Possible Oil Bust in the future (Full Version)

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freakofnature -> Possible Oil Bust in the future (5/7/2008 3:27:55 PM)

All good things must come to an end.

MoneyNews.com

"Breaking News from MoneyNews.com"
quote:

Lehman Bros. Report: Oil Bust in the Cards
Is $120 oil even real? Not if you ask the Saudis, or even Lehman Bros.
The investment bank’s oil expert said this week that the oil boom is due to bust. Economic growth across the globe will slow just as new refineries kick in, raising supply.


EDIT: Sorry... try this link here my bad...

http://moneynews.com/money/archives/st/2008/5/5/115537.cfm?s=st



freakofnature -> RE: Possible Oil Bust in the future (5/7/2008 3:34:25 PM)

If you aren't completely into linking up and reading this article, one of the main points is this:

quote:

What effect does the falling dollar have on the price of crude?

Most oil price contracts are denominated in dollars. The dollar has fallen in value by more than 30 percent against a Federal Reserve index of major currencies since 2002. This means that the price of imports, including oil, have gone up. To some extent, the chief of the Organization of Petroleum Exporting Countries (OPEC) Chakib Khelil was correct when he said earlier this week, "What's happening in the oil market is due to the mismanagement of the U.S. economy."



TomTurn -> RE: Possible Oil Bust in the future (5/7/2008 8:55:07 PM)

Thanks to chicken littles we did not advance nuclear power in the U.S. and yes I say nuclear just like Pres. Bush



colliefan -> RE: Possible Oil Bust in the future (5/7/2008 10:43:04 PM)

There was a bust in the early 80s and it will happen again, just the nature of the free market. When India and China start going for their own oil instead of buying from the Saudis the price will go down, But we are in an ecconmonic crisis due to the environmentalist wackos refusal to drill for our own oil.



blessedinnyc -> RE: Possible Oil Bust in the future (5/7/2008 11:00:17 PM)

quote:

ORIGINAL: colliefan

There was a bust in the early 80s and it will happen again, just the nature of the free market. When India and China start going for their own oil instead of buying from the Saudis the price will go down, But we are in an ecconmonic crisis due to the environmentalist wackos refusal to drill for our own oil.

We are in an economic crisis because of:

50%: Us americans are stupid and borrowed too much money to finance their homes and extravagant lifestyles.
15%: Banks loosened credit too much
35%: Energy costs are too high{
-15%: China and India are consuming more energy.
-17%: America consumes too much energy
-3%: Darned environuts are keeping us from producing an extra 200 kbpd out of the world's 80 mmbdp production.}



blessedinnyc -> RE: Possible Oil Bust in the future (5/7/2008 11:19:48 PM)

quote:

ORIGINAL: freakofnature

All good things must come to an end.

MoneyNews.com

"Breaking News from MoneyNews.com"
quote:

Lehman Bros. Report: Oil Bust in the Cards
Is $120 oil even real? Not if you ask the Saudis, or even Lehman Bros.
The investment bank’s oil expert said this week that the oil boom is due to bust. Economic growth across the globe will slow just as new refineries kick in, raising supply.


EDIT: Sorry... try this link here my bad...

http://moneynews.com/money/archives/st/2008/5/5/115537.cfm?s=st

I disagree with this.

Being a contrarian and claiming that things will get back to normal is a very rational, wise thing to do. However, I don't know if it's correct in light of current fundamentals. Here's why today might be different than the '70s:

1.) In the '70s, we had Japan, Korea, Singapore, and maybe a few other countries developing. Combined their populations were smaller than the US's. Today, China and India are maybe three times as large in terms of population as the developed world. How much oil does it take for them to become developed nations?

2.) Oil production in the US has long since peaked. Oil production in Saudi Arabia and the North Sea may also be peaking. We have the Athabasca Oil Sands and Brazil, but these aren't anywhere near as large as some of the discoveries we made in the '70s (IE: the North Sea and Prudhoe Bay).

I think the US economy will recover as we become more energy efficient, but I don't think oil will get much below $80 until we are starting to run our cars on something else.

Look for oil to stay "relatively expensive" for at least five years. Prices will eventually come down, but that will be when the auto companies are cranking out 5,000,000 hybrids per year and plug-in hybrids are on the horizon. That will be a good time to buy Uranium.



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