$100 / bbl Crude? 2

[Ashereng]

So, crude hit $88 a barrel the other day.

Is $100 a barrel crude likely now? By next year?

"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?

 

[civilperson]

This year, (before Oct. 2008). 150/bbl in the next four years. Increasing demand and stagnant/stable supply.

 

[metengr]

Start riding a bike, walking or take public transportation.

 

[zdas04]

When I was doing computer junk for a major oil company we had this huge scare that all of our programs had 2 digit price fields for oil. We went through a multi-year multi-million dollar program to upgrade them to accept numbers larger than $99.99.
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That was 1984. It is nice to see (23 years later) that we were right.

David

 

[jmw]

zdas04, I hope your tongue was firmly in your cheek when you said that....
No you weren't right. You spent a lot of $$$$ on a problem that didn't have any short term reality.
If that company is still using it's 1984 hardware and its 1984 programs ....... if it had been the 70's then the fuel shortage could justify such a panic but what on earth would prompt such a project in the 80's?

What is the peak oil price going to be?
Sure as eggs is eggs it will reach a point beyond which no one can afford it. That point, and the approach to it, will make alternatives cost effective and then you won't be able to give it away.

However, interesting to note that we all have alarmism fatigue.
It wasn't long ago that oil was at $17 (?) and then everyone panicked when it started up toward $70 and sent lots of people into a blue funk.

The oil price is largely controlled by the Cartel, not resource availability... about the only "legal" price fixing (who can argue?) there is.

High oil prices fund exploration and recovery from expensive wells. They also fund wars. There is a point at which someone will figure out it is worth going to war with someone else. That is the value we need to worry about, not some decimal number system quirk that will excite the media into alarming the public.


JMW

http://www.ViscoAnalyser.com

 

[davefitz]

It may also be related to the foreign exchange value of the USD. At 1.4 USD = 1 Euro, a 90 USD/ bbl of oil equates to a $64 /bbl oil price at an earlier exchange rate of 1 USD = 1. euro.

So the drop in value of the greenback reduces US demand for oil while allowing other countries to imbibe more of the gooey stuff. Time to scan e-bay for a 1981 VW rabbit diesel.Or time to move closer to work.

What I have not yet figured out is why it should matter if the oil producing nation sells the oil for USD or for euros, if the currency is freely available for exchange on the open market.

 

[jmw]

Ah! the money markets..... another virtual wealth creating area where no actual wealth is generated....
why do I get one exchange rate when buying dollars and another for selling and pay a commission? So someone can get rich without actually producing anything.
Hey, even when I use my switch card and no real money is used I get clobbered, I get clobbered just for spending my own currency (probably because if I didn't spend my own money I'd have a surplus and if enough people have a surplus the Tax man sees some scope for more taxes..... disposable income is a measure of taxation potential.....

[blue]Sorry Engineers, we just had to take JMW away before he became to dangerous to himself and others.
This has been a public service for your benefit.
Your friends at the IRS.[/blue]

JMW

http://www.ViscoAnalyser.com

 

[epoisses]

Nobody can actually predict this with any reasonable accuracy. I remember more than one ERTC (European Refining Technology Conference) where all the experts gather, and where everyone showed themselves surprised by the increase vs the previous year, but where everyone had the feeling that next year's prices would not exceed the (insane) level that had been reached. Wrong...

It's true part of the price hike must be speculation. I'm sure a coupe years from now the crude price will drop, just like everything else that's overpriced, eventually...

 

[zdas04]

Until the last few weeks, the record oil price was in early 1985 (at constant dollars). During 1984, average price went from around $3/bbl to over $40/bbl (1984 dollars), and it didn't take a rocket scientist to project that curve to $100/bbl in 1986 or 1987. Of course in real life the Oil & Gas Depression started in the Spring of 1986 and prices stayed outrageously low for 20 years. Had the depression held off for another year, we would certainly have seen $100 oil back then.

David

 

[PSE]

JMW,

The IRS pulled you because you had stumbled across a secret you were not supposed to know. Making money from other peoples money.

To track back to the OP. My guess is prices will increase to shy of $100/bbl and hold for a bit. Just long enough for some crisis or "disaster" to provide the excuse/reason for it to go over the $100 threshold. It might bounce back and forth there until the public becomes used to the idea before continuing it's onward trek.

Regards,

 

[Gymmeh]

Well our great Gov doesn’t want people to bike

"United States Secretary of Transportation
In an interview with PBS on August 15, 2007, Mary E. Peters said that riding a bike is not a form of transportation. " and she goes on to say basically there is no reason to support any biking infrastructure.

She also blamed the I-35W Bridge collapse on money wasted on pointless projects like making bike lanes and bike paths.

So with such great gov't support i guess we as stuck buying oil, or getting hit by cars while biking.

