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With oil prices now above 70$/bbl, and 25 diaries later, it's time to take a look back at the "Countdown to $100 oil" series and see if we can learn anything - and update your bets.

graph from

I started the series on June 20 last year, as oil prices were about to reach 60$/bl:

Countdown to 100$ oil (1) (eurotrib)
Countdown to 100$ oil (1) (dKos)

So, going from 60$/bl to 70$/bl in a year doesn't seem too impressive, right? Should we expect to need another 3 years or so to get to $100? Another way to look at it is that oil prices increased for a short two months after my first diary, and have since been moving sideways, which means that we may never reach $100. Of course, one could also consider that we are now due another spurt of growth of the price, and thus $100 is just around the corner...

Or you can take a longer perspective...

I'd like to point out a few things, though:

  • one is that prices have not been lower at any point than what they were when I started the series (57-59$/bl). So we're getting close to a full year at $60+ oil prices, and that level now seems "normal". As I noted in Diary 24, what has been remarkable is how quickly the financial world has accepted significantly higher prices as a reasonable long term hypothesis. The future markets are still pointing to $60 oil for the foreseeable future, and investors and financiers are willing to provide money for projects on the basis of such high prices for income modellisation purposes;

  • the second item is that the man cause of the oil price tensions a year ago - tightness of supply, an increased sensitivity to any disturbance to supply shocks, and an apparent inability by the main producers to boost their production - are still with us; if anything they have all gotten worse. Nigeria was a problem then, it is a problem today. OPEC has not increased its production in the past year:

    (both tables from CGES);

    Overall production seems to be plateauing, as discussed over at the Oil Drum


  • the last item to note is that despite such high ol prices, not only has demand not plateaued, but it is expected to increase at an even faster pace in  2006 than in 2005, according to the latest estimates by the International Energy Agency, thus guaranteeing more strain on the supply side.

  • also, we can note that a number of commodities are reaching record high prices, and these increases feed one another in a vicious circle.

As a note, we haven't yet had a really big external shock on the oil market - i.e. an event (strike, weather, accident, political decision) that would take out a couple million barrels per day of production from the markets. We've had a number of smaller events (strife in Nigeria, Katrina) that have each brought prices up brutally when they took place, but none was of a scale to completely destabilise the market. The shananigans around Iran clearly have the potential for that, and the markets reflect that as well (a probability of the event taking place multiplied by its potential impact brings a real price increase).

So, all things considered, would you like to update your bets? The existing bets are in these threads: they will be honored unless updated in today's thread (under the same screen name, of course).

Countdown to 100$ oil (19) - Your bets for 2006 (Eurotrib)
Countdown to 100$ oil (19) - Your bets for 2006 (DailyKos)

Same questions as last time:

  • What will be the highest price for oil in 2006? (As usual, you may choose your benchmark. If not provided, WTI will be the default option). And as an additional twist to that question (to be used to determine the winner if needed), what will be the proximate cause of that high?

  • What will be the year-end price for oil in late December 2006?

  • Same questions for natural gas: year high, and end-year prices, in $/mbtu, using Henry Hub (prices in $/boe will be accepted as well)

  • On what date will 100$/bl oil be reached? And same addendum - what will be the proximate cause?

My own bet was as follows, and I'll stick to it:

  • Highest: 240$/bl, after a US bombing raid on Iranian nuclear facilities, in October
  • Year-end 90$/bl
  • Natgas highest: 25$/mbtu after a cold spell in March. Year-end: 17$/mbtu
  • 100$/bl oil reached in October
-- --
Earlier "Countdown Diaries":
Countdown to $100 oil (25) - Iran vows that oil prices will not go down
Countdown to $100 oil (24) - What markets are telling us about future energy prices
Countdown to $100 oil (23) - Running out of natural gas in North America
Countdown to 100$ oil (22) - gas shortages in the UK - 240$/boe
Countdown to 100$ oil (21bis) - long term vs short term worries (dKos)
Countdown to 100$ oil (21) - 8-page extravaganza in the Independent: 'we're doomed'
Countdown to 100$ oil (20) - Meteor Blades is Da Man in 2005
Countdown to 100$ oil (19) - Your bets for 2006 (Eurotrib)
Countdown to 100$ oil (19) - Your bets for 2006 (DailyKos)
Countdown to 100$ oil (18) - OPEC happy with oil above 50$
Countdown to 100$ oil (17) - Does it matter politically? A naked appeal for your support
Countdown to 100$ oil (16) - We'll know on Monday
Countdown to 100$ oil (15) - the impact on your electricity bill
Countdown to 100$ oil (14) - Greenspan acknoweldges peak oil
Countdown to 100$ oil (13) - Katrina strikes / refinery crisis
Countdown to 100$ oil (12) - Al-Qaeda, oil and Asian financial centers
Countdown to 100$ oil (11) - it's Greenspan's fault!
Countdown to 100$ oil (10) - Simmons says 300$ soon - and more
Countdown to 100$ oil (9) - I am taking bets (eurotrib)
Countdown to 100$ oil (9) - I am taking bets (dKos)
Countdown to 100$ oil (8) - just raw data
Countdown to 100$ oil (7) - a smart solution: the bike
Countdown to 100$ oil (6) - and the loser is ... Africa
Countdown to 100$ oil (5) - OPEC inexorably raises floor price
Countdown to 100$ oil (4) - WSJ wingnuts vs China
Countdown to 100$ oil (3) - industry is beginning to suffer
Countdown to 100$ oil (2) - the views of the elites on peak oil
Countdown to 100$ oil (1) (eurotrib)
Countdown to 100$ oil (1) (dKos)

Originally posted to Jerome a Paris on Tue Apr 18, 2006 at 02:20 PM PDT.

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Comment Preferences

    •  what ever happened (3+ / 0-)
      Recommended by:
      Moli, Ptah the Great, greenearth

      to that oil bourse iran was supposed to open in march?

      "It was a bright cold day in April, and the clocks were striking thirteen."

      by hoodoo meat bucket on Tue Apr 18, 2006 at 02:28:12 PM PDT

      [ Parent ]

    •  Crossposted on European Tribune (4+ / 0-)

      Remember that their is a prize of a nice bottle of French champagne for whoever wins (bets from eother thread qualify) - and it's free to participate!

      In the long run, we're all dead (Keynes)
      Read more on the European Tribune - bringing dKos to Europe

      by Jerome a Paris on Tue Apr 18, 2006 at 02:31:25 PM PDT

      [ Parent ]

    •  Prices are artificially high (4+ / 0-)
      Recommended by:
      melo, bhlogger, Ryvr, greenearth

      because when the shit hits the fan like it is now, and confidence in the government drops to nothing, money is just so much waste paper.

      Right now oil companies are successfully getting away with scaring people about running out, keeping the price high and making huge profits, to the point they have so much money they don't know what to do with it, so lets ask what are they going to do with it?

      The idea that accumulating wealth is better than solving the problem is a symptom of the problem.

      We all kinow we can't prepare to fight the last war to win the next one. To solve our energy problems we need to take the production and distribution infrastructure out of the loop.

      While running out is happening now, there is no serious effort to go to non nuclear alternative energy and will be none until every drop of oil and gas and coal is gone, because alternatives to cheap fossil fuels won't come from a corporate infrastructure.

      Oil companies will try to go forward with drilling in our wilderness lands like Anwar and deep offshore ruining fragile eco systems.

      These are damages to systems we can never replace. Destroying watersheds and killing off species and bringing us every closer to global warming just to make more money is insane.

      The real reason is oil companies have no other option but to continue as they are or go out of business because they really can't do a non distributed alternative energy alternative.

      You can't pull up to a gas station to get your wind or sunshine. Efficient sustainable systems won't be drilled for, or refined, or transported across oceans in super tankers, or distributed through pipelines.

      Its a fact that almost 2/3 of our cheap fossil fuel is wasted in distribution systems including everything from production and transportation to resistance and friction.

      Sustainability is about finding ways for the end user to produce enough energy to suit their own needs. People will need to stop using planes, trains and automobiles, stop commuting to work and find solar sustainable lifestyles that can work with that.

      Everything a government does is about infrastructure and distribution of resources. We need to reject government continuing in that role and find our own answers if we want to survive.

      I have no idea what oil companies think they are going to do with their money after our cities are drowned and people can't afford to commute to work, and the brownouts we are experiencing now become an everyday experience.

      We shouldn't rebuild our roads and cities and railroads after they are destroyed by ever more powerful storms. We need to think ahead a century and give some thought to how fixing the levees will help as sea levels continue to rise.

      Without the jobs associate with production and transportation and building infrastructure our economy needs to find new ways to sustain itself.

      we need a mindset where when we think about rebuilding New Orleans we recognize the place to do it would be upstream somewhere around Baton Rouge.

