Oil price of $120 is acceptable - Iraq oil min

[phantom power]

Reuters) - Iraqi Oil Minister Abdul-Kareem Luaibi said on Monday a world oil price of $120 a barrel is reasonable and acceptable.

"We in OPEC see that this price will not affect economic growth," Luaibi said.

http://in.reuters.com/article/2011/04/25/idINIndia-56548220110425?rpc=401&feedType=RSS&feedName=businessNews&rpc=401

[LAGC]

1. Yeah, of course it is.

I yearn for the day when we are no longer dependent on oil as our primary energy source.

Between electric cars and bio-fuels, some day we will be able to tell them to take their asking price and shove it.

[GliderGuider]

2. $140, however, is catastrophic - as we have already seen.

Does anyone else feel like we're walking on the edge of a precipice?

[yourout]

3. That is a fricking cool mural. Were is it at?

[GliderGuider]

4. Here's a link to the story

http://www.dailymail.co.uk/news/article-489360/Taking-chalk-wild--new-form-street-art-takes-world-storm.html

[phantom power]

6. Seems like just recently $80/bbl was Acceptable.

Defining Acceptable Up.

[happyslug]

7. Not at $140 a Barrel, I suspect $252 a Barrel before the economy tanks.

140 divide by 42 Gallons in a Barrel that comes to only $3.38 per Gallon. If we add state and Federal Gasoline tax, that adds about 63 cents per gallon. i.e. to a price of $4.01 per gallon. Add distribution and refining cost of about 30 to 60 cents, at 30 cents that comes to $4,31 a gallon.

Cost of Refining Gasoline:
http://business.whatitcosts.com/refine-oil.htm
http://www.npr.org/templates/story/story.php?storyId=5365439

Please note, the low end is the cost to refine Sweet Crude (like Libyan Crude), while 60 cents reflect what it cost to refine Sour Crude (what most new oil coming into production is, sweet crude is dropping in volume, increase Sour Crude production is barely keeping total oil production even with demand).
In 2008, the cost of refining was determined to be 19 cents a gallon, the increase in price reflects the switch to more Sour Crude production.

Please note, Sour Crude sells at a lower price then Sweet Crude, the difference in price is generally the difference in the cost of refining the Crude. Thus Brent is a better quality then what Chavez is selling from Venezuela, and thus Brent oil is higher then Venezuela oil. Given all of this 30 cents is a good price for the cost of refining, if we accept $140 as the price for Sweet oil.

Also please note, Natural Gas is the energy used in Texas to refine oil, thus the price of Natural Gas affects the price of oil.

As to price that people stop buying oil, that appears to be $5 a gallon (Less the 63 cents taxes and 30 cents refining cost, then Multiplied by 42 is about $168 a gallon.


I come to $7 a gallon using the following formula:

There is 2080 hours in the 40 hour, 52 week work year
Minimum wage is not $7.15 per hour. Total yearly income if employed 40 days a week for 52 weeks is $14,872
In 2008 Minimum Wage was $5,25 per hour. Total yearly income if employed 40 days a week for 52 weeks was, $10,920 per year.
Social Security Taxes for everyone earning less then over $100,000 a year is 7 %
Local and state taxes tend to be about 3% even for low income people.
Total Social Security, State and local taxes paid per year at minimum wage of $7.15 is $5498.80
In 2008 it was only $4368 per year
If someone is in Public Housing, 30% of their income MUST go to Rent and Utilities (Defined as Electric, Heat, Water and Sewerage only).
There are 365 days in the year.
You must eat Breakfast (Low cost $2 a meal), Lunch (Low Cost $3 a meal) and Dinner (Low cost $5 a meal). Thus everyone eats at least $3650 a year in food.

A minimum wage worker income in 2011 is as follows:
Total Income: $14,872
Less Taxes and Housing Costs: -$5948.8
Less Food: -$3650

That leave only $5273.80 dollars for everything else including gasoline.

In 2008, the minimum Wage Worker income was: $10,762.50
Less Taxes and Housing: -$4305
Less Food: -3650

That left $2802 for everything else in 2008

The average used car gets 20 mpg and us used about 12,000 miles per year, or the average driver uses 600 gallons per year. In 2008 that meant that people on Minimum wage could no longer drive to work once the price of Gasoline reached $4.67. $4 a gallon is about 85% of 4.67. Thus I tend to use 85% of minimum wage less the cost of Gasoline to determine when the economy collapse, mostly do to the inability of low income people to get to work, i.e. it is more expensive for such low income people to get to work, they they get in income from working.

At 7:15 minimum wage, the money left over for Gasoline is only $5724.00 is $8.78 dollars a gallon. 85% of 8.78 is $7.46, thus the same situation for minimum wage workers will take $7.46 a gallon gasoline (Through the increase in the cost of food may increase this to 80% of 8.78 or about $7 a gallon.

If we accept $7 a gallon, less the Dollar for Refining and taxes, then 6 times 140 equal $252 a barrel, and we have a while to hit that number.

Please note, the above has a lot of assumptions that may NOT work, but it shows when Minimum wage workers HAVE to stop driving to work, and their employers must either pay them more, find workers who can bike or walk to work, or go out of business.

[Javaman]

5. The price of crack goes up. nt