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Bloomberg.com: Energy — When you start to see stories like this it means it will never happen and the bottom is near. It may be there now. This was exemplified by all the $200 a barrel predictions followed by a plummet. Give it a couple more weeks. Supply and demand, HAR! And never overlook the fact that oil trades at a relative $25 forever. While the experts predict eventual upward price swings, history indicates the opposite.
Oil traders made their biggest bet yet that the Organization of Petroleum Exporting Countries will fail to prevent crude prices from plunging below $30 a barrel. Trades in crude-oil options contracts that would allow the holder to sell oil for February delivery at $30 a barrel reached 1,407 on the New York Mercantile Exchange yesterday, making the contract the day’s second-most active, exchange data show.
OPEC, the supplier of about 40 percent of the world’s oil, plans to meet Nov. 29 in Cairo to discuss another output cut after crude oil touched $54.67 a barrel, a 21-month low, yesterday. The 13-member organization cut production by 1.5 million barrels a day at a meeting in Vienna last month.
“Somebody is buying a little bit of insurance with a very deep out-of-the-money put option,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “It’s very exciting to think about $30 oil, but are we going there? Most likely not.”
If oil and gas rise it will have more to do with artificially low interest rates, deficit spending and industry bailouts and other inflationary practices.
If alternative energy gains traction, it will drive oil and gas prices down. This will unhinge the greenies because each time oil and gas go down, it makes alternatives less advantageous, economically speaking.
Only for you ECON grads out there:
And why do we call it the line of equilibrium? Because a horse isn’t a horse of course!
#26, Confederate Traitor,
#25 – Mr. Fusion
Re: “It was the price of oil that broke the economy.” Are you kidding me!!?
It was GOVERNMENT forcing banks to make home loans to people who didn’t qualified that crashed the economy.
Can you provide a link (other than Rush Limbaugh or O’Reilly) that shows the government “forced” banks to make loans? Not that they couldn’t discriminate in their loans, but that they had to make loans to unqualified people that they wouldn’t make to other people. Then provide some numbers that lower income people are in a higher default rate than other borrowers.
Until then shut the eff up with the “government forcing those nice bankers to make loans they didn’t want to”.
The anti-discrimination push was the very force he is talking about. The government claimed that banks weren’t lending to minorities, while the banks decided they were not as credit-worthy and others decided was racism. But of course you knew that already.
#24 Mr. Fusion
Nailed It. I would go back one step further, though. Supporting our out of control government spending requires smokin’ hot GDP growth. So the Fed responded to political pressure by turning up the oven and now we’re (over) cooked.
If the farmer already spent his money on high priced feed due to high priced fuel last summer you aren’t going to get cheap food instantly. Get over it.
What scares me is that the tar sands of Canada aren’t worth mining at $30.00 a barrel. If that closes… we are back to middle east oil and the price will go up even in a down economy.
Besides its the world economy that matters not just you own local pond.
#33 – MikeN,
#25, that doesn’t prevent fluctuations above your price floor. You just don’t like cheap oil.
To prevent fluctuations, they should fix the dollar to gold, and it would add some stability.
Fixing the dollar to gold might be a good idea. However, setting a price floor quite obviously does take away a lot of the range of the fluctuation. If the floor is set at $100, then the range of prices may be from $100 – $140 or so. If there is no floor, then the range is $25 – $140. Of course the latter is more of a fluctuation.
And, yes, I don’t like cheap oil because there’s no such thing as cheap oil. The price per barrel is low because the vast majority of the costs are externalized. If some butthead is driving around in a Humper, Naggravator, Land Bruiser, or whatever, I am subsidizing the majority of the cost of said butthead’s fuel in my tax bill.
Tell me why I should be happy about that?
http://tinyurl.com/6y847h
# 45 Misanthropic Scott said, ” I am subsidizing the majority of the cost of said butthead’s fuel in my tax bill.”
And how does THAT work exactly? Unless, you are talking about Oil companies not paying mineral rights payments like Palin enforced and raised in AK.
But, that would be very little as most of our oil is from foreign sources
He means that he is paying taxes that that guy could have been paying in gas taxes.
I’d rather have $25 oil sometimes with fluctuations than a fixed $100.
# 47 MikeN said, “He means that he is paying taxes that that guy could have been paying in gas taxes.”
That’s hilarious and assumes you WANT a gov’t with run away spending.
#46 – Paddy-O,
# 45 Misanthropic Scott said, ” I am subsidizing the majority of the cost of said butthead’s fuel in my tax bill.”
And how does THAT work exactly?
I knew that you did not know how to post a link. I assumed you’d know how to read one. My mistake. The answer is in the link in the post. I’m not going to post the entire text of a large PDF.
#47 – MikeN,
He means that he is paying taxes that that guy could have been paying in gas taxes.
No. I mean that I am literally paying about 80% of the cost of the gallon of gasoline. Read the link.
#48 – Paddy-O,
That’s hilarious and assumes you WANT a gov’t with run away spending.
No. It means I want the government to STOP run away spending of my money on oil. It means I want the costs paid for on the spot by the consumer, rather than in my income tax bill after filtering it through a corrupt government hell-bent on burning as much oil as possible because they get kickbacks from the oil companies.
# 49 Misanthropic Scott said, “I knew that you did not know how to post a link. I assumed you’d know how to read one. My mistake. The answer is in the link in the post.”
What an idiot. Here’s the result of your link…
The page – http://www.google.com/url%3Fsa%3Dt&source%3Dweb&ct%3Dres&cd%3D1&url%3Dhttp:%2F%2Fwww.icta.org%2Fdoc%2FReal%2520Price%2520of%2520Gasoline.pdf&ei%3DFq4hSeykFofcer2o1dIG&usg%3DAFQjCNHqvQpmGxj5plGuZA0LHFx192gcKw&sig2%3D7GoqNYCs6plhH2906GvgNw – does not exist.
A link that actually works would help. Most of those studies are bogus, taking tax credits used by all companies as special subsidies for oil companies. I’ve even seen one study that claimed spending money on roads and bridges was a subsidy for the oil companies.
#50, laugh out loud, he blames you for not knowing how to post a link!
#50 – Paddy-O,
Yay me!! I finally taught you to post a link. It happens to be my own failed link. But, you posted a link.
Here. Try it without the tinyurl.
http://www.icta.org/doc/Real%20Price%20of%20Gasoline.pdf
#51 – MikeN,
How about the war in Iraq. Surely you’re not going to claim that there’s some other reason we’re there, right? How about all of the money we spend around the world to keep the oil wells safe so that ExxonMobil can get to the oil?
Do those count? Does the money from Ex/Im bank count? Even if other corps get it too, corporate welfare is corporate welfare.
#53 – Scottie
>>It happens to be my own failed link.
>>But, you posted a link.
Paddy O’Pinocchio is very derivative. He can only follow someone else’s lead, even if his leader makes a mistake. I’ve been waiting with bated breath for him to ever post a link of his own, but I got light-headed from hypoxia and and to give up. He has no links anyway. He just makes up all that shit he posts. No need to tell the truth when you’re Paddy O’Pinocchio. That 4mpg stretch limo he rides in back and forth to his job at Radio Shack has plenty of room for his nose, no matter how long it grows.