Oil Continues Free-fall

[UNTflyer]

NEW YORK (AP) -- Oil prices kept falling Tuesday, sinking as low as $118 a barrel on growing concerns that a U.S. economic slowdown and high energy costs are curbing consumer demand for gasoline and other petroleum products.

Crude has now fallen more than $25 since reaching a trading high of $147.27 on July 11.

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What gets me is the inconsistency of our government. Barack Obama wants to release 70 million barrels of oil from our strategic reserve, enough for 3 1/2 days of supply, claiming that the increased supply will lower prices. But out the other side of the mouth, he claims that more drilling will do nothing to lower prices. Did he miss the day they taught economics at Harvard? Not bashing Obama, just pointing out the complete failure of the government to recognize a crisis and act upon it. Alternative fuels sure would be nice and clean, but it does nothing for us today as we continue to pay ridiculous prices for energy. It likes sitting on a picnic basket while going hungry.

[BeanCounterGrad'03]

I'm no petrol expert, but the effect of releasing oil reserves would be almost immediate (relatively) compared to new drilling which I've heard anywhere from 2-7 years for it to affect supply.

Your take?

[forevereagle]

I'm no petrol expert, but the effect of releasing oil reserves would be almost immediate (relatively) compared to new drilling which I've heard anywhere from 2-7 years for it to affect supply.

Your take?

Using the oil reserves can be very effective in the short term. By selling the oil well below the market value, all prices will drop. It also makes it very difficult for speculators to project prices, especially if they do not know how much is being released at what price. CNNMoney has an interesting article about it today, but I don't have a link.

[UNTflyer]

I'm no petrol expert, but the effect of releasing oil reserves would be almost immediate (relatively) compared to new drilling which I've heard anywhere from 2-7 years for it to affect supply.

Your take?

Very true. But how long will the development, marketing, and distribution of alternative fuels take before it is as cheap and dependable as oil?

I think we'll continue to see a drop in prices now that China is done with their building for the Olympics.

Edited August 5, 2008 by UNTflyer

[GoMeanGreen1999]

Very true. But how long will the development, marketing, and distribution of alternative fuels take before it is as cheap and dependable as oil?

I think we'll continue to see a drop in prices now that China is done with their building for the Olympics.

Well gas definately goes up faster than when the price of oil drops.

[yyz28]

I'm no petrol expert, but the effect of releasing oil reserves would be almost immediate (relatively) compared to new drilling which I've heard anywhere from 2-7 years for it to affect supply.

Your take?

Think of it like this -

Since futures speculation is what sets the daily price of a barrel of crude, anything that will increase supplies either in the long term or the short term will effect the futures prices immediately.

...if the Government says "we're dropping all restrictions on the supply side" the speculators will (correctly) determine the futures they own are worth more now than they will be in the future when there is a larger supply and many will dump now at the peak to get maximum profit.

There you go...

[Coffee and TV]

How out of touch is Barack Obama? He's so out of touch that he suggested that if all Americans inflated their tires properly and took their cars for regular tune-ups, they could save as much oil as new offshore drilling would produce. Gleeful Republicans have made this their daily talking point; Rush Limbaugh is having a field day; and the Republican National Committee is sending tire gauges labeled "Barack Obama's Energy Plan" to Washington reporters.

But who's really out of touch? The Bush Administration estimates that expanded offshore drilling could increase oil production by 200,000 bbl. per day by 2030. We use about 20 million bbl. per day, so that would meet about 1% of our demand two decades from now. Meanwhile, efficiency experts say that keeping tires inflated can improve gas mileage 3%, and regular maintenance can add another 4%. Many drivers already follow their advice, but if everyone did, we could immediately reduce demand several percentage points. In other words: Obama is right.

http://www.time.com/time/politics/article/...00.html?cnn=yes

[yyz28]

But who's really out of touch? The Bush Administration estimates that expanded offshore drilling could increase oil production by 200,000 bbl. per day by 2030. We use about 20 million bbl. per day, so that would meet about 1% of our demand two decades from now.

Right... and that's why China and Russia are drilling in our backyard.

that's Democratic Talking point number 345. I'd like to see your sources source. ...posting an opinion piece as fact is sorta funny, but I digress.

