And keep in mind that 2 years ago, economists said that the US economy would collapse if oil went over 60 dollars/barrel. Yet here we are, 93 and counting. We will probably break 100 by the end of the year.

I haven't looked into oil production very much. I am wondering how something that happens that day or the next would immediately affect the market. I know we don't have a pipeline that shoots oil at the speed of sound to American refinery, which produces the oil is mass quanitity than put directly in the refilling tanks instantaneously. I'm being absolutely dramatic, but I'm only trying to exaggerate my point to make a clear understanding.

Oil is drilled.
Oil is refined.
Oil is shipped.
Oil is sold.
Oil is filled.

How do day to day events have such a dramatic and sudden impact on day to day prices, or even those of weekly prices when the oil that we're paying for today is the oil that was produced more than 2 weeks ago?

Oil prices go up on the rumor, and only go down on proven fact.
Take the lowly gas station. The owner buys a weeks worth at a certain price. The price goes up the next day. Knowing that the next weeks delivery will cost more, he has to raise prices to keep from losing money.
Remember, the vast majority of gas stations only make a few pennies profit on each gallon sold, that is why there are no more pure filling stations---they are all service and/or convenience stores that sell fuel to entice people to come inside and buy other things.

We are at war in the area of the world that produces the most oil, and contains the majority of the people who control the price. They are allowing it, but extracting their blood money too.

Tankers stay just offshore, and make slower trips, knowing that their commodity gets more valuable every day, and being late, or causing shortage, just makes it even more profitable.
Follow this reasoning from the sheik that owns the oil field and drills, all the way through to the company who owns the tankers that deliver the fuel to your local station.
We get the shaft in the end, and the poor independant gas station owner takes all the grief for just trying to keep his business open.
The price will continue to rise until it is on a par with alternative energy, and people start to chose those as a more stable source. It doesn't really matter to the producers as China will buy every drop we abandon.

All I know is I went and bought a new economy car,as my Land Rover gets about 12 mpg on the highway,don't want to have to carry a bag of gold everytime I go to fill up, I keep hearing 5 dollars a gallon,so better safe then sorry

oil is not yet as expensive as it was in real dollar terms during the oil embargo of the 1970s. The rise in the price is mostly due to the fall in the value of the dollar as oil is priced in american dollars; if our economy is fixed and the dollar rises in value, then the price of oil will drop. Of course, there is the peak-oil idea about supply, but, to my knowledge, that has not happened yet; the current change is just a reflection of Bush and Co destroying our economy by accumulating so much debt.

Agree with what as posted as oil has not reached embargo prices
with inflation adjustment that mark is right around $100 dollars give or take
depending on the dollar value..

once we cross the $100 mark on oil we will be setting historic pricing records..


Respectfully
GEO

[edit on 10/29/2007 by geocom]

Those corporate oil contigens must be so upset over our lame hurricane season to jack up the prices. They'll find a way no matter the circumstance. Reformulation for winter, bad karma, rabid bunnies etc. Can you even imagine the profit over a measely 20 cent rise per gallon nationally? It is greed and rape at its best.

Put simply, the price of oil will hit $100 a barrel before year end,

WHY?

Because the traders want it to. The fundamentals of oil does not equate to $100 a barrel.

Also, The $100 a barrel has less signifigance if oil was priced in Euro's. By keeping it priced in the US$ it is artificially climbing everytime the US$ falls. If we priced OIL in the EURO, there would not be as much of a % rise in the price, but our inflated euro would buy less. Its all about sematics. They like the oil being priced in the US$, because it is a negative for the US $. Did you know that alot of oil producing countries are now requesting to be paid in the Euro or the Yen, due to currency risk of purchasing with the US$?

I am not absolutely positive, but I think I read somewhere that only 2 countries remain that sell oil in $$. Saudi Arabia and the UAE I thought.
I also am having a problem with the peak oil theory. Seems the Russians found massive amounts of oil at a depth of around 5 miles. There is no theory as to how a vast amount of organic material got down that far to explain an organic base for it.
Today, 10/30 I am paying $3.44 for gas and $3.02 for LPG. As I have no choice of fuels without an expensive modification to my home ( no wood in the high desert, so it's electric or lpg or pellets) it's going to be a cold, or broke, winter.

Will be talked about in my own upcoming theory on PEAK OIL.

Its another sham!

I don't believe that peak oil is a sham or that traders alone are causing the increase inprices. What we are seeing is oil production affecting geopolitical and financial trends. Let's face it, if oil was plentiful and everywhere the price would be much much cheaper. It's a limited commidity. The less of it we have the more insane the prices and reactions of others are. The higher prices cause an increase in production, which causes us to run out faster, which causes the prices to increase. It's a self-feeding loop that's spiraling towards an extreme ending. The only solution to this would be an influx of excess oil. I don't believe you're going to see that because it just isn't there.

First off.....the theory of peak oil does not take into consideration heavy oil, the oil sands around the world (especially Canada), oil shale, oil that is currently too expensive to dig for and not being drilled for, oil in the ANWAR area of Alaska (because it is illegal to drill), oil off the coast of Florida (because it is illegal to drill for), Oil where that prarie dog took a crap last week because it might interfear with its sex life. Do you see my point? Not oil is taken into consideration when it is being accounted for. Every year new and deeper reserves are being found. Why? Because of technology. Technology will allow us to extract and exploit oil until oil can not longer be found. Now, although it probably is inevitable that, that day will come, its not even close yet. Give us the permission to drill, we will find it!

I have my own theory about not drilling in all the preserves. (And this is why there is no mad rush to find alternatives) Once PEAK ARABIAN oil is done with, just think how much OIL the US/NOrth American countries will be sitting on!!!! I bet then they find away to make it legal. Who will be the exporting power then???? What else do they have in the Arabian countries besides OIL? Uh-Oh. How the power shifts!!!

By the way. Oil down over $3.00 today!!!! Traders control the price, they use the news to manipulate this. TRUST ME ON THIS ONE! I think I know where I am coming from with this..........Wall Street is just down the road a bit from me.

What I find curious is the apparent decouple between gasoline & oil prices...especially in the face of declining petroleum stores. According to one source, gasoline inventories dropped 2MMbls this month, supposedly due to annual refinery maintenance...while demand rose by 120,000bls. At the current price differential, oil refiners are absorbing the diff. With the US economy showing strain, could this be big-oil & big government conspiring to hold the price of gasoline at, or near the psychological $3.00 mark? My sense is that Gas is coiled-like-a-spring at current prices.

Anyone paying markedly above $3.00 in their area?