$100/bbl by winter?

Listening to the Laurie Roth show on the way home tonight, I heard her say that an analyst was predicting oil to hit $100/bbl because supply is going to be overtaken by demand in large part due to the Chinese.
Also, those who own Unocal is seriously considering the Chinese bid. If that occurs, one of the largest oil companies will be owned by the Chinese.
Considering the Chinese's military train with us as their enemy, does anyone else see a little problem on the horizon?

it's a huge problem. I believe there is bi-partisan support on capitol hill to block the sale of unocal to the chinese but the bush administration doesnt seem to want to do anything.

I agree that things are going to get more expensive too faster than previously thought, not because we can't ramp up production any higher (which we're having A LOT of trouble doing, many countries just can't meet the quotas they are setting) but because there will be more people who can afford to buy more oil (i.e. China and India).

Even if oil hits US$100 a barrel, Americans will probably pay less at the pump than I do now (I pay over US$4.20 a gallon). But maybe if oil does keep going higher the fat cats on capitol hill and the americans with their giant SUV's will start taking alternative energy and fuel efficient cars seriously again.

thanks,
drfunk

[edit on 9-7-2005 by drfunk]

I think it is possible for oil to be at $100 per barrel by the winter, all I know is I dont think there will be a major oil price drop in the future. I know people are waiting for oil to go down in price, but that is unlikely.

$100 per bbl does seem a bit high to me for this year, for an average price, but I could easily consider $80 reasonable, based on today's futures.

China has been on a tear lately. They are buying up oil field rights right and left, they hold a large amount of US securities and debt notes, and their manufacturing ability and productivity show no signs of slowing down.

What else do you need to be the worlds superpower,... an army?

Speaking of Unocal this happened on the 4th, July, 2005.

ap.lancasteronline.com...

China on Tuesday demanded that the U.S. Congress "correct its mistaken ways" and stop interfering in the proposed takeover of the Unocal oil corporation by China's State-owned CNOOC Ltd, according to the State news agency Xinhua.

American politicians have warned that the $18.5 billion takeover bid announced last month, could pose risks to U.S. national security and called for a full review by the Bush administration.

Rather ominous isn't it. What will the next year bring? Maybe China doesn't have to win a war with the USA maybe they can just buy it.

[edit on 9-7-2005 by valkeryie]

That estimate may not be far off. Many mainstream sources have been saying that for a while now.

From a post of mine back in April:

I noticed that the $80 Oil, Here We Come!!! article was the first to predict much higher oil prices and that The Perfect Option article was the first to claim $100 dollars per barrel.

Other more mainstream forecasters have issued similar predictions...

The Globe and Mail as reported here: Production theory could make $100 oil a reality
CIBC World Markets as reported here: CIBC sees oil at $100 (U.S.)
The IMF as reported on CNN and available here: IMF: Oil could hit $100, hurt growth
As well as Goldman Sachs reported on CNN and available here: Goldman sees oil spiking to $105

link

I'll bet we see $80 before long and this winter will give us an idea of just how real peak oil may be.

Originally posted by Thomas Crowne

Also, those who own Unocal is seriously considering the Chinese bid. If that occurs, one of the largest oil companies will be owned by the Chinese.
... anyone else see a little problem on the horizon?

It's kind of a damned if you do, damned if you don't situation.

When will "foreigners no longer finance our debts"?

Well since China is one of the largest holders of US debt. All those assets in dollar denominations and the flow of interest payments (also in dollars) have sent them on an investment, deal making and buying spree.

Examples:

NEWS: China National Offshore Oil Corp Re-ups Bid For Unocal
China bidding for Maytag corp and Huffy bikes
China a Leader in Scramble for Oil

So I figure that US corporations and their indentured political class have two choices. One is to hold dear to their principles of capitalist "free markets" and sell to the highest bidder. The other is to intervene in the name of "national security" with "protectionist" solutions.

If the later is chosen, I have a question.

What happens when China realises that all of those US dollars and other financial instruments it holds can't buy them what they need (like energy)? - link

Don't sell to them = problem for the US when China starts dumping dollars.

Sell to them = problem for the US lossing an asset to China.

Things are getting interesting...
.

How about this for a piece of the puzzle? Just throwing it out there.

Major (and majorly underreported) oil news from the heart of the secret oil war in the Caspian between China, Russia and the US; May 2005:

news.bbc.co.uk...

Oil is set to flow from the Caspian Sea direct to the Mediterranean for the first time after a $3.6bn (£2bn) pipeline opened on Wednesday.

