Oil goes above 52 dollars a barrel... how will this affect us and when ..

[southernleftylady]

will people WAKE UP about this????
http://news.yahoo.com/news?tmpl=story&u=/ap/20050302/ap_on_bi_ge/oil_prices_38
SINGAPORE - Crude oil futures prices rose above $52 a barrel Wednesday morning after the U.S. government reported that supplies of oil and gasoline grew last week, while inventories of heating oil and other distillate fuels shrank.

[SpiralHawk]

1. "Mission Accomplished" - George W. Bush and Republican Party

"Unless your family owns an oil or pharmaceutical company, there is no reason they should support the Republican party."
-Andy Nonomous

[still_one]

2. my natural gas and oil stocks will go up

[mmonk]

26. Alot of oil company stocks

continue to go up but they are reporting losses. Just a reminder that after awhile, the numbers that matter come into play (remember the dot coms?). Sold my profit in Chevron-Texaco today. I tend to sell at all time highs.

[still_one]

36. upl, ixc, bp, of course it depends when you bought it

unfortunately I believe oil will get to at least 60 dollars a barrel this year

If Clinton was president they would be screaming how he has no energy plan

The silence is deafening under *

In addition, why don't the Democrats take the lead for an energy plan, why be on the defensive all the time?

[mmonk]

37. wish I knew

[still_one]

39. nobody really knows

but one thing is for certain this country is very quickly turning into the haves and the have nots

An aristocricy is forming before our very eyes, it makes me sick

[Norquist Nemesis]

3. When they get their morning coffee at the pump?

Because gas prices are already on the rise. Station owners are trying to maximize their profits now before their prices go through the roof and they have to, once again, pass that along to the consumer.

[ryan_cats]

4. Hey, this is great

I for one am proud our republican overlords are making good money on oil. I'm sure it'll trickle down to us? Right, right?????

I love how they tend to take out energy costs when talking about inflation.

[madinmaryland]

5. Does this mean $3.00 a gallon at the pump this summer?

Until we can get a national conservation policy to wean ourselves from the petroleum addiction, we will continue to stifle our economy. Unfortunately that will never happen with this admin.

[Webster Green]

6. Prices will rise steadily for the next month, at least....

Perhaps we'll see $3.00 per gallon averages this time.

[TheFarseer]

7. People should take to the streets demanding alternative fuels

n/t

[EVDebs]

8. Well, there goes Wal Mart ! BTW, for every $1 jump in price per barrel

of oil, the economists estimate that our GDP drops by an equivalent of $6 billion dollars, assuming the price increase is sustained.

So, if oil started out at $35/barrel awhile back, and if the $50/barrel is sustained ... that $15 x $6 billion is acting like a 'tax' of about $90 to $100 billion dollars, whose value also is falling like a rock yet those same dollars are what oil is paid for with...

Something has therefore 'got to give'.

[davekriss]

14. Actually that looks refreshing...

$100 billion is 0.1% of a $10 trillion economy. So by these metrics the rise in oil prices appear to have insignificant impact. My understanding, though, is it has tremendous "multiplier" impact; that $15 per barrel rise is a major drag on economic growth.

[EVDebs]

31. Correct. I'm now hearing $75/bbl is possible...but Saudis $25

per bbl was supposed to be their target price not too long ago. That tripling is uncannily identical to the '74-79 quadrupling. We got thru all that by conserving our way out...up till the '83 price drop which hit Mexico very hard. I remember that well along with the lines, even/odd, etc.

Check Fareed Zakaria's Newsweek article too !

[tolseq]

9. end of suburbia?

if gas hits 3.00 a gallon, interest rates rise to calm the international money markets, what happens to suburbia?

peace

[Roland99]

10. Let it keep going up...wake up the consumer maybe

It's up to us. It's a market-driven economy. Speak with our actions.

If you can, take public transportation.
If you can, carpool.
Trade in that gas-guzzling V8 for a manual transmission 4-cyl.
Run several errands on one trip.
Etc.

[megatherium]

16. if you try to be frugal with your oil consumption

you'll help keep gas prices down, which will allow the guy with the big SUV to keep driving it.

[Roland99]

17. But if more people did as I suggest, it would hit the oil companies harder

I, for one, will not shed a tear if the oil companies go the way of the whip and buggy companies. It's not my fault they are not hedging for the future by actively seeking alternative sources of fuel to bring to market.

