DebateGate
General Category => 3DHS => Topic started by: sirs on January 04, 2011, 07:57:06 PM
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Oil price ?threat to recovery?
By Sylvia Pfeifer, Energy Editor
Published: January 4 2011
High oil prices threaten to derail the fragile economic recovery among developed nations this year, the leading energy watchdog has warned, putting pressure on the Opec oil cartel to increase production.
Over the past year the oil import costs for the 34 mostly rich countries that make up the Organisation for Economic Co-operation and Development have soared by $200bn to $790bn at the end of 2010, according to an analysis by the International Energy Agency.
?Oil prices are entering a dangerous zone for the global economy,? said Fatih Birol, the IEA?s chief economist. ?The oil import bills are becoming a threat to the economic recovery. This is a wake-up call to the oil consuming countries and to the oil producers.?
Oil prices have edged closer to $100 a barrel in recent weeks and Brent crude hit $95 a barrel for the first time in 27 months on Monday as the economic recovery has gathered pace.
Although oil prices dropped on Tuesday, the warning from the IEA will put pressure on Opec to increase its production. Despite the high prices, oil ministers decided last month to leave their quotas unchanged.
Ali Naimi, the Saudi oil minister, repeated at the time that he favoured an oil price of ?$70 to $80 a barrel? and that there were no plans to convene an extraordinary meeting before June 2 this year.
However, according to Mr Birol, ?it is not in the interest of anyone to see such high prices?.
OECD countries account for about 65 per cent of all global oil imports, he said. ?Oil exporters need clients with healthy economies but these high prices will sooner or later make the economies sick, which would mean the need for importing oil will be less.?
In the very short term, therefore, ?it may not be a bad idea that the producers are ready to increase production and show their understanding that these high prices are not good for the global economy,? he added.
Oil consuming nations, meanwhile, need to accelerate their efforts to reduce their reliance on oil, especially for transportation, he said. According to the IEA?s analysis, the European Union has seen its import bill rise by $70bn during 2010, equal to the combined budget deficits of Greece and Portugal.
On top of the high crude prices, Europe is still to feel the full impact of higher gas prices as 75 per cent of its gas contracts are linked to oil prices. The weak euro against the US dollar will also amplify the cost.
The US, meanwhile, has seen its bill jump by $72bn. Japan, which imports more than 99 per cent of its energy needs from oil, gas and coal, is paying an additional $27bn. Less developed nations are also being hit, seeing their bill rise by $20bn, equal to a loss of income of almost 1 per cent of GDP.
The ratio of countries? oil import bills to GDP, a key measure of the cost of oil prices on economies, is close to levels last seen during the financial crisis in 2008, Mr Birol warned.
If oil prices remain above $90/barrel for the rest of this year then the ratio for the European Union will be 2.1 per cent ? close to the 2.2 per cent level it reached in 2008.
?It is a very telling story. 2010 rang the first alarm bells and 2011 price levels could bring us to the same financial crisis times that we saw in 2008,? said Mr Birol.
Article (http://www.ft.com/cms/s/0/056db69c-1836-11e0-88c9-00144feab49a.html#axzz1A76o9DYU)
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$5 gas! What, no pitchforks?
Posted: December 30, 2010
Five dollars per gallon of gas by 2012! A former president of Shell Oil considers this likely. The average price on Christmas Day for a gallon of regular gas reached $3.28 in Los Angeles County, the highest price since October 2008. In one month, the price rose 13 cents, up 35 cents year to year.
Where are the calls to sic Obama's Justice Department on Big Oil to hold the oil companies accountable for "market manipulation"?
Why aren't we hunting down the amoral "oil speculators" responsible for repealing the law of supply-and-demand in order to line their pockets?
During President George W. Bush's administration, we constantly heard demands to hold the president accountable for "Big Oil's price gouging." House Speaker Nancy Pelosi, D-Calif., just two years ago, knew exactly whom to blame for "skyrocketing" oil prices: "The price of oil is at the doorstep; $4-plus per gallon for oil is attributed to two oilmen in the White House and their protectors in the United States Senate."
In 2007, when the average national price ranged from $2.17 to $3.22, then-Sen. Barack Obama demanded that the Federal Trade Commission investigate Big Oil for "price manipulation." In 2008, presidential candidate Obama urged the Justice Department "to open an investigation into whether energy traders have been engaged in illegal activities that have helped drive up the price of oil and food."
Obama also called for "a windfall-profits penalty on oil selling at or over $80 per barrel." As of Christmas 2010, a barrel of oil sold at slightly above $90. What happened to the windfall-profits tax?
Yes, back then the average price per gallon was four bucks. But blaming "oilman" Bush for high prices began when the average price was well below today's $3.05 national average.