      We need to stop thinking in terms of economic competition with other nations, and arms deals, and nuclear proliferation before we make nuclear war and islamic jihads and civil wars and famine, polution, pestilance and plague self fulfilling prophecies.

      Live Free or Die (-8.88 -9.49) IMPEACH

      by rktect on Tue Apr 18, 2006 at 04:39:17 PM PDT

      [ Parent ]

      •  hey rktect (0+ / 0-)

        great nailed the whole issue perfectly.

        these guys are stuck in 'on' mode, and the post-peak oil world we see as liberating, as liberating as kicking a meth habit, they see as hell on earth.

        they just don't get that we'll be better off once we learn to harmonise with the environment, instead of trampling it, and the transition freaks the shit out of them, 'cuz they want to hang on to the $tit like a baby long overdue for weaning.

        why? just kos..... *just cause*

        by melo on Wed Apr 19, 2006 at 12:44:55 AM PDT

        [ Parent ]

    •  giving it a go... (2+ / 0-)
      Recommended by:
      bronte17, greenearth


      High - 89.50  8/15/06
      Yearend - 77.25

    •  I'm down with peak oil (0+ / 0-)

      but is that chart inflation from 1988 adjusted for inflation or not?  It might look a lot different if not.

      Either way, the capacity staying the same probably tells a better story than the price increases.

      And here's to a supply restriction at that level:  if it doesn't happen now, it will be much worse later and will be more severe - on the economy, on the environment, etc.  

      9/11 didn't change the Constitution!

      by Prof Dave on Tue Apr 18, 2006 at 06:17:08 PM PDT

      [ Parent ]

    •  USO? (0+ / 0-)

      So should we all be buying some USO?

  •  The day after we bomb Iran. (8+ / 0-)

    $100 +, way plus.

    "A wise man who stands firm is a statesman, a foolish man who stands firm is a catastrophe" Adlai Stevenson

    by irate on Tue Apr 18, 2006 at 02:20:57 PM PDT

    •  unfortunately, there's other issues (8+ / 0-)

      down here in Texas we are having rolling blackouts.  my first thought was "what?  California, again?".

      they are saying it's the high temperatures but i wonder about the profiteering & speculation going on.

      i don't know the markets well enough, but if a company buys X amount of energy & finds that energy suddenly more valuable b/c of market prices, wouldn't it be tempted to sell a little bit off to other regions & squeeze their customers?

      that's a question to the economists out there.

      if we bomb Iran, we're fucked.  really.

      if iran is causing such havoc for our soldiers in Iraq today, imagine what that'll be like if there's open warfare?

      & israel is going to get attacked & if they get drawn in, will other muslim nations get involved?

      i just don't like the geopolitical & financial direction this is heading in.  

      even if it diffuses, it blows me away that we are coming to this point.

      perhaps the Cold War moderates had the same incredulous feeling when the saw Soviets & Amererican hard-core "patriots" come to the brink of total annihilation.

      •  typo: incedulous feeling when THEY saw Soviets.. (0+ / 0-)
        •  On a roll with typos! (4+ / 0-)
          Recommended by:
          SarahLee, krazypuppy, bhlogger, Gegner

          Now you've gone to "incedulous", you should have just left the "the" alone, many of us read it as "they" in the context.

          What's up with the "blackouts" in Texas?  Enron reborn?

          We have a batch of ex-Enron types here in Maryland, raising our electric rates 72% to line their pockets.  What a deal.

          •  72%!!! (0+ / 0-)

            Can you believe it??? Do you think they'll really do it? I'm alot worried about that... that would be about a $65 increase in my electrice bill. Couple that with the rising gas prices and the fact that we just had yet ANOTHER health insurance hike of 10% (better than last year... 30%!)... well... guess I'll be eating Ramen noodles and kissing my travel season goodbye.

            72%!!! Amazing.

            We shall fight them on the internets. We shall fight in the Starbucks, and in the streets, we shall fight them on the Hill. We shall never surrender!

            by bhlogger on Tue Apr 18, 2006 at 05:17:02 PM PDT

            [ Parent ]

            •  BG&E Increase 72%, Pepco 'only' 39% (0+ / 0-)

              Yes, they'll do it.  No way around it with price of fuels increasing, cost will be passed on to consumer.  It'll cost Ehrlich the gov just like it did Davis in CA - hopefully without blackouts here - but some consumers could do with a little jolt now that it's warm enough not to freeze.

              Duncan came out saying he's against Deregulation and I think it's a sign of desperation rather than educated analysis.  More for political capital and expediency.  Still down several points to O'Malley and way behind in the money game.  We'll see how O'Malley answers, if he bothers.  O'Malley still on big win with voting down of takeover of Baltimore schools.

              Jerome - ever done a diary on Deregulation v Regulation?  We here in MD would be interested.  Thanks in advance.  Seems to work in New England, but not in California.

      •  There's a good question (1+ / 0-)
        Recommended by:

        For Jerome, or anyone else who wants to answer it.

        Where in the world, where prices consistently get above 100 F, are they not experiencing rolling blackouts? Just asking out of curiosity, mostly. But I get the feeling that we're becoming adjusted to less effective power grids around the world.

        This is the way democracy ends Not with a bomb But with a gavel -Max Baucus

        by emptywheel on Tue Apr 18, 2006 at 02:32:20 PM PDT

        [ Parent ]

      •  Hurricane season just 6 weeks away. (3+ / 0-)
        Recommended by:
        krazypuppy, bhlogger, greenearth

        "A wise man who stands firm is a statesman, a foolish man who stands firm is a catastrophe" Adlai Stevenson

        by irate on Tue Apr 18, 2006 at 02:41:13 PM PDT

        [ Parent ]

      •  The excuse I heard today (4+ / 0-)

        was that at this time of year, the utility companies do maintainence work to prepare for the summer high demand season.  When they do this work, the normal capacity is reduced.  

        Beause it has been unusually hot this spring, and customers are using their ACs much more so than usual, the utility companies don't have the spare capacity they usually have at this time of year.

        I was wondering this myself, and wondering if Governor Perry would be blamed like Gov. Davis was a few years ago.

        January 20. 2009 cannot come soon enough.

        by Crisis Corps Volunteer on Tue Apr 18, 2006 at 02:42:24 PM PDT

        [ Parent ]

        •  Maintenance (4+ / 0-)

          This was exactly the same reasoning they gave in CA for the rolling blackouts. Plants were down and problems with transmission lines. All of which may have been true but it appeared to be a planned action where as one producers plant came up another would go down.

        •  Actually ERCOT and LCRA would catch the blame (4+ / 0-)

           Yesterday it hit over 100 in many places (102 where I live), the highest ever recorded this time of year in the central Texas region. ERCOT, the statewide group, only advised Austin Power & Light and LCRA (Lower Colorado River Authority, a quasi-governmental entity), which supplies much of the area, 30 minutes before the crunch hit. The rolling blackouts in Austin were a tactic to avoid a shutdown of the whole state-wide grid (Texas has its own statewide grid, unlike many other places).

           The bad news was that the Texas Legislature held the opening session of a Special Session (about school financing and the June 1 court dictated deadline) and the blackouts were a source of interest, according to news reports. So, the energy companies were in the crosshairs and generally that's really bad news for them, because the powers that be within the state are beholden to them in many ways and deflect all attention.

           I know this may seem a little too nuanced, but the truth was the heat caught them with their pants down and they barely averted a real disaster. No blackouts today whatsoever and you can bet this gets buried faster than decaying fish.  

        •  Scheduled Maintainance (2+ / 0-)
          Recommended by:
          Jerome a Paris, krazypuppy

          My father is a Inventory & Purchasing supervisor for three power plants in Oklahoma and is based at one that is ten miles from the Texas border and they are down now for turbine maintainance. It's a yearly thing in March and April. As I understand it, they 'buy' excess capacity from the Colorado state area to cover.

          -7.63,-4.31 "the trouble with the world is that the stupid are cocksure and the intelligent are full of doubt."

          by mlbx2 on Tue Apr 18, 2006 at 06:34:11 PM PDT

          [ Parent ]

      •  wow - in Texas (0+ / 0-)

        Maybe if this keeps up there will be disenchantment with the oil/power industry republicans??  Just asking since IANIT  (I Am Not In Texas)...

    •  Bombing Iran (6+ / 0-)

      Man, it shows you the state of things when we just take it for granted that this mofo administration is going to do bomb regardless.

      "Be who you are and say what you feel, because those who mind don't matter, and those who matter don't mind." - Dr. Seuss

      by Sleeps in Trees on Tue Apr 18, 2006 at 02:31:29 PM PDT

      [ Parent ]

    •  one thing that is important to note (5+ / 0-)

      is that expensive oil is not necessarily good for the environment. many of my environmental friends believe this to be the case because high energy prices spur the development of alternative sources; however, high prices also spur extraction of carbon fuels that were previously too expensive to go after. the net result is more carbon being released into the atmosphere, not less. if oil were being taxed to $100/bbl it would be a different story.

