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Old 06-21-2005, 10:54 AM  
sd4chiefs sd4chiefs is offline
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$60 a barrel! Now its getting scary.

http://news.yahoo.com/news?tmpl=stor.../oil_prices_30


NEW YORK - With oil prices marching to new heights of close to $60 a barrel, the president of OPEC said Monday the group will consider raising its output ceiling by half a million barrels as early as this week.

The Organization of Petroleum Exporting Countries raised its output target by that amount just last week. The move appeared to have little impact on prices, which have risen by almost $12 a barrel in the past month because of concerns about limited refining capacity and rising demand for gasoline and diesel.

Light sweet crude for July delivery climbed 38 cents to $58.85 a barrel in afternoon trade on the New York Mercantile Exchange. Earlier, prices hit $59.23, an intraday record on Nymex, where oil futures have been traded since 1983.

Gasoline prices in the U.S. average about $2.13 a gallon, an increase of more than 40 percent over the past two years, but government data released last week showed that demand is up almost 3 percent from a year ago over the past four weeks at nearly 9.5 million barrels a day a growth rate that surprised many analysts.

While soaring jet fuel costs have been a major problem for the airline industry, higher energy prices have not taken as much of a toll on the broader economy as analysts had previously feared. In the first three months of the year, the U.S. economy grew at a 3.5 percent annual rate, according to the Commerce Department, slightly slower than the 4.5 percent pace a year earlier.

The prospect of another attempt by OPEC to cool prices did not impress brokers, who said the effort could actually backfire by highlighting the group's dwindling excess production capacity.

Still, "it looks like we might have difficulty holding these levels," said Mike Fitzpatrick, an oil broker at Fimat USA in New York. "You're seeing a great deal of reluctance among buyers to pay these higher prices."

Oil analyst Andrew Lebow at Man Financial in New York said "once we're in this $55-$60 area, it's been kind of hard to justify. But it is what it is. It seems like we'll hit $60 at this point."

Brent crude for August delivery broke the $57.65 per barrel peak it reached last April to set a new high of $58.58 Monday on London's International Petroleum Exchange. It later fell back to $58.01 a barrel, up 25 cents.

OPEC President Sheik Ahmed Fahd Al Ahmed Al Sabah said Monday that "if the prices continue to the end of this week at the same level, I will start consulting my colleagues to release the 500,000." Asked by reporters in Kuwait what he meant by the end of this week, the minister said Friday.

Last week the oil cartel agreed to raise its official production ceiling to 28 million barrels, starting July 1, but that failed to soothe traders because OPEC's output is already exceeding that level as producers seek to cash in on high prices. Including Iraq, which is not bound by the quota system, OPEC is pumping close to 30 million barrels a day, or about 35 percent of global demand.

Another development brokers were watching on Monday was the threat of a strike by oil workers in Norway, the world's third-largest exporter. A strike could begin as soon as Wednesday because of a salary dispute, potentially slicing the country's daily output of 3 million barrels by a third.

"If you take off 1 million barrels a day in this market, it's going to get ugly," said oil broker Tom Bentz of BNP Paribas Commodity Futures in New York. "Let's just hope it doesn't happen."

While Nymex oil futures are more than 50 percent higher than a year ago, they are still below the inflation-adjusted high above $90 a barrel set in 1980.

Analysts said unlike the record prices last year, which were driven largely by concern over geopolitical events in oil-producing countries such as Nigeria, Saudi Arabia, Iraq and Venezuela, this year's trend has more to do with speculative buying, continued supply fears and limited excess production capacity.

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Old 06-21-2005, 02:49 PM   #61
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Quote:
Originally Posted by Donger
I read a report a few days ago that suggested that the price of oil may presently be FAR overvalued, and that it could come crashing down. We'll see, I guess.

Anyway, regardless, we simply don't have the refining capacity any longer. It's not been since 1978 (IIRC) that we built a new refinery in this country.
And, why do you think that is?
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Old 06-21-2005, 02:50 PM   #62
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Quote:
Originally Posted by mlyonsd
I'd like to know the answer to Cochise's original question because I'd like to know if there's regulations prohibiting refinery construction.

IMO however I don't see building refineries as being a high priority item for the oil companies....I mean they're making money hand over fist right now aren't they? Why would they spend money to reduce their profit?
Absolutely.

Building infrastructure (in this case refineries) is expensive, take a long and are not immediately profitable. However, they do know that in the long term, they are.

But, anyone that thinks that oil companoies no loger build refineries in this country simply becasue they are not immediately profitable is nuts. You would not believe the red tape they would have to clear before even ground breaking began.
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Old 06-21-2005, 02:51 PM   #63
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Quote:
Originally Posted by KC Dan
And, why do you think that is?
See 62. Not immediately profitable and a ton of red tape.
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Old 06-21-2005, 02:51 PM   #64
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My 2 cents...

