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Oil dips below $100, even as Ike plows toward gulf.

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phantom power Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-08 04:09 PM
Original message
Oil dips below $100, even as Ike plows toward gulf.
I had decided I didn't think oil was going to drop below $100 this fall. Busted.

NEW YORK (CNNMoney.com) -- Oil prices zig-zagged Friday, briefly dipping below $100 a barrel for the first time in 5 months, as the the fury of a massive hurricane blowing toward refineries on the Texas coast countered .concerns about a global economic slowdown.

U.S. crude for October delivery briefly traded at $99.99 a barrel on the floor of the New York Mercantile Exchange, the first time oil has fallen below the $100 a barrel mark in more than five months.

The last time oil traded below $100 during a session was April 2, when it hit $99.84.

Oil recovered to settle up 31 cents at $101.18 a barrel. Earlier, prices rose as high as $102.89. Oil prices were volatile as traders gauged what Hurricane Ike's impact would be.

http://money.cnn.com/2008/09/12/markets/oil/index.htm

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billyoc Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-08 04:11 PM
Response to Original message
1. The speculators know they're caught.
They'll be off to speculate in other markets for a while.

They'll be back.
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Old and In the Way Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-08 04:41 PM
Response to Original message
2. If you can't refine it, you can't sell it.
This may be a case when the price of oil is going done while the existing inventories of gas go up.
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Strelnikov_ Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-08 10:51 PM
Response to Reply #2
3. Yep n/t
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NNadir Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-12-08 11:11 PM
Response to Original message
4. This is actually not especially good news.
The price of oil should be kept as high as possible - even if artificially - to offset its external cost.

Of course if the true external cost were charged, there would be no such thing as gasoline stations.
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happyslug Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-13-08 01:08 AM
Response to Reply #4
5. On that I Agree, we need to tax oil just to get people to use less of it.
That is why Europe does. Even as Oil reached $150 per barrel, Europeans were paying more per gallon in taxes then for the fuel itself (Ireland and one other European country did have taxes less then the cost of the oil at that price, but the rest of Europe did NOT and even in those two countries the cost were close).

We in the US pay about 50 cents per gallon in states taxes and 18.5 cents per gallon in Federal Taxes. Prices have dropped about 50 cents per gallon since the peak prices in July so we have survived a oil prices HIGHER then there are now, yet NEITHER candidate is talking about any form of increase gasoline taxes even as revenue from the taxes have dropped do to the drop in usage of gasoline.

From the drop in oil prices of 50 cents a gallon it is clear we can afford a double of today
s taxes and we have to start to demand that our Government do such an increase. We also need to tell both the Federal and State Government we need them to use that money to improve alternatives to automobiles i.e. increase spending on Trains (Amtrak needs new rolling stock and rebuild they stations), mass transit (i.e. Streetcars, LRVs (Light Rail Vehicles) and Buses) and bike lanes/paths in additions to improvements in the Highway infrastructure. I hate to say this but this has to be done on the Federal Level for many states has state constitutional provisions adopted in the 1940s that forbid the use of State Gasoline taxes on anything but highways.

Amtrak needs to buy new passenger cars and rebuild its stations so the stations are more like modern LRV stations and New York subway stations i.e. High platforms so people walk straight into the car NOT up a set of steps. This permits people in wheelchairs to use the cars but also speeds up loading and unloading passengers. This requires new cars AND new Platforms, both of which Amtrak does NOT have. Outside of the Eastern Corridor (Which I have NOT been on) Amtrak uses other railroads rail lines. The stations are owned by Amtrak (when Amtrak was formed in 1969 the Rail lines not only did not want to run Passenger Trains they did not want to run the stations so gave them both to Amtrak even when the track goes right by the station). Thus you may have to add a side track for many of these trains to go by the new platforms but even that cost can be justified. The problem is NOT what is needed but how to pay for it. Using the increase in Gasoline Taxes to do so would be a big help.

