Oil prices/supply

[edyzmedieval]

All this 110$ per barrel of crude oil makes me start to think: Oil supply and reserves are really starting to go down or are they actually putting higher prices in order to keep the oil for many other generations to come?

I've suddenly grew an affinity for oil because it powers cars and planes, and I really will miss oil once it's gone. Nothing will replace the smell of a burning-oil American muscle car. :teardrop:

So what do you think? Oil supply and reserves are actually dropping? What do you think about the prices? (keep in mind, only 70% of the price at the pump is from the actual price of the oil)

[pevergreen]

I'm still in disbelief. My grandfather worked for Caltex most of his life, Dad did the same. I grew up with petrol stations. I looked at them and though 82 cents a litre? Thats ridiculous! Now i see 140 cents...

I dont doubt reserves are dropping, I just think fuel companies are making a tidy profit as well.

[Furious Mental]

Well oil the supply must inevitably diminish eventually. Whether or not it is dropping now it makes sense to start adapting to a post-oil economy.

[Beirut]

The price of oil at any given point has in its structure the single goal of achieving the highest possible profits given market conditions. All other considerations are light years distant in terms of importance.

[SwordsMaster]

Well, the soon to be formerly sovereigh republic of Brazil has discovered a couple of huge oilfields recently, haven't they?

[CBR]

World demand is increasing, the Dollar is exceptionally low and production has been more or less the same the last couple of years.

A century ago Im sure some people missed the lovely smell of horse manure :beam:


CBR

[HoreTore]

http://news.bbc.co.uk/2/hi/business/3708951.stm

A rather old article(2004), but I believe the causes are the same then as now.

[Craterus]

Elasticity. Or rather, inelasticity. The demand for oil does not decrease when there is an increase in price, as tends to happen with other products.

People need the oil so the companies can charge whatever they like for it because people will still cough up the cash.

[Ice]

Well one of good things about this insanely high price of oil is it will encourage more alternative energy research.

Another good thing is that there will be more drilling for oil in places that it was previously unfeasible due to the high cost. Hello more domestic oil for Canada and the USA. :beam:

[Crazed Rabbit]

Supply and demand, and OPEC not pumping at full capacity.

I don't know if we've reached the peak oil time, or when finding of new oil fields is no longer higher than the rate of oil fields drying up, but it's likely relatively near.

CR

[master of the puppets]

hmm, do you think the saudis will put up much of a fight? no, no, not implying anything, just saying... if its there...


:surrender:

[Papewaio]

So what is the price per barrel of oil in Euros?

[Xiahou]

World demand is increasing, the Dollar is exceptionally low and production has been more or less the same the last couple of years.

A century ago Im sure some people missed the lovely smell of horse manure :beam:


CBR
I think that's all part of it. I'd put special emphasis on the weak dollar though- it makes oil a very attractive investment.

[SwordsMaster]

So what is the price per barrel of oil in Euros?


At the current exchange rate, 72.163 ish.

Besides, it's all the FED's fault for dropping nominal interest rates.

[CBR]

So what is the price per barrel of oil in Euros?
Here is a graph for Oil in Dollars and Euros: http://en.wikipedia.org/wiki/Image:Oil_Prices_in_dollar_and_euro_1998-2007.gif

I just checked gas prices for the last 5 years here in Denmark and it has increased about 23%. Since a good part of the price of gas comes from taxes the % increase in price per barrel of oil doesnt mean the same % for gas. So the effect has not been that bad for the consumer here.

edit: added graph for last 10 years in Denmark

https://img100.imageshack.us/img100/4472/benzinfe9.th.jpg (https://img100.imageshack.us/my.php?image=benzinfe9.jpg)
CBR

[Sigurd]

Too bad we don't sell oil for €uros...

My former company, Norsk Hydro is reduced to manufacturing aluminium.
Alum. also is traded in dollar$, but I don't think they upped the prices because of the low value.
I know that Hydro have a much lower revenue due to the low exchange rate.
I am talking about a 2 billion drop in revenues.

If the US can't get their dollar up to it's normal rate, I am afraid that the dollar and its role as a international and stable currency might lose to the €uro.

The result could be devestating, but it only takes a few that makes the change and the others will have to follow. The dollar will plummet and the €uro will soar. Not a good situation for any.
Those who made sure to rid themselves of their dollars and then make the change will benefit and get filthy rich.

Just imagine if oil, aluminium and coal changed their trade currency from dollar$ to €uros... what would happen to the world economy?