[Ninong]

Oil topped $65/barrel today!

http://moneycentral.msn.com/content/...es/P125635.asp

[schrocat]

Originally Posted by Ninong

Oil topped $65/barrel today!

http://moneycentral.msn.com/content/...es/P125635.asp

Up Up Up!
Go Economy Go!

Higher costs at the pump mean more local tax revenues!
I'm sure property taxes will be lowered and I can apply it to my tripled electric bill!

[Ninong]

Crude oil hit $66/barrel today: http://moneycentral.msn.com/content/...es/P125764.asp


P.S. -- Gold topped $447/oz before closing at $444.80. That takes out all the tops going back to early December 2004. We need a NY close above $455 to break out. I'm surprised it's doing this well given the recent strength in the dollar since the ECB trashed the euro.

[Ninong]

Crude oil hits $67/barrel today!

http://moneycentral.msn.com/content/...es/P125922.asp


P.S. -- On the plus side, the AMEX index of oil stocks that was at 425 on March 21, 2003 (start of War in Iraq) is now above 1000. Assuming you own oil stocks, or course. Is it too soon for Exxon to lay the keel for the Condoleezza Rice II?

[Ninong]

Originally Posted by schrocat

Up Up Up!
Go Economy Go!

Higher costs at the pump mean more local tax revenues!
I'm sure property taxes will be lowered and I can apply it to my tripled electric bill!

That's the spirit, guys!

Take that gas-guzzling SUV you bought after 9/11 to help stimulate the economy and fill 'er up, up, up!

It's your patriotic duty!


Sign of the times:

San Francisco 8/12/05

[Poseidon]

So at what point, and milage does it become to expensive to DRIVE to WORK? I remember working 50 miles away for $23 an hour, but waht about those that drive an hour for $14? If this keeps up it will certainly be cheaper to NOT go in. Heck it may even be better to collect un employment! Not condoning that, but I am sure it will come up at some point!

[schrocat]

My gas budget has gone up 96 bucks per month over the last eight weeks. About 8 bucks a tank.

...I just can't see how these spikes won't start increasing the costs of goods and services very soon.

[Ninong]

Since you guys are so young (compared to me ), I guess I'll have to tell you what effects these spikes have had in the past.

During the Arab oil embargo (1973-'74), the trade-in value of full-size American cars was cut in half almost overnight. The value of foreign imported cars that got good gas mileage went up overnight. The U.S. auto industry finally began taking the imports (Japanese) seriously and started downsizing their cars and improving gas mileage. Oh, and the government lowered the speed limit to 55 mph!

In the 1979-'80 gas shortage and price spike, gas was "rationed" in that you could only buy it every other day and you were usually limited to 10 gallons. The value of downtown condos skyrocketed while the value of suburban homes that required a long commute plunged. One-bedroom condos in downtown San Francisco that were $129,000 jumped to $189,000 within a few months. Similar condos in downtown Oakland that were $49,000, jumped to $79,000. Those same one-bedroom condos that were $129,000 in SF back in 1980 are now $750,000 today. HOV lanes (car-pool lanes) were introduced.

Gas prices will probably peak around $3.30 - $3.75 a gallon, depending on where you live, sometime within the next couple of months unless something new happens in the Middle-East. A few years from now we may look back on $3/gal gas as the good old days.

Right now both GM and Ford are faced with huge inventories of gas-guzzling SUVs that are no longer selling like hotcakes. William Clay Ford is firing people right and left. GM has become a bank (GMAC) that gives away cars. Both of them are losing billions of dollars a year in their domestic assembly divisions. They try to make up the losses elsewhere. GMAC may even spin off it's profitable mortgage business just to generate capital. Ford's paper has been downgraded to junk status and GM's is one notch below Ford's!

If gas settles back down to a range of $2.50 - $2.95 a gallon, I don't think you will see any big changes. Once gas gets closer to $4.00 a gallon, I think you will see an impact on the value of real estate in that homes closer to work centers will go up in value and those far away will fall in value. This could even precipitate the bursting of the current real estate bubble. You will also see an intensification of the current trend of large companies moving their headquarters out of congested cities and into suburbia to be closer to where their employees actually live.

[Ninong]

Originally Posted by Ninong

President Bush signed the new Republican energy bill today. It provides billions of dollars in tax credits to the oil companies to add new refining capacity, something they haven't done in more than two decades, and to help cover their exploration expenses. This will have no near term effect on the price of oil.

Yep, oil prices are sky high and the oil companies are making money hand over fist -- more than they ever made in history -- but we have to pay them look for oil and to build new refining capacity.

