American Crude Oil Prices Rising Like Hell
By Dr. Hassan Isfahani • May 16th, 2008 • Category: Misc, Worth A Second Look • (3,081 views) • 14 CommentsAs the Asian Development Bank puts it that the world now has got to become accustomed of the expensive food items. The thing is that the world has not only to become habitual of buying expensive food but also any and every commodity on the earth. So beware and plan ahead, but then what to plan and how to plan.
The parabolic rise in oil prices is just scaring the hell out of everyone. When the oil prices go up, the inflation goes up and the prices of everything shoot up. 42 gallons comprise a barrel. The price of a bbl of crude at this writing is more than USD 127, its a record and it is expected to rise more.
The rise in the oil prices is an international phenomenon and we cannot do much about it. But we can do much back at home. We could save on oil and we could use oil-efficient vehicles and other machineries and we could buy less or use it on inevitable occasions and we could compel our government to find alternate energy resources and methods.
The thing is that we have become addictive to oil and every piece and parcel of our life now depends upon the oil and we cannot even think straight without it. There hardly is any chance that the oil prices would come back at normal prices of yesteryears, if they come down at all, so we need to not only become accustomed to this hellish rise but also, more importantly, should try to break the oily shackles. We need to stress more upon the ethanol based and solar based fuels rather than the oil, but that has to be governed and facilitated by the government.
Last 5 posts by Dr. Hassan Isfahani
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Dr. Hassan Isfahani
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May 16th, 2008
Considering the price of putting crude on a ship, costs of refining and distributing fuel and taxes, there’s some major profit taking happening in the market. The sheiks, tax collectors and oil companies were doing just fine at $30 a barrel. A good part of the higher prices are going right back to the sandboxes, but the commodity traders are also making huge profits on churning paper and without them, the cost of crude would still be substantially under $100, even with the demand from India and the PRC. Everyone is crying about the oil company profits, but that is *MINOR* chump change compared to the money OPEC and the commodity middlemen are pulling in. Taxes are a factor where those are not fixed, but a percentage (e.g., a sales tax) - the highest taxes being, of course, in the bluest states.
May 16th, 2008
The current energy crisis may be coming to a head, as the lack of adequate supply growth is becoming apparent
May 16th, 2008
Oil prices could reach $150 to $200 a barrel over the next 6 months to two years
May 16th, 2008
Get Used to it, mates or start buying horses and donkeys.
May 16th, 2008
The important point is hat production is highly likely to be on plateau and consequently it is also highly likely that supply will be unable to meet increasing demand. Prices will continue rising and the IEA, EIA and USGS need to make more realistic statements about their risks of overoptimistic production forecasts being too high. Their forecasts need to be partly driven using a bottom method of forecasting by field/project and not just assume that the supply forecasts will be equal to demand forecast.
May 16th, 2008
What does the earthquake in China do to demand? Increase it or decrease it?
I’m guess short-term decrease followed by a big increase as rebuilding begins in earnest.
May 16th, 2008
It is the DOLLAR that has caused the price to go up, NOTHING else.
May 16th, 2008
Why are corporates and politicians trying to hide this from us? Why are we waiting the last moment to act? What options do we have? Will we witness ¨energy wars¨, like China invading Indonesia or the US invading Mexico?
May 16th, 2008
Keep in mind that these are now normal prices with no international crisis happening. Imagine the prices if the U.S. decides to attack Iran, or a Saudi refinery gets blown up, or a super hurricane shuts down Gulf of Mexico production, etc. etc. A barrel of oil could quickly quadruple to over $500 barrel and gas at the pump would be $15 a gallon, then we will be looking at the good old days of $3.50 a gallon.
May 16th, 2008
One of the tenets of Peak Oil is that once we’ve hit the “peak” (or, more appropriately, the “plateau”) then even the slightest disruptions will send the price higher. Saudi Arabia has served as the world’s “swing producer” for nearly 30 years yet the evidence is mounting that they can no longer produce enough to make a difference. Mexico’s main field (Cantarell) is rapidly depleting, as is the North Sea. Kuwait has admitted that their supergiant Burgan field is probably past its peak. Russia’s production is dropping. Combine this with the increased demand from China and India and you begin to see that a very serious problem is developing. Stop blaming the oil companies and their “profits.”
