Gas and oil prices

[maple_leafs182]

My prediction is the US dollar will collapse within two years.

The US needs their government to have a 1.5 trillion dollar deficit and print 700 billion in quantitative easing measures in order to keep their economy going. At the rate they are creating new debt and increasing the money supply I would say the resulting inflation will be too much for the economy to take.

The fed says the inflation rate is at around 2% but that is only because they fudge the numbers, the real inflation rate is closer to 9%.

Source

[msj]

More on oil prices and Saudi Arabia:

An increase of a million barrels per day in Saudi production relative to reported November levels, some of which may have in fact already been implemented, would put them back up to where they were in July of 2008. If all of Libyan production gets knocked out, we'd need 1.8 mb/d to replace it. If the Saudis weren't able or willing to go above those production levels in 2008 when oil was selling for over $140 a barrel, why would you expect them to do so now with West Texas only at $106?

My answer is, I don't.

Link.

Of course, it's not so much a matter as "won't" as much as being unable to increase production.

[Oleg Bach]

Can't believe how cold blooded and cruel oil executives are..The are willing to run us ragged with rising food prices that are directly connect to the price of production and shipment of produce..The bastards have no soul - spirit or heart...If these mad men settle down and frooze fuel prices instead of constantly seeking a cheap thrill from profiteerig..things would be better - When one has a billion dollars of personal wealth - only an idot seeks a second billion.

[GostHacked]

Can't believe how cold blooded and cruel oil executives are..The are willing to run us ragged with rising food prices that are directly connect to the price of production and shipment of produce..The bastards have no soul - spirit or heart...If these mad men settle down and frooze fuel prices instead of constantly seeking a cheap thrill from profiteerig..things would be better - When one has a billion dollars of personal wealth - only an idot seeks a second billion.

Not to mention that big patch of oil smack dab in the middle of the USA, brings them on par with Saudi Arabia, in terms of tappable oil.

[WIP]

More on oil prices and Saudi Arabia:

Link.

Of course, it's not so much a matter as "won't" as much as being unable to increase production.

Right! The Saudis are not upping production to keep prices stable because they can't do it anymore. A local blogger in Hamilton - Ryan McGreal, has posted several articles on oil and gas prices over the last year - Raise The Hammer - and shows us that, because of continued demand, the supply curve becomes inelastic as soon as the price per barrel goes past the mid $80.00's. That sudden inelastic supply curve is a tell-tale sign that supply can't match the demand. All of the whining about OPEC and gouging and price fixing is useless chatter -- the crucial issue is something that many oil industry analysts have been trying to tell the public for the last 10 years -- the high grade, easily accessible oil is running out, and the crap that replaces it to keep an oil-based economy going is more expensive to access and produce, so all of you who kowtow to the Oil Lobby STFU and take your medicine!

[msj]

Right! The Saudis are not upping production to keep prices stable because they can't do it anymore. A local blogger in Hamilton - Ryan McGreal, has posted several articles on oil and gas prices over the last year - Raise The Hammer - and shows us that, because of continued demand, the supply curve becomes inelastic as soon as the price per barrel goes past the mid $80.00's. That sudden inelastic supply curve is a tell-tale sign that supply can't match the demand. All of the whining about OPEC and gouging and price fixing is useless chatter -- the crucial issue is something that many oil industry analysts have been trying to tell the public for the last 10 years -- the high grade, easily accessible oil is running out, and the crap that replaces it to keep an oil-based economy going is more expensive to access and produce, so all of you who kowtow to the Oil Lobby STFU and take your medicine!

No, it means that we should work on the demand side: alternative energy sources like coal, nuclear, wind, tidal, solar etc.... Energy conservation would be good too.

Oil's gonna be around for a long time. It's just that it's going to cost a bit more than it used too.

BFD - budget for it.

[dre]

My prediction is the US dollar will collapse within two years.

The US needs their government to have a 1.5 trillion dollar deficit and print 700 billion in quantitative easing measures in order to keep their economy going. At the rate they are creating new debt and increasing the money supply I would say the resulting inflation will be too much for the economy to take.

The fed says the inflation rate is at around 2% but that is only because they fudge the numbers, the real inflation rate is closer to 9%.