      "It was a bright cold day in April, and the clocks were striking thirteen."

      by hoodoo meat bucket on Tue Apr 18, 2006 at 02:33:50 PM PDT

      [ Parent ]

      •  But wouldn't the decrease in gasoline use . . . (2+ / 0-)
        Recommended by:
        bec336, greenearth

        offset that spurt for more oil? And, in fact, the flush of more extraction doesn't necessarily imply more use at all---extraction is following the price, not following demand . . .

        •  gasoline use is not decreasing (8+ / 0-)

          look at china. as bill mahar has pointed out, with so many chinese people trading in bikes for cars the answer is simple, "we need to build an engine that runs on chinese people"

          "It was a bright cold day in April, and the clocks were striking thirteen."

          by hoodoo meat bucket on Tue Apr 18, 2006 at 02:40:50 PM PDT

          [ Parent ]

          •  You're right about worldwide use . . . (2+ / 0-)
            Recommended by:
            bec336, greenearth

            but price definitely affects consumption in places like the US, where our monsterous gluttony has room to step back a few paces. This is all anecdotal, but I knew plenty of people I see daily who changed some of their driving habits after the last burst to near $3/gal.  And it's starting to happen again.

            •  global consumption is growing (2+ / 0-)
              Recommended by:
              Jerome a Paris, greenearth


              Growing Demand. Consumption of gasoline and other oil products is growing around the world, especially in rapidly developing countries such as China and India. For example, global petroleum demand grew by 3.2 percent in 2004 – or by more than a 100 million gallons a day – and continued to climb in 2005. U.S. gasoline demand has been growing less than in developing nations, but nevertheless gasoline consumption reached a record high last August, averaging nearly 400 million gallons a day. The U.S. consumes more gasoline than any other country in the world.

              i have also read quite a few articles lately on the race to the arctic, where it is believed that 1/4 of the world's untapped reserves lie. i will try to find a link or two. give me a minute.

              "It was a bright cold day in April, and the clocks were striking thirteen."

              by hoodoo meat bucket on Tue Apr 18, 2006 at 02:49:23 PM PDT

              [ Parent ]

            •  Except with low population density (2+ / 0-)
              Recommended by:
              bhlogger, hoodoo meat bucket

              and no access to reliable public transportation, the amount of cutting back is very limited.  The people I kknow who cut their shopping trips to once a week (cutting maybe 20 miles out of their weekly driving) still drove over 100 miles to work in that same week.

              •  High school students -- (0+ / 0-)

                seem to have switched to driving big SUV's and even Hummers.
                  I walk my dog every morning past the local high school.  When gas was 3.00 /gal back when, I suddenly noticed that the normally full parking lots were half empty.   Then they started to fill up a bit more -- I guess the kids were driving the gas guzzlers for the short trip,  and Mom and Dad were commuting using the kids littler cars.  
                  Gradually the lots had begun to fill up again with cars, but last week I noticed a really big fall off again.   I can't imagine that half the school took off early for spring break -- have to wait now and see how many come back next week --

        •  Oil is still cheap at $100/ barrel (7+ / 0-)

          Especially when you compare it to solar power.  So the ultra-rich class in the USA will not alter their driving habits at all- look at all the traffic in Europe, where $6/ gallon gas is the norm.

          At least the Europeans are getting some taxes from that gas price to pay for other things- here in the greedy USA the REpubs want to CUT gas taxes to keep the price as low as possible at the pump- unbelievably stupid.

          •  i recently read (2+ / 0-)
            Recommended by:
            Gorette, greenearth

            that car companies have done research that people will stil buy suv's if gas reaches $4/gallon.

            "It was a bright cold day in April, and the clocks were striking thirteen."

            by hoodoo meat bucket on Tue Apr 18, 2006 at 02:51:58 PM PDT

            [ Parent ]

            •  Europeans drive SUVs with 7$/gal gas (6+ / 0-)

              As I've written before, you get used pretty quickly to any given level of price. what people notice (and resent) are increases.

              The ONLY way to get people off their SUVs is via CONTINUOUS price increases. The only way to do that is to conssitently increase gas taxes over the medium term. That was wisely done in Europe in the 80s, but it was stopped in the 90s, and now the size of cars sold has been increasing steadily.

              In the long run, we're all dead (Keynes)
              Read more on the European Tribune - bringing dKos to Europe

              by Jerome a Paris on Tue Apr 18, 2006 at 03:16:39 PM PDT

              [ Parent ]

              •  What's true (5+ / 0-)

                is that Europeans drive diesel SUVs. Even the big Mercedes or BMW SUVs will get 30-40 mpg on diesel with Europe's modern high-pressure technology.

                Small diesels get 60-80 mpg easily, and hybrids make little sense over here.

                In the long run, we're all dead (Keynes)
                Read more on the European Tribune - bringing dKos to Europe

                by Jerome a Paris on Tue Apr 18, 2006 at 03:18:32 PM PDT

                [ Parent ]

                •  Digression (0+ / 0-)

                  If new diesels are now competitive with hybrids, why isn't that in the US awareness/marketing?

                  Second question: I know diesels have gotten cleaner. But that's from formerly putting out 50 times the particulate (i.e. cancer-causing) emissions. What's the trade-off on that now?

                  •  Can't say about the US (0+ / 0-)

                    But European diesel engines are much cleaner now, thanks to stringent regulations on fuel (very low sulfur content allowed) and on emissions. Most manufacturers now add particule filters on their diesels that furthr improve things.

                    Diesels make more than 50% of the car market in Europe (80% for the high end brands) and are now seen as polluting less altogether.

                    In the long run, we're all dead (Keynes)
                    Read more on the European Tribune - bringing dKos to Europe

                    by Jerome a Paris on Wed Apr 19, 2006 at 04:34:26 AM PDT

                    [ Parent ]

              •  Rich people only? (3+ / 0-)
                Recommended by:
                melo, bhlogger, greenearth

                Jerome, do you mean ordinary people or the rich?  The rich in the USA will drive their SUVs regardless of the price of gas, they are so wealthy that it actually would please them to see gas go up in price to cut down on the rabble on the roads.

                But a "regular" citizen taking home $50K per year can not afford a gas-sucking SUV at $4/ gallon, much less $7/ gallon.

                It seems to me that Europeans have many more choices in mass transit than we do in the USA, and a more comprehensive rail network.

                •  Saw a guy yesterday (2+ / 0-)
                  Recommended by:
                  bec336, greenearth

                  ... at a local gas station.  After I paid he was next in line and nonchalantly said to the cashier "$75 on pump 5".  I did a double take.  He was driving a big pickup truck that appeared to be a personal vehicle as opposed to a commercial one.  Makes you wonder.

                  A pessimist sees a glass half empty. I see a paper cup with holes punched in it.

                  by Paper Cup on Tue Apr 18, 2006 at 03:35:46 PM PDT

                  [ Parent ]

      •  The fact is that we cannot get off oil (4+ / 0-)
        Recommended by:
        bhlogger, Ryvr, bec336, greenearth

        Industrial society only exists because of oil. Without it, we would have very little industry of any great consequence. Vast amounts of cheap oil underpins everything we do, everything we are. And it's not just about burning oil. Oil is used to make fertilizer, plastics, pharmaceuticals, computers, in fact the vast majority of everything you use and wear and eat comes to you through cheap oil. Our whole civilization is built on an infrastrucure that needs lots of long-chain hydrocarbons, hundreds of millions of years of stored sunlight.

        I believe in the Easter Island theory. The islanders cut down the last tree on the island, and could no longer build boats to go out and fish, or even to escape their now desolate island. They died. We will do that too. Even though we know enough to fix it, we won't just like those islanders. We look in pity at those islanders, thinking how foolish they must have been. But we are exactly the same. No matter how much data we have, no matter how many warnings we get, we are so invested in the way we live that we are not very able to change. I used to have some optimism on the question of climate destruction, but now I think the forces are too great to overcome. Enjoy it while it lasts; this world is going to get pretty bad pretty fast.

        Walking. It's the new driving.

        by Batfish on Tue Apr 18, 2006 at 05:07:01 PM PDT

        [ Parent ]

        •  Actually... (0+ / 0-)

          That's a myth. Oral histories of the region, combined with careful archeology have pretty much nailed down that the culture of Easter Island was wiped out in a series of nasty wars. Nothing to do with environmental degredation. Just good old fashioned human slaughter.

          Not disagreeing with the sentiment, but just being factual.

          Oh, and two numbers...

          My actual bet is $87 Brent.

          If we see a hit on Iran, I expect to pass $100 within days.

