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Oil $110. But That's Not The Scary Bit

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http://www.telegraph.co.uk/money/main.jhtm...12/cnoil112.xml

Oil price hits new high of $110 a barrel with no sign of a fall
By Tom Stevenson
Last Updated: 1:59am GMT 12/03/2008
The oil price hit a new record for the fifth consecutive trading session, coming within a whisker of $110 a barrel, as the International Energy Agency warned there was little prospect of energy costs falling far..../
The IEA predicted that global oil demand would rise by 1.7m barrels a day to 87.5m barrels in 2008,
with the 2pc growth rate running at almost twice the 1.1pc increase reported for 2007 over 2006
.

Think of the millions of new cars on the road in Chindia (I like that--who came up with it?). Think of all our larger gas guzzlers flying off the shelves in the big, polluted, Chinese cities. Think of the fact that, according to the SMMT, SUV sales in the UK are rising 28% faster than cars. I have never seen so many RangeRovers on the M-ways--and they are driving faster than the white vans!

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'I have never seen so many RangeRovers on the M-ways--and they are driving faster than the white vans!'

They are miracle range rovers, capable of miracle speed and miracle recovery if something goes wrong, (not that it ever does in this miracle enviroment).

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http://www.telegraph.co.uk/money/main.jhtm...12/cnoil112.xml
Oil price hits new high of $110 a barrel with no sign of a fall
By Tom Stevenson
Last Updated: 1:59am GMT 12/03/2008
The oil price hit a new record for the fifth consecutive trading session, coming within a whisker of $110 a barrel, as the International Energy Agency warned there was little prospect of energy costs falling far..../
The IEA predicted that global oil demand would rise by 1.7m barrels a day to 87.5m barrels in 2008,
with the 2pc growth rate running at almost twice the 1.1pc increase reported for 2007 over 2006
.

Think of the millions of new cars on the road in Chindia (I like that--who came up with it?). Think of all our larger gas guzzlers flying off the shelves in the big, polluted, Chinese cities. Think of the fact that, according to the SMMT, SUV sales in the UK are rising 28% faster than cars. I have never seen so many RangeRovers on the M-ways--and they are driving faster than the white vans!

I can see a significant reduction in demand for crude in the next couple of years. By 2010 the US economy will have stopped circling the pan and will be well and truly up the U bend. By this time our own economy will have started to splutter out as we will be in the grip of a nasty recession. These two factors will also have a negative effect on the global economy, including Chindia. Couple that with the fact that 30-40% of the crude price is mostly froth and speculation, it's not unreasonable to predict a 50% drop in crude over the next few years as western economies start to melt.

Edited by Lander

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'I have never seen so many RangeRovers on the M-ways--and they are driving faster than the white vans!'

They are miracle range rovers, capable of miracle speed and miracle recovery if something goes wrong, (not that it ever does in this miracle enviroment).

I think we ought to nominate the RangeRover as the symbolic vehicle of the Brown decade. It represents that air of arrogance, a bullying sort of vehicle, often paid for by MEW and no longer a purpose-built vehicle that famers need but a miracle toy that says to the world--we deserve the biggest and the best and most thirstiest of all SUVs. Very Brown like IMO.

What vehicle will characterise the post-Brown era I wonder?

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I think we ought to nominate the RangeRover as the symbolic vehicle of the Brown decade. It represents that air of arrogance, a bullying sort of vehicle, often paid for by MEW and no longer a purpose-built vehicle that famers need but a miracle toy that says to the world--we deserve the biggest and the best and most thirstiest of all SUVs. Very Brown like IMO.

What vehicle will characterise the post-Brown era I wonder?

Lada. Can you still but them ?

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I can see a significant reduction in demand for crude in the next couple of years. By 2010 the US economy will have stopped circling the pan and will be well and truly up the U bend. By this time our own economy will have started to splutter out as we will be in the grip of a nasty recession. These two factors will also have a negative effect on the global economy, including Chindia. Couple that with the fact that 30-40% of the crude price is mostly froth and speculation, it's not unreasonable to predict a 50% drop in crude over the next few years as western economies start to melt.

I'm sorry but you have a lot more reading and understanding to do dear boy, your statement is naive to say the least.

Can you tell me what you base your assertion on or is it just a 'hunch' you have?

Edited by Impartial

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The $ price of oil is increasing because the $ is increasingly worth less. Not a speculative bubble or anything, merely a reflection of the actual value of the $. A no brainer really.

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ex-Foxton's mini's with faded silly paint job's being used by joe public......now where's Paddles? :lol:

I think we ought to nominate the RangeRover as the symbolic vehicle of the Brown decade. It represents that air of arrogance, a bullying sort of vehicle, often paid for by MEW and no longer a purpose-built vehicle that famers need but a miracle toy that says to the world--we deserve the biggest and the best and most thirstiest of all SUVs. Very Brown like IMO.

What vehicle will characterise the post-Brown era I wonder?

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You have to question the sanity of anyone who buys one of these gas guzzlers given the looming of peak oil, and the rise in demand from China and India. As the proverb says a fool is easily separated from his money (or should that be credit...).

