How High Will Prices Get at the Pump?

[adios]

Heard they're around $3.00 a gallon in some parts of the country. Here in NM they're around $2.00. I'm fairly certain gas prices are hurting low wage earners badly now. I've heard a lot of estimates for oil at $45.00 a barrel as the top near term. Seems like it could go higher though. I think the Saudi government is a lot less stable than most people think but could be convinced otherwise.

[GWB]

The better question:

When should I have prices peak, so I can derive the maximum benefit of a steady pre-election price decline?

[Sloats]

[ QUOTE ]
The better question:

When should I have prices peak, so I can derive the maximum benefit of a steady pre-election price decline?

[/ QUOTE ]

Just invade Venesuala and fix their labor problems already.

[jayadd]

NY prices are in the 2.20 range and NJ prices are in the 2.07 range. Amazing how jersey is catching up to NY. I live on the border of both states and soon it wont make a difference.

[Elephant's Eye]

/images/graemlins/tongue.gif

[M2d]

In SF it's around 2.60 for supreme (slightly less in the burbs). Makes me glad I shunned my first couple of choices of cars a few years ago. I got an accord (four banger) that honda recommends filling with standard gas. whew.

[Cyrus]

...And the new floor is higher up than the previous floor.

Fasten your seat belts because there is absolutely nothing in the horizon that could take prices back to pre-January 2004 levels - and they were already high even then.

The only chance that the markets have to (artificially) "correct" down to more "reasonable" levels, is a cumulative barrage of good news, such as :

- Bush roadmap endorsed by the Israeli government

- Peace breaks out in Iraq

- Bin Laden captured

- America stops boosting its Strategic Reserves

- American States to consolidate oil products' specifications, so that inter-state trade and product exchanges is facilitated (Sen. Byrd submitted yesterday such a proposal)

- OPEC decides that a "lower floor" is needed for crude and allows excess production.

What chance is there of all of them (or at least some of them) happening? Very little, I'd say.

--Cyrus

[MMMMMM]

Right.

That is why, if I were President, I would warn all countries which are supporting terrorists that if they do not cease and desist straightway, their oil fields may be subject to seizure at any time. We know they ALL won't desist, so we'll be bound to get some oil. And the others will get the message pretty fast--a lot faster than the message which went out with this slow-as-molasses multilateral Iraq campaign.

Iran, Syria or Saudi Arabia: which would be left? Only the shadow knows. But they won't ALL be supporting terrorism when we get through, and we won't have high oil prices either.

By the time gas prices hit around $4.00 a gallon, you can count on this happening. And there will be plenty of young, new, pissed-off volunteers for the US Army to make it happen, too.

[paland]

[ QUOTE ]
That is why, if I were President, I would warn all countries which are supporting terrorists that if they do not cease and desist straightway, their oil fields may be subject to seizure at any time. We know they ALL won't desist, so we'll be bound to get some oil. And the others will get the message pretty fast--a lot faster than the message which went out with this slow-as-molasses multilateral Iraq campaign.

[/ QUOTE ]
Yep.. But why wait. Just label them "terrorists", "enemy combatants", or "freedom fighters". OOPS, maybe not that last one. And then do whatever we want. This kind of thinking just gives every dictator justification to do anything they want. Even Hitler is justified by your reasoning.

[MMMMMM]

I'm not "labeling" them anything: those states support terrorism whether I label them kitty-cats or anything else.

And if it doesn't happen at $4.00 a gallon, it will happen at $5.00/gallon.

[ACPlayer]

Yeah, the Bush admin has it wrong. They should have fought a better than this slow-as-molasses campaign, a little less shock and awe and a lot more "cruise-message sending" even if it meant killing 200,000 people so that the rest of the world could get the message --- that we want cheap oil.

Morally bankrupt, MMMMMM

[MMMMMM]

Obviously you can't tell when I'm half-joking.

The rest I expect from you: unsupportable conjecture and conclusions, courtesy of ACPLayer.

[ACPlayer]

Half joking? Is that like Half Bigotted or like Half Dead or Half Pregnant?

[cardcounter0]

GWB checked with his Saudi Business Partners, and they don't have a problem with the high price for gas.

Now Gays getting married - That is something we need to do something about!
/images/graemlins/smirk.gif

[MMMMMM]

"
Half joking? Is that like Half Bigotted or like Half Dead or Half Pregnant?"


In the world of ACPlayer, I wouldn't be surprised if it were;-)

[jdl22]

How would capturing UBL lower oil prices?

[Cyrus]

I wrote "The only chance that the markets have to (artificially) "correct" down to more "reasonable" levels, is a cumulative barrage of good news".

Those quotation marks indicate that these will not be true downturns, and they will not last long either. In more explicit terms, there just might be a slight downturn ahead but not a truly serious decline, such as, for example, back to 2002 levels.

Capturing bin Laden along with some other piece of "good news" could trigger a small "correction", for psyhcological reasons, but the fundamentals are simply not there to allow for a decline. (You know what would trigger a true decline[/i]? The discovery of a couple of major new oil fields somewhere in the world, and preferably in the Middle East. Hasn't happened for the last 10 years or more.)

[jdl22]

I see your point.

Also I'm assuming you meant preferably not in the middle east. It would be much better for oil prices imo if oil were found in, say, Canada or some other stable democracy. They need to discover more oil in the middle east about like Bush needs more of the millionaire vote in the next election.

[Rushmore]

Maybe I'm just independently wealthy or something, but I couldn't care less if gas is $2.00 or $4.00 a gallon.

And I drive a gigantic V8 that gets like -2 miles to the gallon.

My point is that this story just doesn't strike me as all that important. I wish they'd drag the damned potato car off the shelf anyway.

