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bingobob777

Oil Question

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The arabs stockpile it, and a month or two later the economies of America and China collapse.

Almost happened in the 70's.

suppose they stockpile a couple of years worth on the fly, how long could the Arab countries get bye without the cash coming in?

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Another Oil question.

Can someone please explain to me, why Oil went up to over $140 pbl last year?

Demand from the emerging economies, although nobody really knows. Money flowing back and forth from the oil producers and the rest

of the world, either way the system amplified the problem, 'who is paying whom with what money based on

what.'

Or where do the emerging econimies get their money from in time to pay the oil producers while charging us enough to pay them so they

can pay more for oil.

Another important feature of the global economy in recent years has been the unprecedented

swings in the price of oil. The rise in oil prices prior to the crisis boosted commodity-exporting

countries’ income. With the expenditure of oil-producing countries lagging their income, this

contributed to the build-up of global imbalances. Most commentators agree that a significant

part of the increase in the oil price during this period was due to rapid growth in demand from

emerging market economies. However, there is less of a consensus about the role of other

possible drivers, such as institutional factors and speculative activity. What can be said about the

rise and fall in oil prices analyses the main explanations for the rise and fall in oil prices between

2003 and the end of 2008. It argues that the differing trends in demand and supply are

consistent with the sustained rise in the oil price between 2003 and 2007. But the rapid rise and

subsequent fall in prices in 2008 is more difficult to explain. Empirical evidence suggests that

financial flows into oil markets have not been an important factor over the period as a whole,

but the evidence is not sufficient to rule out the possibility that such flows might have played a

role in 2008.

http://www.bankofengland.co.uk/publication...lletin/2009.htm

bit like a diesel engine runaway

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suppose they stockpile a couple of years worth on the fly, how long could the Arab countries get bye without the cash coming in?

If they could convince their population to put up with the taxes necessary to do it.

The Arabs want American money, the Americans need Arab oil, the system works.

No one has a vested interest in stopping the party.

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suppose they stockpile a couple of years worth on the fly, how long could the Arab countries get bye without the cash coming in?

Not long - Saudi Arabia basically needs its income to keep its under employed disenfrancised massses from revolting.

Money used to fund the 'stick' - police / army and 'carrot' - subsidised food, accomodation, fuel

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Another Oil question.

Can someone please explain to me, why Oil went up to over $140 pbl last year?

Houses proved to be less good an investment than they thought?

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China and USA in cahoots say to oil producing countries we're only going to pay $25 a barrel, like it or lump it. What happens?

You need to bone up about the global oil and gas biz.

The oil and gas industry started in America and is effectively mainly controlled by them.

And since the secret movers and shakers of the industry are tightly connected to US government and banking interests it would be simply shooting themselves in the foot to take on OPEC head-to-head as well as compromising their own financial position and powerbase.

These people don't care if the oil price goes to $300 barrel: the higher the price then the more they make.

Their price sensitivity point is callously calculated on the old yardstick "What the market can afford".

And since the Western world relies far too heavily on oil and gas for simple continuation, then the consumer will just grumble a lot and grin and bear it as price rises inexorably continue.

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Another thing to point out, even at $140 per barrel its still 3 times cheaper than mineral water.

30-40p a liter for petrol and diesel right now, £15 instead of £50 from complete empty for the most popular car like a 3 series BMW.

Instead of QE they should just drop the fuel tax =,

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I think instead of asking why oil went to $140+, it is better to ask why it is so damned cheap.

When you look at how much it would cost to get the same amount of energy from almost any other source (excluding natural gas, which is also under priced), oil prices could be multiples higher and still be justified.

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I think instead of asking why oil went to $140+, it is better to ask why it is so damned cheap.

When you look at how much it would cost to get the same amount of energy from almost any other source (excluding natural gas, which is also under priced), oil prices could be multiples higher and still be justified.

Well, I wasn't really commenting on how cheap or expensive it is/was. I was wondering how come it went up so fast, when the world economy was looking so screwed. At the moment, any bit of good news seems to push up the price. Was there loads of good news around when it went to $140?

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The reason crude zoomed in price was simple speculation.

There are effectively two methodologies for pricing crude oil: the long-term contract price agreed with the largest major oil companies such as Exxon-Mobil, BP and Shell and the Spot Market price.

By rights, the oil companies should be using the contract price to set retail prices (That's precisely why the oil and gas industry needs urgent heavy-handed regulation): they don't; they use the spot market price.