Another problem with Amtrak is that study and study has shown that you will see a tremendous increase in passenger service if you have at least Four (4) trains in each directions per day. Below that number the system does NOT provide enough flexibility for people to use the train. In the days where train travel first became popular, passenger trains were quite short or even just the last car on a Fright train. I do NOT advocate adding passenger cars to Fright trains, but modern LRVs can be used on rail lines.

The only problem with using LRVs is that by Federal Law, LRVs are to light to travel on fright lines. This law dates back to pre-WWI, do to the number of accidents between trains, Congress decided all passenger trains needed to be able to take a direct hit from another train, Europe which also had that problem did NOT solve it with heavier trains but better signals and greater control over trains on the track, something first developed in the US during the 1930s and 1940s, after the Statute I talked about had been on the books for 20 years. With Today's signals systems and computerized controlled locations of trains the chances of two trains hitting each other is slim (Most train accidents today involved either some Vehicle crossing the track OR something wrong with the Track itself NOT two trains hitting each other). Thus LRV can be used if Congress just repeal that statute. New Jersey Transit rules LRVs (Light Rail Vehicle) on Fright lines with permission of the US Department of Transportation with the proviso that the LRVs and Fright trains do NOT use the tracks at the same time, the Fight trains operate at night, the LRVs during the day.

The Great Advantage of using LRVs is first the fuel savings, LRV being lighter then heavy rail cars use less energy, second, and more importantly, you can run LRVs 4-5 times a day on a rail line that now only has one train a day. This multiple trains per day makes the train more convent for more people and more people will then use them. I am looking at train outside the Eastern Corridor for example New York to Chicago. At present the trip is New York to DC or Philadelphia. Then, if from DC, take the one train per day that goes to Chicago from DC. If you transfer in Philadelphia, you take the one train per day to Pittsburgh and then catch the train from DC (The train schedule is set so this can be done, in fact the Train to Pittsburgh via Philadelphia starts iN New York City, thus the only issue is do you want to catch the DC train in DC or Pittsburgh). Given that choice, driving I-80 to Chicago is shorter and a lot quicker, even if you add in the time to find a parking spot for your car. On the other hand if you had 4 trips a day from DC or even Philadelphia, the fact you can rest on the train and catch it when it is convenient for you is a big plus. Now most people will NOT be traveling from New York To Chicago (Plane travel is still available between those two cites and will continue for many years for you an fill 747 between those two cities each day and a fully filled 747 is one of the most fuel efficient planes on a per passenger basis). The real advantage will be the various small cities between New York and Chicago that no longer have to drive to one or the other to get that plane to get to another small town or city (Or drive directly between the two small towns or city, or in the case of Cleveland, Toledo, Youngstown, Pittsburgh, DC Baltimore and Philadelphia drive from one large city to another). Roll on luggage with high platforms will speed up loading and unloading these passengers. You could then have a viable transportation system to compete with people's cars and maybe even air travel, but again we need money to get the new cars for the 4-5 trips per day that are needed to get the system working.

