Sticking it to us at the gas pump because of the Iran 'crisis'

[bigtree]

The price of oil is destroying the economy for the working folks of America. They have us good now. It would take a social, political, international upheaval to get the price of a gallon of gas to go below $2 again. They've been floating the prospect of $4 a gallon. They say prices may hit 80 or 90 dollars a barrel.

The U.S. supply is up. On Wednesday, the U.S. Energy Information Administration reported that commercial inventories in U.S. of stored crude rose by 3.2 million barrels to 346 million, the highest level in nearly eight years, since 1998.

Compare the $70 something we're being charged now for a barrel to the $15 a barrel in '98, and we're left with nothing but the Bush wars to blame for the price of gas today.

I remember the cockiness from the conservatives before the war as they gloated over the prospect of the U.S. taking over Iraqi oil. I know they're not all wealthy. These prices have to be putting the squeeze on so many Bushites, in so many ways.

Bush didn't say it outright, but he wanted to get his hands on Iraq's oil. I won't say that he quite knew what HE was going to do with it, but Cheney did. Right from the start he brought in the oil executives and they literally mapped out their plunder of Iraq's oil fields.

But, it's been a disaster for oil prices. And the silence that went on for so long was from the same bunch of Americans who voted for this regime, and expected that all of the macho talk about rolling over the evil Iraq was real.

Their fantasy came true. Liberals were pushed aside, moderates got to practice their conservatism in the open, and Bush Fonzerelli sent his boys (and girls) to rumble. Their target crumbled right away. Saddam retreated to a hidey-hole. That's the history. So are those amazing photos of him submitting himself to the de-lousing like a lost child.

Iraqis, though, would not willingly submit themselves to our invasion, and we were never welcomed to stay.

How stupid are the average Bushites? Stupid enough to believe that multi-national corporations, oilgarchies, Exxon, Mobil, Shell, BP . . . would actually take what they gained by the sacrifice of our soldier's lives and the lives of those they were tasked to kill, and use it to lower our gas bills.

Are they really that stupid? Yup. Are they wising up? I would hope so.

Mission Iran. Oil prices going back up through the roof. Neonuts blame the rise on 'Middle East' unrest, tension, violence, uncertainty. Those Bushites, though, have got to be looking at the next round of military action and saying to themselves, this can't be good for my wallet.

I saw a lot of expressions of nationalism from Americans for years after 9-11. There's still a hardcore percentage of them who have convinced themselves that Iran is coming to kill their God, and I know it won't take anything for them to get behind another crusade against evil. But they've got to wonder just how this president let things slide so far that we're talking nuclear war again.

It's not like we've been toiling within the isolation of a cold war for decades like before. Anyone with a memory can recall the salad days of the Clinton era of peace and prosperity. Sure, the Clinton bunch wagged around our nation's defenses like typical imperialists when it suited them, but their most prominent doctrine was one of reserve and diplomacy. It was no accident that a great deal of the world seemed to be working together then.

President Clinton, Remarks to the British Houses of Parliament, London, U.K., November 29,
1995:

"For the first time in half a century now, we can put our children to bed
at night knowing that the nuclear weapons of the former Soviet Union are
no longer pointed at (our) children."

Americans knew and felt the difference. The attacks on 9-11 scared some Americans into going along with chasing 'terrorists' to Afghanistan, knocking a dictator out of power while we were at it . . . and there's where they were left hanging. Bush has done nothing to bring our nation back to the security of the Clinton era which preceded his ascendance to office. He's hell-bent on muscling around, itching for a fight while most Americans who backed him up are waiting for the payoff.

No bin-Laden. The Iran thing is completely removed from that.

No 'democracy' in Iraq. How the hell are we going to rustle the Iranians into seeing things our way?

A billion dollars a week spent for the occupations in Iraq and Afghanistan. Bombings all over Iraq, soldiers still dying almost daily, and they say that all of this war-making hasn't intimidated anyone who would do our nation and our citizens harm. We've inflamed violence with our military meddling and muckraking. This can only get worse.

I'll bet there are more than a few bushites who wish their glorious leader would just shut up and stand down from all of the world-crusading he's doing with our soldiers and our money. I'm hoping that, at long last, this sneering frat-boy is wearing thin on folks who didn't think Bush could do any wrong, and cheered him on as innocents overseas found themselves at the destructive point of his politics.