As the global economies and more critically capital markets started melting down in 2007, many large investors swapped into oil and gas and food futures and bidded up forward contract prices.

They saw this as a method to hedge incipient losses on their capital as both food and oil are essentials.

I'm glad to say the bubble collapsed rather quickly and many speculators lost a bundle thanks to their greed.

However, many Third World nations were taken to the edge of starvation by the sudden stratospheric rise in food commodity prices.

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Another oil question when will the oil run out ?

In the 1970's they said that the oil would run out by the year 2000

Today they say the same thing by the year 2030 or in thirty years time the oil will run out

So when will the oil run out ?

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Another oil question when will the oil run out ?

In the 1970's they said that the oil would run out by the year 2000

Today they say the same thing by the year 2030 or in thirty years time the oil will run out

So when will the oil run out ?

If you ask Greenpeace they will tell you about 10 years time. If you ask the Oil companies they will say about 500 years.

Everyone else is somewhere in the middle.

Unless you want to pick someone else opinion you have to bone up on geology and spend a lifetime studying the issue.

Personally I don't have any idea.

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Another oil question when will the oil run out ?

In the 1970's they said that the oil would run out by the year 2000

Today they say the same thing by the year 2030 or in thirty years time the oil will run out

So when will the oil run out ?

S'funny.................

Everytime the doomsters state we have reached Peak Oil: another vast strike seems to be made...........

http://www.businessweek.com/magazine/conte...46000578301.htm

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Not that vast - assume it's twice as good as the other field mentioned in the piece and it's enough to last about 4 months at current consumption levels.

It is the deepest offshore well ever drilled in that area: which will probably yield far more over time.

And typically insofar as reserves are concerned then it's very much a case of whom one believes............

http://seekingalpha.com/article/159845-bp-...-gulf-of-mexico

http://www.eia.doe.gov/emeu/international/reserves.html

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It is the deepest offshore well ever drilled in that area: which will probably yield far more over time.

And typically insofar as reserves are concerned then it's very much a case of whom one believes............

Yes, certainly don't want to get into any peak oil debate. Just pointing out that BP said that it is probably even better than the 4 - 6 bln barrel field that they already have in the gulf of mexico, but that 5 or even 10 bln barrels don't really go all that far these days, as annual usage is 30 bln barrels.

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Again it's funny.

I well remember the huge raging debate back in the early 70s when OPEC quadrupled Post Prices: and then US companies particularly (Mainly since the US had capped so many indiginous wells and over-relied on "Cheap" Gulf oil) were raving about Oil Shale and etc.

And since this time, new mega-reserves have come onstream almost with monotonous and boring regularity.

I was actually in Mexico on a couple of projects, when Pemex (Petroleous Mexicanos) was just really coming onstream in 1979.

And then we had Russia: just a glance at Russian reserves, explored and found since the end of the Soviet era and with Western oil corporation smarts have shaken up most theories about Peak Oil.

For the moment.

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Again it's funny.

I well remember the huge raging debate back in the early 70s when OPEC quadrupled Post Prices: and then US companies particularly (Mainly since the US had capped so many indiginous wells and over-relied on "Cheap" Gulf oil) were raving about Oil Shale and etc.

And since this time, new mega-reserves have come onstream almost with monotonous and boring regularity.

I was actually in Mexico on a couple of projects, when Pemex (Petroleous Mexicanos) was just really coming onstream in 1979.

And then we had Russia: just a glance at Russian reserves, explored and found since the end of the Soviet era and with Western oil corporation smarts have shaken up most theories about Peak Oil.

For the moment.

The giant Canterell field in the Gulf of Mexico has gone into a terminal decline in output, and Mexico could cease to be a net exporter within the decade. Just as the UK has since the peak of the UK sector of the North Sea in 1999. Russian output peaked last year I believe.

The boss of French oil giant Total is warning of a peak in oil output by 2015. etc.

You can verify all of these statements via google.

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Exxon Mobil is the largest corporation in the World: and the other remnants of the Seven Sisters are in the top phalanx.

Now are they in fact hugely diversifying and investing in say alternative energy technologies?

Or are they investing in exploration of areas hitherto too climate-hostile and geophysically difficult in order to seek out new reserves?

OK: perhaps they are dumb bunnies who lucked into running the biggest businesses on the planet by accident rather than smarts and design.

Always worth remembering that it pays the oil majors to propogate the imminent demise of hydrocarbon energy resources so they can ramp the prices.

Again.

And again.

And again.

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