The pipeline has been an international effort and was built by a consortium led by UK oil giant BP, which has a 30% stake.

Other consortium members include Azerbaijan's state oil company Socar, Amerada Hess, ConocoPhillips, Eni, Inpex, Itochu, Statoil, Total, TPAO and Unocal.

news.bbc.co.uk...

The United States has given significant political support, seeing the pipeline as a way of transporting vital energy supplies out of the Caspian, avoiding alternative routes to the south through Iran, or to the north through Russia.

But Russia has been unhappy with the project, seeing it as further evidence of the West seeking to exert power and influence in an area Moscow has traditionally seen as its own backyard. [/url]

Opening of New Russian military base November, 2004:

news.bbc.co.uk...

The US ambassador to Tajikistan has welcomed the opening of a Russian military base there as a key element in building stability in the region.

...The Central Asian republics of Tajikistan, Kyrgyzstan, Uzbekistan and Kazakhstan - formerly part of the Soviet Union - have become US allies since the start of the war on terror.

Apart from Iran's obvious influence in the area and the chronically more under reported (until very recently) state of Uzbekistan (one of the worlds most brutal dictatorships, but hey it's a fully paid up member of T.W.A.T) Maybe the SCOs demand for US withdrawal from the area (brought up by Hellmutt) might also be connected..?





[edit on 9-7-2005 by kegs]

i hear on the grapevine that bilderberg people want $250 a barrel at some point

i hear on the grapevine that bilderberg people want $250 a barrel at some point

I sincerely doubt that. Yes, they want to make as much money as possible off of oil, but with prices that high, who will be able to afford it? Bankrupting the middle class means that the biggest money machine in the capatilist system won't be able to buy lots of stuff, and make the rich even richer.

As far as a China/US war goes, I HIGHLY doubt such a thing. Here's why:

The DoD estimates that feeding a troop stationed in the US costs 150 a month. I imagine that feeding a troop stationed overseas may cost about 250 a month, if not more.

Now, let's assume that China spends much less (they are communists after all) per troop. Let's say they spend only 50 per troop, per month. And we can reasonably assume that a drafted Chinese army could mean 50 million troops. That's 500 million dollars a month just to feed them on Chinese soil. That doesn't count armor, weapons, ammo, training, logistics, etc.

Speaking of logistics, moving troops consists of 5 stages:

1. Troop

2. Immediate vehicle (tank, troop transport)

3. Transport for vehicle (cargo plane)

4. Fuel for transport (Tanker)

5. Fueler for fueler (Tanker)

Do you see how this adds up very quickly? Now, being communist, I doubt they will measure this in actual dollars, but in man-hours. Still, this means an enormous amount of effort, time, and dedication of people for a full-on war to happen. In comparison, during WWII the average American worked about 90 hours a week.

On top of that, China holds enormous amounts of our debt. Do you honestly think they will attack their meal-ticket, thereby destroying their own infrastructure in the process? By killing American civilians, they kill the people who make the products that support the economy on which theirs is currently being built.

China won't attack the US, and the US won't attack China. It doesn't make economic sense. China has just as much to fear from Middle-Eastern terrorism as we do, and I'm sure over the next 20 years as China slowly becomes a Democracy, they will end up fighting alongside us.

Actually according to the CIA Fact book on China their army is this;

www.cia.gov...

Military manpower - military age and obligation:
18-22 years of age for compulsory military service, with 24-month service obligation; no minimum age for voluntary service; 17 years of age for women who meet requirements for specific military jobs (2004)
Military manpower - availability:
males age 18-49: 342,956,265 (2005 est.)
Military manpower - fit for military service:
males age 18-49: 281,240,272 (2005 est.)
Military manpower - reaching military age annually:
males: 13,186,433 (2005 est.)
They have a way bigger army, I heard once you could march them into the pacific ocean and the line would never end. Scary, give them the right technology, even scarier.

[edit on 10-7-2005 by valkeryie]

The quotation of the entire post directly above this one removed by TC

[edit on 11-7-2005 by Thomas Crowne]

nobody seems to be concerned

that we're SELLING OUT to the COMMIES !

WTF ?

and a hundred a bbl , maybe...

That is very scary, but the amount of materials needed to mobilize such an army, and command it is astronomical. 280m (est.) people being fed at 50 dollars a month is 14,000,000,000 (billion) dollars a month. Just to feed them. When they are at home. Deploying them, shipping them, setting up a support and command structure...whew!

