Oil's Recent Rise Not as Familiar as It Looks

[RamboLiberal]

Source: Washington Post

After a week of new records for crude oil prices, the question is: How high can they go?

In the past 10 weeks, the price of crude oil has shot up $25 a barrel, closing at $95.93 in New York on Friday, an all-time inflation-adjusted peak. Unlike earlier spikes in oil prices, which came on the heels of war in the Middle East, this latest ascent does not appear to be linked to any one conflict or to any physical shortage.

Instead, traders who treat oil like any other commodity are widely thought to be driving prices upward, bolstered by a weak dollar and money flowing out of stock markets and other investment vehicles.

So far U.S. consumers have not felt the full impact. Sluggish U.S. gasoline demand over the past two months has made it hard for oil giants to pass through higher costs; refinery profit margins, which hit records in the spring, have been squeezed. But if high crude oil prices persist, they will flow through to the gas pump. Yesterday, the Lundberg Survey reported that the average retail price of regular gasoline is up 16 cents in the past two weeks to $2.96 a gallon.

Many veteran oil analysts say this is a bubble. Oil is historically a cyclical business. Modestly higher production by the Organization of Petroleum Exporting Countries, a warm winter, slower U.S. economic growth and a flattening of demand in the United States could puncture these lofty prices.


Read more: http://www.washingtonpost.com/wp-dyn/content/article/2007/11/04/AR2007110401753.html?hpid=topnews

[soothsayer]

1. just a parting gift from the BFEE to its pals

[tom_paine]

11. Oh no, the parting gift whatever it is, is yet to come

My prediction (God Forbid) :nuke: 9/11 #2 - brought to you by the same Bushie LIHOP/HIHOP Pals who brought you the first one.

This will trigger the Penultimate and Final Satges of the Old USA's transition to the New Totalitarianism.

I hope that I am wrong, and predicting details of the future is a notoriously sketchy practice, so it wopuldn't surprise me if it ws a different parting gift. Do they dare nuke Iran without a phony False Flag provocation first? I don't think so.

[Tandalayo_Scheisskopf]

2. I hope it's a bubble.

Watching rapacious pricks lose their shirts is great good fun.

On the other hand, I am not all that sure that this qualifies as a bubble. But what I know about the oil market ain't much.

[Kagemusha]

3. It's only a bubble if Bush doesn't bomb Iran anytime soon.

Then it looks like insufficient pessimism.

[Acadia Blue]

13. Bush is beholding to oil.

[WCGreen]

4. It's a bubble...

The gamblers follow the best game in town and right now that is Oil and Gold...

[Eurobabe]

5. I think it's not a bubble, it is directly related

to the shitty dollar. And speculation. After all, there's no houses to speculate on anymore, so let's JACK oil!

:sarcasm:

[DFW]

6. Be thankful if all you're paying is $3 a gallon

Here in Central Europe, it's somewhere between $7 and $8.

[BB1]

7. over 6.50 in holland

[DFW]

10. Some Germans drive over the border to gas up

For me, it's over an hour's drive to the border at insane (from my American piont of view)
speed, and then the same back. I don't drive much anyway--usually fly or take the train, so
I pay the local tariff. Ongraag, natuurlijk, but it's not worth my blowing an afternoon to save $15
per tank.

[Delphinus]

8. No one is bringing Peak Oil into the mix.

I know it's not talked about in mainstream public a lot, and certainly not in congress other than through Roscoe Bartlett, but this might be playing into the price.

[depakid]

9. What a laughable article

Hardly deserves a comment other than it's a good example of why the Post has lost the credibility it may have had in years gone past.

[Acadia Blue]

12. Consider that they did all this on purpose to make it rise! So we the

consumers could pay and pay and pay while these bloated ticks on the backs on honest working citizens can get fatter.

[Tesha]

14. The converse question: how low can the dollar go?

Answer that and you'll know more about how high the
price of oil can go when denominated in dollars.

Tesha

[truthisfreedom]

15. How high can they go? How high is the sky? Oil will be $500/bbl soon.

If prices more than multiply by 4 in less than 5 years, imagine what can happen during the next 10.

http://www.ioga.com/Special/crudeoil_Hist.htm

[pfitz59]

16. Went up $,10 overnight!

Expecting worse..