 

[metengr]

Gymmeh;
Maybe we need to send our great politicians to Belgium for several months to see firsthand where bike riding is a form of transportation. Also, if you don't get out of the way in bike lanes in Belgium and Germany you WILL be hit (just like crossing the street with cars). I was in those countries last month and saw first hand. Also, most people don't lock their bikes because they all basically look alike - model and color.

 

[jmw]

Meteng,
Better they should see how Belgium is managing without a government... which they have been without for some time now.

http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2007/09/08/dl0803.xml

It begs the question, which other coutnries would be better off without their governments?

JMW

http://www.ViscoAnalyser.com

 

[Gymmeh]

I went to Univeristy in Denmark, same thing, I biked 5k to school morning... in Denmark they did lock their bikes if it was nice with a little with a small thing that can easly be broke. If you really needed one there were always old ones that did not have locks.

I came back to the US and thought...gee i will bike only 2 miles to work. That lasted only one day, and so did my bike!

 

[owg]

On the main streets in Beijing there were 3 lanes each way. The outside lane was occupied by Mercedes and Audis driven by government people, the middle lane was for various small cars and trucks, and the curb lane was absolutely crammed with bikes. Many of the bikes were hauling one or two concrete blocks to building sites.

HAZOP at

http://www.curryhydrocarbons.ca

 

[jmw]

The principle Chinese bicycle factory is in trouble because of the switch to cars and the new affluence. (Part of the reason to buy Rover was to establish production for internal sales, I'm told).
Some manufacture they are moving (to Africa) not simply because of the lower labour rates but to get around the import taxes levied by the US on Chinese exports.

This quote from a Telegraph article:

Bicycles have been banned in parts of Shanghai to ease congestion and cycling in Beijing has become a daily suicide mission with 1,500 new cars a day swerving onto the capital's roads.

Even the chairman of the China Bicycle Association, Wang Fenghe, has abandoned his bike after being knocked off and badly injured.

In a cut-throat market, the only bicycles selling well are racers and mountain bikes. Most up-and-coming Chinese would not be seen dead on Flying Pigeon's sturdy 45lb bone-shaker with its reinforced crossbar to carry pigs.

So while in the UK Two Jags spent part of his day not chasing secretaries, converting motorways (M3) into two lanes with bus and taxi lanes, and, if he had lasted, probably going to a one lane for cars, one for buses and one for bicycles.... the UK has been transformed to cater to cyclists with all sorts of new cycle lanes, shared use of pavements with OAPs, new layouts at junctions and masses of coloured road markings, and yet.... as a significant proportion of road users with a significant involvement in accidents, there are virtually no (enforced) requirements for training, lighting, brakes, speed, insurance, tax or anything else.

All this before the Greens got at all the political parties with the same message of AGW.

JMW

http://www.ViscoAnalyser.com

 

[jmw]

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/05/21/wbike21.xml

This is such an amusing article I posted the link.
I particularly liked Mr Wang:

And asked if he was willing to enter a joint venture to help to modernise the company, Mr Wang was horrified. "Never! No! Too much history, too much culture. We can never have joint venture here. Flying Pigeon is too Chinese, too traditional," he shouted among the assembly lines, clattering machinery and boxes of spokes and cogs.

After a long pause, Mr Wang shouted with a degree of pride: "Maybe this was like England 100 years ago."

Er, yes..... and probably like England 20 years ago and the Flying Pigeon Factory will probably go the way of British Leyland.

JMW

http://www.ViscoAnalyser.com

 

[dcasto]

I'm with davefitz, As long as we send billons of greenbacks overseas, they just stack up there (China, Tiawan, germany, ect..) Those con tries just spend them on oil at any price, whatelse can they do with the dollars, burn them for home heating?

 

[owg]

dcasto - They are working to control the stack. In early 2007, China put $200 billion -- about 15% of its reserves into a state-run fund.

China's fund paid $3 billion for a stake in private equity firm Blackstone. It said on Oct. 17 that it's interested in a stake in Bear Stearns.

They are also out buying oil properties so they pay today's price rather than the future price.

The next time the speculators leave the market we will see a $20/bbl drop in the price - maybe.


HAZOP at

http://www.curryhydrocarbons.ca

 

[0707]

The crude-oil market is in what traders call cotango, meaning futures contracts for a given product are priced higher than that same good for near-term

When the market is in contango, refiners tend to operate at the top of their tanks.

A skilful trader can quite possibly buy a cargo of oil at a rather low price to quickly resell it at a profit, if others need the cargo more than he does and are ready to pay the price. So, it is not rare for a cargo of oil to change ownership during transport, sometimes several times: destined initially for the United States, it is purchased during transport by a refiner in Rotterdam in the Netherlands and finally finishes up at the Fos-sur-Mer refinery, which had a more pressing need for it.

All of these situations are also responsible for oil price increase.