Everytime I swerve to avoid some mad biddy in her 4x4, I have a smug smile of satisfaction that she'll be draining her finances for years to come. Not so much a status symbol, just a tribute to monumental ignorance and stupidity.

http://www.stopurban4x4s.org.uk/

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What's so wrong about the Range Rover? My diesel one does 27mpg which is within 20% of the consumption of Mondeo Mans 2.0ltr Estate. My Range Rover carries 7 though and can pull the horse trailer. I do 7,000 miles a year in it and thus the machine consumes less fuel than a Toyota Prius that does 14,000 miles a year and has considrably less utility.

I would also be confident that my two year old Range Rover will still be on the road in 15 years time whereas all Toyota Prius will have had to have TWO battery changes by then which are so expensive as to render the car scrap. Range Rovers like 911's have a much longer life cycle than the average car as their abilities and features remain relevant and thus they are kept on the road. The enviornment like this very much.

ANDY

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The $ price of oil is increasing because the $ is increasingly worth less. Not a speculative bubble or anything, merely a reflection of the actual value of the $. A no brainer really.

The Arabs still buy goods from the US in $--such as aircraft and technology. They probably buy a lot of Chinese and Indian tat too and those Asian currencies are stable vs. the US$. I am not so sure the $ falling in value verses the Euro, Yen and other European currencies is a good excuse.

No, OPEC are gouging because they can. The ideological war if you like. Its a power trip.

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What's so wrong about the Range Rover? My diesel one does 27mpg which is within 20% of the consumption of Mondeo Mans 2.0ltr Estate. My Range Rover carries 7 though and can pull the horse trailer. I do 7,000 miles a year in it and thus the machine consumes less fuel than a Toyota Prius that does 14,000 miles a year and has considrably less utility.

I would also be confident that my two year old Range Rover will still be on the road in 15 years time whereas all Toyota Prius will have had to have TWO battery changes by then which are so expensive as to render the car scrap. Range Rovers like 911's have a much longer life cycle than the average car as their abilities and features remain relevant and thus they are kept on the road. The enviornment like this very much.

ANDY

If you NEED a Rangerover there should not be any objection to it. The problem is that most who drive the guzzlers do not need one. 27 mpg on a run might be classified as a guzzler these days. The new VW Fox diesel gets 72 mpg on a run--or so VW claims.

Its the symbolism that it carries. The power and greed of the Brown years. The symbolic "MEW" machine that has become disaffectionatley known as the "Chelsea Tractor."

If you observe the non-farmer/horse types drinving them on the M-Ways you get the picture. They drive up the ar*se of the white vans flashing their lights while pressing on at 110 mph plus.

Edited by Realistbear

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A 30% drop in the price isn't an unreasonable ascertion IF the western economies are in a depression or recession.

That only takes the price back to $70. Still up by a lonnnnnnnnnnngggggg way.

Are you being serious?

The western economies can go into a depression, the increased demand from emerging markets will far outweigh the (relatively small) fall in consumption by the West.

Anyway if - i mean AS the depression will be inflationary expect oil prices to go a hell of a lot higher - I expect to see 120 this year on the way towards 200.

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I'm sorry but you have a lot more reading and understanding to do dear boy, your statement is naive to say the least.

Can you tell me what you base your assertion on or is it just a 'hunch' you have?

``The decline of the dollar has a lot to do with the rise in prices,'' said Frank Verrastro, director of the Center for Strategic and International Studies energy program in Washington. ``People are looking at the oil market as a safe place to park their money in this time of economic uncertainty. The end users of oil are not major participants in this market.'

The International Energy Agency, an adviser to 27 developed nations, cut its forecast for 2008 global oil demand for a second month as record prices curbed consumption in some parts of the world. The agency reduced its forecast by 80,000 barrels a day to 87.54 million barrels a day, leaving annual demand growth at 2 percent, the IEA said today in a monthly report.

``It's a bubble and eventually it will burst,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``The fundamentals aren't supportive of these prices. Today's IEA report sure looks bearish to me.''

http://www.bloomberg.com/apps/news?pid=new...id=aLom4V1suPNI

The recent run up in crude prices is more of a speculative bubble than concerns on rising demand and tight supply.

Edited by Lander

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A bit of perspective:

http://biz.yahoo.com/cnnm/080311/031108_ga...nking-budgeting

CNNMoney.com

Record gas prices push energy spending to near 1980s levels
Tuesday March 11, 2:04 pm ET
By Steve Hargreaves, CNNMoney.com staff writer
So gasoline prices are at an all-time high. But after adjusting for inflation, rising incomes and better fuel efficiency, how bad are they really?
The experts' answer: Bad. Nearly as bad as they've ever been, and not likely to get better anytime soon.
Adjusted for inflation, gasoline at $3.227 a gallon, according to AAA, is still about 18 cents below its peak of $3.405, set in March 1981, according to the Energy Information Administration.
And Americans are spending about 6% of their total disposable income on energy, down from about 8% in 1982
.