Believe it or not, they allocated $52 million out of the $14.5 billion dollar energy bill to encourage the use of solar energy. Wow! Isn't that great!

I'm surprised they think we can afford that much, what with the $1.6 billion in tax credits for new coal technology, $1 billion in tax credits for gas distribution lines, $1 billion for oil and gas exploration and $400 million for oil refineries.

I'm surprised that they think we can afford to waste all of $52 million in tax credits to push this hippy solar energy stuff. All we need to do is pay the good ole boys in Houston to find more oil and build more refineries and our problems will be solved. Besides, Team Rapture isn't really convinced that we need to worry about anything too far in the future anyway.

http://moneycentral.msn.com/content/...=126521#Rating

[Ninong]

CRUDE OIL HIT $68/BARREL TODAY!

http://moneycentral.msn.com/content/...es/P127454.asp

[Poseidon]

According to GM's state of the business meeting, they expect OIL to top out at $71 a barrel. And what is GM's plan to help the consumer you ask? How about REDUCING MPG on it's brand new Malibu? The old model was 32 mpg highway, the new one? 28! YAY for big business!!!!

Hey Ninong, back 10 years ago or so didn't President Clinton release some "reserve oil" so that the price per gallon would come down? I think I remember Washington getting involved somehow last time Gas was so high.

Also I heard a stat that Mobil Oil made 21 BILLION last year, this year they are projecting to make 31 BILLION! Doesn't that sound a little extreme to come on the backs of the blue collar guys? I mean COME ON!!! SOmething really needs to be done!

[schrocat]

Clinton released 30 million barrels.
That's less than 2 days worth and might have been largely symbolic...I don't remember if it helped really.

I think our total reserves would last less than 60 days...but that could be urban legend.

[Ninong]

"SPR" is the Strategic Petroleum Reserve--petroleum stocks maintained by the Federal Government for use during periods of major supply interruption.


Here is the historical chart from 1977-2004: http://www.eia.doe.gov/emeu/aer/txt/ptb0517.html

It seems Clinton released some 26 million barrels in 1996 and another 33 million barrels in 2000 to increase heating oil stocks.

Bush took office in 2001. Note the additions of 36 million barrels in 2002, 23 million barrels in 2003 and 34 million barrels in 2004. It seems there was a release of 5 million barrels in an exchange in 2004.

[Ninong]

Originally Posted by Poseidon

Also I heard a stat that Mobil Oil made 21 BILLION last year, this year they are projecting to make 31 BILLION!

Mobil Oil merged with Exxon a few years back to become Exxon-Mobil (XOM) -- previously it was XON.

Their net profit for the past 12 months was $29.6 billion. http://moneycentral.msn.com/investor...asp?Symbol=XOM

Doesn't that sound a little extreme to come on the backs of the blue collar guys? I mean COME ON!!! SOmething really needs to be done!

Not exactly. Their net profit margin is a little over 10%. That doesn't sound extreme to me. Oil is a commodity and it's price is influenced by supply and demand. Right now the price is rising for a variety of reasons but especially because of the risk factor built in by the lack of stability in the Middle East. That alone probably adds about $15/barrel to the price.

I think GM is correct, if they are talking about short-term prices, that oil is about to top out somewhere around $70 before dropping back to a range of between $55-$60/barrel. But it's long-term trend is up. Even assuming no extraordinary interruptions in the supply caused by a worsening of the situation in the Middle East, I think we will see $75/barrel oil by some time next summer and $100/barrel oil some time in the next three to five years.

Whether Venezuela cuts us off or not really doesn't matter as long as they keep producing the same amount and adding it to the worldwide production. Saudi Arabia keeps promising to increase production but I am beginning to doubt that they can do what they say they can do. I think their main fields have peaked and the remaining reserves are of lesser quality and will cost a lot more to tap.

Everything could change overnight if the political situation should explode in the Middle East or if some other unforeseen event should disrupt worldwide supply. In that case, you could see an increase of $20/barrel within days. It's a very speculative market and it reacts quickly to bad news.

As far as General Motors is concerned, they are supposedly in the process of redoing their entire product line but I'm not sure they can do it fast enough. They are saddled with fixed obligations that make them uncompetitive with the Japanese. Both GM and Ford are in a bad way right now. They have never really built the cars that the public wanted, like the Japanese do. They always built the cars that they wanted to build that they thought the public would see as a good value.