I'm hoping they've finished playing cowboy because they can't afford it, and because they've come to realize that Bush sucks at every single thing he does.

[The2ndWheel]

1. Yeah, it would

"It would take a social, political, international upheaval to get the price of a gallon of gas to go below $2 again."

Like, say, a third of humanity and the US not thirsting for cheap energy. But that won't happen, because we all bitch about gas being so expensive.

[bigtree]

3. you'd think we'd be grateful that the oil executives enjoyed record profit

while spreading the myth that demand has just increased so much that the oil glut that had driven prices down so far before the wars wasn't enough to sustain it any more.

the myth of increased demand

[The2ndWheel]

5. So all those people in India and China don't count?

Their growth is what, imaginary?

I'm open to an oil company conspiracy to control prices.

Or maybe they're just at the top of the food chain when resources are running low and the addicts can't stop, and there are billions of people who want to be new addicts too.

[bigtree]

6. how do YOU account for the rise in prices?

China and India didn't have some explosion of demand. The price was low because of a glut of oil. Just saying there's a demand in China and India doesn't explain why that glut, still in evidence in the U.S. supply, doesn't sustain roughly the same amount of consumers that managed before.

Where is your evidence that the increased demand tracked the increase in price?

[The2ndWheel]

10. So there is enough for everyone?

This magical glut will go on forever? Isn't oil traded globally? It's not just the 5% of the world's population that gets to play with it.

I just see it as more people, using more and more energy, which in my mind is a finite resource, and prices will eventually go up. Oil companies may control prices here and there, and some instability in this region and that doesn't help, but it won't last until the sun burns out.

[bigtree]

11. naw, it won't last

[bigtree]

7. "High Oil Prices More Serious This Time"

he global economy dodged a bullet last year when oil prices edged above $70/barrel but won't be so lucky again should prices remain north of that for an extended time, says NYU business prof. Nouriel Roubini on his RGE Monitor blog. That's because higher long-term rates, driven by tighter U.S. monetary conditions and dwindling liquidity in euro zone and Japan, will put bigger squeeze on U.S. consumers. Even with a U.S. housing slowdown, sustained oil prices above $70 would force Fed to keep raising rates to counter inflation, not to mention central banks in Europe and Japan, and combined stagflation effect would hit trade hard. Should U.S.-Iran tensions escalate further and military clash start to look likely, "oil could easily spike above $100 and we would experience a global recession rather than just a global slowdown," Roubini writes. May light sweet crude on NYMEX around $68.65/barrel in recent trade, not far from all-time high of $70.85.

http://framehosting.dowjonesnews.com/sample/samplestory.asp?StoryID=2006041215330013&Take=1

The Iraq invasion was presented as risk-free. An Iran invasion threatens to plunge us into another recession . . . easy to cheerlead a war without direct consequences. An Iran invasion would bring it home, for sure.

[NickB79]

14. Supply is falling

Cantarell in Mexico, Burgen in Kuwait, the North Sea fields, the North Slope of Alaska, they're all going into decline. There are rumors that Saudi Arabia's giant Ghawar field is also going into decline, as they are increasing the amount of water they have to pump into the fields just to maintain pressure. 25% of the Gulf of Mexico's oil production is still offline, and will likely stay that way, as they are predicting another bad season this year (thank you global warming).

Even if our demand stayed static, our supplies are faltering. Welcome to Peak Oil.

[bigtree]

16. That seems to encompass the US sources

more than it does those who rely on sources like Iran (Pars fields), Venezuela, Sudan . . .

It won't last, but for the time being there should be some rationality to the increase in price that isn't explained away by refinery issues or increased demand. $70 a barrel is way to high an increase to be explained away by market forces, or catastrophic events. This 'unrest' that the Bush administration is keeping hot is too convienient for their oil buddy's fortunes.

[Spider Jerusalem]

22. Global production = 84MM bbl/day; global demand = c. 83MM bbl/day...

according to the latest figures I've seen. Not much headroom there to increase production enough to drive prices down very far.

Also, both production and demand have INCREASED by twenty million barrels a day (from levels around 65MM bbl/day in 1995) over the past decade...but there's not much room to increase production any further, because the oilfield capacity just isn't there (but unfortunately demand is not lessening any time soon). Anyone who thinks increased demand is a "myth" obviously has no idea what the hell he's talking about.