Yes, such an army attacking the US would overwhelm us pretty damn quickly, but giving all of those troops the proper training, and technology, to do the job is barely within comprehension. I just don't see how it could be accomplished.

Any army would only be needed to 'enforce' policy though.

Consider instead if China decided to just drop the dollar, not worry about the interest it earns,.. and then begin just buying AND selling oil in some other fledgling currency.

Those implications, along with their manufacturing power, could ultimately change the way (and with who) the world does business.

I can see the price rising to 100 around winter time. Perhaps lower, but I wouldnt say that 100 is rediculous. I think by the end of summer we will be talking some big numbers.


But !


I hope im wrong.

Originally posted by smirkley
Consider instead if China decided to just drop the dollar, not worry about the interest it earns,.. and then begin just buying AND selling oil in some other fledgling currency.

Those implications, along with their manufacturing power, could ultimately change the way (and with who) the world does business.

I completely agree, however, the same thing holds true: if China buys up all the oil, there is still a point at which charging a certain amount will be self-defeating. If I take all of your money away, you stop being able to support yourself, and can't earn any more money, therefore there's no more money for me to take.

Yes, oil will go up, but it will always be affordable. We may have to stretch our wallets a little further, but maybe that will encourage us to seek out other means of energy that don't require us to depend on others to supply it.

Since Unocal was brought up, I figured I'd point something out..

Currently Unocal is setup to supply mostly Asia.. I forgot the exact figures, but its something along the lines of 90% Asia.. I'll look for the exact figures later..

Regardless of exact percentage, the Unocal company is being sought to fuel China's economy.. so they say..

Much of Unocal's Asian production is tied up in contracts with Thailand and other nations. That means it is highly unlikely those supplies could be diverted to China for years, if ever. In other cases, China would wind up buying assets whose production it would have bought anyway, even if those assets were owned by rival Unocal bidder Chevron Corp.

The bid for Unocal has ["little to do with security of supply for China,"] says Derek Butter, an analyst at energy consultancy Wood Mackenzie in Edinburgh, Scotland. Instead, he says, it has more to do with China's desire to create a large corporation that ["can compete with the other international companies, and has the skills in the future to negotiate its way into large projects."]"

The bottom line, according to this alternative point of view is that China's bid for Unocal is a bid toward becoming a major oil producer with a global presence, rather than to add to China's reserves for its own personal use.

Here are three interesting facts put forth by the Journal:

1. "In the case of Thailand, all of Unocal's gas production is committed to a single Thai buyer. The gas is committed through long-term sales agreements that have expiration dates ranging from 2010 to 2029. Even if those contracts weren't in place, it would be difficult and costly for China to send the gas elsewhere because the pipelines or other infrastructure to do so don't exist. Building such infrastructure likely would require the consent of the Thai government, which relies on Unocal's gas to fuel its booming power sector."

2. "The idea that China might build a gas terminal to ship liquefied Thai gas to China ["is absolutely preposterous,"] says John Vautrain, a vice president and director in Singapore of Purvin & Gertz, a Houston oil and gas consultancy. ["The Thais wouldn't let you."]

3. "Unocal's Myanmar output also is sold to Thailand. Its Bangladesh gas generally is reserved for Bangladeshi consumption. The picture is somewhat different in Indonesia, where Unocal holds interests in a number of promising fields whose output probably would be earmarked by Cnooc for the China market, according to people familiar with the company's strategy."

In our opinion, the Journal, while clearly listing some interesting observations is missing an important point.

China's purchase of Unocal, even if it did not lead to the diversion of natural gas toward its own borders, would give it control of the energy supply used by Thailand, Myanmar, Bangladesh, and Indonesia. It would also put some pressure on Japan and South Korea.

In other words, in one fell swoop, China would become the energy czar for a significant portion of South East Asia, and would gain valuable leverage with which to further its other goals, the expansion of its influence, and the ability to project its power. A scenario in which China could use its leverage to gain concessions from the four countries mentioned, including the placement of military bases, fueling stations for submarines and merchant ships, and the placement of surveillance equipment and communication relay stations in all of those countries is an easy next step to visualize.

All the while, China could also make money by continuing to sell energy to those countries by honoring existing contracts, while negotiating more lucrative ones in the future.

Indeed, the Unocal purchase can easily be looked upon as a threat to national security, especially if you live in Thailand, Myanmar, Bangladesh, Indonesia, Japan, or anywhere else in Asia.