          Oh, and Gasoline will cross $4 a gallon, unrelated to global oil prices. The increased heat of the gulf waters will generate another 1-2 Cat 3-5 Hurricaines, whiich will whack our already damaged refining capacity.

          •  Read Jared Diamond's account of Easter Island (1+ / 0-)
            Recommended by:

            There were wars near the end, but as in many 3rd world conflicts today, they were caused by a shrinking pool of resources, from lumber to basalt rock.  When they were "rediscovered" in the 1700's they had already long ago cut down all their giant palm trees (a now exinct species)and struggled at 1/10th their former population gathering shellfish and living in caves.  

            The one word they were most desparate to convey to the visiting French in 1838 was "miru" - their word for the now extinct giant palm tree.  Having no way to make canoes any more for fishing, they were forced in a very difficult subsistance living.

            Wars are fought for a reason, usually resources like land... or oil.

    •  And that is why that will never happen (2+ / 0-)
      Recommended by:
      Jerome a Paris, greenearth

      I am a little tired of the "bomb Iran" theory. I think the Bush administration wants Iran to think it might launch a strike. But Iran is reading the situation correctly and is so unworried about it all that they are having fun pulling the tail of the tiger. The fact is that Iran has the US over an oil barrel, as Jerome points out only too clearly. A wise leader (are there any anymore?) would have asked the Iranians right after 9/11 what kind of deal they wanted. In any case, Bush is going to turf the whole Iran question off to the next guy. I know there are people here sweating and hyperventilating over this scenario. But it's a non-issue, just like the Iranian oil bourse story (along with the associated conspiracy theories), which I called way back.

      Walking. It's the new driving.

      by Batfish on Tue Apr 18, 2006 at 04:53:43 PM PDT

      [ Parent ]

  •  Summer driving + gulf coast hurricanes = $100 oil (3+ / 0-)
    Recommended by:
    plymouth, Gorette, greenearth

    Could we get there this year? Perhaps only briefly if we get another supply/refinery disruption?

  •  Could you translate (1+ / 0-)
    Recommended by:

    what does $100/bl cost per gallon at the pump?

    •  it means a bicycle (5+ / 0-)

      cuz that's the only you & i will be able to afford.

      •  Rough Translation Based On Northern California (4+ / 0-)
        Recommended by:
        bhlogger, BillyDean, plymouth, greenearth

        Right now in Humboldt County, California, regular gasoline is $3.09/gal.  That's with oil at $70/bbl.  You get the relevant ratio by dividing $100/bbl by $70/bbl, which equals 1.43.  1.43 times $3.09 equals $4.41/gal for regular gas.  Harsh toke, dude!

        This aggression will not stand, man.

        by kaleidescope on Tue Apr 18, 2006 at 03:12:05 PM PDT

        [ Parent ]

        •  Caveat (1+ / 0-)
          Recommended by:

          The above calculation is crude (no pun intended) and simply based on the change in the price of a barrel of oil.  Of course, during different seasons, different petroleum distillates are more (or less) in demand -- gasoline is more in demand during the summer driving season, fuel oil/diesel is more in demand during the winter home heating season.  The market price of gasoline (and fuel oil) would thus also partly depend on the season in which the $100/bbl crude price occurs.

          This aggression will not stand, man.

          by kaleidescope on Tue Apr 18, 2006 at 03:19:30 PM PDT

          [ Parent ]

    •  A barrel is 42 gallons (2+ / 0-)
      Recommended by:
      Opakapaka, greenearth

      , so that would be $2.38 per gallon just for the oil (not counting processing and delivery costs, and taxes).

      January 20. 2009 cannot come soon enough.

      by Crisis Corps Volunteer on Tue Apr 18, 2006 at 02:46:02 PM PDT

      [ Parent ]

    •  $37/ barrel oil = $.88/ gallon gas (wholesale) (6+ / 0-)

      But of course that is just the cost at the refinery.  So if we use that same ratio, then $100/ barrel = $2.37 / gallon gas + other costs  of $.91/gal = $3.28 / gallon.

      Then add in all the extras to get the retail price.

      Q: I did some simple calculations, and the numbers don't seem to make any sense. Let's assume that the price of crude oil is $37.00 per barrel. At 19.5 gallons of gasoline per barrel, this means that a gallon of gasoline in its crude oil form costs $1.90. Yet, when I pump it into my car, I'm currently paying $1.76 per gallon. This means that the gasoline is losing 14 cents per gallon in value when going from ground to gas pump. This must mean that everyone involved in transporting and refining the oil and gasoline must be marking down the final price of their finished product. Companies mark up, not down. Obviously, there is something wrong here somewhere.

      A: The 42-gallon barrel of crude oil makes about 19½ gallons of gasoline, 9 gallons of fuel oil, 4 gallons of jet fuel, and 11 gallons of other products, including lubricants, kerosene, asphalt, and petrochemical feedstocks to make plastics. [See also this EIA page] That adds up to more than 42 gallons because of something called "refinery gain" - the processing and chemical changes increase the density and hence the volume of the refined components. So, crudely (pun intended), a $37 barrel of crude represents about 88 cents a gallon to start with. That 88c represents the cost of production plus producer profit. Go up from there.

      What company is the largest oil refiner in the US?

      Numbers that I found some time ago had this for other increments of the cost per gallon:
      refiner cost - 13c
      marketing cost - 5c
      transportation cost - 15c
      retailer cost - 5c
      refiner, marketer, transporter, retailer profit - 10c (total, not each)

      Add that to 88c, add the average 43 cents tax, and -- rather remarkably - that adds up to $1.79, if I added correctly - just about what you are paying. All the numbers vary depending on a long list of things -- refiner costs go up when they have to make specialized local blends (one reason for CA and Chicago having higher prices), marketing costs are higher in competitive markets

      But it seems to me that the link I sited is a little low on the "profit" number of $.10/gallon.   So the current price is $70/ barrel while we pay $2.80/ gallon here in MD.  That means the "other costs" are closer to $1.12/ gallon.  So the $100/ barrel oil will probably lead to $3.50/ gallon gas in the US.  Still way too cheap for the SUV drivers to slow down, they'll keep burning up the road until we hit $5/gallon or so.

      •  I Predict Powerboat Effects This Summer (3+ / 0-)
        Recommended by:
        MD patriot, plymouth, greenearth

        A lot of middle class people have mid sized cruising or fishing boats big enough to make them change habits at $3 / gallon.

        We ought to keep our eyes open for RV parks and boat marina patterns.

        I'll do my part--peeking from underneath my dinghy mainsail!

        We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy....--ML King, "Beyond Vietnam"

        by Gooserock on Tue Apr 18, 2006 at 03:08:17 PM PDT

        [ Parent ]

    •  $3.25-$4.00 (1+ / 0-)
      Recommended by:
      Jerome a Paris

      Should be anywhere in this range in the United States under "normal" circumstances. This would mean that the increase in the gasoline price is due only to a rise in the oil price and that there are no bottlenecks in gasoline supply.

      •  How does it translate to diesel (0+ / 0-)

        and heating oil?

        Both which have stayed high all winter and spring.
        How can diesel cost more than gasoline when it doesn't require the refining that gas does?

        Our heating bill  doubled over last winter. 600 gallons at $2.22.
        I can't imagine how many families will be adversely affected next winter if oil does break $100 @ barrel.

        "Judge a man by his questions rather than his answers." Voltaire

        by Esjaydee on Tue Apr 18, 2006 at 06:52:21 PM PDT

        [ Parent ]

        •  To be honest (0+ / 0-)

          I haven't done the calculations. Just for gasoline since it is what drives the system presently. I'll be looking into this. The prices of Diesel and Gasoline also have a dynamic influence on each other because they are substitutes to an extent.

  •  As the push for war with Iran (1+ / 0-)
    Recommended by:

    gets stronger prices will go higher.  This will be used as a justification for attacking.  Some are already using it.  Iran supplies a lot of oil...don't think for a minute that other suppliers wouldn't be tickled pink to see us go after them.

    •  Wow - a feedback loop. (0+ / 0-)

      the more we talk about it the more the prices will go up and the more we'll talk about it.

      However - isn't Iraq supplying only a fraction of the oil it supplied before we attacked them?  So, any attack will in fact disrupt and destroy the supply?

  •  Madame Sosotris sees all: (1+ / 0-)
    Recommended by:

    100$/bl oil reached on July 2, 2006.

    "... Just so long as I'm the dictator." - GWB, 12/18/00

    by Bob Love on Tue Apr 18, 2006 at 02:32:09 PM PDT

  •  newsmax (2+ / 0-)
    Recommended by:
    SarahLee, greenearth

    I get the newsmax mailers all the time.  It's mostly obsessive news on Hillary, but then they also send out things that are disguised as ads.  Like this:

    Dear NewsMax Reader:

    On Monday oil prices hit record highs.