[raccoon]

11. Remember when oil was so high in the '70s

inflation rates jumped up too. The oil prices had a ripple effect through the whole economy.

Good luck on getting raises to try to keep up with inflation in today's job market.

[southernleftylady]

12. I was born in 77

;-)

[Roland99]

13. Gas is still pretty cheap, even given inflation...

[robertpaulsen]

18. 2005 is the last year for cheap gas.

Peak Oil: Current Situation & 2005 Projections
by Dale Allen Pfeiffer

This past year we have seen how volatile the oil market has become as the world approaches peak oil production. But the recent softening of oil prices demonstrates that we have not yet peaked. What we are experiencing right now is a tight oil market. Production can still increase, but not by much and only with difficulty. The good news is that we are producing more oil than ever before. The bad news is that production is barely keeping up with consumption, and the decline is still ahead of us.

In this tight situation, anything which disrupts oil production around the globe has an effect on prices. This year oil prices were driven up by the triple whammy of the Iraq invasion, civil unrest leading to production disruption in Nigeria, and hurricanes in the Gulf. Production could not increase enough to cover all of those shortages. But now the hurricane season is long over, and Nigeria is back in business. Barring further disruptions - such as the horror of a 9.0 earthquake in the Indian Ocean - prices should remain soft for the short term.

2005 Energy Picture

In fact, oil prices might drop back below $20/barrel before 2005 is over - depending on circumstances. Several new large fields should come online this year, adding extra capacity. These are the last of the 500 million barrel mega fields, since none has been discovered in the past few years. Eighteen new mega projects are due to start producing this year, followed by eleven more is 2006. However, 2007 will see the opening of only three new projects, followed by three more in 2008. This will not keep up with declining production in older fields, much less the increase in demand.

ODAC has announced that world production is now seeing a 1 million barrel/day depletion rate. It remains to be seen whether the new production slated to come online this year and next will be sufficient to make up for that depletion rate. And should Ghawar collapse within the next year or two, the loss of production from this one field might cancel out all gains from new fields.

more...

http://www.energybulletin.net/3792.html

[Roland99]

19. Well, it's not about the oil...it's about our refining capacity

When was the last refinery built in the US? 1970s?

[robertpaulsen]

22. It's about both actually.

You're right. We haven't built a new refinery since 1976. But we haven't exactly been searching for oil at the pace we used to either.

This article should illustrate that point:

FACT ONE - If the actions - rather than the words - of the oil business' major players provide the best gauge of how they see the future, then ponder the following. Crude oil prices have doubled since 2001, but oil companies have increased their budgets for exploring new oil fields by only a small fraction. Likewise, U.S. refineries are working close to capacity, yet no new refinery has been constructed since 1976. And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built.

- Mark Williams, Technology Review, February 2005

LONDON -- Major oil companies are replacing dwindling reserves by acquiring other oil companies instead of exploring for new fields, a strategic shift with implications for global oil supplies, investment bank Credit Suisse First Boston said in a report Monday.

Integrated oil companies are spending only 12% of their total capital expenditures on finding new oil fields, down from nearly a third in 1990, the report said. Integrated oil companies like U.S. super-major ExxonMobil Corp (XOM) have upstream oil exploration and pumping and downstream refining and marketing operations.

In addition, with the world's biggest oil companies convinced exploration is too costly and risky, the steady growth of the world's total oil reserves has fallen sharply, the bank said. Global oil reserves are being replaced at a rate of 1.2% a year in the last three years, compared to 2.3% over the last 20 years, even as oil demand growth is hitting new records with China and India becoming industrial powers, the bank said.

-- Dow Jones Newswire, January 17, 2005

FACT TWO - Let's forget about economic growth, how about just offsetting declines. If Mr. Raymond's curve reflects reality we would still have to find about 30 Gb/yr. How are we doing?

From http://www.ems.org/rls/2004/01/28/oil_supply_short.html we find the following:

The rate of major new oil field discoveries has fallen dramatically in recent years. There were 13 discoveries of over 500 million barrels in 2000, six in 2001 and just two in 2002, according to the industry analysts IHS Energy. For 2003, not a single new discovery over 500 million barrels has been reported. Key findings of a recent Petroleum Review report are:

Between 2003 and early 2007 some 8 million barrels/day of new capacity is expected to come on stream.

