Here's a headline for those of you too young to remember the Carter years - "OPEC Concerned Over Falling Oil Prices".
Ministers of the Organisation of the Petroleum Exporting Countries arriving in Vienna on Sunday have indicated concern that oil prices may fall. Though the eleven-nation group is unlikely to officially reduce its production quota when it meets on Monday, the change in ministers’ tone could be a harbinger of things to come.“Inventories are very comfortable, prices are coming down and nobody is concerned about a shortage of supply,” Ali Naimi, Saudi Arabia’s oil minister and Opec’s most powerful member, said as he arrived in Vienna.
At previous meetings Opec members, including Saudi Arabia, have voiced discomfort about oil prices being too high, threatening global economic growth. But there was little the group could do because its members were largely already producing at full capacity while high prices were prompted mainly by worries about sudden interruptions in supply caused by hurricanes or geopolitical tensions.
Now ministers no longer think oil prices, at around $67 a barrel, are too high. Instead they are concerned that the recent $10 drop in prices could be a sign that the market is at the beginning of a larger correction, one that could eventually impinge on oil producers’ revenues.
In the US, for example, sport utility vehicle sales fell 14 per cent in August, while sales of compact cars were up 18 per cent. Opec expects oil consumption in North America to increase by only 90,000 b/d in 2006, compared to the 230,000 b/d jump it experienced in 2005 and 520,000 b/d in 2004.
Price, supply, consumer demand - all connected somehow. (How can that be?*)
And no - despite everything you heard in the mainstream media and associated punditry - oil prices did not reach "all time" highs this summer. Adjusted for inflation, the top price for a barrel of crude this summer still fell well short of those recorded in 1979.;
Adjusted for inflation in June 2006 dollars this $38 peak is the equivalent of paying $100.52 today. This number is constantly changing as we adjust for inflation at the current moment.In other words, Oil would have to average $100.52 for the entire month to be as high as the price we saw in December of 1979. But we are "only" paying about 2/3rds that amount.
So how long do you think it will take before someone thinks that this is a nasty, evil problem brought about by 'big oil'?
Any day now the David Suzuki types are going to switch gears and start going on about how this (low prices)will stimulate more use of oil further endangering the environment, glogal warming, and the spotted owl etc. And they will hit the oil companies with their favorite slag that it is all about corporate greed and bigger profits. Just like when prices were high and they were supposedly gouging.
Is anyone else getting tired of all these self cancelling arguments the left keeps coming up with?
I continue to hope for the day when OPEC's handwringing has absolutely zero effect on our domestic oil prices because we stock our own reserves and DO NOT NEED THEIR OIL.
The world would be a different place, wouldn't it?
Also consider that a 1979 fully loaded Chev/Ford/Dodge pickup sold for about 10,000.00 dollars back then.
Same truck today retails for 45,000.00 to 60,000.00 dollars.
Gas mileage about the same.Purchase price 4 to 5 times higher.
There is never any shortage of folks lining up to buy them today.
I always get a chuckle out of people who complain about the cost of fuel while dragging a 36 foot 5th wheel holiday trailer from one end of the continent to the other behind the biggest V-8 gas pot they could scounge from their local dealer.
Kate is like, correction, IS an auditor of MSM's poor, very poor workmanship. A HOAX BUSTER !! With the help of the Internet, a growth industry.
Yes I remember the Carter years well. I also remember $10 oil. $14 to fill my tank. We will see it again, adjusted for constant dollars, of couse. The only way you can compare throughout the years.
Crude was priced beyond it's value this summer by market manipulators sitting on large reserves and stirring up market panick with fraudulent peak oil hysteria...it didn't work...these guys are now keeping a low profile and prices are falling in the wake of the US administration launching a house investigation into price fixing and market manipulation in the supply side refining capacity scandal.
Look for prices to rationalize near proper market value as supply side manipulators lose their grip on the commodity.
As for Canada, there is NO reason for our price increases save raw unchecked greed...our supply side was never effected like the US...why did we experience penny for penny their increases when we had adequate crude supply and spare refining capacity???
OPEC is a cartel. Do you know what a cartel is?
a. J.R. Ewing's drinking club
b. A personal communications device that, when placed in the hand of minivan-driving female, causes more accidents than drinking and driving.
c. "A group of producers who enter a collusive agreement to restrict output in order to raise prices and profits."
PS: The greatest obscenity in Canadian economics is having to pay over a dollar a liter in Alberta for gasoline produced there from Alberta's ample top grade crude......the petroleum price fixing in this nation still bears the scars of Trudeau's "world price" legislating when he became the CEO of a government-owned oil retail company.
OPEC controls nothing Bob.
Hasnt for quite a few years now.
Guess which finger the invisible hand is holding up!