    Many analysts even say that oil prices are likely to climb higher this summer -- claiming crude-oil production is only barely keeping up with surging global demand.

    That's nonsense! And you can profit big time by not following the stampeding herd.

    Here's why.

    We feel that oil prices will continue to dramatically fall in the next 12 months to $40 a barrel!

    That's the prediction of Financial Intelligence Report. You may know that NewsMax also publishes Financial Intelligence Report, a financial monthly for investors.

    Financial Intelligence Report has made very accurate predictions. In April of 2004, Financial Intelligence Report revealed that oil prices would skyrocket from $29 per barrel to over $60 within 12 months.

    And the shit goes on.

  •  Bush goes into Iran (2+ / 0-)
    Recommended by:
    David in Burbank, greenearth

    in August.  

    That'll make it 100+ on August 28th.  

  •  Tolerance (2+ / 0-)
    Recommended by:
    Paper Cup, greenearth

    I was noticing today that the $70 didn't particularly bother the stock market today - they were more interested in the signal that the Fed was done with raising interest rates.

    At least that was the case in the sectors I watch.

    That tolerance factor has kicked in.

    My bet?  $80 November 7, 2006.

    •  If a barrel is $80 on November 7 . . . (1+ / 0-)
      Recommended by:

      Democrats are taking both houses of Congress.

    •  Earnings (1+ / 0-)
      Recommended by:

      And there were some good earnings reports today.  I haven't had time to read all of the reports, but I recall something about inflation indicators, too.  Of course, "inflation indicators" have become useless lately to anyone that still has to worry about how much milk costs.

      Meet me in Cognito, baby

      by out grrl on Tue Apr 18, 2006 at 02:51:16 PM PDT

      [ Parent ]

      •  Inflation fears are starting to ease (3+ / 0-)

        Some financial muckety-muck today gave "signals" that the Fed would soon start to ease off on the interest rate hikes, which have been going on for 2 years now.  They're thinking about it because they feel inflationary pressures have eased.

        To tell you the truth it sounds like a bunch of horseshit to me.

        I'm waiting for developments on another Jerome theme, i.e. that consumer spending has been fueled by borrowing for several years now and the net savings rate in the US is below zero.  People are leveraged to the hilt with home equity borrowing and the spigot is supposed to run dry soon.

        That sounds like a more realistic reason why they would ease up on interest rates.  I discount every single word that comes out of the mouths of political appointees and their cronies in Washington DC these days.  Too bad there's not a way to make money betting on whether Bush is telling the truth or not.  Plenty of Bush-base suckers out there to fleece.

        A pessimist sees a glass half empty. I see a paper cup with holes punched in it.

        by Paper Cup on Tue Apr 18, 2006 at 03:46:42 PM PDT

        [ Parent ]

    •  Yep I was thinking the same thing (0+ / 0-)

      I've seen about twenty times in the past year when the stock market took significant hits due to spiking crude oil prices - yet today crude hits a new record high and the market is up almost 200 points.  This whole system is so rigged and utterly manipulated that it would be laughable if it weren't so serious.

      Unfortunately I believe the wheels are starting to come off the wagon, as they say...

      My girlfriend is an earth science teacher - she's betting on $100 oil by the start of next school year (Aug - Sept) - I imagine a GOM hurricane would probably do the trick.

      Global production of light sweet crude - the low hanging fruit on the tree - has likely already peaked.  Now the question is how rapidly does depletion outpace development of the heavier crude ?

  •  Mine (3+ / 0-)
    Recommended by:
    SarahLee, FishGuyDave, greenearth

    100 oil= September 25th (my Birthday)
    Highest oil = October 5th @135 (my son's birthday)
    Nat gas = 30 September 25th

    End of year = NA (Apocalypse happens on December 12th, for no particular reason)

    lime rick "...blow them all away in the name of the Lord." -- Jerry Falwell on CNN, 10/29/04

    by mspicata on Tue Apr 18, 2006 at 02:41:40 PM PDT

  •  I tend to disagree (2+ / 0-)
    Recommended by:
    SarahLee, greenearth

    The one thing that would hurt the republicans in Congress more than anything else is high fuel prices. I kind of have this feeling that right now the prices are  high so that by September and October we will get a big decrease, at least at the gas pump. Noone is actually going to care about the cost of a barrel if a gallon of gas is only (only!) $2.00. Even so, I think it at least possible we will see $50.00/bbl around the end of the year, mostly due to political manipulation in order to keep republican control of Congress. Of course, next year is a different story.

    Do Pavlov's dogs chase Schroedinger's cat?

    by corwin on Tue Apr 18, 2006 at 02:42:05 PM PDT

  •  OPEC: No supply increase coming. (7+ / 0-)

    Today on

    "Some ministers from the Organization of the Petroleum Exporting Countries, who will gather informally this weekend during an International Energy Forum meeting in Doha, have said there is nothing the group can do to bring down prices, although Indonesia has suggested boosting output.

    'OPEC does not have the capacity to increase production. Right now, it is not the time to discuss such issues,' a senior Iranian Oil Ministry official told a newspaper.

    Of course, the Iranian oil minister may not wish to calm folks down.  Still, this jibes with Jerome's general "peak oil" views.

  •  What effect (1+ / 0-)
    Recommended by:

    Might the Canadian tar sands have on the market?  Is there any significant amount on line or shortly on line?

    lime rick "...blow them all away in the name of the Lord." -- Jerry Falwell on CNN, 10/29/04

    by mspicata on Tue Apr 18, 2006 at 02:44:05 PM PDT

  •  So what will be the effect of 100 oil on the... (1+ / 0-)
    Recommended by:


    Cats are not absurd.

    by shergald on Tue Apr 18, 2006 at 02:47:07 PM PDT

  •  hoi polloi predicts... (5+ / 0-)


    '06 high: $87.75 (WTI) -- concern over potenial Iran bombing

    EOY price: $75.00 (WTI)


    '06 high: $20/mbtu -- sectarian violence in West Africa or a rhino stampede

    EOY price: $15.50/mbtu

    Oil reaches $100/bl:

    $100/bl oil will be reached in June '07 during the liberation bombings of Caracas, Venezuela.

  •  ok, for the heck of it: (1+ / 0-)
    Recommended by:


    GAS, which I know even less about, pulling Nos. out of my .... hat:


    Free Donuts + Beer Tax Repeal = Landslide Victory '08!

    by PhillyGal on Tue Apr 18, 2006 at 02:52:01 PM PDT

  •  'kay, I'm in too. (1+ / 0-)
    Recommended by:

    Here goes.

    $85 by Sept. 15th

    $100 by Nov. 1st

  •  aoeu (1+ / 0-)
    Recommended by:

    It's sounding like bombing is gonna happen, what with there being Iran warmongering stories in the headlines seemingly every day this past week.

    Gotta go to congress for `approval' close to the election, when they wanna look tough. But gotta start bombing before the election, as it looks like repubs might lose.

    I guess he goes to congress with something in early October, and bombing begins in late October/early November. $100/bbl oil October 15th.

    You cannot depend upon American institutions to function without pressure. ---Martin Luther King Jr.

    by Opakapaka on Tue Apr 18, 2006 at 02:58:12 PM PDT

  •  Ahha -- another free ticket :) (3+ / 0-)
    Recommended by:
    Jerome a Paris, greenearth, Oil CEO

    Thanks, Jerome, for another contest.  You really had me watching the spot prices of oil last December!  

    Last time I was bullish, with a Dec 05 prediction of $51/bbl or so.  Not so this time.  With regional instability in Nigeria, eye-poking from Chavez, all-Iran-war-propaganda-all-the-time from Fox....

    Highest: $130/bbl in summer/fall 2006 after "incident" in Persian Gulf

    Year-end: $78.30/bbl

    Natgas highest: $16.40/mbtu in March 2007. Year-end: 13.20$/mbtu

    $100/bbl oil: reached in August 2006

    If you don't know where you are going, you will wind up somewhere else. Yogi Berra

    by Twin Planets on Tue Apr 18, 2006 at 03:00:02 PM PDT

  •  Iran is not going to be attacked. (4+ / 0-)
    The Iranian nuclear program is an excuse for re-energizing the U.S. nuclear weapons program and the increasing price of a barrel of oil is designed to make nuclear energy more "competitive."
    What we need to understand is that the "military/industrial" complex is dual-use.  It refers to the industrial interest in producing military assets as well as the military support of conventional industry and trade.  The latter used to be called "gunboat diplomacy."

    Forget "GOD, GUNS, GAYS, GIRLS & GETS"

    by hannah on Tue Apr 18, 2006 at 03:04:03 PM PDT

  •  As soon as oil hits 100 I'm buying a Hummer! (4+ / 0-)

    They should cost about the same as a pack of cigarettes by then.

