Clean Energy & Efficiency

This is very interesting and I'm nominating ArdTaoiseach's post in start off the bubble talk for a nomination in the quarterly post of the month competition. Oil is not a normal commodity - it is comparable to nothing else and no wonder it's treated differently by American petrodollarism and OPEC wheelings and dealings and behind the scenes deals and alliances and god knows what.

Remarkably the stuff is very cheap for something that's running out and that there'll be no more of ever... They are comparing the price of Evian water and printer ink to the price of oil over on boards
http://www.boards.ie/vbulletin/showthread.php?t=2055276878 and they're dead right - it's a bizarrely treated substance on world markets. Lately it's been coming to mind that what's behind the price could be alternative energy threats from companies who already have cheaper energy already cracked. Even if they haven't, couldn't alternative energy companies be buying up shares and speculating left right and centre, driving the price up, making more money and in the event of an alternative energy source coming along there will be none because they have it sewn up already. I'm talking about conventional battery makers etc. not Steorn etc.

Isn't the oil market internationally regulated? Abuse of it would have mad effects on world markets in every sector.

Ard-Taoiseach has plenty of excellent posts but this one is faulty. The number of contracts traded or open interest has no bearing on the price. These could triple and the price could be falling. I have discussed this before and they mean nothing unless the market was cornered.

Auditor #9 wrote:

This is very interesting and I'm nominating ArdTaoiseach's post in start off the bubble talk for a nomination in the quarterly post of the month competition. Oil is not a normal commodity - it is comparable to nothing else and no wonder it's treated differently by American petrodollarism and OPEC wheelings and dealings and behind the scenes deals and alliances and god knows what.

Thanks very much, Auditor. I'm glad you think it so. I feel that the price of oil should be about $80, based on the fundamentals. What we're trading in now is silly territory, and will only become serious territory by the end of this decade.

I have been reading that gas usage here is down about 4%. It will fall further now that it has gone above 4 dollars. There is another change that will drastically drop demand elsewhere. Many countries subsidise gas to it's citizens. These are getting too costly so when they are cut back many are in for a shock.

youngdan wrote:

I have been reading that gas usage here is down about 4%. It will fall further now that it has gone above 4 dollars. There is another change that will drastically drop demand elsewhere. Many countries subsidise gas to it's citizens. These are getting too costly so when they are cut back many are in for a shock.

Well, the US is the world's largest oil consumer, so if demand falls 4% in the US, then China, India and the EU have to significantly ramp up consumption in order to fuel more growth in demand. Since the EU is concentrating on developing non-fossil fuel sources and China and India will un-doubtedly invest in similar technologies as they prosper, then the fundamental reasons for high prices collapses.

The price rises are excessively vertiginous. This reminds me of the same time 2 years ago in the Irish property market. 6 months of final madness before the re-trenchment begins.

Ard-Taoiseach wrote:

Does anyone think that this graph...



...is bearing the hallmarks of a speculative bubble which will burst in the coming 12 months?

And compare that graph...



...to this one.

This graph illustrates the performance of the NASDAQ since the middle of the Nineties. Look how even the NASDAQ returns to the 30* trend line of every market.

I feel that oil will go the same way. It will initially over-correct on the downside before resuming a more denuded upward path.

Is the 30 a reference to the angle of the graph? 30º? Alt Gr + 0 (zero)

I've nominated that post because there's loads of food for thought there as I said - how the market even works is a question it brings up; how demand and price interract with supply and how technology comes into focus in times of crisis. I'd also be interested in knowing who would be buying up the oil as it's a fierce weird commodity in that it is probably finite so it will be in demand until the end of its days and considering the uses we get for it will always be a high price. It crossed my mind that rich alternative energy companies might be buying it actually - they have nothing at all to lose and everything to gain... by adjusting their own market they can influence the price of oil which they have invested in ... weird sh*t like that crosses the mind

Now to bring this down to man on the street level, I can afford to buy €2000 or €3000 worth of petrol tomorrow if only I had somewhere to store it. I would be hoping that it would continue to rise in price so that in two years time I will have twice or more the value of oil I currently have. But I'm taking a risk in that the price could fall to well below what it is now or just stay at the current price and so I've beat inflation as my best bet. Something really tells me that this is not a bubble though and that alternative transport fuel will take too long to develop... Could the Americans also be testing the Arabs lately by persisting in enquiring of them to turn up the taps? Do they want to assess and guess at all of what might be under the ground?