Excerpts taken from:
Source

Originally posted by RockerDom

China won't attack the US, and the US won't attack China. It doesn't make economic sense. China has just as much to fear from Middle-Eastern terrorism as we do, and I'm sure over the next 20 years as China slowly becomes a Democracy, they will end up fighting alongside us.

thats about 0.00001% on the concern factor then huh?
So 50 people died in London, in stats terms so what? nobody is worried about it, only the media. People get stabbed to death everyday in the UK, the media ignores it, does anyone care? no. if you talk about it they just tell you to stop being so negative.

Middle eastern terrorism is not on the radar yet for china, and i dont think it ever will be unless the frequency of attacks against non-middle east nations is steped up considerably.
i would put forward that Bird Flu is a far greater concern to them at the moment.

Too much is being made of the potiental negatives of a China/Unocal buyout. With the proper structure a serious advantage could be gained by the US. A buyout deal should be attached to the opening of chinese markets to other US goods or at the very least the enforcement of Trade/Copy right laws. The chinese are getting an oil company but the US, if wise, can gain more. Asking the Chinese to allow US investors to get in on the real estate boom there would be nice but far fetched probably.

I don't trust tthe chinese government but I DO believe in capitolism and democracy. How can we lecture the Chinese on opening their economy to US companies if we block them from getting in on ours. It's all confusing and seems ominous at times but I feel that the US has something to gain in the Unocal deal if it wants to play hard. What's the worst that can happen by approaching the Chinese with a counteroffer that allows US participation in other Chinese markets? They say no, thats all, and we in turn keep Unocal a US company.

Originally posted by RockerDom
The DoD estimates that feeding a troop stationed in the US costs 150 a month. I imagine that feeding a troop stationed overseas may cost about 250 a month, if not more.

It actually depends on what food source the US military would buy from overseas. The DoD have a very lengthy list of food service contractors in another countries to feed the troops around the world by directly purchasing from local sources cheaply rather than relying on imported American foods and beverages. American troops can purchase locally in any country with their own money (with currency exchange) sent from their families or friends or borrow money.

Don't forget that many American non-profit organizations and private Americans donate foods extensively for the troops overseas. The American people are very resourceful when it comes to donating all kinds of foods and supplies to the troops and the DoD would not have to worry about paying too much money for feeding the troops.

Originally posted by RockerDom
Now, let's assume that China spends much less (they are communists after all) per troop. Let's say they spend only 50 per troop, per month. And we can reasonably assume that a drafted Chinese army could mean 50 million troops. That's 500 million dollars a month just to feed them on Chinese soil. That doesn't count armor, weapons, ammo, training, logistics, etc.

That mean a lot of rice and vegetables to eat. Seriously, remember China is now having a poultry livestock crisis due to the H151 virus spreading throughout the provinces. They've already killed millions of chicken and waterfowl livestock to stop the spread of the virus but it is transmitting faster among the poultry livestock before anyone in China could contain it. Now waterfowls infected with the virus are migrating westward and southward (toward Russia, Europe and India) and poultry livestock in Russia, Europe and India would be in danger.

www.rense.com...

Evidence of spread in wild geese means farmers outside of southeast Asia should now be more vigilant for signs of the disease, the research teams say. Avian flu is almost impossible to stamp out once it becomes established in farm poultry populations, they warn.
Source

China is in danger of being hit with a transmittable (cross-species) avian flu among its human population because much of the provinces are medicinally inadequate to treat such large numbers of people. Expect a drastic population reduction once the avian flu pandemic rolls on.

Originally posted by RockerDom
China won't attack the US, and the US won't attack China. It doesn't make economic sense. China has just as much to fear from Middle-Eastern terrorism as we do, and I'm sure over the next 20 years as China slowly becomes a Democracy, they will end up fighting alongside us.

You don't know that for sure. Mere speculation. I don't know if China so desires to be a rival world power to the US directly, they would still have to deal with a rival power on pace to challenge China on equal footing: India. The enmity between China and India is as old as ancient civilizations they were. Future US administrations would count on India to balance the equation of hegemony in Asia against China.

The only way for Red China to fight alongside the USA would be against a massive UFO alien invasion a la "War of the Worlds" or an inspiration for a Harry Turtledove novel.

[edit on 7/10/2005 by the_oleneo]

Originally posted by smirkley
$100 per bbl does seem a bit high to me for this year, for an average price, but I could easily consider $80 reasonable, based on today's futures.

China has been on a tear lately. They are buying up oil field rights right and left, they hold a large amount of US securities and debt notes, and their manufacturing ability and productivity show no signs of slowing down.

What else do you need to be the worlds superpower,... an army?

Nice call.

www.cnn.com...