Oils

[sprucegoose]

Can somebody answer me this. It seems that much of this oil price rise is being blamed on the situation in Iraq. For most of the last twelve years Iraq was banned from selling oil at all. Why is it now such an issue that the priceof a barrel of oil has doubled in the last six to eight months?

I admit I don't pay a lot of attention to the news these days....

[The Enema Bandit]

It depends on what the left wingers want you to believe.

[DirectAnywhere]

There was a great article in "The Australian" a few weeks ago regarding the new role that oil speculators have in the market. According to this article, and I can't attest to its veracity, oil speculation ie. essentially day trading, has become a huge market and trading houses are snapping up speculators at a fast rate. It's the new stock market.

In addition, Yukos in Russia which produces 2% of the world's oil may go under as a result of tax evasion, there are strikes in Nigeria affecting Africa's biggest producer's output, the spate of hurricanes in the Gulf of Mexico has affected production not to mention limited refining capacity and geopolitical tensions.

The good news is that in spite of record high dollar values, oil prices as a percentage of GDP are roughly half what they were during the 1973 oil shock. In essence, things aren't as bad as they may seem.

[sprucegoose]

That I do know. I recall during the original Desert Scuffle in 1990 and during a time when US airlines were in a deepening recession it was pointed out that a one dollar a barrel increase in the price of oil would set the likes of United Airlines back a million bucks a year. Back then it was something like 30 - 35 bucks a barrel at the worst point. That was due in part to Iraq's supply being cut off to the outside world and it took OPEC a few months to ramp up production to compensate. Now it's 53 and a bit a barrel. Whats changed so much?

[Howard Hughes]

I remember hearing the current high prices are mostly due to ongoing strike action in Venezuala. Can't remember the exact percentage, but they supply somewhere around 20% of the US/World oil supplies. This has been going on for around 18 months.


See here: (http://money.cnn.com/2003/02/10/pf/saving/oil_and_you/)


Also here: (http://www.bday.co.za/bday/content/direct/1%2C3523%2C1059096-6078-0%2C00.html)

Cheers, HH.
:ok:

[oicur12]

Sprucegoose,

What makes you think Iraq was not selling oil. Oil sales were suspended years ago but oil has been entering the market from iraq under the OFF program (in rather reduced output though - and via third party brokers to the US jacking up the price)

Direct is correct, a lot of oil pricing is now governed by traders speculating based on what could happen - in Venezuala, Nigeria, Russia, Iraq and especially Saudi Arabia.

Wake up one morning and read that King Fahd Bin Abdul Aziz has died and has been replaced by a Bedouin and be prepared to see some serious hikes in the price of oil.

Also, I think the fact that the market is becoming aware that KNOWN reserves are less than predicted - Hubbards peak is getting closer - has something to do with it too.

Take a look at how many times Royal Dutch Shell has been forced to re-adjust its reserve outlooks this year alone.

[Fred Gassit]

And while the stuff has been flowing freely precious little has been put back into exploration or developing known reserves. The stock market/casino doesnt like high risk activities like that and they cant be brought onstream overnight

[OZBUSDRIVER]

As things get more politically hot, new fields are suddenly "discovered". The latest find is in the Gulf of Guinea. A nice little island called Sao Tome, a former Portuguese colony is going to find itself the centre of a large oil field. This field will be big enough to supply US with 25% of its needs. The sharks are already circling, corruption is rife and the dollars are already flowing to grease the wheels and deals to come.

Speculators are pushing the price at least $20US over the real costs per barrel. Just like ostrich farming, only much bigger :}

HH ,I like your first link. Average US price $1.60US a gallon. Thats around $0.78AU a litre.

[sprucegoose]

Closer to 0.55AUD a litre attodays rates. Yes Thanks folks I appreciate the info. I did some research last night which perhaps I might have done first. Most ofthe above coroborated as well as a burst pipe line in Nigeria causing prices to elevate though I think that is more speculative. Interesting though how volitile the price of a barrel is these days.

[OZBUSDRIVER]

Spruce, don't forget a US gallon is lesser vol than an imperial gallon:cool:

[Pinky the pilot]

Can't comment re the subject of oil wells/fields being 'discovered' but do remember another 'lifetime' ago when working on a Seismic Survey crew in various parts of outback Oz coming across many gas wells that had been drilled and capped anything up to thirty years prior to my driving past, just sitting there unused with some almost hidden by regrowth of the surrounding vegetation.
Just an observation......

You only live twice. Once when
you're born. Once when
you've looked death in the face.

[OZBUSDRIVER]

Pinky maaaate, don't tell me you were a juggy:ok: