Experts See Danger in Rising Oil Prices

[Lone_Star_Dem]

By BRAD FOSS AP Business Writer
© 2006 The Associated Press

WASHINGTON — Oil prices appear headed back toward $70 a barrel, a level not seen since Hurricane Katrina battered the Gulf Coast and sporadic shortages sent gasoline at the pump above $3 a gallon nationwide.

While last summer's price spike triggered outrage in Congress and hurt sport utility vehicle sales, it caused only a hiccup in motor-fuel consumption. And for now, with demand back on the rise, the economy seems capable of absorbing uncomfortably high prices.

Analysts warn, however, that consumers and businesses could be just one major supply disruption away from more serious financial consequences.

Sherry Cooper, chief economist at BMO Nesbitt Burns, said the ramifications of $70 oil and $3-a-gallon gasoline would be "more mild" the second time around "because we're getting kind of used to it."
More...

http://www.chron.com/disp/story.mpl/ap/business/3762439.html

[BiggJawn]

1. Anal rape is "more mild" the second time, too.

Because we're getting "kind of used to it", but it's STILL rape.

Betcha Sherry Cooper makes in 3 weeks what I sweat all YEAR to bring home.

[mr_hat]

12. Wow, it wasn't for me... Damn. I've said too much.

[Avalux]

2. And the question is "WHY"

there is no reason for oil prices to be so high - no shortage. The bastards are desensitizing us to higher prices and we keep buying. The sky's the limit!!

[Dogmudgeon]

5. The reason why

This is the real "Peak Oil". The price rises and becomes much more volatile, due to industry anxiety that is carefully hidden from the public. In a way, they are doing us a perverse favor.

Most of the big oil fields, including the two largest (PEMEX's Cantarell and ARAMCO's Ghawar) are way past their prime of production, and most of them are having their remaining oil extracted by pumping in seawater as quickly as possible, which also ruins the long-term prospects for the oil field. There have been no major oil field finds since 2003, after nearly 60 years of unbroken discoveries.

Of course, you're right, there is major market tampering going on, but it's being driven by the rapid price increases and supply shortfalls. The long-term prospects just plain suck.

Scare-mongering? Not a bit. As I said, the major push has been to convince people that this is just a brief bump on the Yellow Brick Road to Oz. In reality, it is only the first major pothole on the Highway to Hell. Our best solution will be to turn off at the next exit and map an alternative route to someplace else -- like a sustainable economy.

--p!

[Gronk Groks]

9. Brazil will no longer have to import oil by the end of the year...

...they have been working since the late 70's on ethanol technology. All vehicles in Brazil now HAVE to use "flex fuel" technology that will allow them to go from E85 (85% ethanol/current law) to 100% ethanol with the flick of a switch.

Brazil was a 3rd world country last time I looked. If THEY can do it, why can't we?
Oh, I forgot, the Oil Companies have their (fully bought) thugs running our government.

[Lone_Star_Dem]

6. My impression is they plan price push to near $75 per barrel

The article says:

"James Cordier, president of Liberty Trading in Tampa, Fla., believes oil prices will climb as long as the economies of the U.S., China and India continue to grow and that prices may need to hit $75 before there is any significant demand response."

To me, this implies someone has done the research and that's the point that they expect consumers to cut back enough that the suppliers will feel the difference. Until they see a cut in consumption they can (and will) push on to higher profits.

edit: clarity

[Warpy]

14. Oil company internal projections have oil dropping to

the $40/bbl range within two years due to "economic conditions." I think they're dreaming. I can't see all those Chinese parking their scooters and going back to bicycles no matter how rotten their economy gets temporarily. It's a pride thing.

[gratuitous]

7. We keep buying because there's not much of a choice

Well, there is for me, and I use mass transit anyway. The price for a monthly bus pass goes up, but not so precipitously (a few bucks a month) that I notice it at all. If worst comes to worst, I'll start bicycling more. It uses some petroleum products to run my bike, but not a whole lot. And it will keep my legs in shape so that when I meet an oil company executive or one of his bought-off congressional henchmen, I'll be better able to kick 'em in the shins.

[rurallib]

8. My opinion: control of refining capacity in only a few hands

Saw last week that oil inventories were high but refinery capacity was down and therefore so was gasoline inventories.

[texastoast]

3. What's the problem?

The oil companies are doing great.

One of my friends works for one of the major minors. They just sent her for two weeks all expenses paid to Hawaii for a "seminar."

[Skittles]

15. I know an oil whore too

:(

[BlueJazz]

4. Oh..I see their point.

I mean, I smashed my finger once with a hammer and now
(when I smash it) my finger hardly hurts at all.

[Double T]

10. Who is getting used to what????

I'll never be used to being screwed by corporate america and bushco.

[thethinker]

11. We need Windfall Profit Tax NOW

There is no excuse for this except greed. If congress put in a Windfall Profit Tax on the oil companies, you would see the price go right back down. Why has congress not done this?

The middle class is being had by the big oil companies. How much more will people put up with?

[texastoast]

13. You betcha

We need to start a bunch of threads with that title.

[MrPrax]

16. It'll go past 75 a barrel

and more unless governments start signalling an unwillingness to 'subsidize' it's 'market' price. But we can assume that national governments of all types will continue to allow their economies and their programs to be leveraged and cut, so that government revenues can be freed up for consumer subsidies.

[lovuian]

17. I think we are looking at $4.00 gallon gas in the future

and that will grind the economy to a halt...

[pinniped]

18. The prices are already up substantially since the POS*....

stole the office.

--we're getting kind of used to it."--