Surging Oil Prices Crimp Wall Street Rally

[Kelvin Mace]

http://biz.yahoo.com/ap/050810/wall_street.html?.v=14

Soaring oil prices choked off an early rally on Wall Street Wednesday, wiping out the market's optimism about the economy in the process. The tech-focused Nasdaq composite index was also hurt by a disappointing forecast from networking gear maker Cisco Systems Inc.

The department's Energy's Energy Information Administration said it expects world oil demand to grow by 1.7 million barrels per day this year to 84.2 million barrels per day. That was down from its forecast a month ago of 2.2 million barrels a day growth, largely because of lower projections for China. Still, the agency expects oil prices to average above $56 a barrel through 2006, with spikes to $60 possible.

After the report was released, oil prices rose $1.43 to $64.50 on the New York Mercantile Exchange.

Now, here's a question:

How smart is it to screw with Chavez in Venezuela, a country that supplies about 15% of our oil, when they could just cut us off and sell exclusively to China, a country that will buy all they can pump?

How high would oil go? $80? $100?

[whistle]

1. When will oil futures hit $100 per barrel?

[ozymandius]

2. Some analysis expects $100/bbl by the end of the year. EDIT

Jerome a Paris has some analysis:

http://www.dailykos.com/story/2005/8/8/183758/9167

[Kelvin Mace]

3. I predict $4/gallon by the

end of of the year.

[Roland99]

20. Well, the gas companies have been authorized to hit $3/gallon

California is now already seeing that.


I'm sure the gov't will clear the way for them to charge $4/gal soon

[raccoon]

38. If that happens,

can yall say "Stagflation?" I knew you could!

[Dogmudgeon]

8. There's already trading in $100/bbl oil futures for December

I don't have a link, but I saw the story about two weeks ago on a couple of different newsfeeds.

--p!

[ozymandius]

10. :shakes head:

I never thought the prices would escalate this quickly.

[54anickel]

28. Ozy, have you noticed how oil has been moving inversely to the

buck, especially in the last 2-3 weeks? Could they be demanding more bucks as those bucks are bound to become worth less?

Hate to beat a dead horse but it was also 2-3 weeks ago that Tehran announced the go ahead for the Iranian oil bourse.

GCC is being touted as the place to invest? Saudi's wanting to bring investments back home and to the GCC for better returns?

Co-inky-dink? :tinfoilhat:

[ozymandius]

32. Not a coincidence at all.

Those petrodollars are worth less than they were before China attempted to buy Unocal. Now that those dollars we are trading for cheap imports will not buy everything the world wants of us - what reason does the world have to keep collecting them?

A higher cost of oil sounds almost like a punitive measure to me. It also sounds like the world is starting to move on with a quickened pace to entrench the next economic power axis.

[54anickel]

35. Thanks Ozy - looks like we're entering phase II of the economics

war. Wonder if the world is stepping up the pace because of the war drums beating the call for Iran. :shrug:

[D-Notice]

37. Here it mentions

that Goldman Sachs predict $105/barrel by 2007 in a report they released on 30th March.

http://www.businessweek.com/bwdaily/dnflash/apr2005/nf20050427_2905.htm

[whistle]

12. So before Iraq was invaded world oil prices were at $28.00 per barrel

...and that was around January 2003 and now by January 2006 it could hit or exceed $100 per barrel. That's a 3.57 fold increase or an average of 54.5% per year over a thirty six month period.

Doesn't that sound like hyper inflation on energy and windfall profits for the big oil companies and their insiders?

[ozymandius]

14. sounds like war profiteering to me

OIl companies are capitalizing on the war's "sense of urgency" to increase prices - though no genuine sense of urgency exists. Now - a true sense of urgency would exist if the U.S. came to blows with Iran. Iran could effectively shut down the Strait of Hormuz. No Strait of Hormuz... no oil shipped out of the region.

[Roland99]

21. It's Chavez's fault.

[Kelvin Mace]

24. Heh, it was $22.50

when Clinton left office.

[getmeouttahere]

4. 2.83 a gallon in El Segundo, Calif...

for regular unleaded. I'm going to start walking the 1.2 miles to work EVERY DAY now, instead of just a few days a week. These bastards aren't getting anymore of my money than is absolutely necessary.

[Kelvin Mace]

7. I have heard $3+

in N. California.

Can anyone confirm?

I'd love a picture.

[sintax]

13. Laura Flanders

was on air last night talking about $3/gallon in Cal.

[cliss]

9. Yes, great point Get.

That's exactly my thinking too. I'm about to park my car more or less PERMANENTLY. I'm going to take public transportation whenever I can. I actually rode my bike this past week, it wasn't too bad.

And really, we won't be the only ones. There will be millions of angry drivers who are thinking the exact same thing. They'll personally want to boycott the Bastard in the White House.

Let's see who's got who by the jugular?

[Joebert]

27. Believe it or not, it's only $2.29 in northern Colorado

That's at Citgo.