In 2005, 18 projects with a potential peak capacity of 3 million barrels a day are due to come on stream, slowing in 2006 with 11 new projects followed by 3 in 2007, and 3 in 2008 adding a cumulative 4 million barrels/day of potential new capacity at their peak.

It appears likely that from 2007, the volumes of new production will fall short of the need to replace lost capacity from depleting older fields.
Further confirming this trend, recent E&D results strongly support the expectation of a near term peak in oil production. The net present value of all discoveries for the 5 oil majors during 2001/2/3 was less than their exploration costs.

-- Murray Duffin, Energy Pulse, November 17, 2004

(These calculations were confirmed by the Oil Depletion Analysis Centre of the UK in November 2004 and by FTW's Dale Allen Pfeiffer's independent calculations in February of 2004. There was not a single discovery of a 500 Mb field in 2003 and - as far as we know (as of this writing) the same holds true for 2004. The world is currently consuming a billion barrels of oil every eleven and one half days.)

Fact Three -- Look at this imbalance: The average American consumes 25 barrels of oil a year. In China, the average is about 1.3 barrels per year; in India, less than one…

The challenge is huge. For China and India to reach just one-quarter of the level of US oil consumption, world output would have to rise by 44 percent. To get to half the US level, world production would need to nearly double. That's impossible. The world's oil reserves are finite. And the view is spreading that global oil output will soon peak.

-- The Christian Science Monitor, January 20, 2005

These three facts alone dictate a global mêlée over oil and that is in fact what is happening.

more...

http://www.fromthewilderness.com/free/ww3/012505_ftw_maps.shtml

[Roland99]

28. Thanks....but one thing

China has, what, 4 times the population we have? And, according to the CIA factbook, they're already past 1/3 of our electricity usage.

With their much greater population, a small increase in bpd/person results in more oil consumption than the same increase here.

[robertpaulsen]

29. Very good point, very scary point too.

Scary, because with Dimson in charge here, we may be headed for a pretty serious confrontation in the future:

Neo-Con Agenda: Iran, China, Russia, Latin America ...
By Jim Lobe
Inter-Press Service

Friday 05 November 2004

Washington - An influential foreign-policy neo-conservative with longstanding ties to top hawks in the administration of President George W Bush has laid out what he calls "a checklist of the work the world will demand of this president and his subordinates in a second term."

The list, which begins with the destruction of Fallujah in Iraq and ends with the development of "appropriate strategies" for dealing with threats posed by China, Russia and "the emergence of a number of aggressively anti-American regimes in Latin America," also calls for "regime change" in Iran and North Korea.

The list's author, Frank Gaffney, the founder and president of the Center for Security Policy (CSP), also warns that Bush should resist any pressure arising from the anticipated demise of Palestinian leader Yasser Arafat to resume peace talks that could result in Israel's giving up "defensible boundaries."

While all seven steps listed by Gaffney in an article published Friday morning in the 'National Review Online' have long been favored by prominent neo-cons, the article itself, 'Worldwide Value', is the first comprehensive compilation to emerge since Bush's re-election Tuesday.

http://www.truthout.org/docs_04/110804E.shtml

China's response has been to strenghten ties with Russia, and grab oil wherever they can:

Russia and China to Hold Joint Maneuvers
By Vladimir Isachenkov
The Associated Press

Tuesday 27 December 2004

Moscow - Once-bitter rivals Russia and China will hold a massive joint military exercise on Chinese territory next year involving submarines and possibly strategic bombers, Russia's defense minister said Monday as the two nations move to bolster already burgeoning military ties.

http://www.truthout.org/docs_04/122904I.shtml

Venezuela and China sign oil deal

China has become one of the world's major oil importers
Venezuelan president Hugo Chavez has offered China wide-ranging access to the country's oil reserves.
The offer, made as part of a trade deal between the two countries, will allow China to operate oil fields in Venezuela and invest in new refineries.

Venezuela has also offered to supply 120,000 barrels of fuel oil a month to China.

Venezuela - the world's fifth largest oil exporter - sells about 60% of its output to the United States.