Compared with gold, oil has risen much faster. If you take peak gold at around $850 back in the early 1980's and factor inflation it would have to rise to $3,373 an ounce to equal the highs of almost 3 decades ago.

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Compared with gold, oil has risen much faster. If you take peak gold at around $850 back in the early 1980's and factor inflation it would have to rise to $3,373 an ounce to equal the highs of almost 3 decades ago.

Steady now RB, you are giving the gold rampers some ammo there.

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``The decline of the dollar has a lot to do with the rise in prices,'' said Frank Verrastro, director of the Center for Strategic and International Studies energy program in Washington. ``People are looking at the oil market as a safe place to park their money in this time of economic uncertainty. The end users of oil are not major participants in this market.'

The International Energy Agency, an adviser to 27 developed nations, cut its forecast for 2008 global oil demand for a second month as record prices curbed consumption in some parts of the world. The agency reduced its forecast by 80,000 barrels a day to 87.54 million barrels a day, leaving annual demand growth at 2 percent, the IEA said today in a monthly report.

``It's a bubble and eventually it will burst,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``The fundamentals aren't supportive of these prices. Today's IEA report sure looks bearish to me.''

http://www.bloomberg.com/apps/news?pid=new...id=aLom4V1suPNI

The recent run up in crude prices is more of a speculative bubble than concerns on rising demand and tight supply.

Isn't this the same line/group that were describing how 2007 and onwards would see a consumption slowdown - all it did was spring back and explode higher.

If you think about it, 80,000 new cars are hitting the roads in china daily.

China and India have populations moving from pushbikes, to scooters, to cars daily.

China and India population is in the Billions.

Add to this a falling dollar and a flight to hard assets in all commodities because of rising global inflation, yes there may be some froth but nowhere near 30% -40%. A slight pullback there may be but the trend in the price of oil is definitely higher.

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I was laughing at that "The Woman who stops traffic" last night on C4. The stupidity of the average motorist sheeple staggers belief. Literally only a mile or so to walk, with decent pavements, cycle paths, but no, they have to queue up in traffic to do a journey that can be walked or cycled in minutes. Totally unneccessary. They need to get their fat obese *rses out of their cars.

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The Arabs still buy goods from the US in $--such as aircraft and technology. They probably buy a lot of Chinese and Indian tat too and those Asian currencies are stable vs. the US$. I am not so sure the $ falling in value verses the Euro, Yen and other European currencies is a good excuse.

No, OPEC are gouging because they can. The ideological war if you like. Its a power trip.

OPEC has *never* managed to keep spare capacity offline for long because of the obvious temptation.

Every OPEC country that CAN overproduce its quota is, to the maximum possible. Have been since oil passed $30 (Which was once upon a time regarded as expensive oil).

We have hit production limits. It's now essentially a battle between production decline in exsiting wells and new capacity being brought online - and every month that passes makes the former bigger and the latter harder.

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You have to question the sanity of anyone who buys one of these gas guzzlers given the looming of peak oil, and the rise in demand from China and India. As the proverb says a fool is easily separated from his money (or should that be credit...).

Everytime I swerve to avoid some mad biddy in her 4x4, I have a smug smile of satisfaction that she'll be draining her finances for years to come. Not so much a status symbol, just a tribute to monumental ignorance and stupidity.

http://www.stopurban4x4s.org.uk/

thats right its peak oil wots dun it :blink:

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I think we ought to nominate the RangeRover as the symbolic vehicle of the Brown decade. It represents that air of arrogance, a bullying sort of vehicle, often paid for by MEW and no longer a purpose-built vehicle that famers need but a miracle toy that says to the world--we deserve the biggest and the best and most thirstiest of all SUVs. Very Brown like IMO.

What vehicle will characterise the post-Brown era I wonder?

No no no no, the ultimate unnecessary behemoth and the king of tasteless MEW-mobiles HAS to be the bmw X5

I mean really, what is the fricking point of that vehicle? At least the range rover has a tenuous nod to a history that gives it some practical purpose.

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Compared with gold, oil has risen much faster. If you take peak gold at around $850 back in the early 1980's and factor inflation it would have to rise to $3,373 an ounce to equal the highs of almost 3 decades ago.

Peak gold and peak oil are not comparable entities. Oil, you mine it, you burn it, it's gone, the supply falls. Gold, you mine it, you keep it, it lasts forever, and the global supply rises inexorably.

The world has only a small amount of oil in store, and refilling the store is dependent on production rate. That in turn, is increasingly becoming dominated by the geological constraints; whereas in the past, "above ground" factors dominated the production rate. Saudi, for example, have tripled the number of rigs operating whilst seeing an 8% decline in output over the last 4 years. We may still have huge amounts of the stuff left, but so far the highest production rate (all liquids, i.e. including biofuels) was 85.47 mbpd in July 2006.

Quite how the IEA extrapolate a demand figure I don't know; presumably they take previous consumption (which equalled production of course) and add a few percent, then on this assumed demand, traders jack up the price until supply = demand, which is has to, of course. I guess they are saying that at CURRENT prices, demand will grow by <<insert best guess here>>?

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