Car buying is a lot more emotional that GM or Ford ever want to acknowledge. People don't always choose the best value. They will spend more to feed their ego and enhance their image. BMW would never sell as well as they do if they tried to offer "a good value" instead of a state of the art technological masterpiece. Whether BMW can overcome their styling department's latest offerings is another matter. They say they're ahead of the curve and the public will come to accept the new body lines. Fortunately there are enough people willing to buy a BMW for what's under the hood and the way it handles regardless of the body styling on the exterior.

The American big three automakers have always had a strained relationship with their employees and an attitude toward their customers that they knew what was best for them.

[Poseidon]

I see what you mean about 10% margin, that is not very much, BUT almost 30 BILLION in profits? Would it really hurt to make 20 BILLION instead? What about the Iraqi oil? Is that still languishing in the desert? I know that no one wants to admit it, but we have sacrificed 1800+ souls there for the "good of the Iraqi people" but what about the oil? We are forced to rely on it, as the current US regime, (yes I said it.) is unwilling and certainly unable to look for alternative sources. With our national talent, and our production capabilities I'll bet we could have Hydrogen fuel cell powered cars/trucks in less then 10 years. HOWEVER our current regime would lose quite a bit of money if that ever happened!

[Ninong]

Originally Posted by Poseidon

I see what you mean about 10% margin, that is not very much, BUT almost 30 BILLION in profits? Would it really hurt to make 20 BILLION instead?

All public companies have a duty to their shareholders (owners) to maximize value. Would you want to invest your money in a company that wasn't doing it's best to increase profits?

What about the Iraqi oil? Is that still languishing in the desert?

The insurgents are blowing up the pipelines almost daily. Production is still not back up to where it was before we invaded. But not to worry, Paul Wolfowitz assured us that the revenue from Iraqi oil would pay for the reconstruction of Iraq after we took out Saddam Hussein. He said this whole invasion and reconstruction won't cost us anywhere near the outrageous estimates of $50-$100 billion that were being tossed around prior to the war. I believe we are well past $200 billion right now and current estimates are that we will spend more than $750 billion in Iraq before we're done.

I know that no one wants to admit it, but we have sacrificed 1800+ souls there for the "good of the Iraqi people" but what about the oil?

We did NOT invade Iraq for their oil. Only liberal Democrats who hate our freedom and hate our troops would say such a thing!

We invaded Iraq because Saddam Hussein refused to disarm of his weapons of mass destruction and because he posed an immediate threat to the security of the United States of America. That's why! Don't you remember Condoleezza Rice warning us about mushroom clouds if we waited any longer? Didn't you get the memo?

It was only after we learned that there are no weapons of mass destruction in Iraq that the reason was changed to bringing democracy to the region. Any day now the noble Iraqi people will have a new democratic constitution. Just as soon as they make up their minds about a few remaining details. Such as whether they want to be one country or not. Whether women should be allowed in public without a full burqa. Whether the Shiite clerics will have veto power over the legislature. This democracy stuff is hard work and they're working hard because it's hard work. Any more questions?

[Poseidon]

How about a return the policy of "isolationism"? We bring our boys home, and if someone has a beef with us, they come here..... And we kick their Ar$$. That we could have spent that 200 billion on subsidized oil purchases!! I know I know I am living in a dream world...

[schrocat]

The struggle against extremism was to be "self financed" by Iraqi life giving sweet crude (let us bow our heads)...

I have the quotes RIGHT HERE man!! See for yourself!

So quit lyin' with all this "we're paying billions for..." because it just can't be true.

We're just waiting for Chalabi to cut us a check, that's all.

[Ninong]

Originally Posted by schrocat

I have the quotes RIGHT HERE man!! See for yourself!

There you go again. You are misinterpreting what they actually meant. What they meant is that the cost of freedom cannot be measured in dollars and cents or even in the number of dead and wounded Americans or "collaterally damaged" Iraqis.

This is a struggle for our freedom against the evildoers who are using Iraq as a training ground and launching pad for terrorist activities around the globe and if we don't fight them there, we would have to fight them over here. What's wrong with you, dude!?! Didn't we tell you al-Qaida was in Iraq? See, we were right. They're all over the place. And as soon as we finish with the Eye-rackis, we're gonna take care of those Eye-ranians.

What are you, some pinko liberal pervert or something? Why do you hate our freedom so much? Why do you hate our troops?

Quit worrying about the cost so much. God has chosen Dubya to smite the evildoers and that's what he's gonna do. And now that he has them all bunched up in one place, it just makes his job that much easier.

[zhenya]

Quit worrying about the cost so much. God has chosen Dubya to smite the evildoers and that's what he's gonna do. And now that he has them all bunched up in one place, it just makes his job that much easier.

There you go, quoting sir sPat-a-lot again...