Oil rises more than $10 to new record high

Nonsense. Things are working exactly the way they’re supposed to. Caveat emptor.

You can’t pass a law to prevent people from making stupid investments without also preventing the good ones.

Keep a close eye on oil production, though. There doesn’t seem to be any spare capacity and the Saudi’s told Dubya to fuck off when he asked them to pump more. Fact is, they can’t. There may be a short term increase in supply as everyone is eager to cash in.

I thought I had read that they are producing at something like 80% of capacity right now (as of a couple of weeks ago). I don’t believe their refusal to up output was due to lack of capability.

That’s not what I’ve been reading. There’s plenty of spare production capacity. The reason there hasn’t been an increase, the reason the producers aren’t increasing it, is because there is no demand to justify increasing the supply.

There has been no major increase in demand, nor is there a shortage of supply. If supply and demand matter at all, the price should be somewhere just north of $50/barrel. People are talking out their asses, trying to say that the price indicates either a great shortage or a great demand increase, but these just aren’t happening. And even the inaccurate data doesn’t justify the current price.

This is a classic bubble. All of the things that describe a bubble fit what’s happening here. Every single thing common with every single bubble ever are also in common with crude prices today.

So enjoy the ride, make lots of money. Keep in mind that past performance is no indication of future gain. And don’t get greedy. Get out when the getting’s good.

Bubbles can burst?

I’m actually for this.

It’ll spur alternative energy production and alternative fuel cars like nothing else will. Plus it’ll get those goddamned SUVs and Hummers off of my highways.

Of course paying $60 every other week to fill up my gas tank is kind of sucking, but hey, Europe does it! Of course, they also get a social safety net to go along with it.

The Hummer brand is tanking lately. Soon the only people driving them will be rockstars and athletes, just like God intended.

http://www.reuters.com/article/companyNews/idUSN0425421420080605

General Motors Corp’s (GM.N: Quote, Profile, Research) iconic Hummer brand could fetch up to $750 million in a sale, but would likely generate little interest and the company would probably have to look overseas to attract even a few buyers.

GM, the largest U.S. automaker, said on Tuesday it is reviewing its Hummer brand and could sell the SUV line, which has become synonymous with gas-guzzling excess and has hurt GM’s image at a time when consumers are demanding more fuel efficiency.

I am with Lum about the “hard times legitimizing alternative energy which in turn saves the planet” happy feelings. I mean it sucks that people go hungry due to nutso food / fuel costs but I still want to see efficient cars and this seems to be the only thing that’s worked in that political arena.

Believe me, I’m keeping a close eye on it!

The Saudi’s told him to fuck off because they know they can produce more, but that would create a glut of crude on the market and drop the prices. The problem isn’t in the production of crude, there’s still lots of that to go around, the problem is in the capacity to refine the crude into the oil and gas we need. Big oil companies won’t build any more refineries to handle more volume. They claim they can’t because nobody in the U.S. wants a refinery in their backyard and government restrictions on building and maintaining the facilities are too tight. Of course, capping the amount of fuel able to be refined means limited supply to meet demand, thus higher prices, so it’s in the oil companies best interest to NOT build more refineries. They’d be spending money to lose money (as supply went up, prices would go down).

The oil business is a delicate dance of supply and demand. As long as big oil knows they can meet demand, they can continue to raise prices and cry about government restrictions on drilling, shipping and refining. Meanwhile the oil producing nations are only going to put enough oil on the market to meet demand, not a barrel more, as this keep them flush with cash and extends the amount of time they can be players in the world economy. Bush asking them to ramp up production only made him (and us by extension) look stupid.

That’s close to being right. But as time goes on the excuses keep changing. China, India, demand, supply, refining, BP’s oil pipes needing to be fixed, etc.

Right now however, the latest drivers are hedge funds and future traders. These assholes are getting rich at everyone’s expense. Remember the hedge fund trader who got a half a billion dollar bonus for banking against natural gas? Sure that bubble slightly burst shortly thereafter but not for long. Future traders and hedge fund managers are awful for our economy. They add nothing in terms value, except to take money away from those that depend on the resources.

I am totally in favor of doing what Russia and Venezuela have done. Make them government run companies so this crap can no longer happen and the profit goes to the people or reinvestment. Not into the hands of just a few ultra-rich.

And can fit 4 or five of the moderately sized euro-nations in the single state that you live in.

General population density means that a $5 gallon of gas in europe is going to be far less painful to the average consumer than it will in the US.

Cool. I am actually genuinely hoping that you make a metric ass-ton of cash on this and don’t lose big or anything. :)

Pumping more oil is useless unless Big Oil expands it’s refineries to meet demand. The increased operational expenses will, of course, effect gas prices too.

Yup. Some years ago, when gas was running well over $2 a gallon, a lot of Big Oil said they’d build more refineries. All they’ve done so far is expand and update their current ones. Maybe there are far too many laws against them building more. I doubt it. All it requires is more money to governments for other things to get a concession. But, why spend that money when you can just not build at all and charge the public more for gas for nothing because of “shortage”. There’s really no incentive for Big Oil to build more refineries. Hell, we’re already giving them tax breaks up the wazoo. What more can we give them?

Mo’ money.

There’s no need to increase refinery output because there is no excess demand to meet.

If you don’t believe the data, just look around you for a Bullshit Check: Have you noticed yourself and others driving less-efficient vehicles more often since this time last year? Not really, so it doesn’t fit with an increase in demand. Have you noticed that gas stations closed because they don’t have any gas to sell, like we had in the 1970s? No, so that doesn’t fit with a supply problem.

The anecdotal evidence also happens to fit the global data. There has neither been a drop off in supply nor an increase in demand sufficient to justify the doubling in price of a barrel of oil; the equilibrium price is FIFTY DOLLARS per barrel.

Anyway… you don’t have to believe me on this or anything. Whatever will happen will happen regardless of whether some guy on a message board says it or not, you know? :)

Time to liberate Iran. And Saudi Arabia. And…

All we need is a nice big Gulf of Mexico hurricane and PROFIT!

Thank you very much! Why shouldn’t the little guy get a little somethin’ somethin’ now and then?

Either that or another “Fire” at one of the two refineries that we have.