Oil prices soar to record highs!!!

Hellfire3, I think its pretty much a given that oil market speculators are in large part responsible for the surge in prices.

Demand growth in Asia appears to be stabilizing. China's oil imports for the first half of '05 grew at a 4% rate over last year. Compare that to the same period in '04, where imports grew at nearly 10 times that rate. They seem to be getting their electrical power generation problems under control, which has resulted in less gasoline/diesel generator use and more consumption of coal. Meanwhile, one can go to the pump and buy all the gasoline that he or she can afford. Demand has increased, but we have not reached the point where demand even meets supply, much less exceeds it. There is no shortage. In fact, US gasoline and crude stocks are well above average for this time of year. If this continues, its going to be tough for the oil market to maintain these prices without a correction.

Its also a matter of simple economics. There's only a finite supply of money in the hands of consumers. As these fuel prices increase, they also sharply reduce the amount of disposable income that people have to spend on other goods. Demand for those goods declines and because of this, demand for oil will also decline as there will be less need to transport material inputs to factories and to transport final products to market. The result is that you get a recession, which will certainly pop the oil bubble. Given the potential for oil prices to stifle international trade, I think this one is a certainty within the next 6-12 months at the rate we're going.

Well lets hope those prices plumet soon as you say!

Meanwhile, my work on the 90% automated, home bio diesel processor continues . . . . .albiet at a snails pace. My current hold up is getting enough hot water heater tanks for the processing stages and for use as transport. I have a lot of get ideas planned for this one! Time is money and i don't have the time to babysit the processor 3 hours every day so it must, for the most part, take care of itself.

It would be nice to have this thing done in light of the current outragious prices- but even the material used in its construction is not so cheap. Any one price simple plumbing fittings at Lowes or Home Depot lately? Oy!

A little here a little there and eventually every project gets crossed off the list. Just would be nice for this one to be done before those price hikes we just got!

Don't get too excited. Even if the prices do drop as I expect, its probably going to take a recession to trigger it. As it stands, the oil speculators are in a buying frenzy and are ignoring any news that should put downward pressure on the markets.

Was reading an article the other day. It seems that many of the over the road truck drivers are beginning to grumble. They are losing money on each load they haul due to the high cost of diesel now (average about $2.90/gal US). There is a rumble going on about the possibility of a trucker strike. Lower the price of gas or raise the prices (profit margin) of deliverable goods... That becomes higher wages ... Inflation running amok...

According to the old Chinese curse, we are living in interesting times.