1. The days of cheap oil are over...period. Too much demand - not enough supply.

2. Second, more refineries are not being built because oil companies know number 1 is true. Why build new refineries when supply is tapped out?

3. If alternative fuels are not developed in the next 5-10 years, we are all screwed...

4. The Saudi's have said they are going to raise the number of barrels to XX several times over the past 2 years. Guess how many times they actually met their goals.

see... www.peakoil.com

It is worth a read.
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Old 06-21-2005, 02:52 PM   #65
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Quote:
Originally Posted by Donger
You would not believe the red tape they would have to clear before even ground breaking began.
What kind of red tape? Environmental?
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Old 06-21-2005, 02:53 PM   #66
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Quote:
Originally Posted by KC Dan
What kind of red tape? Environmental?
Yes, mostly.

"Not in MY backyard" stuff, environmental groups saying that some gnat would die, et al.
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Old 06-21-2005, 02:57 PM   #67
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Quote:
Originally Posted by oldandslow
My 2 cents...

1. The days of cheap oil are over...period. Too much demand - not enough supply.

2. Second, more refineries are not being built because oil companies know number 1 is true. Why build new refineries when supply is tapped out?

3. If alternative fuels are not developed in the next 5-10 years, we are all screwed...

4. The Saudi's have said they are going to raise the number of barrels to XX several times over the past 2 years. Guess how many times they actually met their goals.

see... www.peakoil.com

It is worth a read.
Personally, I don't believe that the world's supply is going to run out within the next 25 to 50 years. They'll find more.

But, as pointed out, finding supply means nothing without increased refining capacity. That's the bottleneck right now, and it's only going to get worse.

If "alternative" includes nuclear, I'm all for it. Throw in geothermal and wind generation, too.
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Old 06-21-2005, 02:58 PM   #68
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Oh, just in case, adjusted for inflation, the price of a barrel in the 1970s crunch was $90 in today's dollars.

This is bad, but not THAT bad.
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Old 06-21-2005, 03:23 PM   #69
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Donger:

I don't either. It doesn't have too in order to have some pretty dramatic economic impacts...

Peak oil simply argues that the new discoveries do not match what is being used (basically, we have used up over 50% of all reserves). The US, as a nation, hit it in the late 1970's. We all know what happened next. The argument is that the world is very close to hitting it now. I tend to agree with that argument, completely

You get no argument from me concerning nuclear power...The problem is putting one of those damn reactors in your trunk.
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Old 06-22-2005, 07:19 PM   #70
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That's gotta be "premium;" unbelievable....
I must confirm it. Gas ranges from 2.39 for regular to 2.69 for premium out here in the valley. Up to 30 cents higher across the board on the Peninsula where Big D lives.
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Old 06-22-2005, 07:24 PM   #71
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Quote:
Originally Posted by patteeu
Imagine how much oil Rain Man wasted by driving all the way out to the suburbs just to go to a Walmart.
Its his money, who gives a fug how he wants to spend it?

It is a free country, and I believe that the marketplace will solve the energy issues facing us.


More supplies are now cost effective to bring on line, and people are conserving more. If the prices continue to rise, alternative fuels will become more cost effective to produce.

Perhaps a competing alternative fuel will be developed out of a greed to undercut the 60 dollar pbl price that the oil companies are trying to get and that will put a ceiling on the price that they can charge?

Profit is a powerful incentive to invent, create, and produce.
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Old 06-22-2005, 07:52 PM   #72
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Profit is a powerful incentive to invent, create, and produce.
I agree.

But it is also a powerful incentive to lie, cheat, steal, conceal, stonewall, collude, manipulate, commit acts of aggression, etc.

Especially by those who believe they have the power or the connections to get away with it.
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Old 06-22-2005, 09:48 PM   #73
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Quote:
Originally Posted by Cochise
Ok, question. Why have no new refineries been built?

Is it the same reason no power plants have been built in California since what, the 70s?
Not to be an ass or anything but their building a power plant right now in Escondido, CA. San Diego County.

http://www.nctimes.com/articles/2005...2_185_3_05.txt
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Old 06-22-2005, 11:00 PM   #74
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Quote:
Originally Posted by Traveller
Not to be an ass or anything but their building a power plant right now in Escondido, CA. San Diego County.

http://www.nctimes.com/articles/2005...2_185_3_05.txt
i think he might have been referring to nuclear power plants not being built...
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Old 06-23-2005, 02:19 AM   #75
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Originally Posted by mlyonsd

The other is if everyone quit going to the Walmarts of the world China's manufacturing would slow down thus reducing the world wide demand.
Sorry, but I have no choice but to shop at Walmart. I'm not made of money, and Walmart has the best prices...
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