What has to happen to lower OIL...
06-15-2008 | 07:51 PM
#31
Line Holder
Joined: Dec 2007
Posts: 259
Likes: 2
From: CA
Oil is simply not worth 140/barrel! There has been demand destruction all over the market in this country, and it is visible everywhere. People are trading in their SUVīs for much more fuel efficient cars, we are driving now when we HAVE to, not when we WANT to. We had a decrease in demand over the Memorial Day holiday.....A DECREASE!!! Airlines are rapidly reducing routes, thereby using less oil! If it was worth 140, or 130, or even 120, we would not see all of these things.
Oil is where it is right now because of speculation. Two days ago oil was down over 10%, then some big mouth(who probably owns millions in oil futures) at Morgan Stanley gives his prediction that oil will hit 150 by July 4. Result....$11 gain in one day!!! This is the type of behavior that needs to be stopped. It is intentional and in my opinion criminal. If the government made it less attractive to buy oil futures as a safety net against everything you would see oil tumble and settle at around 80/barrel, which is where it belongs IMHO.
Oil is where it is right now because of speculation. Two days ago oil was down over 10%, then some big mouth(who probably owns millions in oil futures) at Morgan Stanley gives his prediction that oil will hit 150 by July 4. Result....$11 gain in one day!!! This is the type of behavior that needs to be stopped. It is intentional and in my opinion criminal. If the government made it less attractive to buy oil futures as a safety net against everything you would see oil tumble and settle at around 80/barrel, which is where it belongs IMHO.
06-15-2008 | 08:03 PM
#32
Gets Weekends Off
Joined: Dec 2006
Posts: 1,784
Likes: 0
From: I was acquired, Not Hired
What has to happen to lower OIL...
A president who is an oil man and a VP that was the head of Haliburton, and a non-existant energy policy to reduce oil prices.
jmho,
Oil prices have been on the rise for seven years, demand for oil has been going on for 100 years. I'm not sure anyone has seen or can justify an increase from roughly $18 bbl to $135 bbl. or an increase of 650% if my math is correct, If not, blame it on the tequilla, but the point is, supply has not skyrocketed hundreds of multiples. The Chinese have had cars for 60 years, we have had gas hog cars for 80+ years, just makes no sense.
Yes I was on the grassy knoll, but this defies supply and demand theories.
JMHO,
FF
A president who is an oil man and a VP that was the head of Haliburton, and a non-existant energy policy to reduce oil prices.
jmho,
Oil prices have been on the rise for seven years, demand for oil has been going on for 100 years. I'm not sure anyone has seen or can justify an increase from roughly $18 bbl to $135 bbl. or an increase of 650% if my math is correct, If not, blame it on the tequilla, but the point is, supply has not skyrocketed hundreds of multiples. The Chinese have had cars for 60 years, we have had gas hog cars for 80+ years, just makes no sense.
Yes I was on the grassy knoll, but this defies supply and demand theories.
JMHO,
FF
06-15-2008 | 08:53 PM
#33
Gets Weekends Off
Joined: Jan 2008
Posts: 396
Likes: 0
From: 767 FO
There are some tell-tale signs that supply-demand issues are causing some big players to resort to desperate measures to try and rectify the current oil situation.
2 weeks ago the 5 largest oil consuming nations (U.S., China, India, Japan, and South Korea) urged the oil producing nations of the world to boost their output to offset cost. Perhaps they do not understand the nature of the problem, but their actions seem to suggest that supply, not speculation, is the root cause of price.
Now, the G8 is making waves and is asking for increased production from Saudi Arabia, others. Again, production seems to be the central theme here. The timing couldn't be worse in that worldwide production of oil has been flat for the last 3 years @ 85 million/bbls per day. The Saudis are unlikey to be able to sustain an increased output of 500,000 bbls/oil per day. The Russians are reporting that for the first time in a long while, their oil/natural gas production actually declined this last year.
In taking a balanced approach here, I do think speculation has a bit to do, but not much to do w/ current prices. I don't think oil prices will come down much for 2 very basic reasons: 1.) The obvious driving force behind the rise in oil prices are basic supply concerns. Supply issues will continue into the future, unabated. Global demand will stay strong despite strides made in our country to curtail use. 2.) The future of the American dollar does not look good. If there is some truth to speculation and that the weak dollar is driving this speculation, then the prognosis is not good as most analysts, including Warren Buffet, are banking on the dollar's continued weakening.
The most realistic outcome that could result in oil prices falling dramatically will me a massive worldwide recession or depression. This event would significantly curtail worldwide demand and would obviously put some downward pressure on prices. Of course, oil prices in this situation would probably be the least of our concerns.
As far as the ailines are concerned, you either learn to adapt to the prices, or you don't. I wouldn't want to be working for an airline w/ a management team that was banking on the price of oil coming down significantly.
2 weeks ago the 5 largest oil consuming nations (U.S., China, India, Japan, and South Korea) urged the oil producing nations of the world to boost their output to offset cost. Perhaps they do not understand the nature of the problem, but their actions seem to suggest that supply, not speculation, is the root cause of price.
Now, the G8 is making waves and is asking for increased production from Saudi Arabia, others. Again, production seems to be the central theme here. The timing couldn't be worse in that worldwide production of oil has been flat for the last 3 years @ 85 million/bbls per day. The Saudis are unlikey to be able to sustain an increased output of 500,000 bbls/oil per day. The Russians are reporting that for the first time in a long while, their oil/natural gas production actually declined this last year.
In taking a balanced approach here, I do think speculation has a bit to do, but not much to do w/ current prices. I don't think oil prices will come down much for 2 very basic reasons: 1.) The obvious driving force behind the rise in oil prices are basic supply concerns. Supply issues will continue into the future, unabated. Global demand will stay strong despite strides made in our country to curtail use. 2.) The future of the American dollar does not look good. If there is some truth to speculation and that the weak dollar is driving this speculation, then the prognosis is not good as most analysts, including Warren Buffet, are banking on the dollar's continued weakening.
The most realistic outcome that could result in oil prices falling dramatically will me a massive worldwide recession or depression. This event would significantly curtail worldwide demand and would obviously put some downward pressure on prices. Of course, oil prices in this situation would probably be the least of our concerns.
As far as the ailines are concerned, you either learn to adapt to the prices, or you don't. I wouldn't want to be working for an airline w/ a management team that was banking on the price of oil coming down significantly.
Thread
Thread Starter
Forum
Replies
Last Post
