Interesting Read - $500 oil?
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Kestas
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He's an investment banker with a client base in the oil industry. Of course he wants people to believe the price of oil will go up. He probably has a lot of investments in the energy sector and missed out on the last runup in speculation, or forgot to sell on time.
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Well, then again, today's $100 is fixed at our contemporary index of worth. When our US$ is devaluated/diluted to 20% of today's value ..what would you expect other "true values" to rise to??
That is, it may be a play on words. It may cost exactly the same as today and still be $500/bbl.
That is, it may be a play on words. It may cost exactly the same as today and still be $500/bbl.
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I guess you could reason it a "resource sharing" project/program ..but done with a redistribution of poverty ..sorta.
"Hey, I can't just give you the stuff, but you're right, we have hogged it for a good while. How about this? You let me and my pals prosper enough ..you know, for our own good, and I'll hand you a population with so much debt they can't afford the stuff anymore. You can hold all the IOU'S. Then you can compete. You can keep the currency if it's convenient.".
"Hey, I can't just give you the stuff, but you're right, we have hogged it for a good while. How about this? You let me and my pals prosper enough ..you know, for our own good, and I'll hand you a population with so much debt they can't afford the stuff anymore. You can hold all the IOU'S. Then you can compete. You can keep the currency if it's convenient.".
I think the main point in the article if you know how to "read between the lines", so to speak. Is this - the price will always trend up, you will see some dips to the downside from time to time but that is just the precursor for the next spike.
There is no mention of a specific time frame, but I can tell his inferrence is that it will be a few years away.
There is no mention of a specific time frame, but I can tell his inferrence is that it will be a few years away.
I think the author needs a serious reality check. Why would anybody pay $500/barrel of oil when they can switch over to equivalent alternatives. Oil Sands, coal gasification, oil shale all become profitable around 60-$80/barrel. Electric cars are real, we can covert and power with nuclear and wind. Then there is the natural gas option. There is still too much fuel in the energy tank to talk about $500 oil. There is no reason a developing economy needs to go the way of oil and they are the ones that are truly driving this price spike.
Are you actually implying that the market works??
Would you continue to drive if it cost you $500 to fill up your car? Thats what I call market forces.
Well, my original response seems to have evaporated, so I will truncate it into a new one.
That was an attempt at sarcasm.
That was an attempt at sarcasm.
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Quote:
Why would anybody pay $500/barrel of oil when they can switch over to equivalent alternatives.
If inflation merely keeps those other modalities of producing liquid energy just as expensive as they are now (relatively speaking).
Why would anybody pay $500/barrel of oil when they can switch over to equivalent alternatives.
If inflation merely keeps those other modalities of producing liquid energy just as expensive as they are now (relatively speaking).
A devaluation of the dollar to that magnitude is even farther out there than $500 oil. I dont think that is what the author had in mind either.
Originally Posted By: Tempest
That was an attempt at sarcasm.
Normally when you are being sarcastic you dont laugh at your own joke ==>
That was an attempt at sarcasm.
Normally when you are being sarcastic you dont laugh at your own joke ==>
Originally Posted By: Duffman77
Originally Posted By: Tempest
That was an attempt at sarcasm.
Normally when you are being sarcastic you dont laugh at your own joke ==>
Sorry for the reverse psychology.
Originally Posted By: Tempest
That was an attempt at sarcasm.
Normally when you are being sarcastic you dont laugh at your own joke ==>
Sorry for the reverse psychology.
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Originally Posted By: Duffman77
A devaluation of the dollar to that magnitude is even farther out there than $500 oil. I dont think that is what the author had in mind either.
We consume (what is it?) 25% of the current production with (what is it?) 5% of the global population and the stuff is traded in (mostly) in our currency?
It may not have been what the author had in mind, but he should surely have figured it into the mix if he knows what he's talking about.
There is no supply problem at this price. To paraphrase Al, there's no shortage of $3.50 gasoline. There's a shortage of $2 gasoline. No lines (except in Nashville for some reason) ..nada. The price fluctuations are currency related. I expect them to continue and deepen.
A devaluation of the dollar to that magnitude is even farther out there than $500 oil. I dont think that is what the author had in mind either.
We consume (what is it?) 25% of the current production with (what is it?) 5% of the global population and the stuff is traded in (mostly) in our currency?
It may not have been what the author had in mind, but he should surely have figured it into the mix if he knows what he's talking about.
There is no supply problem at this price. To paraphrase Al, there's no shortage of $3.50 gasoline. There's a shortage of $2 gasoline. No lines (except in Nashville for some reason) ..nada. The price fluctuations are currency related. I expect them to continue and deepen.
All energy has a price. At anything over 4 dollars per gallon, oil becomes more expensive than the alternatives. Even solar can compete at those prices!
500 dollars per 42 gallon barrel is 11 bucks a gallon. Or put another way, $11 per 130K BTU. Or ONE DOLLAR for each 11K BTU. Or roughly 50 cents per KWH. A clearly ABSURD number.
500 dollars per 42 gallon barrel is 11 bucks a gallon. Or put another way, $11 per 130K BTU. Or ONE DOLLAR for each 11K BTU. Or roughly 50 cents per KWH. A clearly ABSURD number.
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I still don't see a ceiling if the US$ is tanked to toilet paper. Even the internal economy will wrap around the cost of imported energy. Sure, alternatives will be automatically subsidized with toilet paper, but if there's not enough capability to produce that mass of energy ..what's it matter
We do use about 25% of the worlds oil. We also generate about 25% of the worlds GDP...
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