The average price was $1.72 on March 5, 2003, when CBS News posted a story online with this headline: "Dems Blame Bush For High Oil Prices." It referred to an investigative report by Sen. Carl Levin, D-Mich. Levin blamed Bush's post-9/11 decision to increase the amount of oil in the Strategic Petroleum Reserve by 40 million barrels in 2002 ? bringing the total to 600 million. Levin said, "We're confident this had a significant impact on the price of oil in 2002." Never mind that the Bush administration called the amount of oil diverted too small to matter.
The average price was $2.80 on April 22, 2006, when USAToday.com posted an article with the headline "Democrats blame Bush for high gas prices": "Consumer gasoline prices continue to soar as the Bush administration places too much emphasis on drilling reserves and not enough on alternative fuels, Democrats said." The article quoted Sen. Bill Nelson, D-Fla., who praised Brazil's "energy independence." "In Brazil," Nelson said, "drivers are filling up their cars with ethanol instead of gasoline."
Not exactly, Sen. Nelson.
Brazil may be "energy independent" in that it imports only a small percentage ? 649,000 barrels per day in 2009 ? of the oil it consumes. But that makes Brazil the 19th-highest oil-importing country in the world. Its economy relies heavily on oil that is domestically produced and consumed. Brazil is the seventh-largest consumer of oil in the world and the ninth-largest producer. Its famous ? and heavily government-subsidized ? sugar cane-based ethanol fuel is actually a blend that uses approximately 75 percent gasoline.
As for U.S. ethanol, which is made from corn, Nobel laureate environmentalist Al Gore recently called it a bad deal: "It is not a good policy to have these massive subsidies for first-generation ethanol. First-generation ethanol, I think, was a mistake. The energy conversion ratios are at best very small. ... The size, the percentage of corn particularly, which is now being (used for) first-generation ethanol definitely has an impact on food prices. The competition with food prices is real." Why did he once support ethanol? He admitted that he'd wanted to help farmers in Iowa, site of the nation's first caucus, since he "was about to run for president."
The silence over the recent price run-up is yet the latest example of left-wing hypocrisy.
It was always about bludgeoning Bush rather than a sincere conviction that Big Oil was cheating. How else to explain the absence of demands for investigations?
America could achieve "energy independence" if producers were allowed to drill in Alaska, the lower 48 and offshore, where substantial amounts of untapped oil remain off-limits. Obama, who currently squanders hundreds of billions of taxpayer dollars by "investing" in alternative energy, possesses no more control over the law of supply-and-demand than did "evil" Oilman Bush.
Op-ed (http://www.wnd.com/index.php?pageId=245441)
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Libs hate war, high gas, homelessness & disasters, under Bush, but when Obama is in charge they are OK with them all.
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This is absurd.
My reaction will be the same as always: invest in an energy/natural resources fund.
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This is absurd.
My reaction will be the same as always: invest in an energy/natural resources fund.
dickhead, this isn't about you, or what you will do.
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Oh no! You mean mean we might have to pay approaching what rest of the western economies pays?
Waaaaaaaaaaaaaaaaa...waa...sniffle......waa.
bsb
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Oh no! You mean mean we might have to pay approaching what rest of the western economies pays?
Waaaaaaaaaaaaaaaaa...waa...sniffle......waa.
bsb
go get yourself a half decent education at some evening college campus!
1. The higher price for gas isn't because of increased taxes as is the case with other western economies.
2. The higher costs are probably because the idiot you helped elect, as POTUS, has ruined or harmed our off-shore oil drilling ability.
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Thanks for reminding me. I paid $3.22 a gal for the good stuff last night and I should have paid $3.32 including my proposed 10 cents a gal War Tax.
Write your representatives and advise them that you want a War Tax to help keep us from falling deeper into debt.
bsb
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Thanks for reminding me. I paid $3.22 a gal for the good stuff last night and I should have paid $3.32 including my proposed 10 cents a gal War Tax.
Write your representatives and advise them that you want a War Tax to help keep us from falling deeper into debt.
bsb
no thanks
speaking of debt, the NEW Congress is going to defund lots of stuff and that makes the Tea Party happy and Sarah Palin happy and even me happy.
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SIRS this proves Obama is owned by Big Oil!
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Thanks for reminding me. I paid $3.22 a gal for the good stuff last night and I should have paid $3.32 including my proposed 10 cents a gal War Tax.
Write your representatives and advise them that you want a War Tax to help keep us from falling deeper into debt.
You do realize that you can write out a check for the difference and send it off to DC, right? They will always take extra money. This way, you can put your money where your mouth is and go ahead and pay the tax.
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everytime there is talk of more war in the mideast oil prices go up. And there is talk of more war.
Jordan says so.
Iran is going after US Generals. Hezbollah is re-armed. Israel won't budge.
then again it is winter which means fuel oil is being used more.
Supply and demand.
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everytime there is talk of more war in the mideast oil prices go up. And there is talk of more war.
Jordan says so.
Iran is going after US Generals. Hezbollah is re-armed. Israel won't budge.
then again it is winter which means fuel oil is being used more.
Supply and demand.
Except it was all Bush's fault when he was President!