It's $2.39+ at Conoco.

Not sure how that happpened. Usually we're pretty expensive due to being in the middle of nowhere.

[applegrove]

5. Now that the Saudis have announced they will be withdrawing cash..perhaps

they can artificially beat back the crimp. One more time.

Just who sacrifices for the economy? Not oil, not the rich. Just he underemployed middle class & poor.

[ozymandius]

11. withdrawing cash?

From where I wonder?

[hatrack]

15. This was in yesterday's Stock Market Watch - $360 billion, I believe

Can't remember the citation, but it was about withdrawals from equity markets, investments in the West, etc., for "reinvestment" back home.

[barb162]

18. or reinvestment in China

maybe they just want to dump their dollars?

[ozymandius]

19. Dang! I missed this one. Gotta run check it out. n/t

[applegrove]

25. No - Saudi Money has been dominating the US economy for 30 years.

That's perhaps why Cheney wanted all the cameras following him to the funeral. What a powerful man. He gets Saudis to 'voluntarily' stop dominating the US economy. That will put a stop to inflation. For a bit.

Except inflation hurts the rich. And they used to partake in fighting it by taking part in recessions. They no longer do. They just watch the market rock & roll.

What are they doing to sacrifice?

[NEOBuckeye]

26. Cheney is no one -- Just a madman in a suit

He's a coward who only acts big and bad, like a bully. When finally faced down by real men (and women) of courage -- the resurgent democratic movement of America -- he will fall... and all of his ambitions and desires shall be smashed and broken to pieces.

[applegrove]

31. Yes - I was being sarcastic. I need to use the smilie more often.

[The_Casual_Observer]

6. We would all be on easy st. if energy were cheap and plentiful

however, there isn't a Santa Claus, and the circumstances surrounding the Iran/Iraq war could only happen once so, it's the 70's all over again.

[newswolf56]

44. Four reasons this crisis is infinitely worse than the '70s crisis:

(1)-Even at the height of the '70s oil crisis, there was general public awareness the crunch was temporary. Now there is general awareness the crisis is permanent and worsening, and growing political awareness on the Left its ultimate consequence (and the oligarchy's specific purpose) is reducing the entire U.S. workforce to Third World status: cheap labor easily intimidated.

(2)-During the '70s, there was a more than adequate social safety net including hundreds of government jobs programs begun as part of the Great Society and continued by Nixon. Now -- again to reduce the U.S. workforce to the readily exploitable Third World levels of fear and intimidation --the oligarchy has deliberately abolished (or is abolishing) all such programs.

(3)-During the '70s, government had the money to offset the transportation crisis by construction of a national rapid transit system. Indeed an agency -- the Urban Mass Transportation Authority -- was created specifically for that purpose, authorized to provide federal matching funds at up to a 90/10 federal/local split for the construction of rapid transit: petroleum-free systems to run on rails and be powered by electricity. But most politicians, already on the Big Oil payroll, betrayed their constituencies by ignoring (and in many instances aggressively obstructing) this huge opportunity for achieving a national transport system that was not dependent on Big Oil and Big Automotive. Significantly, one of the first Reagan Administration moves was to abolish all this funding, applying most of it to the huge military build-up the Reaganoids undertook. And no such transportation funding will ever be available again: not ever. Federal deficits prohibit it, and even if that were not so, the ever-intensifying hostility of the oligarchy toward working families would obstruct all public-transport expenditures save the most minimal -- allowing nothing beyond maintaining the hazardous, deteriorating and increasingly expensive Third World-type bus systems most American cities have now.

(4)-While the '70s crisis imposed a huge drag on the economy, the oligarchy shared with the workforce an eager determination to engineer economic recovery. Now the oligarchy simply doesn't give a damn; our American workers' well-being is meaningless to the plutocrat and his acquisition of ever greater wealth, and he despises American workers' traditional freedoms also. Hence the oligarchy's response to the economic crisis is merely more outsourcing and downsizing -- moving its capital and the means of production to realms where workers can be more brutally tyrannized to enable oligarchic power to survive the now-inevitable global economic collapse resulting from peak oil. All industrial countries will be hard hit, but the U.S. -- specifically because of betrayal by its politicians (see again Item 3) -- will be totally and permanently destroyed. Massive starvation, homelessness and disorder is therefore inevitable: undoubtedly the secret reason for the U.S. presence in Iraq -- to guarantee U.S. soldiers acquire the necessary urban warfare skills and the killer mindset essential to suppressing the domestic protest that will inevitably arise as the economy takes its final plunge. (It may not be possible for the oligarchy to abolish all U.S. constitutional guarantees immediately, though the process has already begun via the Patriot Act, its drug-war precursors and the Bush Administration in general: the real reason Supreme Court appointments are so vital.)


Edit: clarification of third paragraph.

