion into oil and other commodities early last year, and since then, Calpers has seen it soar 68 percent. Fairfax County pension managers have enjoyed a 61 percent return from a similar move over the past 12 months, far outpacing any other segment of the fund's portfolio.

"Our commodity investment has really helped," said Robert L. Mears, executive director of Fairfax County's Retirement Administration Agency. "This year would have been a lot worse."

Other pension funds are rushing to get in on the action as the prices of oil, precious metals, corn, uranium and other vital goods continue to reach record highs. Montgomery County officials are in the process of shifting 5 percent of their $2.7 billion pension fund away from stocks and into commodities.

These funds are part of a tidal wave of investment dollars that has flooded commodity markets in recent years and, critics say, contributed to the run-up in prices.

[provis99]

4. there is a massive criminal conspiracy going on

but of course, the Bush Justice Department won't lift a finger to enforce the Sherman Antitrust Act, as weak as the act is, because they don't want to hurt Bush and Cheney's oil buddies.

This isn't a democracy, it's a kleptocracy.

[salguine]

5. Of course, the government could step in and seize control of the oil industries and

operate everything on a not-for-profit or a minimal-profit basis.

[tama]

7. How much US imports?

And how much of US consumption is from domestic production? Do you have any idea?

Even if governement did socialize domestic oil industry (which it can't), the fact remains that US production peaked in 1970 and has been in decline ever since, and that over 60% of oil consumed in US is imported - at world market prices.

[WriteDown]

19. You could...

But the price drop would be a maximum of maybe 30 cents per gallon. Probably more like 10 or 15. Won't make much of a difference as we approach peak oil.

[Aqaba]

6. I read all of your replies...

...and the only thing I can say is you are all crazy. Happy motoring crazy people!

The shit is starting, just now starting, to hit the fan.

Just wait until society basically stops functioning when oil is between 300-400 bucks a barrel. I'm wondering at what point the nukes will start flying.

Bleh. You can blame whoever you want, it won't change the fact that global net petroleum exports are declining, and petroleum is a fungible commodity (priced to the highest bidder).

You can scream and yell at speculators, the market, the oil companies, Bush, all you want.... but its not going to change the facts on the ground.

The fact is that demand is outstripping supply for the first time ever. If you think its bad now, get back to me in 5 years.

Bleh.

[tama]

8. And the Darwin award...

goes to Global Consumerist Capitalism for overachievement in Peak Stupidity.

Famous last words: Why can't gubment fix this or do sumfink so that we can keep on consuming? It's not Peak Oil and Peak Everything, it's just them specumalators conspirating agains Good Murican Consumers!

[nolabels]

9. On the streets out and around where i live the auto traffic seems about halved

I kind of like it. Everybody drives real slow and deliberate, they the ease up to traffic lights, all the while with hope it will turn green before they get there. It is even starting look safe enough to be able to travel by moped.
Here's to lookin for this election cycle to getting even more anti-climatic :toast:

[shanti]

25. i noticed that too

LOTS of sunday drivers now!

[bulloney]

10. But, but AAA said July 4 weekend traffic was only down 1% from last year.

That means all's well, right?

Right?

[LiberalFighter]

17. AAA July 4th 2008 Travel Forecast CHART

Question that should also be asked is how many have changed their plans on where they will travel. Shorter distances?

Chart

[liberal N proud]

12. World economy will grind to a complete stop

All for the greed of the speculators

[Altean Wanderer]

13. It's the plan called Disaster Capitalism per Naomi Kline n/t

[DallasNE]

14. I Seriously Doubt $200 Oil

$150 will offer some resistence but once that is broken it will shoot to near $170 but I look for that to be the last big push. Why? Because that will take us to Labor Day and that is important for two reasons. It is the end of the summer driving season. More importantly, we should have a pretty good indication on who the next President will be. If it is Obama, as I expect, then that will have a calming effect on the oil markets and start a retreat in oil prices. Obviously, Cheney could order air strikes against Iran and that would throw this off but that is about it.

[natrat]

18. if the dollar keeps tanking oil will keep rising

[tama]

20. Yes and US is the whole world n/t

[Kelvin Mace]

23. Sorry

this is not a living creature that "offers resistance". This is a commodity totally at the mercy of greedy speculators.

[LiberalFighter]

16. Who the hell is pushing the $200 a barrel talks? SHOOT THEM!!

[tama]

21. I'm talking $2000 a barrel

And that would still be cheap. So shoot me.

[David__77]

22. Who says $200 is overvalued?

People will buy it, right? So, therefore, is it overvalued? If people value it enough to buy it at a given price, then it's not "overpriced" from a "market" perspective. So if you believe in capitalism, then it's all well and good, and "enlightened self-interest" will magically make everyone as happy as can be. I have another view, however. But I do not think $200 is somehow wildly off-base.

[classysassy]

26. Greed

all over the world,the poor go hungry,the rich gorge themselves,our leader smile and say "bring it on",al of you greed merchants,beware of the peasants on the other side of the moat,your love of money will end soon.May you sleep well tonight.