And Americans still pay approximately 50-60% of the world average price for a gallon of gasoline. Which is not that bad, you know...and, shocking as it may be to think, Americans actually DON'T have some sort of god-given right to cheap fuel.

[bigtree]

23. can you really show me that demand has increased at such a rate

to justify the price increase? How much do you think that demand grew from 2005 when oil was about $28 a barrel? Do you really believe that the price of gasoline jumped so high from glut levels of 2005 due to 'demand'? Even with all of the profit taking?

I don't. That's the lie, in my opinion. I understand refinery pressures, and I understand the problems with production in Nigeria that would affect the supply.

What I don't understand is $70 a barrel. All of the factors like demand should have been sustained by $50 a barrel oil. How did it get to $70? Doesn't profit-taking play a large role here? Isn't the market using 'unrest' as an excuse?

In 1998 we had a worldwide oil glut. OPEC didn't seem to want to do a thing about it. Prices fell to amazingly low levels, rising a bit in 2005. Then OPEC scrambled to slow production to keep the price from falling again. There was the view that if OPEC produced all they could the glut would continue and worsen, driving prices down further. OPEC was quoted at the time saying that, even if they wanted to produce more oil, they would have trouble finding buyers.

In the markets that was a bad thing. To the consumer, it rocked. Now we have demand in the U.S. increased by about 2% from the 2005 level, according to the International Energy Agency. Would a 2% increase in demand support a $40+ rise in a barrel of oil?

I don't believe that oil is running out so fast that we can see the tail of the dragon, even though it is obviously a finite supply. What I do believe is that oil producers have figured out how to manipulate production levels to make it appear that they can't keep up with demand. I don't think that we can blame the gas price on 'Peak Oil" at this point.

What happened between then and now? 9-11 and Bush's militarism happened. 9-11 and Bush's mismanagement of the economy pushed us into a recession. Gas prices started to rise. There was almost no effort made to halt the rise except for some token moves by OPEC around election time in the U.S. to increase production.

Now we have the news that the U.S. crude supply is high, with refined supplies too low for it to make much of a difference today. But, there will be an after-winter drop in demand and refinery issues should be resolved in the next quarter. So, there will be a downward trend in prices.

There will be an effort to keep those prices high. Not for the environment. Not for the sake of some sanity on the part of oil executives who have seen the light about our wasteful ways. The price is kept high to feed the record profits that they have enjoyed throughout our struggle with expensive gas.

I agree that we waste too much oil. But, there millions of Americans whose gasoline bills are stretched by normal, necessary driving. The effect of high oil includes other uses like heating, and also hits the industries who rely on a low gas bill to survive. There's a point where technology hasn't caught up with the ideology of conservation and alternatives to oil that makes all of the finger-wagging about consumption seem misguided. We still need oil and gas to survive.

We could likely sustain high prices for a determinate time if the goal was truly a shift to alternatives. But, until there is some true path to all of that, a high price of gas will only shrink demand as far as folks actual needs allow. There's little point in forcing responsible users to pay for some punitive, corrective notion of conservation when the overall industry takes the profits off of the top. They're not going to make any substantive investments that would undermine their own oligarchy of greed.

[Spider Jerusalem]

27. You're neglecting several factors.

For instance, your numbers for demand focus on the US, and ignore the REST of the world.Which would be fine if the US were the ONLY market for crude petroleum, but...it isn't. Demand has increased worldwide by ten million barrels a day since 1998, and by five million since 2002.

Also, there WAS effectively no oil glut in 2005. I just took a look at the historical price data, and Brent and West Texas Intermediate never went below $40-45/bbl, and that was very early in the year. Those prices aren't 'amazingly low' unless the late summer/early autumn spikes above $60/bbl are your reference point.

Andn there's yet another reason for the price increases: output of Middle Eastern light, sweet crude has declined significantly, and the Saudis are making up the difference with oil from other fields, so-called 'Arab Heavy', which is high in sulfur, and very difficult to refine (there are very few if any American refineries that can handle sour crude in large amounts). So, if you have a glut of oil the refineries can't do anything with, is it STILL a glut? I'd say the answer is no. And of course demand, and thus price, for the more desirable, lighter grades of crude will increase regardless of how much heavy oil is on the market.

