Elena predicts 5 dollar per-gallon gas in 2011. Blames the traders.

[elehhhhna]

Not the oil companies -- the middleman traders that jacked us up last time.

I work in the periphery of oil & gas exploration and production now. I talk (listen) to a wide and deep group of people in the industry, and 'tho I'm no expert, they are! They generally all acknowledge that the trading companies jacked us last time around and they're doing it again, starting now.

[lonestarnot]

1. And he/she did it twice.

[Tunkamerica]

2. 3 times

[lonestarnot]

7. das alot.

:evilgrin:

[MadHound]

3. It's not just speculation that is pushing prices up,

The dirty little secret that is helping concerns our currency. Currently many oil exporting countries are switching off the petrodollar to a basketful of currencies to carry out their business. This makes oil more expensive for us.

[robcon]

4. Laughably stupid prediction.

n/t

[bbinacan]

6. Pray tell,

why is this a stupid prediction?

[robcon]

25. It sounds like a guy is stuck with some oil futures

..and wants to run up the price, if only briefly, to get out of his position.

The stupid ones are those who believe that the guy actually believes this.

[HuckleB]

19. Most of them are.

DU seems to love predictions, and, of course, if you make enough of them, some of them will come true, sort of, and the Internet prophets will bask in the glory of the odds, all the while pretending they haven't made dozens of other predictions that failed to come to fruition.

[bbinacan]

5. The traders are only the mechanics

behind prices. The real influences are supply/demand and currency.Prices change due to consuming entities locking in the prices for future delivery.

[howaboutme]

10. The traders are the blood suckers

that make big profits for making deals and producing nothing. Enron did it to California. Wall Street and the commodity pits does it to America. They are the destructors of our society and nation, and they provide nothing that benefits except for their self gain. They have their own little club that they limit to their own ilk and they all gather round and profit enormously. Greed plays a big part in the common denominator and ilk.

[bbinacan]

17. LOL.

I see you know nothing about the commodity markets. You need two sides. One is to lock in a finite supply at a finite price in the future. The other side is speculation. You can't have one without the other. Sheesh.

[Spider Jerusalem]

8. Blame China and India.

Or more accurately, blame peak oil (conventional crude oil production peaked four years ago).



See those two charts? Notice anything? Supply is running at close to a million barrels a day lower than demand. What does a basic understanding of economics tell you is going to happen?

[elehhhhna]

11. LNG & unconventional sources are bountiful. We'll have enough o&g.

We have enough right here on this continent.

[Spider Jerusalem]

12. The supply numbers are for all sources including unconventional.

And there's not enough even now to cover the gap in demand. There's a bit of a supply cushion because of reserve stocks, but it's not enough.

And the US at present supplies roughly 25% of its domestic demand (c. 5 million bbl/day); Canadian tar sands are both more expensive to produce and more environmentally damaging (and Canada produces less than 4 million barrels a day). Mexico's largest oilfield, Cantarell, is in decline; Mexico produces c. 3 million bbl/day. Sum conventional production for North America and the total is only about 60% of the total for US domestic demand. "Enough on this continent"? I don't really think so.

[elehhhhna]

13. um, no.

[Spider Jerusalem]

14. Um, yes.

Conventional crude production is at about 68M bbl/day; total supply is in the range of 18M bbl/day above that. It's not coming out of thin air.

[TBF]

15. They seem pretty confident about how much is under the Gulf now -

and they are determined to continue drilling there. Scuttlebutt here in Houston after the spill was higher ups remarking "we really had no idea how much was under there", along with making cracks about BP (which were probably true, but they just want BP out of the picture so they can get the contracts for themselves).

[Spider Jerusalem]

16. And it takes five years for a field to come onstream at full production...

from initial discovery and drilling. Which means that by 2016? 2017? 2020? any new Gulf oil production will likely just be offsetting declines elsewhere and not actually contributing to any production increase.

[elehhhhna]

20. true. then there's Canada.

[TBF]

22. I didn't even know about Canada -

I just hear things now and then (family members don't work directly in the industry though alot of folks down here do)...