Now one of the problems with trips between New York City and Chicago is if you look at an Amtrak Schedule and the time it takes to go from New York to Chicago, it takes about 18 hours at today's train speeds (The Schedule say 21 hours, but that includes a 3 hour overlay in Pittsburgh). I do NOT see the speeds increasing but one of the problems is that a train that is also a commuter train in New York hits Pittsburgh and Chicago at off hours (and the reverse is true, if you set up the train for Chicago Rush Hour, it hits Pittsburgh and New York at the dead of night). The more I looked at the problem the only solution became more and more clear, a train (One or two cars at most) every 1-2 hours, 24 hours a day. Some of these trains will run empty at times, but by running you will have a train in action AND in position during such rush hours of New York, Philadelphia, Pittsburgh, Cleveland, Toledo, Gary and Chicago. Maximize passengers maximize use of the train. Given the mountains between Philadelphia and Pittsburgh the best choice would be to tun a train from New York to Chicago via Philadelphia, Pittsburgh and Harrisburg every two hours, and then another train via Philadelphia, DC, Cumberland, Pittsburgh every two hours. The two trains so be scheduled that each starts one hour after the other. The trip via DC will take an extra two hours. Thus A train leaves New York at Noon to go to Chicago via Harrisburg will be followed by a train at 1:00 pm going from New York to Chicago via DC. The noon train will teach Chicago at 6:00 am the next day. The 1:00 PM train will arrive in Chicago at 9:00 am (It takes an additional two hours to go via DC thus you will always have a two hour longer trip via DC then via Harrisburg). If you this becomes successful you can increase the size of the trains and maybe even adopt a trip via Albany or even an express along the old Erie Line across the Endless Mountains of Northern PA (Which would require rebuilding the high bridge on that old line blown down a few years ago, but that trip can cut 1-2 hours off any other rail line given it is the only direct line between New York and Chicago, I-80 followed it basic rail line and like I-80 had a severe disadvantage, going through a low population area on an expensive route to maintain).

I am most familiar with the New York to Pittsburgh rail line and what is needed to make it usable, thus the long discussion above. From what I have seen, other then in the Eastern Corridor, similar train service would also be an advantage. The problem is the lack of funds, and an increase in the price of oil to fund such improvements will provide the money needed. I would prefer Electric drive but there are manufactures of diesel rail cars that meet the legal requirements of today. We can use these at first and then slowly convert the whole system to overhead electric drive.

One last comment, The only profitable line for Amtrak is the North East Corridor. It has the highest and densest population. The Pittsburgh to Chicago "Mega-city" is almost as large. The Appalachian mountains separate these two "Mega-Cities". We can save a lot of oil by adding a Rail system mentioned above to the Mid-west Mega-City and then connecting the two Mega-cities together. A similar program can work in the West Coast (Through the Cities of the West Coast are no where near sharing each others Suburbs which is characteristic of the East Coast Mega-City (Through LA and San Diego are sharing some of their Suburbs and thus becoming a "Mega_City". Texas three cities can have a similar program if Combined with New Orleans a real oil reducer (i.e. Houston to San Antonio to Austin to Ft Worth to Dallas back to Houston and then to New Orleans via Barton Rouge or even three lines New Orleans Houston San Antonio, New Orleans Houston Dallas and then Dallas/ Ft Worth Austin to San Antonio.

Amtrak needs to look at smaller trains coming more often, even if that means one car trains and using the operator of th train as a conductor as they do on Commuter LRVs and Buses. To do so e will need to improve the stations and the Trains and we need to money to do so, and an increase in the price of gasoline will give us the money to do the above.

Now I also would like to see more LRVs in Cities (almost all major US Cities have at least one LRV in them). Hopefully removed from traffic (Which is easier for LRVs do to being electric drive so air supply for the diesel are one less problem and being rail not rubber, the movement of the cars are easier to control in tight situation as in a tunnel or underground). LA seems to have embraced LRVs as the solution to its traffic problem (getting people to where they want to go on a system independent of the Freeway system). Other cities need to embrace the LRV and see is as it is, the best way to move people in density populated areas to other areas of density populated areas (LRVs and their predecessors the old Streetcar systems do this better then cars or buses, but fail when it comes to low density areas, where buses and cars come into their own). The problem is a lack of money to build new LRV systems. The Oil tax would provide the money needed.

Finally bike trails. These need to be expand so that people can use them to bike to and from work. Many people will opt for bikes as a means of transportation as the price of gasoline goes up (in the area where I live I have seen such a Switch and it is a low Income area NOT a yuppie area). The problem is people want to feel safe when biking, and being on a highway does NOT make them feel safe as cars pass them all the time. Thus better urban bike trails would help such people bike to work and this cut back our use of gasoline. Again the problem is a lack of funds, an increase in the gasoline tax will provide the needed cash to build these trails.