Source

Thats not going to happen in two years. Two many of the large emerging economies are dependant on the US consumer market, and they cant afford to allow the US dollar to depreciate that fast, so they will keep buying bonds.

What youre predicting wont happen until theres SIGNIFICANT further growth in other consumer markets, and the pacific rim and oil producing nations that are propping up the US dollar can start selling exporting comparable volumes of goods to these emerging markets.

[maple_leafs182]

Thats not going to happen in two years. Two many of the large emerging economies are dependant on the US consumer market, and they cant afford to allow the US dollar to depreciate that fast, so they will keep buying bonds.

What youre predicting wont happen until theres SIGNIFICANT further growth in other consumer markets, and the pacific rim and oil producing nations that are propping up the US dollar can start selling exporting comparable volumes of goods to these emerging markets.

I disagree. I don't believe there is much room for economic growth around the world. If there is significant economic growth, that would drive up the demand for, and the price of oil. Since the current global economy is built around cheap oil, higher oil prices will end up hurting the economy. Hitting peak oil may mean we have hit peak growth unless some other cheap alternative energy is found.

China is also in a real estate bubble.

I think China is due for a severe recession.

[GostHacked]

Thats not going to happen in two years. Two many of the large emerging economies are dependant on the US consumer market, and they cant afford to allow the US dollar to depreciate that fast, so they will keep buying bonds.

What youre predicting wont happen until theres SIGNIFICANT further growth in other consumer markets, and the pacific rim and oil producing nations that are propping up the US dollar can start selling exporting comparable volumes of goods to these emerging markets.

The Chinese Yen is ready to take the place of the US greenback as the world's currency. The shift has already begun. The US would not be able to do what it has done (bailouts) without the help of the Chinese.

Iraq was ready to start trading oil in another currency besides the US dollar. Iran was going to get on board with that as well. We saw how that played out.

[M.Dancer]

The Chinese Yen is ready to take the place of the US greenback as the world's currency. The shift has already begun. The US would not be able to do what it has done (bailouts) without the help of the Chinese.

Iraq was ready to start trading oil in another currency besides the US dollar. Iran was going to get on board with that as well. We saw how that played out.

And the iran oil bourse was all the rage and in the end, amounted to nothing....

Get back to me when oil is priced against the yuan...

[dre]

The Chinese Yen is ready to take the place of the US greenback as the world's currency. The shift has already begun. The US would not be able to do what it has done (bailouts) without the help of the Chinese.

Iraq was ready to start trading oil in another currency besides the US dollar. Iran was going to get on board with that as well. We saw how that played out.

Actually China has no interest in having the Yen replace the US dollar. Their top bank is pushing for an international unit of economic exchange similar to the "bancor" that most of the world wanted ater WW2.

But this isnt just about reserve currency. China cannot allow the US dollar to fall too low because a huge part of its economy is built around selling goods to US consumers. If the US dollar falls too sharply Americans will no longer be able to import Chinese goods.

The situation with the US and its trading partners is very similar to what happened with some companies during the financial crisis. The US government decided that some companies were "too big to fail" so they got bailed out. Thats exact same reason why China and other pacific rim nations, and oil producing nations have been bailing out the US. If the US currency was to completely collapse those countries would fail, and fail fast... so they keep buying US bonds to keep the US dollar high enough to allow US consumers to keep buying their goods.

It will take a LONG time for this paradigm to change. Probably a decade or two, and those countries will not be able to abandon their policy of bailing out the US until theres other markets that can absorb all these goods, and that is NOT going to happen in two years.

[Oleg Bach]

Not to mention that big patch of oil smack dab in the middle of the USA, brings them on par with Saudi Arabia, in terms of tappable oil.

Biggest mistake America ever made was not declaring war on the so-called Royal House of Saudi Arabia. They attacked everyone except those who deserve it most for screwing the west. If you want a pear or a peach - or some garlic - you either fly it in from China or Chile. Which is bizarre - to use high test and very expensive aviation fuel to bring a man an apple is nuts! Oil prices effect everything because of the dysfunctional system that only oil companies benefit from...why should we have to use five litres of jet fuel to ship a pumb?