Mr Chavez's administration, which has a strained relationship with the US, is trying to diversify sales to reduce its dependence on its largest export market.

http://news.bbc.co.uk/2/hi/business/4123465.stm

Associated Press
Cuba, China Sign Oil Production Contract
Monday January 31, 11:39 am ET
Cuba Signs Production Contract With China's SINOPEC to Work on Island's Oil Deposits


HAVANA (AP) -- Cuba signed a production contract with China Petroleum & Chemical Corp., or SINOPEC, to work in areas around the island believed to contain oil deposits, the government announced Monday.

http://biz.yahoo.com/ap/050131/cuba_china_oil_1.html


Also, I read somewhere China's oil consumption will double by 2020. I'm still looking for the source on that. All in all, this spells TROUBLE.

[Roland99]

32. Wanna join me in volunteering for the Japanese manned moon base?

:)

[robertpaulsen]

35. Sure! Unless the Rethuglicans militarize outer space like they want to.

Here's that article on China doubling their energy demand that I was looking for:

Energy Demand Set to Double by 2020

China's energy demand is likely to more than double in two decades from the current level with the nation's industrialization and urbanization drive, according to a research center at the National Development and Reform Commission.

Demand is expected to rise to 2.4-3.2 billion tons of standard coal by 2020 from 1.4 billion tons last year, according a report by the Energy Research Center.

snip

The report said that oil demand is expected to rise to 450 million tons of oil equivalent by 2020 in all three scenarios.

China now imports one-third of its oil consumption; and if the prediction is realized, it needs to import more than half of its oil consumption by 2020.

http://www.china.org.cn/english/BAT/80343.htm

:scared:

[LunaC]

34. China uses 7x more oil than we do.

So said a talking head on CNBC today. All the new development they're doing sucks it up at an alarming rate..

[hatrack]

38. I think that talking head (whoever it is) is full of it

US daily consumption is just a tad under 20 million barrels per day. There's absolutely no way that China is currently using 7 times more than the world's biggest oil market.

Could they have meant China's oil demand is growing 7x faster?

[Jimbo S]

23. Brought down the Carter Administration

I was born in 1966. The thing I remember about the late 70's is rampant inflation and high unemployment. The inflation caused by rising oil prices. That couple with the Iran situation brought down Carter and led to the rise of Reagan, something I feel the Democatic Party has yet to fully recover from.

I look at the bright side and see that the current situation could be the beginning of the end of the modern Republican Party.

[newportdadde]

15. Here comes the pain.

Gas is 1.89 here in KC about at where it was in its peak last year right before Memorial Day... we have a long way to go still. This is going to be painful.

[ohio_liberal]

33. I just bought gas

about a half hour ago. It's already at 1.93/gallon. If I remember correctly the highest I saw gas prices was 1.99/gallon last year.

[hatrack]

20. Pemex announced today their biggest field (60% of production) has peaked

March 1 (Bloomberg) -- "Petroleos Mexicanos, Mexico's state oil monopoly, said it expects production at its largest oil field to decline this year, earlier than previously forecast, and plans to boost investment by more than $1 billion from 2004 to make up for the shortfall at other fields.

Cantarell, which accounted for more than 60 percent of oil production last year, will produce an estimated 2.02 million barrels of oil in 2005, down from 2.11 million barrels per day in 2004, Vinicio Suro, planning director for Pemex's production and exploration unit, said on a conference call with investors. ``That means that we're going to begin the decline of production in Cantarell by around 80,000 or 90,000 barrels of oil'' per day, Suro said.

Pemex plans to invest as much as $11.5 billion this year, up from $10.1 billion in 2004, to boost production in other fields, including exploration of deep-water deposits for the first time, to make up for the Cantarell decline. Pemex has doubled its debt in four years to $45 billion to finance annual investments of about $10 billion."

EDIT

Next stop Venezuela, I guess . . .

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=115x20477

[robertpaulsen]

24. Good find, hatrack!

Of course, China might have something to say about Venezuela being our next stop. Not that that would stop Dumbya.

[southernleftylady]

21. its 52.93 now wow... nt

[Bouncy Ball]

25. My husband is looking to trade in his

Ford F150 pickup for a Toyota Corolla. Our goal is to do it before June, when gas prices typically rise. We might just speed that up a bit now, go looking this weekend.

[southernleftylady]

27. It ended at 53.10 up by 1.42 in ONE day ... wow.. nt

[lovuian]

30. It will get even higher!!!

Hold onto your hats!!!