The myth is that the U.S. only has a small percentage (from 2-6%) of the world’s oil supplies, and since oil is a global commodity, our increased production won’t affect prices much if at all.

The facts remain that this estimate of 2-6% of the world’s oil supplies does not hold up to scrutiny.

In oil shale alone, found in the Green River Formation in parts of Utah, Colorado, and Wyoming, the U.S. has approximately 800 billion barrels of recoverable oil, or over three times the proven reserves of Saudi Arabia. This comes from a midpoint estimate in a 2005 RAND study done at the request of the Department of Energy, and a higher end estimate puts the number at over one trillion barrels.

Furthermore, there are vast areas of the United States and its outer continental shelf where it is illegal to even look for oil. Exploration routinely yields additional resources far larger than initial estimates.

Resources from oil shale and additional oil resources that are likely to be discovered are not included in the estimates of American oil supplies.

[GoMeanGreen1999]

How out of touch is Barack Obama? He's so out of touch that he suggested that if all Americans inflated their tires properly and took their cars for regular tune-ups, they could save as much oil as new offshore drilling would produce.

I love this argument. Three weeks ago I finally went out and had a tuneup on my Honda Accord and made sure I had proper air in the tires. Difference in miles at the end of the fill up - 0. That's right no difference than from the week before. Well worth the $200 I spent.

[UNTflyer]

Nice copy and paste, but the figures are wrong.

The author of this editorial, who is an Obama supporter and an environmentalist, conveniently misstates the numbers and offers no link or reference to back them up. Every other reference I could find in Google pointing this 200,000 a day figure points back to this article.

The EIA conservatively predicts that domestic production would increase by 5.6 million barrels a day by 2030, an increase of over 25% of current consumption, if the OCS ban is lifted by 2012. Naturally, this number would be even higher if the ban was lifted in 2008 and the oil companies had an extra 4 years to explore and drill and bring production online.

[Coffee and TV]

I guess its true: reality has a liberal bias.

[JesseMartin]

Thought I posted this already...

http://men.style.com/gq/features/landing?id=content_7211

More info than you could ever want on the "oil crisis".

Also keep in mind that HOW you drive affects your mpg. I get about 34 in my 03 Cavalier. My wife only gets a little over 20 in her 06 Rio, but when I drive her car I get about 30. I've used about 3 tanks of gas since moving to Phoenix mid-April.

[BeanCounterGrad'03]

Very true. But how long will the development, marketing, and distribution of alternative fuels take before it is as cheap and dependable as oil?

I think we'll continue to see a drop in prices now that China is done with their building for the Olympics.

A good point...from the articles I've read on ethanol production, I'm getting the sense that the cost of producing may be partially affected by geography and the proximity of available inputs. Corn and other grain based ethanol will always be pretty expensive because they aren't that efficient. Cellulosic ethanol is already yielding some real, tangible results as illustrated by a conversation I had with a controller at a small ethanol "refinery" in Wyoming. She was telling me that they just started up production a couple of months ago and that they were producing ethanol at about 1 - 1.25 a gallon. This is because they are using deadwood and excess forest cover from the blackhills forest of SD and turning it into cellulosic ethanol.

Now, after transport, marketing, etc. costs are factored in, I'm sure we may still be sitting at 2-2.50 a gallon, but that would illustrate the need for there to be more smaller regionalized refinery operations to at least keep the cost of transport down.

But that's just my theory.

OK, I'm done being an armchair economist for now...my head hurts.

[emmitt01]

What I find funny is the "punch line" politics that is going on. Tire gauges? Really? I mean, it's cute and is helpful in boiling down an issue to a "punch line" but I would think (hope) people see the transparency in it.

Obama's energy policies may be dead wrong. But Republicans still seem to be clinging to the same tired tricks they have for years.

[meangreendork]

Looks like Obama's changed his tune on drilling:

http://www.msnbc.msn.com/id/26010962/

[meangreenacct]

Looks like Obama's changed his tune on drilling:

http://www.msnbc.msn.com/id/26010962/

I heard a speech from Obama that discussed this issue. He basically said that he still was not in favor of offshore drilling, but would vote for it if that was what it took in order to get an energy plan that had other features that he felt where important. So I wouldn't say it's so much of a changing a tune as it is agreeing to a compromise to get stuff done.