And...you know, whatever the reason for the increase in prices, if there were people who actually gave a damn about the future of America running things instead of the sociopathic Gordon Gekko clones we have now, we'd be taxing oil company profits at 70-90% and dumping all the money into mass transit and alternative energy research. Ah, well. We'll pay for our short-sightedness soon enough, I imagine.

[bigtree]

28. thanks for your info. I daresay, you have a convincing argument

but I recognize the differences in our perceptions of the worldwide supply and whether there was a glut.

It's hard to be definitive about this from the outside when the data comes from so many compromised sources. Of course, the ones that are in opposition to the industry are compelling even as they completely contradict the industry data. And, the government sources are suspect . . .

All of the price increase seemed to occur much to fast, and went way too high to be a result of demand. I'll have to watch for a more comprehensive look in the coming months to see where the price pressure actually originated and was aggravated, or encouraged.

[markam]

30. Demand has gone up

by 10 million barrels/day over the past 7 years, completely eliminating the production cushion that used to exist. The world is using 4 barrels of oil for each one that is being discovered, and has been using more than being discovered for 30 years. Publicly traded oil companies only produce about 1/6th of the worlds production of oil (most of it is produced and controlled by national governments).

The fact is, we are using a lot more oil, and we are starting down the backside of production capability. Oil companies, while making good money, are not in control of circumstances right now. Only governments and individuals, by significantly reducing consumption, can have any impact upon prices.

[bigtree]

31. why does that make a $28 a barrel price rise to $70

why are we a hostage to this production/demand/price equation? It doesn't add up that supply has so diminished in a year since the 2005 levels to justify the price increase as a result of increased demand. Production has dropped maybe, but isn't that mostly a manipulation to keep the price high? At some point the price jumped far higher than demand/supply could explain outside of manipulation.

Also, I think any production issue could be addressed in favor of lower prices but I won't hold my breath for that.

[markam]

32. demand for oil is highly inflexible

at least in the short term. Any substantial reduction in supply will demand a large increase in price in order to curb demand. When OPEC enacted their embargo and cut production by about 25-30%, it resulted in quadrupling of oil prices. Without rationing, drastic price increases are the ONLY way to reduce consumption short term.

Prices on the world market have historically been controlled by a swing producer. Until the early 70's, it was the U.S. Since then, it has been Saudi Arabia. The swing producer has the ability to ramp production up and down in order to control prices. The U.S. controlled prices until they hit peak oil production in 1970. After that, they had no ability to control the price of oil. Saudi Arabia has maxed out their production capability, so they now have no ability to control prices. Hence, we have the market matching supply and usage through price.

If we have reached peak oil production (which I am convinced we have), there is no mechanism to control demand except price. And it is going to take much higher prices to reduce demand as supply drops (which it will on the backside of the production peak). I fully expect $5-6/gallon by the end of next year. This will probably be sufficient to drive the country and the world into a depression and reduce demand dramatically.

[bigtree]

35. I thought that's what the $70 a barrel was supposed to do.

I can't say for certain whether Saudi Arabia has maxed out or not. We just don't have that kind of info about their reserves. There's speculation, but I've also seen reports that say they are only producing a fraction of their supply.

I think the supply is there, but there seems to be a refinery problem. I agree that the future holds a caution because of the finite supply, but I still think there's plenty of room (oil out there) for production to catch up with demand, IF the oil companies go along with it. But they won't because they are growing accustomed to the new super profits that were a result of their latest gouging.

There are many convincing arguments that 'peak oil' is a real and present problem, but this squeeze, this soon, seems manufactured to generate profits. I don't think they are trying to curb demand. I think they are more than comfortable with this argument that puts the blame for the price increases on the consumer. I'm just not buying it. So long as we have to speculate about actual reserves and reasons for adjustments of production levels by these money-grubbers we will never actually know whether we're being manipulated into accepting that there's a crisis, or if our supply has really reached a level of diminishing returns. There has to be more transparency from the industry and these foreign suppliers before I can go along with the 'peak' explanations.

[sinkingfeeling]

2. Too bad there's no Iranian crisis...just a bunch of 'macho' crap.

[bigtree]

4. manufactured crisis

buoyed by 'macho' crap

[bigtree]

8. Retirement at Exxon: chief gets $398 million

Retirement at Exxon: chief gets $398 million

The New York Times
THURSDAY, APRIL 13, 2006
http://www.iht.com/articles/2006/04/13/business/exxon.php

NEW YORK Last year's high oil prices not only helped Exxon Mobil report $36 billion in profit, the most ever for any corporation; they also allowed the chairman, Lee Raymond, to retire in style.