[Speck Tater]

18. And you and all your neighbors will be converting your cars to LNG when?...

In time to make any difference?

I doubt it.

[elehhhhna]

21. you're free to be hysterical.

[howaboutme]

9. Their name is GOLDMAN SACHS

These overcompensated greedy deal making bxstards have been instigating or feeding at the trough of every financial calamity in the USA. They are in partnership with the Federal Reserve and the regulators.

We Americans need to take our country back from these thieves.

There was a time in the not distant past when investors could not speculate in commodity contracts. The futures contracts were limited to those who could take delivery. (airlines, etc) Then Goldman Sachs somehow finagled a special secretive deal through the CFTC (I believe it was during Clinton's term) where they were given a special exemption to speculate. In the mid 2000s they pumped up interest in energy futures by big institutional investors and pension funds and that drove oil to 150/bbl and pricked the housing bubble. These scum are at it again.

[Statistical]

23. Blaming traders is simplistic.

Did traders bring oil down from $147 to $35 as the economy collapsed.

The reality is the FED (with full support of Congress) has real interest rates at 0% and is using "quantitative easing". What is "quantitative easing"? Glad you asked?

1) The govt spends money it doesn't have.
2) The treasury sells debt (China, pensions, Social Security) to balance the books (deficit).
3) The Fed produces money out of thin air and buys the debt.

That step #3 dumps money into the money supply. The side effect is it keeps US debt borrowing rates low.

So what does this have to do with the price of oil? The dollar index has fallen nearly 10% in the last 6 months. On a dollar neutral basis oil would only be $81 per barrel and a gallon of gasoline would be about 10% less at the pump.

This is the side effect of QE. The rest of the world is recovery. Demand for oil in China is ramping up. Oil is traded in dollars and over time dollars are worth less (not worthless but worth less and less) thus it takes more and more dollars to buy the same amount of oil.

People should ask Obama why is the administration pursuing a weak dollar policy?

[howaboutme]

24. Fed works for banks - not Americans

I agree. The Fed is a non-publicly unaccountable organization and is taking care of the bankers while harming Americans. Ron Paul has been saying it for years. The PTB tried to make him into a weirdo but he has been absolutely correct. Even JFK wanted to reign them in. But it took the recent financial crash for the public to see just how biased that their policies are that favor and enrich the bankers while harming Americans.

The bankers colluded to create the Fed in secrecy at Jekyll Island for a reason, and it has been working in their interest ever since. Today the banks are offered virtually free money that they then use to trade or loan. It will inevitably cause inflation and more lost money as those who would have invested in fixed income (CDs or treasuries) are forced to invest in the Wall St casino or accept virtually no return.

Matt Taibbi will be writing about the Fed Audit.

http://howieinseattle.blogspot.com/2010/12/taibbi-bernie-sanders-puts-barack-obama.html

http://www.youtube.com/watch?v=acLW1vFO-2Q (1,103,922 views going to 2 million and beyond)

[customerserviceguy]

28. You're absolutely right

Quantitative easing is the opening of Pandora's box. I'm pretty sure we'll have $5-6 a gallon gasoline sooner rather than later. If it comes in the next year, my union can use the inflation figures to negotiate a decent raise in March 2012 when our contract expires. If it doesn't, they're probably going to be able to stick us with a very low or zero increase for a few years to come.

[Vogon_Glory]

26. I Wouldn't Be Surprised If It did

I wouldn't be surprised if the price for gasoline DID reach $5/gallon. I've lived through eighteen years of corporate malfeasance as political policy, starting the day after Bill Clinton was inaugurated as President (If not before). The idea that some greedy, profiteering s.o.b wouldn't use the chance to install another corporate tool in the White House while lining his or her pocket in the process is hopelessly naive, especially as the acts of the Bush Cheney regime are dragged out into the open air and Faux Noise lies on.

:argh:

:patriot:

[robcon]

27. I would be shocked beyond belief if $5 per gallon gas occurred

It's a fantasy, IMO.