    Actually, they do make a diesel Hummer, but I wouldn't waste a drop of biodiesel in one of those...and I'm gearing up with some friends to start producing biodiesel.  One person I know (who happens to live in a fairly rural area) makes about 300 gallons a month to use in his vehicles and farm about .70 cents a gallon after you add in the time it takes to go pick up 50 gallon drums of used fryer oil from the restaurants he gets his oil from.

    Once in a while you get shown the light in the strangest of places if you look at it right

    by darthstar on Tue Apr 18, 2006 at 03:04:12 PM PDT

    •  Powerboats & RV's, Skiddoos & Jet Skis n/t (0+ / 0-)

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy....--ML King, "Beyond Vietnam"

      by Gooserock on Tue Apr 18, 2006 at 03:13:20 PM PDT

      [ Parent ]

    •  Hmmm... (3+ / 0-)
      Recommended by:
      Ryvr, Magnifico, greenearth

      At what point do the restaurants themselves start to realize that they're in a supply market of a different sort?  We're back to classic supply and demand theory: used fry oil is only cheap as long as no-one else wants it.

      •  For the time being, (4+ / 0-)

        in not so developed biodiesel markets, the restarants still pay for waste oil collection. The time has come (so I'm told) in a few regions (SF, Seattle, Boston) that the biodiesel refiners are getting into competition with eachother & beginning to pay for their waste veggie oil. It's pennies on the gallon, but the price will increase with time & eventually I  & my colleagues will pay for waste oil...

        I'm not worried though, demand for quality, trash & waterfree waste oil will drive the market. If Joe's Chalupa Hut wants to begin charging me for their oil that is 20% water & 10% chicken giblets, I'll pass. Someone else might pay for it, but odds are they won't. Not unless Joe starts filtering & storing his oil responsibly to make it a competitive commodity.

        I expect commercial renderers to get into the waste veggie oil resale business soon. They already have a transportation & storage infrastructure in place. It makes economic sense to drive to a central location to pick up your waste oil, rather than visiting a dozen different resteraunts every week. Heck, get it delivered to your refinery! The renderers already evaporate the water off & filter out most of the particulates. I'd pay for that waste oil. Would save me time & money.

  •  100 dollar oil occurs on Oct. 7, 2007 (3+ / 0-)
    Recommended by:
    sacrelicious, polecat, greenearth

    It will get close when Bush bombs Iran and Iran retaliates, but top off at 95 and then go down again when the Congress changes hands and starts impeachment hearings.

    100 on Oct. 7, 2007

  •  Oil (2+ / 0-)
    Recommended by:
    greenearth, StrayCat

    Oil is the grease that keeps our economy moving. Literally. We have only a one planet supply, and we are burning thru that at an incredible rate. Once we use it up, that's it. No more.

    When we reach peak oil, production has to go down. So demand/supply will force prices up. That's probably why my company started an "Energy" mutual fund last month.

    My prediction is June 22, 2007 to hit $100. Cause will be shortages due to increased use for summer in the northern hemisphere.

    A President in his own league. The Bush League!

    by Tuba Les on Tue Apr 18, 2006 at 03:17:22 PM PDT

  •  my bets (1+ / 0-)
    Recommended by:

    (1) 85 $/BL  (not obvious cause)
    (2) 74 $/BL

    (3) (a) 20$/mbtu. (seasonal)

  •  My bet is sooner rather than later (2+ / 0-)
    Recommended by:
    Jerome a Paris, greenearth

    Highest: $320/bl, after a tanker is attacked and sunk in the Straits of Hormuz in September.  The source of the attack will be uncertain.

    Year-end $125/bl
    Natgas highest: $23/mbtu after a cold spell in October.
    Year-end: $21/mbtu
    100$/bl oil reached on July 5th after terrorist attacks on multiple Independence Day celebrations world-wide.

    I work with Transportation costs daily and I keep asking what our long term plans are.  The answer I keep getting is that we hedge in order to provide protection against wild swings.  OK as far as it goes, but I fully expect a DRAMATIC paradigm shift in the next 18 months.

    What if diesel goes to $3.00 and stays there?  $5?  $15?  At some point the supply chain will be unworkable.  I desperately want to be involved in planning for supply catastrophes.  That might include identifying the essential items that are the last to stop shipping and the ones we can stop shipping with little impact.  It might include plans for backup supplies that are not spread all over the country.  Analysis of what the break point is for a higher priced supplier to become attractive at $xx /gal.

    I feel like I am in a theatre watching a movie and shouting WATCH OUT FOR THE MONSTER! but the PWGIT just keeps walking.

    I'll keep pricking the bosses, maybe the best case is that when the shit hits the fan they might remember my questions and come ask me for advice.  Better late than never, but even better is an ounce of prevention and a gram of forethought.

    •  WTF? (2+ / 0-)
      Recommended by:
      seanleckey, greenearth

      Oil shoots up to over $300 per barrel after an attack on a tanker and no one will be able to identify who did it?

      •  Well (5+ / 0-)

        WI Deadhead knew about it in advance, so he or she has to be the prime suspect.

        My apologies to students who took my U.S. Government class in the 90s: evidently the Constitution doesn't limit Presidential power after all. Who knew?

        by Major Danby on Tue Apr 18, 2006 at 03:45:34 PM PDT

        [ Parent ]

      •  How Do You Identify a Mine Attack? (3+ / 0-)

        What happens if the tanker gets sunk or crippled by a mine, which can never be identified?  Was it the Iranians?  Was it the US trying to force a casus belli?  The charges and countercharges will be flying fast and thick at the UN and in the media, but the tankers still won't be moving through the Straits of Hormuz.

        "Love the Truth, defend the Truth, speak the Truth, and hear the Truth" - Jan Hus, d.1415 CE

        by PrahaPartizan on Tue Apr 18, 2006 at 04:43:00 PM PDT

        [ Parent ]

        •  Not a military guy (0+ / 0-)

          I know very little about arms and military tactics, but I can imagine 4 possibilities that would leave the responsible parties at least somewhat uncertain.

          A passenger airplane dives into a ship and sinks it.

          A ship hits a mine of uncertain origin.

          A ship has a fire/ explosion on board that sinks it.  Sabotage? Accident?

          Somebody on shore uses some shooty-doohicky to breach the hull.

          Would any of these be enough?  Beats me, I still don't even know the difference between a ship and a boat so I have no idea if any of these would actually sink a ship.  Is it possible for one to go down under mysterious circumstances?  Absolutely.

  •  On-topic ... but sideways (1+ / 0-)
    Recommended by:

    I frequently see the argument that the recent surge in oil and gas prices over the last year or so are not having an appreciable effect on the economy as a whole.  The technical phrase the markets use is something like "increasing prices have not had a restrictive effect on consumption".

    I hope the Leaker in Chief doesn't do anything stupid in Iran, and I sure as hell don't like to see the big oil companies lining their pockets with obscene profits courtesy of Richard B. Cheney, but....

    Consumption of foreign oil in the U.S. will not decrease until demand decreases and the surest way to do that is through increased prices.  Hate to say it, but I actually think gasoline priced at $4 or even $5 a gallon would be a good thing, for the environment and, in the long run, for the economy (re. the trade deficit).  Not sure how to do that exactly.  Like I said, I don't want to see big oil get even greedier, and I think taxation at that level would be political suicide.  No, I know it would.

    A pessimist sees a glass half empty. I see a paper cup with holes punched in it.

    by Paper Cup on Tue Apr 18, 2006 at 03:24:31 PM PDT

  •  Here you go! (0+ / 0-)

    Highest point - $77.56 reached on May 3, 2006.

    End of year:  $56.31 on December 31, 2006

    $100 p/b oil reached on February 15, 2013.

  •  My best is that $100/bbl oil (2+ / 0-)
    Recommended by:
    Jerome a Paris, greenearth

    will also be oil costing about 12 euros/bbl as the U.S. hyperinflates out of debt.

    OK, that was mostly just cheek.  Real predictions, based on my assumption that we will not attack Iran (because if we do, the public Internets won't be operating after the resulting carnage and there will be no way to collect on the winning bet):

    Highest oil in 2006?  $83.34, in December.  Proximate cause is response to foreign government's relaxing of efforts to keep price low in advance of U.S. elections, as a favor to Boosh.

    What will be the year-end price for oil in late December 2006?  $83.34.  It will close at its high.

    Natgas?  $22.22/mbtu; closes at year-high.  Also just due to general upward creep; no sudden precipitating factor.

    /$100/bbl/?  June 22, 2007.  Efforts to quash price fail in light of rising summer demand, esp. in China.  
    /$110/bbl/?  July 19, 2007.  $100/bb barrier having been smashed, all hell breaks loose.  Jerome starts his "$200/bbl?" pool.