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Except it was all Bush's fault when he was President!
Yeah that was a silly argument too!
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Except it was all Bush's fault when he was President!
Yeah that was a silly argument too!
yeah, I guess Obama is silly too
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Except it was all Bush's fault when he was President!
Yeah that was a silly argument too!
yeah, I guess Obama is silly too
yep
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>>You do realize that you can write out a check for the difference and send it off to DC, right? They will always take extra money. This way, you can put your money where your mouth is and go ahead and pay the tax<<
You seem to make a habit of missing the point.
bsb
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>>You do realize that you can write out a check for the difference and send it off to DC, right? They will always take extra money. This way, you can put your money where your mouth is and go ahead and pay the tax<<
You seem to make a habit of missing the point.
bsb
you mean the point about there being more than enough money to pay for 10 wars if they stop wasting it on Stimulus, pork projects, earmarks, ObamaCare and other SOCIALIST projects and Democrat give-aways?
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This is absurd.
My reaction will be the same as always: invest in an energy/natural resources fund.
dickhead, this isn't about you, or what you will do.
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Duh.
So you are saying that saying something theoretical and essentially useless is inferior to a concrete suggestion that would perhaps benefit others?
I suggest that when one sees that the price of gasoline goes up and the price of gold rises, that it makes sense to benefit by investing in a natural resources fund. I believe that this is bound to be more useful than calling anyone a "dickhead".
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Is There Enough Oil to Pay Our Debt?
By Jeff Rubin on Wed, 5 Jan 2011
2010 left us all with a mountain of debt. Whether you're a taxpayer in the UK, Ireland or the US, it must already be pretty clear that you?re on the hook for a lot of IOUs borrowed from your future. You may not have borrowed the money yourself, but your government has already done it on your behalf, running up massive, record-setting deficits.
What's not clear is exactly how your government is going to pay that debt back.
With students already rioting in London over huge tuition increases, and general strikes the order of the day in places like Athens and Madrid, chances are slim that incumbent governments will survive long enough to cut their way to fiscal solvency. That's not to say the fiscal brakes aren't on (they are at least everywhere but in the US). But the deficits are so gargantuan (as an example, Ireland's is equal to one third of the country's GDP) that the twin tasks of slashing spending and hiking taxes could last decades, provoking all kinds of social and political push-back during that time.
Given austerity's slim chance at success, you might ask why government borrowing rates in the bond market, though rising, aren't much higher. History would suggest that the yield on a ten-year US Treasury bond should be close to double what it is, given the size of Washington's borrowing program.
The reason it's not is that creditors and debtors both share a common belief that a powerful economic recovery lies just around the corner?one so powerful, in fact, that tax revenues will suddenly fill government coffers and let bondholders be paid the huge sums they are owed while at the same time sparing taxpayers an otherwise draconian fate.
The only problem is that the economic growth everyone is counting on is powered by oil.
And as you've probably noticed, that?s getting more and more expensive to burn.
The minute global industrial production recovered from the recession, oil prices were suddenly on the verge of triple digits. That's not an accident, since the two go hand in hand. Global oil demand is up 2.5 million barrels per day from last year. Any further increases in oil demand and oil prices will be trading comfortably in triple-digit range.
That suddenly makes all that government debt very energy intensive. It will take huge amounts of energy, particularly oil, to achieve the growth rates that all the near-bankrupt governments around the world need to even service their debt, let alone repay it.
So consider just how sustainable economic growth would be in a world of oil prices of $100 to $225 per barrel. Because those are the price parameters we'd be facing in the unlikely event that we actually see the kind of economic growth that bond markets and public treasuries around the world are so desperately depending on.
[EM]
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Any further increases in oil demand and oil prices will be trading comfortably in triple-digit range.
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UNLESS there is an increase in supply. There are all those deposits off the coast of Brazil. It is pretty hard to predict this, really.
For the time being, I recommend investing in Natural Resources funds.
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You seem to make a habit of missing the point.
The point being that instead of paying it yourself, voluntarily, you would rather force everyone else to do so at the point of a gun?
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What's the matter with you?
bsb
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What's the matter with you?
bsb
I think that the real problem here is a socialist mind is wired different than a normal persons mind and that is why you can't grasp the point. This is similar to trying to debate (or even understand) when Nancy Pelosi says unemployment benefits create jobs.
Nancy Pelosi- Unemployment Creates Jobs (http://www.youtube.com/watch?v=xdAj8zui6ss#)
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More accurately, Unemployment creates need for more Government jobs and intervention
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More accurately, Unemployment creates need for more Government jobs and intervention
But my point is even that trying to have a rational discussion with a Socialist like Pelosi, and I guess BSB, is fruitless as they can't grasp (because their brains are wired different) capitalism and what built this great nation into the great nation that we once were. And that socialist government policies are crippling us.
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Definately can't argue with that last point on socialist policies
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More accurately, Unemployment creates need for more Government jobs and intervention
How so?