Auditor #9 wrote:

Is the 30 a reference to the angle of the graph? 30º? Alt Gr + 0 (zero)

Yes, I couldn't find the degree key on my keyboard, thanks.

This is not a bubble in my opinion. The fact is the Saudi's are pumping at the max. This was discussed in the oil threads on Pie about last August. It was pointed out that the big Saudi field Ghawar and the big Mexican field had already peaked in production. I opined at the time that the fact that prices were rising in the face of a recession meant that supplies were tight.
The fall in usage here will be more than offset by the fall in supplies worldwide. Some of the price reflects the possibility of a new war but the bottom line is that supply is falling.

Yeah there's a few excellent threads on p.ie on it - SPN is particularly scary on this thread
http://www.politics.ie/viewtopic.php?f=161&t=34260

I don't think it is a bubble either but it will be bubblish at the beginning while the American especially adjust their/your consumption of it. It's good to hear that consumption has fallen by as much as it has there - that's like 8% in the rest of the world you know.


http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_market_basics/demand_text.htm

What are people doing youngdan? Simply driving less? When you go out into the street tomorrow to collect your breakfast twinkies at the shop on the corner will you count the number of cars with engines of around 1.4/1.5 litres? I'll give you a dollar via paypal for every one you count

The drop in usage is understated because it was measured probably 50 cents a gallon ago because it has risen that much in about 2-3 weeks. What people will do is different to what would happen in Clare. The concept of financial planning is different here. A good percentage of people will just keep going as usual using plastic for as long as possible. Eventually they will fail to pay insurance or excise and their registration will be cancelled. They will continue driving till a cop pulls them over on a random computer check or speeding or something. Then the car is towed and money is due. At this point their gas usage drops to zero. The people who want to sell the guzzler are dreaming beause there are no buyers.
I expect and have heard reports that public transport is up a decent bit. People will carpool.
All this is not happening in a vacuem. If a family is living in a house that drops in value by 25 grand a year he is losing 500 bucks a week. The good news is when he realises that, he is not worried about 4 dollars a gallon any more:lol:

Ard-Taoiseach wrote:

It's also my view that the oil price should be at about two-thirds of where it is now. It's gone mad in the oil market and it'll get even more insane before the froth is blown from this bubbly market.

I hope you are right about that. From one of the Sat/Sun papers (I think the Sat Guardian), it was suggested that US demand has dropped 7% since the start of the credit crunch (roughly 2% drop in world demand as they account for 1/4 world consumption)

To my mind there are possibly 3 reasons why the price has not followed suit.

1) as you say, bubble

2) BRIC demand growing by 7% as US demand contracts

3) supply has dropped by roughly 2%.

OK you economics heads, what happens if a speculative bubble centres on an essential commodity with inelastic demand and increasingly limited supply. Have we been here before, or is this uncharted territory??

Nice interactive oil production and distribution map here:-

Interactive Oil Map

From the FT it appears that 300 million Americans are devouring the oil that 700 million Germans would

US electricity demand is 450,000 MW
UK electricity demand is 40,000 MW

Yet UK has only 4 times the people !

From Breakingnews tonight -

27/05/2008 - 21:58:47
Wall Street advanced in uneven trading today after a drop in oil prices and an unexpected gain in new home sales encouraged investors to put money back into the market.

Stocks picked up momentum late in the session as oil prices drifted below US$129 a barrel. This helped ease investor concerns about the effect of soaring energy and food prices on consumers, who account for more than two-thirds of US economic activity.

It has a little way to go yet, Ard Taoiseach, but you will be pleased with the direction.

cactus flower wrote:

It has a little way to go yet, Ard Taoiseach, but you will be pleased with the direction.

Yup, and if Quinlan Private is particularly successful with their fund-raising, we can begin to put the credit crunch behind us too.

I still feel that there are enough animal spirits in the oil market to take us all the way to $200, but I feel that that would be similar to taking the NASDAQ above 5,000 in early 2000.

Overall, I'll be sticking to my view that oil will be at $80 by New Year before the long-term upward trend re-asserts itself and we're back above $100 before the end of the decade.

I will put a shilling with you that it is going to 150 after a small pullback that will be short lived

Ard-Taoiseach wrote:

Ard-Taoiseach wrote:

Does anyone think that this graph...



...is bearing the hallmarks of a speculative bubble which will burst in the coming 12 months?

And compare that graph...



