About Oil Prices

arch_worrior asked:


since we are heading to another severe depression/inflation, US is constantly being bombarded by horricane which destroy the oil rig there.and the States will increase the crude oil price throughout the world. and why not they give it to other countries which are not prone to climate calamity.

Clifford

Jordan Christopher asked:


On May 6 oil analysts again predicted more records for the oil prices and in response the market again set a new record reaching over $122 per barrel before settling at $121.84 a barrel. The analysts predicted prices could reach $150 and then $200 per barrel. Sure enough the market responded with a new record.

A team of analysts from Goldman Sachs made the prediction in the media and triggered the price increase and NBC News then had their own oil specialist, John Kilduf of Fimat USA confirm the numbers. So what do you think?

Well, Goldman Sachs is an investor and the lead broker for the IntercontinentalExchange, Inc., owner of the London Futures Exchange one of the two leading oil futures markets in the world. In the old days such action by Goldman might be construed as a conflict of interest and an effort to manipulate the price of oil.

Then there is the NBC news report. It seems their independent analyst works for Fimat whose name has been changed to NewEdge who just happens to be a wholly owned subsidiary of a wholly owned subsidiary of Societe Generale (SG), one of the largest banks in the world from Paris.

Surprise, Societe Generale was a founding partner of the IntercontinentalExchange (ICE) and benefits significantly every time the price of oil increases. So now both Goldman Sachs and NBC have offered experts whose companies directly benefit from the oil chaos and neither Goldman, NBC or Societe Generale disclosed the insider position they have in ICE and the oil prices.

Now where is Congress, the Justice Department, the Bush Administration, the presidential candidates, or even the news media in exposing this farce? How long do the American citizens and citizens of the world have to be victimized by such tactics before someone says “Stop” and investigates? Before you vote for any congressman or candidate for president ask them why they are not stopping these market manipulations.

If they continue to ignore them or you then vote them out of office. This is still the country of the people, by the people and for the people, we just have too many politicians who forgot.

Leo

j polins asked:


Wouldn’t it be nice if those recent oil spikes were entirely due to speculators/investors, and these greedy hedge and pension funds are simply creating an “oil bubble” that will burst sooner or later?
According to Iraq’s Oil Minister Hussain al-Shahristani :
 
“There is more oil in the market than consumers want. What is driving up prices is an increase in speculative funds. An increase in production by OPEC countries would not really change the scenario – it would not affect the price.”
(http://groups.msn.com/CNBCBoard/general.msnw?action=get_message&mview=0&ID_Message=147298&LastModified=4675673990919292694&all_topics=1) All bubbles ultimately end up the same way - They burst sooner or later. If thats the case, oil prices would fall below $100 and we can all enjoy cheap oil, filling our cars for less than $4 per gallon.Unfortunately, this scenario does not depict reality. In fact, it sounds more like a fairy tail ending. And of course, if speculators are indeed responsible for the spikes, those Arab nations would be freed from the burden of increasing oil production. In my opinion, oil prices are going to spike higher, at least in the long run. Heres why : 1) Stagnant supplyThere is a something called Hubbert’s peak theory, which predicts that oil production will increase, peak and stay stagnant for some time, and then decrease at almost the same rate it went up.Dr. Hubbert predicted in 1956 that US oil production would peak around 1965-1970. Just like Arjun Murti (Goldman Sach’s analyst who predicted oil will hit $100 a few years ago), he was snobbed by other “experts” who seemed to be extremely optimistic about oil supplies. Unfortunately, both Hubbert and Murti were proven correct.Take a look at this graph :
 
The ASPO (Association for the Study of Peak Oil and Gas) has predicted that the peak in global oil production would occur in 2010. Some analysts even believe that the peak had occured in 2005.
The evidence proving that peak oil is coming soon is irrefutable.Oil companies are finding it harder and harder to replace every barrel of oil consumed with another barrel from oil fields. Even Saudi Arabia’s vast oil fields are drying up soon. The mighty Ghawar oil field probably peaked in 2005 , and other fields such as Shayba might soon follow Ghawar’s footsteps. (Saudi Arabia still has LOTS of oil, but it is running out soon)Its no surprise why oil companies are not investing money into oil exploration when theres not much oil left. As one analyst said, “Drilling more wells doesnt mean more oil. It simply means more holes.”Meanwhile, British Petroleum (BP) recently announced that global oil production fell for the first time, by 130 000 barrels/day. Supply was at 81.53 million, while demand climbed to 85.22 million/day, which leads me to my next point.2) Rising DemandAs we all know, China and India are rapidly growing economies with a huge appetite for oil. Although China is still almost entirely dependent on coal for energy, this trend looks to change very soon as more and more affluent Chinese are snapping up cars. In 2002,General Motors enjoyed a 300% increase in Chinese sales.Take a look at 2 graphs :
(Doesnt the population graph resemble the graph of the prices of oil, food and metals?)
As you can see, it is fairly obvious that our world is experiencing an unprecedented population growth since the industrial revolution. Indeed, even Ken Lay and other Enron executives would probably be envious of such a high growth rate!
If you think oil is only needed for transportation, you are very wrong.In agriculture, for example, most commercial fertilizers and pesticides come from oil. The tractor or combined harvester runs on oil. And of course oil is needed to transport food from the farm to the restaurants and supermarkets.Petrochemicals (from which many plastics and gels are made), come from oil. A growth in population simply leads to a grow in the demand for oil, there is no doubt about this.Currently, demand is growing at about 1-2% annually. This might not be a lot, but it does means that demand will double from about 85 million currently to 170 million in a few decades. (That is, assuming growth in demand remains constant, when it should in fact increase)3) A weaker US Dollar
The last, and perhaps weakest factor which leads to the oil spikes, is due to the weakening US dollar. Since oil traded on the NYMEX is bought in US currency, the price of oil must therefore increase, as simple as that.
————————————————————————————————-
In my opinion, oil will go up even higher. In the short term, it might fluctuate, probably due for a correction some time next month.Nevertheless, Im still extremely bullish about oil prices. Even Goldman Sach’s $200 prediction looks to cheap for me.Disclosure : I own some DBO shares, which tracks the price of oil, and Im very certain it will make even more profits in the future
http://investing-advice.blogspot.com/
 

Elsie

srinule e asked:


Oil price Iternationally is same. With Oil-Energy price, has Domino effect on everything else, including our life. Meager increase in income level is going to nullify anything. God gave us Intelligence to be Human: Is it?

Vanessa