    My apologies to students who took my U.S. Government class in the 90s: evidently the Constitution doesn't limit Presidential power after all. Who knew?

    by Major Danby on Tue Apr 18, 2006 at 03:43:35 PM PDT

  •  Still pretending (1+ / 0-)
    Recommended by:

    that I know what I'm doing - I'm going to stay with the numbers I had before which are as follows:

      1. 124$/bl the highest price
      2. 85$/bl at years end
      3. 28$/mbtu, 25$/mbtu at end of year

    and adding to your last question above:

      4. 124$/bl in late October due to bombing Iran

    They that live in fear are never free, resolute, secure, never merry, but in continual pain...It causeth oftimes sudden madness. -- Robert Burton

    by Pandora on Tue Apr 18, 2006 at 03:57:02 PM PDT

  •  What about the recent find offshore in Mexico? (1+ / 0-)
    Recommended by:

    "It's better to realize you're a swan than to live life as a disgruntled duck."

    by Mumon on Tue Apr 18, 2006 at 03:57:23 PM PDT

    •  Won't Help This Year (1+ / 0-)
      Recommended by:

      It's good news that an additional field was discovered offshore Mexico, but it will take about three years for a producing field to be available for production.  Multiple wells will need to be drilled and transportation elements put into place (pipelines, marine heads, etc.).  This discovery won't help us this year and is subject to the hurricane issues which seem to bedevil the Gulf of Mexico these days.

      "Love the Truth, defend the Truth, speak the Truth, and hear the Truth" - Jan Hus, d.1415 CE

      by PrahaPartizan on Tue Apr 18, 2006 at 04:39:56 PM PDT

      [ Parent ]

  •  My entry (0+ / 0-)

    My prices are USD for Brent Blend...

    Highest oil:  $94.35 on 24 July
    End of the year: $78.45
    Date of $100/bbl - N/A

    Proximate cause of the spike in July will be action taken, not by the US, but by Iran taking the first shot, fearing that US military action is imminent.

    It won't get to $100 this year.  The mid-90s will be chaotic enough and I don't think the traders are quite willing to breach the $100 mark.  Not this year anyway.  Talk about a psychological barrier!

    A pessimist sees a glass half empty. I see a paper cup with holes punched in it.

    by Paper Cup on Tue Apr 18, 2006 at 03:57:55 PM PDT

  •  oil will go down (2+ / 0-)
    Recommended by:
    Jerome a Paris, plymouth

    it will drop below 60 by September and stay in the 50's through the Nov election. Year-end price: $54/bbl.

    "He lives most life whoever breathes most air." Elizabeth Barrett Browning

    "We don't do fours." General Tommy Franks (on Dkos)

    by SeattleChris on Tue Apr 18, 2006 at 04:00:13 PM PDT

  •  Exxon CEO (1+ / 0-)
    Recommended by:

    retires with 400 million package.
    Exxon profit last year 36 billion, a record for any company at any time.

  •  My picks for the year... (3+ / 0-)
    Recommended by:
    decembersue, greenearth, Oil CEO

    Peak price of $95/bbl.

    Year end: 92$/bbl.

    Natural gas: peak price $24 in Nov.  $23/mbtu at year end.

    I am guessing that 100$/bbl won't be reached this year.

  •  but what of the price of beer?! (1+ / 0-)
    Recommended by:

    "Rovus Vulgaris Americanus" nasty, soon-to-be-indicted co-conspirator -7.63, -9.59

    by shpilk on Tue Apr 18, 2006 at 04:38:25 PM PDT

  •  Jerome...a naive question (0+ / 0-)

    I read all your diaries though understand very little of the economics and have not been able to discern the answer to this question.

    If there is a worldwide collapse of markets won't the rich/super rich suffer as much or more then us lowly retirees with our $30,000.00 a year pensions?

    Domestic Violence Hotline 1-800-799-SAFE (7233) 1-800-787-3224 (TTY)

    by Sassy on Tue Apr 18, 2006 at 05:18:15 PM PDT

    •  Here is my naive answer (1+ / 0-)
      Recommended by:
      Jerome a Paris

      (FWIW I'm also often confused by J A P's diaries not being an economist myself)

      If you are making 30K a year and the rich dude is making 30Million and you lose half and he loses half, you are at 15K and he's at 15 million.  So where eould you rather be in that scenario?  I mean yes, absolutely it hurts them, but it hurts us little gals and guys more.  The pain will not be shared equally.

      "Victory means exit strategy, and it's important for the President to explain to us what the exit strategy is." -Governor George W Bush (R-TX)

      by espresso on Tue Apr 18, 2006 at 05:32:10 PM PDT

      [ Parent ]

  •  I've Never Been Happier (0+ / 0-)

    to be a non-driving citizen.

    Of course, I'm still gonna get screwed other ways - higher bus/taxi fares, higher delivery charges, and all the ripple effects this will cause thru the entire economy.

    But at least I won't be bending over at the pump every couple days like most people!

  •  Hi Jerome, thanks as always. Now a question. (2+ / 0-)
    Recommended by:
    Jerome a Paris, SLJ

    How does propane figure into all of this?  I'm a propane user and prices seemed to fluctuate pretty widely this winter (05-06).  What should I expect for next winter?  Would you reccomend pre paying for a;ll my next winter's propane this summer?



    "Victory means exit strategy, and it's important for the President to explain to us what the exit strategy is." -Governor George W Bush (R-TX)

    by espresso on Tue Apr 18, 2006 at 05:34:55 PM PDT

  •  My guess... (1+ / 0-)
    Recommended by:
    Jerome a Paris

    $100/bbl - 8/31/06 - another Gulf Coast hurricane

    It will come down before the elections, but not enough. And then start climbing again - to about $75-$80 at the end of the year.

    Remember, ExxonMobil isn't putting any of those billions into upgrading the infrastructure or improving the delivery capabilities. Nope, they're spending it all on lobbyists to buy their way into the Arctic Refuge.

    And this year, we won't be getting stories of happy shoppers at the malls and how the oil prices don't seem to be hurting consumer spending and don't worry, be happy from our nightly news shows at Christmastime as the home equity has been spent and the credit cards are maxed out again.

  •  Chart request (0+ / 0-)

    Great diary!  Do you have access to a chart that shows consumer gas prices with the crude oil price?  I love the 1998-present timeframe, and would love to see gas price information on there too.

  •  My Bet is as follows... (0+ / 0-)

    I bet that Oil will cap $100/bbl in the middle of June right after the US has a go at bombing Iran. Depending on the time of day that it happens IPE and Brent Crude will fly up first if in the early morning hours of the US followed the NYMEX crude will go out the roof too because they seem to have over night trading in the Pacific. Then WTI will fly when the Markets open in NY.

    So by June 15th 2006 Oil will have reached or exceeded $100/bbl. From there on in its any persons guess what will happen next.  

  •  Canadian oil sands? (0+ / 0-)

    Jerome, thanks for another illuminating diary.  The other day, there was an article in the right wing New York Sun by Youssef Ibrahim, claiming that oil sands in Canada are an immense source of oil that will now be profitable and that this and other alternate sources of energy will keep the price of oil down.  Considering the source, I am very skeptical. What is your assessment of claims like this?

  •  Too Much Natural Gas? (0+ / 0-)

    My understanding is that at present we have more natural gas than we can store (or very close to that point)......

    So, My predictions:

    NatGas $5.50 mbtu by the end of the year.

    Oil, High of $81.65 bbl sometime in late July, then steadily falling to low 50's through the end of November and ending on Dec. 31st around 60.

    Gasoline however, will hit $3.50 in time for Memorial Day, and stay between $3 and $3.50 until the end of July, falling back to $2.20  for October and November, then going back up and ending the year around $2.70.

    Big Oil will blame it on High Ethanol Prices, cost of rremoving MTBE and changeover, lack of refinery capacity.

    •  Manipulation, Baby (0+ / 0-)

      I can't speak to the natural gas storage situation, but I agree with your 'S' curve on prices the rest of the year.

      Living here in Iowa, I can say that Big Oil is NOT happy with Little Ethanol and Big Oil is already scapegoating them for part of the runup in prices. Yes, Ethanol prices are up, but production is also ramping up to help meet demand.

      There's a tremendous amount of manipulation going on in the oil markets and in distribution, unfortunately the press/public will swallow whatever reason is put forth explaining the rise/fall of prices.

      However I think $3.50 gas this summer will succeed in pissing most everyone off, even those of us with cars that get around 30mpg.

  •  Are there other reliable web sites (0+ / 0-)

    that supply information and commentary on oil economics here in the US?  WOrldwide?  That have a good progressive slant?   Would appreciate any recommendations --

  •  Outide high bet. (0+ / 0-)

    $433 in October after an American nuclear attack on Iranian facilities in early September. The diplomatic fallout causes huge instability, and political pressures amongst European countries cause markets to panic.
    Year end $164
    NatGas $48 during the scramble in October, $29 year end.
    $100 oil reached September 2, as Bush launches a nuclear attack on Iran during congressional recess.