Bloomberg did a report of sorts on Peal Oil a couple of weaks ago. Those that said they felt we where at peak oil tended to be those that could profit from the worry it may be true. IE. A Large Hedge fund was started to take long positions in oil service and exploration stocks. The other main proponent was T Boone Pickens. The guy made out like a Bandit in 1979 Oil shock. Small producer who's Mesa Petroleum Stock went through the roof.
Those who felt we weren't there among others is Exxon. Who believes there is 4 Trillion barrels of Oil. The Boone Pickens of the world believe there is 2.5 Trillion barrels left. Thats proven and probable a number that has very strict reporting criteria.
Personally I'm with the 4 Trillion barrel crowd for reasons of having researched the number.
OOps forgot the most important part to date we have consumed about 1 Trillion barrels.
"A group of producers who enter a collusive agreement to restrict output"
sounds like the Canadian Health Care system.
funny thing about "adjusted for inflation" prices. About this time last there were economists touting $83-$85 as the equivalent to 1979 prices. Hmmm, anyone else see the flaw?
I think a better measure is how people are reacting in the local markets. We're selling more cars & less trucks in a rural community PLUS people are staying home & shopping locally because it's cheaper to stay home and pay a little more in the store. All of these things eventually have an effect - hence the price of oil is dropping. Just wait; we'll be waxing eloquent about the good ol' days and Ralph bucks by the end of 2007.
Good one, Fred.
Premium gasoline -- still cheaper than bottled water!
Who is to blame for so called(CBC term) PEAK OIL ?? The Environmental Activists, of course. Not the real environmentalists, like Patrick Moore of Greenspirit.com, but the activists.
The sky is falling, the sky is falling. The world is running out of oil. Can't use what we do have left cause the sky will fall. Man is burning up the earth. If you don't believe me ask Al the loser Gore.
The oil price graph looks exactually like the Nasdaq of 2000 fame. A mountain. A bubble. Any bets the ones caught in the price crash will be the loney activists ? Swallowed the Peak Oil Hoax, wind power scams, acres of solar panels, plant acres of biodiesel even though there is a net energy loss. You would think they would be full !! And quess what ?? Now I bet the Losers will ask for govmint help, and United Nations controls on our lives. Pathetic.
WL said,
"As for Canada, there is NO reason for our price increases save raw unchecked greed...our supply side was never effected like the US...why did we experience penny for penny their increases when we had adequate crude supply and spare refining capacity???"
Why would an oil company sell a product cheaper in Canada when the US will pay more for it? We are in a global economy. If a company says they will sell oil/gas in Alberta for half price, why would companies in the US not just phone them up and say, "I'll take everything you have".
Supply and Demand is what economics is all about. When supply is low demand is high and the price trend will follow the demand trend.
Maybe we should vote the liberals back in and they can pass legislation to control these things. We won't have to pay as much for gas but we wont have jobs so it will even out.
TD
Why doesnt GM sell cars in Canada at half price?
We have ample steel,plastic and raw material.
Must be some of that unchecked greed at play.
I heard somewhere that Alberta has threatened to separate from Canada if they are forced to sell their oil to the rest of Canada for less than the world market.
Please someone correct me or confirm this.
Check the history of the hated NEP back in the early '80s. Basically the same thing. Ottawa made Canadian oil prices less than the world market. Net result was an exodus of oil production and exploration resources to areas of the world that would make it worth their while. The economy of Alberta tanked thanks to those eastern bastards not freezing due to Alberta oil. Oh, and BTW, the east coast was buying up Saudi oil at world prices while Ottawa was giving the west the shaft.
A lot of people forget that it is called oil exploration for a reason. There is no guarrantee that every well will produce or even be viable.
actually ud513, the figures I have are around 2000 bucks of certain gm models goes into paying for pension benefits.
2 grand of the selling price right into the pockets of retired gm workers sitting high on the hog.
*********************
and even if we do have 2.5 trillion or 4 trillion barrels, there isnt any more being generated in the ground. looks like the right wingers are spot on eh? dont give a tinkers hoot about the 7th generation descendants. when the population will be even bigger, eh?
gulp gulp gulp go the gas guzzlers.
please...within 50 years, technology will have solved the majority of issues related to energy, global warming, etc....nuclear power to harness the oil sands....that is the short term answer
oh ya right kingston. 50 years ago they were predicting utopia with single person helicopters filling the skies.
thats all we need, DWI in 3 dimensions.
there is nothing in the labs right now to support your claim. the only thing remotely like it is cold fussiona dn there isnt any research on that.
"please...within 50 years, technology will have solved the majority of issues related to energy, global warming, etc...."
I agree,
To quote a friend of mine, "The stone age didn't end for a lack of stones."
trev