[Javaman]

16. I'm so glad moron* kept his campaign promise...

Blathering about how he was going to "jaw bone the saudi's into lowing the price of oil per barrel" back in 2000, when gas was 1.25 a gallon. Seems they only like to hug and kiss each other. What a fucking asshole lair*.

Boy, a 1.25 a gallon sounds quaint now.

colossal failure*

[12345]

17. Oil prices surge to record $65 a barrel

http://www.msnbc.msn.com/id/5612507/

[Delphinus]

23. Quote:

Even so, Cordier said he has been stunned by the recent runup in oil and gasoline prices and the apparent lack of any response from motorists. Gasoline prices averaged $2.37 a gallon nationwide last week, up 49 cents from last year. Demand picked up by 1.4 percent from a year ago, according to government data.

My thinking is that there is not a lack of response from the motorists - I'm sure the motorists are responding, it's just not being carried by the Corporate MSM.

[durablend]

33. Me thinks the REAL reason...

The rich have NO problem with these prices and that's ALL that matters.

"Working poor and you can't afford the gas? BOO HOO HOO....you can go eat cake. The world revolves around US (who are raking in the money hand over fist) and not you."

[Roland99]

22. A peak at 87 octane prices around the country:

http://www.newjerseygasprices.com / $2.19 - $2.67
http://www.atlantagasprices.com / $2.23 - $2.51
http://www.newyorkgasprices.com / $2.39 - $2.89
http://www.losangelesgasprices.com / $2.48 - $3.05
http://www.sanfrangasprices.com / $2.53 - $3.03
http://www.seattlegasprices.com / $2.44 - $2.78
http://www.chicagogasprices.com / $2.27 - $2.95
http://www.denvergasprices.com / $2.11 - $2.54
http://www.dallasgasprices.com / $2.23 - $2.69

[Strelnikov_]

29. Not Very Smart

The 1973 oil shock was due to a loss of 10% of supply, 15% in this tight market would be devastating.

US Contingency Plan For A Venezuela Oil Cut Off

http://www.falkland-malvinas.com/Detalle.asp?NUM=6206

United States Congress has begun considering consequences of a potential Venezuelan petroleum cut off given the country's "political instability".

Indiana Republican Senator Richard Lugar requested the contingency study in a letter sent to GAO Director David Walker, arguing that for the last two years Venezuela's “political instability” had led to direct threats on oil shipments to the United States.

Mr. Lugar emphasized that the State Department had indicated on several occasions that Venezuela was no longer a "trustworthy" source of crude, but the United States still depends on that country to satisfy approximately 15% of its consumption.

[Kelvin Mace]

36. Direct or covert action in Venezuela

would not go down very well with our neighbors to the South.

[okieinpain]

30. oh guy's don't you watch fox news. cavuto or whatever says ha

bush is president and god loves bush. so don't worry, pushing your car is good for your heart.

[durablend]

34. Did he also say...

That if you're not bending over and paying the price (whatever it is), you're obviously an anti-American terrorist sympathiser?

[Frederik]

39. Flashback

Rand Corporation - the heart of the military-industrial thinktankocracy - predicted that the Iraq "liberation" would result in crude prices of $8-12 a barrel:

"For decades, the United States has appeared satisfied with the status quo of high oil prices more than $20 per barrel in today's dollars, rather than prices in the $8 to $12 per barrel range, which is where they would be today under a free market. The Organization of Petroleum Exporting Countries drives oil prices artificially high by keeping the supply of oil artificially low.

U.N. sanctions against Iraq are a key factor in holding down worldwide oil production and keeping oil prices high. Because of the sanctions, Iraq produces fewer than 2.5 million barrels of oil a day -- far below what that country's huge oil resource base can sustain.

If Iraq is defeated in a war with the United States and allied nations, Iraq will need funds to rebuild. Oil exports are the obvious answer. Within 5 to 10 years, a combination of high pay-off investment and sound management could enable Iraq's oil fields to produce more than 10 million barrels of oil per day -- more than four times the current level.

Pumping millions of additional barrels of oil into the world market everyday would cause world oil prices to plummet. It is very unlikely that key OPEC members would agree to cut their own oil income by accepting significant cuts in their production. OPEC could plunge into a death spiral.

Under a free market, oil prices would probably fall to between $8 and $12 per barrel over the next 10 years -- down dramatically from today's price of about $25 per barrel. At current prices, the United States is sending about $90 billion per year to OPEC members and other oil exporting countries. Globally, about $350 billion per year moves from oil importers to oil exporters. With free-market oil prices, these huge transfers of wealth would drop by at least half and possibly as much as two-thirds."

http://www.rand.org/commentary/010603ATU.html

[Dogmudgeon]

43. Well, Bush lied to the Rand Corp., too

This one had slightly worse effects than that lie about about Monica Lewinsky, didn't it?

--p!

[RUMMYisFROSTED]

40. Sure.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1693211

[struggle4progress]

41. kick

[Fire Walk With Me]

42. Thought that read: "Surging oil prices, chimp dances in street"