  •  Wagering the price of oil and natural gas in 2006 (0+ / 0-)

    1 What will be the highest price for oil in 2006? (As usual, you may choose your benchmark. If not provided, WTI will be the default option). And as an additional twist to that question (to be used to determine the winner if needed), what will be the proximate cause of that high?

    IPE Brent Crude (since that is the graph you use in this diary) will spike to $142/bl as a result of U.S. attacks on Iranian nuclear facilities, and Iranian retaliation on shipping in the Strait of Hormuz.

    2 What will be the year-end price for oil in late December 2006?

    I posit two possible prices here: a) $135 / bbl if Iran succeeds  in obstructing the Strait of Hormuz and the U.S. Navy can't figure out how to remove the wreckage of a 200,000 dwt tanker, or b) $106 / bbl if Iran fails to block the Strait of Hormuz.

    3 Same questions for natural gas: year high, and end-year prices, in $/mbtu, using Henry Hub (prices in $/boe will be accepted as well)

    High: $28/mbtu   Year End: $21/mbtu.

    No idea; just pulled these out of thin air.

    4  On what date will 100$/bl oil be reached? And same addendum - what will be the proximate cause?

    The second week of October, because the Bush cabal will launch military action against Iraq three weeks before the elections in an attempt to swing people in support of the President's party "in a time of war."

    My email is Oh, and could I trouble you to please set up a secret Swiss bank account to hold my winnings from this wager? You're so sweet.

    If you're tired of being screwed by them, in November is your chance to tell Republicans to go screw themselves.

    by NBBooks on Tue Apr 18, 2006 at 08:22:33 PM PDT

  •  Oil will hit $100 (0+ / 0-)
    on 7/4/2006.

    High for the year? $102, 9/30/06
    Year-end? $71

    (disclaimer: I know not a thing about any of this.  I'm just guessing.)

    I beg to dream and differ from the hollow lies/This is the dawning of the rest of our lives

    by celticshel on Tue Apr 18, 2006 at 08:34:50 PM PDT

  •  between 70-75 high, year close at 69 (0+ / 0-)

    Since we're taking bets.  But $10 a year is a lot and that means $100 in three years.  Only if Iran is not bombed.  If Iran is bombed all bets are off.

    " you smell something" -ghostbusters

    by David in Burbank on Tue Apr 18, 2006 at 08:42:13 PM PDT

  •  Sooner than we think. (0+ / 0-)

    June 14, 2006

    "If he who bases his hopes on human nature is a fool, he who gives up in the face of circumstances is a coward." -Albert Camus

    by jcbhan on Tue Apr 18, 2006 at 08:46:25 PM PDT

  •  this is not a sure thing (1+ / 0-)
    Recommended by:
    Oil CEO

    Today's WSJ has an important piece on what's happening with the price of oil. You may need a subscription to access this link.

    But let me try to summarize some important points.

    Investment flows into oil futures are supplanting nitty-gritty supply-and-demand data as prime drivers of prices.

    In contrast to past bull markets in crude, this year's run-up has occurred even though oil inventories in the U.S., the world's largest market, have swelled to their highest levels in nearly eight years.

    What's so important about oil futures today? Well, you have to consider how investors are shaping the price.

    The answer to the puzzle posed by rising prices and inventories, industry analysts say, lies not only in supply constraints such as the war in Iraq and civil unrest in Nigeria and the broad upswing in demand caused by the industrialization of China and India. Increasingly, they say, prices also are being guided by a continuing rush of investor funds into oil markets. Institutional money managers are holding between $100 billion and $120 billion in commodities investments, at least double the amount three years ago and up from $6 billion in 1999, says Barclays Capital, the securities unit of Barclays PLC.

    What this means is that commodities are a hot investment as they are appreciating more than other traditional assets like stocks, attracting investor money.

    Analysts say that behind the flush U.S. inventories lies a new trend born of the extended run-up in oil prices. Refiners of crude, who once sought to hold lean inventories, and traders, many of whom prefer to flip paper rather than buy and hold actual oil, are now grabbing more than they used to.

    Since early 2005, the crude-oil market is in what traders call "contango," meaning futures contracts for a given product are priced higher than that same good for near-term delivery. The price of oil to be delivered four months from now is about $3 more than oil to be delivered next month.

    So refiners are building more storage tanks to keep their crude inventories as high as they can. This investment in new tanks can be reducing the investment in maintaining or improving refining capacity. So gasoline prices, that have to go up with rising crude prices, could also go higher because of the refiners goal of incresing their crude inventories.

    The last time U.S. inventories were at today's levels, in 1998, the market was about to crash. By the end of 1998, prices fell below $11 a barrel from an average $18.32 in December 1997.

    A crash looks unlikely now, both because supplies remain tight and because of the large volumes of money that investors are pouring into oil markets. Money managers such as pension funds are investing in commodities to diversify away from stocks and bonds, and appear willing to buy commodities through passive, index-linked investments at ever-higher prices. But if the investment tide turns, prices could fall quickly.

    How is the investment tide is going to turn is a good question. But just having a more volatile market will make money for the hedgers. And volatility is what we are seeing. If Bush says we have 10 years to deal with Iran, the prices will drop instantly, but it doesn't mean his hedging cronies will not make money (or gain some politcal capital).

    During their meeting in Vienna last month, officials from the Organization of Petroleum Exporting Countries expressed concern about rising inventories and the growing role of financial players. Their fear: Money flows could reverse on the proverbial dime, while any move by the cartel to reduce supply would take months to affect markets.

    OPEC also fears a return to "backwardation" -- the opposite of contango -- with near-term prices higher than long-term contracts. Such a flip-flop could prompt speculative buyers to dump inventories; prices could quickly drop $20 a barrel or more, OPEC officials said.

    So this market is no different than any other market. You can make predictions, but the chances of being right on the money are slim. Hedge your bets.

  •  My bet from before stands. August 2007 (0+ / 0-)

    (First, I don't think we'll cross $100/bl in 2005 dollars in 2006.)

    (Second, if there is a big bolus of inflation, that could change, so I'm using 2005 dollars as a reference.)

    (Third, my prediction includes an estimated 12.5% inflation along with the demand increase in China, but a demand slowing in the US as we slide into recession.)

    1. Highest price in 2006: October (of course) due to Hurricanes.  $84 (in 2005 dollars).  Accounting for 12.5% inflation (2005->2006), this could be nearly as high as $100 ($97.87), but I'm predicting it stays below $100.

    1a.  Should it hit $100, both options on the CALL and PUT side will have a profound effect upon prices so you might see it BOUNCE off $100 before driving right through.

    1b.  It won't stay above that point for long, again because of the unwinding of the options.  A lot of money will change hands, but we'll end up below that.  (In essence, crossing $100 will be because someone is trying to manipulate the market and make money on options.)

      2. Year-end 2006: $91 (in 2006 dollars, or about $81 in 2005 dollars).

      3. Natgas BOE $115 (2006 dollars)

      4. $100/bl reached in August (AUGUST) 2007 at the first sign of a hurricane headed for the Gulf. (in 2007 dollars)


       * Inflation is real and present.  Whether they measure it or not.  The lack of an M3 published measure is disturbing and makes me wonder about the wording of the FED's governers' statements.  

       * I expect a deep recession in 2007 -- so deep that some guys in China will be jumping out of buildings because they're too leveraged.  Not to the point of a depression, but a 1987-style correction.

    Happy little moron, lucky little man. I wish I was a moron, my God, perhaps I am! -- Spike Milligan

    by polecat on Wed Apr 19, 2006 at 05:08:48 AM PDT

  •  My Guess.... (0+ / 0-)

    "PEAK": $145; it appears we hit Iran but we're officially denying it. Murmurs abound that the Israelis grew impatient and did it themselves. Israel has no comment. Bush preemptively puts some SPR oil on the market, preventing barrel price from spiking higher.

    Year-End Price: $85 (with a downward trend towards a new $75 "equilibrium)

    Nat. gas: Ask me in a week when my STELLA model (for class) includes natural gas. :)

    $100 per barrel reached on or about September 20th when U.S. forces mass near Iranian border fueling speculation of an attack.

    The scary thing about the Iran situation is they're following the exact same playbook as Iraq. Be ready for 1) Bush to ask Congress in mid-late September for some sort of resolution giving him "free play" in Iran and 2) for Republicans to use Iran as national security campaign issue (nevermind that Iran is MORE paranoid now than in 2000 because of Iraq because the classic Rove campaign strategy is to make your candidate's weakness his (or her) strength.)


    Maryland School of Public Policy Master of Public Policy Candidate

    by magicrusslc on Sat Apr 22, 2006 at 06:01:53 AM PDT

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