Posted by: thescoundrel | June 8, 2008

Is Oil to Reach $450 a Barrel by the Next Decade


I have read a couple of articles that suggest the possibility of a barrel of oil reaching some unthinkable prices (possibly as high as $450 a barrel) within the decade. Once again it is all speculation but it seems logical that it could happen. I have thought for some time that the oil producers have no compelling reason to reduce their price. And their response for increased production pleas from world leadership has been met by that attitude. Really why would they needlessly cut into their profits if it is not necessary? The World is shifting gears and leaving behind energy sources from oil products, although it is currently moving at a snails pace. When you have X amount of product and X/Y as the time to make your money on the product, you search for ways to keep the value of your product at the highest levels for the longest amount of time before your product becomes obsolete. That is what the oil producers are doing. If you have absolute control of the supply, then you can manipulate supply and demand – to maximize your profit for reinvestment. The traders will also be an influence as they are gambling on the market and riding the wave out until the peaks crash. Right now with the frenzy created by newly industrialized countries bidding for the same limited amounts of Oil produced that every other country is wanting, will make for a gamblers wet dream. There has been a lot of yammering about the traders influence on the market, but realistically most are just doing what traders have always done gambling their money by investments. I am not into trading but if I were I would venture a guess that they are licking their chops at the futures prospects over the next decade, which is the amount of time that seems to be agreed upon for a realistic weaning for a large amount of the world from big oil’s drying teats. OPEC meanwhile has been manipulating the supply and demand since the 70’s gas crisis. They have become larger than a 800 lb Gorilla that sits on our backs just because he wants to. Through inaction at developing alternatives energy sources, The World’s leadership has basically let OPEC become King Kong size squashing the life out of the whole Worlds economy because they want to. OPEC’s manipulation combined with all the other factors including a devalued dollar is making it tough on the home budgets here in the US. It has become a dangerous game of poker we are playing.

The USAmerican government’s (along with the rest of the Worlds leadership) dragging their feet since the 70’s in looking for alternative energy looks more insane everyday. The US could kick the market in the shins if they would just crack into the dormant oil fields we have been sitting on and start refining the product. But if they continue to sit on their haunches and not drill, not refine and continue to vacillate on finding alternative energy sources –> then who knows how high gas will get until finally a viable energy alternative is found and replaces oil products. If the government continues to drag their heels, $450 a barrel might look cheap in ten years. It will get even tougher on the middle class and the poor around the world.

I am including an interesting look at the devaluing of the US dollar and skyrocketing Oil prices at this link.

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Responses

  1. I’m not a Catholic, but I think we deserve $450 a barrel oil as penance for electing all the dumb@ss politicians we have sent to Congress over the last 40 years.

  2. THE ORACLE is Catholic. But I will forgive QCE if she removes Congressman Hare from her list of “dumb@ss politicians”.

  3. QCEx you might be right that we deserve the $450 a barrel for our constant re-electing of Democrat and Republican politicians that prefer to play political hot potato rather than actually solve problems. Even so if such were to happen you could very well see a new USAmerican revolution. Heck we went to war with England over a lot less to win our independence. We could have another tea party but instead of dumping tea into the bays (I guess the founding fathers were not to much into ecology thing) we could toss the useless politicians. They all need a good bath and scrubbing anyway.

    Cubs Win – Cubs Win – Cubs Win!!!

  4. Sorry Oracle but I tend to think along the same lines as QCEx. I am not Catholic but I have stayed and even managed at a Holiday Inn so that makes me pretty much an expert on whatever I choose. So I believe that although QCEx could remove Hare from her dumb@$$ politician list, God would probably send down a pox on her household for denying the obvious and not using the intelligence he gave her. The best you can grade him is that Hare is an oversized human intestinal fluke that is a danger to the health of this district and country. The problem with such parasites is that once they entrench themselves in the intestinal tract, much like the previous intestinal fluke that infected this district – Lane Evans, they are difficult to eradicate from the body.

  5. Remove Hare from my list of dumb@ss (or dumb@$$ as Scoundrel would have it) politicians?

    O, you are such a hoot!

  6. Scoundrel, I’d say we are ripe for a revolution.

    One of my many backburner blogging projects concerns an article by Malcolm Berko about why we haven’t developed a synthetic fuel in the decades we have had an “energy crises”. The answer, not surprisingly, is that politicians block it because, as Berko puts it: “It certainly seems that there are strident and powerful opposition groups with more influence in Washington than the 150 million voters who are paying $4 a gallon to fill up their tanks.”

    It will take a revolution to break the hold these “strident and powerful opposition groups” have on our feckless political class, and $450 a barrel oil ought to do the trick.

    Bring it on!

  7. Yeah I am not so sure about current politicians, perhaps a real revolution is all that will cure the mess the two political parties have made. Too many Republicans have lost touch with the Average USAmerican and are unable to communicate with the public at any level. The Democrats are turning into European Socialists more and more every year. Both parties seem to have forgotten that they work for the Citizens of the United States not their personal connections of special interest groups. And with the possibility of the Agent of Shame -Obama- becoming POTUS, I am actually considering investing in some gun weaponry for protection before Obama goes all Chicago loony toons on the country and attempts to take away the right to own guns. Heck I have never even owned a gun nor have I shot one since I was five and that was a BB-gun. But this clown scares me when it comes to personal rights. If he completely flips out into Kosocialist mode we might have to return to the days of vigilantism to protect our rights, property and family.


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