Raymond received a compensation package worth about $140 million last year, including cash, stock, options and a pension plan. He is still entitled to stock, options and long-term compensation worth at least another $258 million, according to a proxy statement filed by Exxon with the Securities and Exchange Commission on Wednesday.

The total sum for Raymond's golden years comes to at least $398 million, among the richest compensation packages ever. The record was the payout of $550 million to Michael Eisner, the former head of Walt Disney, in 1997.

Exxon's board also agreed to pick up Raymond's country club fees, allow him to use the company aircraft and pay him another $1 million to stay on as a consultant for another year. Raymond agreed to reimburse Exxon partly when he uses the company jet for personal travel.

[RUMMYisFROSTED]

20. Welcome to the oligarchy, Mr. Raymond.

And welcome to your children, as well.
And their children.
Ain't aristocracy grand?

[Hubert Flottz]

9. Because the GOP lets them!

Because the energy companies own the GOP!

[Blue_Roses]

12. great post!

:thumbsup:

[bigtree]

13. kick

:hi:

[Justice Is Comin]

15. If Iran is attacked

you will be thankful for $4 a gallon. Bush is one sick bastard and if he pokes this beehive we're heading straight for WW III.

Iran will rally the entire Muslim world, terrorist factions of every sect, shut down the oil and make the gas lines of 1978 look like a happy memory.

Gas could reach $7-8 a gallon.

[bigtree]

17. gotcha

I saw one analysis that predicted $100+ a barrel if that happens.

[bigtree]

18. .

[lovuian]

19. $3.00 gallon gas is going to cause the nation to go into a

recession or a depression ... we just aren't prepared for that ...

[bigtree]

29. they seem to think we are

if there's another war the price is predicted to go even higher.

[OmmmSweetOmmm]

21. I think the real reason is that it was such a mild winter that they didn't

rake in the expected profits from heating oil.

[Catrina]

24. Great post. I think this whole Iran crisis is being manufactured so that

Big Oil can eek out as much profit as they can while their mentors are still in the WH. I doubt even Bush is dumb enough to start nuking Iran. Or if he is, I would hope there is someone in this country with the power to stop him.

Meantime, I read that the price of oil went up directly as a result of the fear that there will be a war in Iran.

[bigtree]

25. that's what got me

How could the oligarchy not be enthralled with knowing that their profits can be enhanced by stirring up trouble with Iran?

It would be silly to think they didn't plan this all along. Virtually nothing gets done in America that doesn't enhance their wealth. If war wasn't good for their profits they wouldn't go there.

[bigtree]

26. I went ahead and submitted this

not my best footing, but it's got a good drift. I'll be looking for more on this . . .


final version:

Sticking it to us at the gas pump because of the Iran 'crisis'

by Ron Fullwood

http://www.opednews.com/articles/opedne_ron_full_060414_sticking_it_to_us_at.htm

[Catrina]

33. Excellent and I think anyone who thinks about this has to agree, that

there's no way demand for oil increased in just a year to justify the current cost per barrel.

There's little point in forcing responsible users to pay for some punitive, corrective notion of conservation when the overall industry takes the profits off of the top. They're not going to make any substantive investments that would undermine their own oligarchy of greed.

Another very good point ~ I've read that we have the technology to start switching to alternative energy sources but many of the patents were bought by oil companies.

There are two other reasons to believe that these wars are being fought for profit. One, Bush cut back on funding for research on alternative energy.

And you mentioned the second one in your article, we really need to see those memos from Cheney's energy meeting in the WH at the beginning of this administration. He has fought so hard to hide those memos from the American people. I have a feeling that's where all this was planned, the wars, the profits etc. Those oil execs need to be called back before Congress and this time, put under oath.

[YouthInAsia]

34. Goddamn gas was $3.09 for regular today in Philly.

Total fraud. Nice to see the CEo of exxon is getting a $398 MILLION dollar retirement package. I hope he spends my money well.

[bigtree]

36. stoking war with Iran could make for more record profits for the industry

"Oil prices have risen more than 20 percent since mid-February, despite sizeable U.S. crude inventories, as geo-political fears compounded fundamental worries that refiners might struggle to make enough gasoline for the summer driving season."