Now the above sounds like it help urban (and to a degree Suburban) America and I agree, but nothing in the above restrict any of the above programs to urban areas. In fact the increase spending on Amtrak would provide an alternative means of transportation for much of rural America, but Much of Rural America will NOT be helped directly by the above (The reduction in demand for gasoline do to the above will help rural America but that is an indirect benefit NOT a direct benefit). Thus we have to do something for Rural America for i has become to dependent on oil. The Bike Trails will help by providing an alternative means of getting around, but the real big help for rural america would be an improvement in it roads and bridges. Rural America has a problems with Bridges and Roads, In many cases people have to travel 20-30 miles because a bridge is out (Or emergency vehicle have to go 20-30 miles for the bridges can not take the wait of the emergency vehicles. Increase spending on such bridges would save a lot of oil by just having people NOT having to travel 20-30 miles out of their way do to a closed bridge. Such improvements are needed and at present NOT being done do to a lack of funds, Such bridges should be a priority use of any increase in gasoline and /or oil taxation for every dollar we spend to update these bridges we be saving 10-20 dollars in oil and gasoline NOT used do to people no longer having to go 20-30 miles out of their ways.

All of the above can be done, but we need the funding to do so. An increase in gasoline taxation will provide the funds for ALL of these projects.
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kristopher Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-14-08 10:36 AM
Response to Reply #4
8. That's the first thing you've written that I agree with totally.
However, I suspect that if you'd gone on one more sentence, I wouldn't have been able to say that.


I know, I know...

You don't care blah blah blah.
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tom_paine Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-13-08 06:41 PM
Response to Original message
6. No telling what Ike does to this equation, but this is all about crashing the price for the
Edited on Sat Sep-13-08 06:42 PM by tom_paine
Stolen Election, in order to give the Amerikan Subject Opulace the "junkie's rush" that will come with gas being $2.90 or less on Stolen Election Day, which statistically means more nonspecific good feelings flipping more votes to the Status Quo aka Bushie Inverted Totalitarianism.

It is a statistical certainty.

That is what I have been predicting for months, and as you can see, it was already starting in exactly the timeframe I'd predicted.

Now Ike.

But what I think is coming is a very "swift recovery" orchestrated by the Bushie Oil Barons and the Saudis, who are likely behind the manipulation of the oil supply.

Remember those stories about tanker backing up in Middle Eastern ports a couple months ago. Hmmmm.

Bet they're starting to move NOW, and probably already were in motion for the Bushie/Saudis a month ago...ramping up to the "mini glut" occurring just before Stolen Election Day.

I think Ike dampens their plans, but I would say look for the spike to be of short-duration, as short as possible, and I still think the Bushies will get the price under $3.00/gal in time for Stolen Election.

When the Bushie Oil Barons want to get oil prices down, as we saw after 9/11 considering that it was the EXACT OPPOSITE REACTION of a free market to a disastrous shock...OIL PRICES GO DOWN.

Ike complicates things, but you watch. I think the worst possible effect Ike could have is that gas will only be $3.25/gal on Stolen Election Day instead of $2.85/gal (all prices being relative; in CA it may still be $3.330 or $3.50/gal.

Now, we watch it unfold...
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lakeguy Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-14-08 09:19 AM
Response to Reply #6
7. bingo
what he said.
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MrMonk Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-14-08 10:36 AM
Response to Reply #6
9. b..b..but,
Lou Dobbs said that oil prices were crashing because people were talking about drilling more!

I think he's also the one who said that the stock market was crashing because people were talking about having a Democratic administration.
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hunter Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-14-08 12:46 PM
Response to Original message
10. You don't buy gasoline for a wrecked car.
Big chunks of the U.S. economy have crashed.

The price of oil might go anywhere as the extraction rate declines.

This is a very unstable market.
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