[UNTflyer]

I heard a speech from Obama that discussed this issue. He basically said that he still was not in favor of offshore drilling, but would vote for it if that was what it took in order to get an energy plan that had other features that he felt where important. So I wouldn't say it's so much of a changing a tune as it is agreeing to a compromise to get stuff done.

Either that, or the Messiah has finally figured out why he doesn't have a 20-point lead over that old geezer.

This is great, I can poke fun at both candidates since I'm voting 3rd party.

[eulesseagle]

http://abcnews.go.com/Video/playerIndex?id=5504708

Pelosi is just out of touch......

[meangreendork]

http://abcnews.go.com/Video/playerIndex?id=5504708

Pelosi is just out of touch......

I lean a little left, and I am entirely behind that. I don't like Pelosi much and I don't know how she got where she is.

[UNTflyer]

http://abcnews.go.com/Video/playerIndex?id=5504708

Pelosi is just out of touch......

God, I could only get two minutes into that interview before turning it off. The woman is a complete imbecile. She favors sapping the strategic reserve for 3 days worth of oil, but doesn't want to allow stable drilling sites that can provide oil for years? And she didn't even have the guts to stand in front of the House for the adjournment vote, she sent some junior member to do it.

Congress' approval rating is lower than Bush's... that's pretty bad.

[Mean Green 93-98]

This is great, I can poke fun at both candidates since I'm voting 3rd party.

Decided to go Nader, eh?

[UNTflyer]

Decided to go Nader, eh?

I've decided to vote for whoever is listed as the 5th party on the ballot. I'm anxious to see who it is.

[eulesseagle]

The problem is not the pumping of oil and gas.....Texas, along with other states, have idle rigs already in place to pump. The problem is with refining the oil and gas. The United States needs to double its oil and gas refineries. About three weeks ago (either South or North Dakota) passed legislation to build one refinery. If all our refineries can produce "X" amount of product and we extract "Y" then that is normal. If we extract Y+1 or Y+25 of product then we still only produce "X."

For anyone who believes it will take 7-10 years for the United States to retrieve the crude then they have been sniffing too much H2S.

Case in point: How long did it take companies like Chesepeak and WXO around the DFW area to set up and drill????not 10 friggin' years! There are homeowners in the DFW area already receiving their residual checks from these companies. Rigs are going up all over the Denton, Wise, Tarrant, Dallas and Johnson counties.....and it aint takin' no friggin' 10 years for 'em to start pumpin'.

Heir Goebbles once said, and I paraphrase, if you tell a lie long enough people will believe it (please, no nazi pictures).

Chesapeak has a slick advertisement showing how oil and gas, now, can be extracted by using ultra sonic technology to retrieve product that could not have been extracted, only, a few years ago.

Refineries don't take 7-10 years to build.....who the heck believes that? American ingenuity and know how can get these structues built in a year or so. Not 10!!

I too am voting independent 3rd party for president (again), but, I do like both of Texas' U.S. Senators (because they do vote for the best interest of the country) and I do like my represenative Kay Granger....who also votes the way I want her to vote, at least 90% of the time.

If Pelosi and the rest of the Democrats refuse to allow an up and down vote on drilling then the US will continue to ship valuable monitary resources overseas and will, in my humble estimation, bankrupt the country enough to make the US subserviant to the whims of other oil producing countries.

As far as the national reserves.....that is for the US military emergency use. By tapping into that will NOT help our current short term needs and will only put our armed forces at danger of running out of gas. Just ask the Germans how valuable gas was in 1944 and 1945. They lost more tanks from fuel shortages than actually lost in battle. (again, please no nazi pictures). I only say this because we have to learn from history & if we don't then we will fall prey to the same mistakes.

[Mean Green Matt]

Looks like Obama's changed his tune on drilling:

http://www.msnbc.msn.com/id/26010962/

He tells the people what they want to hear.

[BeanCounterGrad'03]

He tells the people what they want to hear.

The same could be said for 98% of all politicians including his opponent.

While we're straying into 3rd, 4th, and 5th party candies, Nader is probably in the 2%. I think he's lost it in his older age, but he's not afraid say what he believes no matter how unpopular it may be with the masses. I gotta respect it.