...to this one.

This graph illustrates the performance of the NASDAQ since the middle of the Nineties. Look how even the NASDAQ returns to the 30* trend line of every market.

I feel that oil will go the same way. It will initially over-correct on the downside before resuming a more denuded upward path.

You see what he is saying up there youngdan? The graph will be at a 30º angle after some rush which I've missed now godamm it but I drive a petrol not a diesel (€1.30 & €1.41 a litre here now) and I don't think the Gardaí will allow you to store 1200 litres of petrol on your premises but they might with diesel. I could have bought it at €1.10 and now look at it and it's going up some more too.

Do you think it will come back down and then go back up to 150 and then back down like in Ard-Taoiseach's graph of the Dot Com boom?

Thread Split to Create New Thread on One World Government (cf)

Re: Oil & Energy Watch
by youngdan Today at 2:07 am
I don't see why it should come down. Who wants it down. Not Bush, Cheney or Sutherland that is for sure. Putin or the producers don't want it down. If cheap energy was the desire they would be drilling in Alaska that has an estimated 200 year supply
The plan is to crash the economies and starve about 5 billion. Even as you see it happening some will not believe. There are threads on the S American Union, The African Union, I speak of the North American Union and I see some over yonder speak of a Mediterranian Union to join the AU and EU. The only ones in the way of a one world government is Russia , China and the muslims. The EU will subvert themselves to rule from Moscow when they invite them to join.

Some of the short-term bubble has been squeezed out today...

Oil prices drop despite lower stockpiles

I don't know if this is the beginning of the crash, but I'm still of the view that oil should over-correct on the downside after this irrational exuberance before returning to the mean of long-term price rises.

Ard-Taoiseach wrote:

Some of the short-term bubble has been squeezed out today...

Oil prices drop despite lower stockpiles

I don't know if this is the beginning of the crash, but I'm still of the view that oil should over-correct on the downside after this irrational exuberance before returning to the mean of long-term price rises.

Now this is price elasticity in action, isn't it? Or is it? Isn't the rate at which the market price responds kind of important? The price seems to go soft easily enough - put yourself in an investor's shoes with the squibillions you've bet on the price of oil staying up and suddenly the tech starts emerging and people start looking at alternatives like lightening and suddenly your squibillions start looking only like mere billions.

I was guessing that there are plenty of ways and means that we'll get by without oil if we have to, particularly in transport, but you'd never know the wider impact of an oil shortage might have - the domino effect knocking on to plastics industries etc. However, human ingenuity will out at the end of the day and we'll probably end up with something better than the Oil World we're imprisoned in at present.

On the Newsfeeds the other day I saw a CNN report on how, at the turn of the century, petrol was the fuel equivalent of VHS or of the Blueray format that simply happened to win over others...


Alternatives to 'distilled dinosaur juice'

A poll on the CNN site shows that 86% of the people who voted there believe that high oil prices are because of price fixing ... Have your say HERE just under the 1 year oil price graph. 11% say it isn't.

This doesn't sound right though and CNN in fairness have an article on the price of oil where they have this to say
Oil trading probe may uncover manipulation
But overall, any wrongdoing is likely to play a small part in soaring crude prices. Meanwhile, speculators aren't expected to hang.

Quite a row brewing between BP and the Russians over a major jointly owned oil resource.

http://www.iht.com/articles/2008/05/30/business/ruble.php

Is this what the Green Party was talking about when they said we needed to vote Yes for fuel security?

With any luck the Greens will be wiped out next election. The true colours of the top level has been exposed to even the most brainwashed. Gormleys drives around in a merc while the young woman risks her life in a hole in Tara. How real conservationalists and real environmentalists fell for this cheap trick is beyond me. The Greens urging a yes vote is like a turkey voting for Christmas being held early.
Putin's actions are part of a bigger picture. As hard as it is to believe the Soviet/Russian state was controled by the Western money men. When Putin came to power he began to take steps to expel the oligarchs who were robbing the country blind. He was able to grab the Yukos guy and stick him in jail but many of the rest escaped to London where their masters protect them and will not extradite them. Last Summer Putin told the American delegation of bigwigs including Kissinger, Rubin, Shultze and Nunn to screw. Putin has it seems freed Russia from Western control and now we see that he is doing what is best for the Russian Nation. This is good news in one way but it makes the possibility of a nuclear war real for the first time in history... The Russians believe that for the first time they are strong enough to defy the West.