May 17th, 2008
It is the weak US dollar (that is pegged to many world wide currencies) along with the demand by investors in the oil futures that has caused the increase in oil prices. Before this rise in oil prices, roughly $11 billion in US dollars was traded each day, and now the number is way above $250 Billion.
May 17th, 2008
No doubt, lot of factors are involved in this price hike… but why Governments not asks USA to open their World’s Largest Fossil Oil reserves (sorry, I forget the name of state) in their one state now. They runs towards Saudi Arabia and Kuwait always. They are the real problem creators. Maximum demand of Oil is also in USA but they are playing with the rest of Oil generating countries and whole pressure is bearing by poor countries.
An other biggest problem that is upcoming…. FOOD SHORTAGE GLOBALLY> Now every thing will be globally. From last couple of years few countries have started using food for oil generation and it is increasing gap between demand and supply in food also. This will prove to the bigger giant as compared to FUEL CRISIS. Very bad situation.
May 17th, 2008
The World’s Growing Food-Price Crisis:
By VIVIENNE WALT
Rocketing food prices—some of which have more than doubled in two years — have sparked riots in numerous countries recently. Millions are reeling from sticker shock and governments are scrambling to staunch a fast-moving crisis before it spins out of control. From Mexico to Pakistan, protests have turned violent. Rioters tore through three cities in the West African nation of Burkina Faso last month, burning government buildings and looting stores. Days later in Cameroon, a taxi drivers’ strike over fuel prices mutated into a massive protest about food prices, leaving around 20 people dead. Similar protests exploded in Senegal and Mauritania late last year. And Indian protesters burned hundreds of food-ration stores in West Bengal last October, accusing the owners of selling government-subsidized food on the lucrative black market. “This is a serious security issue,” says Joachim von Braun, director-general of the International Food Policy Research Institute (IFPRI), in Washington. In recent weeks, he notes, he has been bombarded by calls from officials around the world, all asking one question: How long will the crisis last?
The forecast is grim. Governments might quell the protests, but bringing down food prices could take at least a decade, food analysts say. One reason: billions of people are buying ever-greater quantities of food — especially in booming China and India, where many have stopped growing their own food and now have the cash to buy a lot more of it. Increasing meat consumption, for example, has helped drive up demand for grain, and with it the price.
There are other problems too. The spike in oil prices, which hit $123 per barrel in recent days, has pushed up fertilizer prices, as well as the cost of trucking food from farms to local markets and shipping it abroad. Then there is climate change. Harvests have been seriously disrupted by freak weather, including prolonged droughts in Australia and southern Africa, floods in West Africa, and this past winter’s deep frost in China and record-breaking warmth in northern Europe.
The push to produce biofuels as an alternative to hydrocarbons is further straining food supplies, especially in the U.S., where generous subsidies for ethanol have lured thousands of farmers away from growing crops for food. “The area used for biofuels is increasing each year,” says Nik Bienkowski, head of research at ETF Securities, a commodities-trading firm in London. To make matters worse, global stockpiles of some basics have dwindled to their lowest point in decades. Rice — a staple for billions of Asians — has soared to its highest price in 20 years, while supplies are at their lowest level since the early 1980s, according to the U.S. Department of Agriculture. Meanwhile, the global supply of wheat is lower than it’s been in about 50 years — just five weeks’ worth of world consumption is on hand, according to the U.N. Food and Agricultural Organization.
As always in a crisis, there are winners. The creeping fear that the world might actually run short of food — no longer simply the stuff of sci-fi movies — has led speculators to pour billions into commodities, further accelerating price rises. In a single day in February, global wheat prices jumped 25% after Kazakhstan’s government announced plans to restrict exports of its giant wheat crop for fear that its own citizens might go hungry. Jittery officials in India and Egypt are also restricting food exports. “Prices have risen at a much faster rate in the last few months,” says Fazlul Kader in Dhaka, Bangladesh, where he coordinates rural projects for the U.N.’s International Fund for Agricultural Development; there, soybean oil alone has shot up 60% in a year.
July 10th, 2008
soybean oil in horses…
How does the rss feed work so I can get updated on your blog?…