Maybe the hybrids will actually start to sell, and we can start to save the stupid world.

So maybe it's a good thing.

Read Bataille's The Accursed Share.

Or don't.

[B-Man]

Not if you consider inflation. If you take inflation into account, gas prices are pretty much in line with where they have typically been for the last 50 years, and considerably LOWER than they were in the 1970s. I just read an article about this yesterday. People are blowing this issue way out of proportion.

[adios]

[ QUOTE ]
Not if you consider inflation. If you take inflation into account, gas prices are pretty much in line with where they have typically been for the last 50 years, and considerably LOWER than they were in the 1970s.

[/ QUOTE ]

Yep I agree.

[ QUOTE ]
I just read an article about this yesterday. People are blowing this issue way out of proportion.

[/ QUOTE ]

I think their are four major concerns:

1. Demand in China is worrisome. Not a lot of spare capacity in production or refining in the world.

2. Terrorism and Jihadists are a threat to production.

3. Reserves have probably been overstated and the costs of production may have already seen their lows.

4. US environmental laws for the most part mandate using natural gas for power production. Although natural gas is not an issue at the pump, it does provide an alternative to oil for some applications and it's prices typically maintain a relationship to oil prices.

[MMMMMM]

I personally don't care a great deal whether it costs me an extra few bucks to put gas in the tank, but high gas prices are a drag on the economy. The higher they go, the more negative impact it will have on nearly every aspect of the economy. If at some point in time that negative drag combines with other economic factors to produce a serious recession, poker games will definitely be affected. With the current poker boom and robust economy that may not seem important, and currently it isn't. Conditions will not always be so favorable on both fronts, however.

In Connecticut we are a bit insulated from such effects in the poker world, because there always seem to be many players around with lots of disposable income and because Foxwoods is such a magnet. However what we don't see are the players who never showed up, or we forget about those who slowly stopped showing up. Anyway it doesn't seem to matter much at the moment so enjoy it while it lasts, I say;-)

[sam h]

High is a relative concept. Prices may not be high relative to the 1970s, but of course this was when prices were at their highest, after the formation of OPEC. But prices are certainly high now relative to the range they have been oscillating between in the last fifteen years. And, as Adios rightly points out, there are several new realities like booming demand from China that are not fictional and really matter.

[ThaSaltCracka]

We are paying on average 2.50 a gallon here in the puget sound.

Honestly, what is so bad about rising gas prices? It should increase inflation, but that is not neccesarily a bad thing. In fact inflation has been decreasing in the U.S. for quite some time, to the point now where some economists are worried about deflation, although many don't see this a crisis situation now.
I realize that there are two distintcly(sp? lol) different views on inflation, and both have their positive and negatives, but I am like many of you, rising gas prices aren't really concerning me.

[Slacker13]

http://money.cnn.com/2004/05/21/news/international/opec.reut/index.htm

[Rushmore]

I know.

[CORed]

I know. I cringe every time I fill my gas tank. However, we need to kick our fossil fuel habitt, and that's just not going to happen until fossil fuels cost more than renewable enrgy sources. The supply of oil, coal and natural gas in the world is not infinite. Neither is the supply of uranium and thorium (nuclear fission) or lithium (needed for hydrogen fusion using tritium-duterium reaction). Past predictions of exhustion of oil reserves were overly pessimistic, but the cold hard reality is that sooner or later, we're going to run out, or run so low that the value of oil, gas and coal for chemical feedstocks will be so high that we simply can't afford to burn it.
This will not be as catastrophic as many think it is. Energy is everywhere for the taking, wherever the sun shines or the wind blows. Note that I did not say free for the taking. Using wind and solar energy on a scale sufficient to satisfy our needs will require an enormous capital investment in hardware, and an ongoing cost to maintain that hardware. The barriers to using wind and solar energy are not technological. We know how to use solar, wind, tide and geothermal energy. These sources are not currently used very widely for the good and simple reason that oil, gas and coal are cheaper. When that is no longer the case, expect a rapid transition.

[Cyrus]

Take a look at this chart (http://inflationdata.com/inflation/images/charts/Oil_Inflation.gif). Extend the red line after 2002 to the low 30s for 2003 and to the upper 30s for 2004. (We can afford not to adjust for inflation because we are so close to the base year of 2000.) You will see that the price of crude oil is currently on an unsteady but steadfast course upwards. (The 1996-98 slump was exceptional and uncharacteristic.) Plus, in terms of 2000 U.S. Dollars (i.e. adjusted for inflation), the price of crude oil has jumped in 2004 to levels that have not been seen but once during the last 80 years!

Crude oil is no longer the cheap raw material it once was - period.

More importantly, this is about oil products. The products are hitting high after high because most refineries are going full blast but cannot meet demand. China's GDP, for instance, is supposed to be growing by 9%! The Far East refineries simply cannot meet that huge sucker.

And there has not been a new refinery built around the world in the last fifteen years, except one in Saudi Arabia - and that one's debatable. No plans to build new refineries either.

We are at a crunch - and the prices of oil products, especially Gasoline, are rushing towards levels that better reflect this.

[Cyrus]

From the link (http://money.cnn.com/2004/05/21/news/international/opec.reut/index.htm) you posted :

"...Saudi Arabia holds the only significant volumes of spare capacity in the 11-member [OPEC] cartel."

Translation : Everybody else is already producing full blast.

[MMMMMM]

That's only in the cartel, Cyrus. Couldn't some non-cartel members such as Russia could produce a lot more, especially if if they were to beef up their oil industry infrastructure?

[MMMMMM]

So: 1) we especially need more refineries...and 2), in case you weren't aware of it, China cooks their books (which is not to say they aren't experiencing significant growth, or that they won't have great future demand for oil).