OPEC - Oil To Reach $170 This Summer; West Leaders Look Dazed

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posted on Jun, 26 2008 @ 09:35 PM
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World leaders abandon their constituents

With OPEC predicting $170 per barrel in the not very distant future, the leaders of the Great Democracies in the Western World look HELPLESS. Say Hello Nevile Chamberlain, can you tell us where is the road to Munich?

There are 42 gallons in a barrel of oil. Total state and federal taxes on gasoline average 58 cents a gallon. It costs about that much to ship, refine and put the fuel into the ground for us to pump out. Profit on a gallon runs 20-25 cents. At $150 a barrel, the basic prices to refiners is $3.57 PLUS the above costs. About $4.97 a gallon national average.

At $170 a barrel, that is $4.05 a gallon PLUS the above costs. At the pump that means about $5.45 a gallon.

And our leaders are silent. Oh they talk that 5-10 years out crap because they think we are DUMB enough to fall for that sweet talk.

They have not assembled in EMERGENCY SESSIONS to take on this devastating problem. Our own economy is going south in a hurry. The 1 billion people on this planet who scrape by on $1 a day or less are in grave jeopardy. It took us - the West - 10 weeks to finally get food into Myanmar after a cyclone killed perhaps 100,000 people there. We still won’t go to Somalia. It has been abandoned and written off by the CIVILIZED world given over to the worst criminal elements.

Darfur still burns from lack of real concern shown to its leaders ensconced in historic Khartoum where famous British general “Chinese” Gordon lost his own head! .




NY (Reuters) - Oil prices surged nearly 4 percent to a record over $140 a barrel on Thursday after Libya said it was studying possible options to cut output in response to potential U.S. actions against producer countries. U.S. crude settled up $5.09 at $139.64 a barrel, after hitting an all-time high of $140.39 earlier, eclipsing the previous record of $139.89 a barrel hit on June 16.

The benchmark London Brent crude settled up $5.50 at $139.83 a barrel.

After Thursday's settlement, prices fell more than $1 to $138.61 on news that the U.S. House of Representatives directed the Commodity Futures Trading Commission to use its authority, including emergency powers, to "curb immediately" the role of excessive speculation in energy futures markets. The Senate must now take up the measure.

Earlier, the record was hit largely on the news from Libya. "The crude oil market spiked sharply higher in early trading after Libyan National Oil Company chief Shokri Ghanem said that Libya was considering a production cut," said Tim Evans of Citi Futures Perspective. Ghanem, Libya's most senior oil official, said he was studying the possibility of reducing production in response to a bill before the U.S. Congress that would empower the Justice Department to sue members of the Organization of Petroleum Exporting Countries for limiting oil supplies.

"We are studying all the options," Ghanem told Reuters. "There are threats from the Congress and they are taking OPEC to court, extending the jurisdiction of the U.S. outside the U.S." Libya pumped about 1.71 million barrels per day (bpd) of oil in May, according to a Reuters survey, out of total OPEC output of 32.12 million bpd.

U.S. crude prices stood at $70 a year ago.


Rising flows of cash into commodities from investors seeking to hedge against inflation and the weak dollar have added to gains this year. The dollar fell broadly on Thursday after the Federal Reserve held interest rates steady on Wednesday and dashed expectations of an imminent rate hike. OPEC President Chakib Khelil said in an interview Thursday that prices could reach $170 a barrel in the coming months, and he reiterated the cartel's position that speculation -- not a supply problem -- was driving oil to new highs.

"I forecast prices probably between $150 and $170 during this summer. That will perhaps ease towards the end of the year," Khelil told France 24 television, according to a text of the interview released by the station. Nigerian oil workers met with Chevron management and the OPEC country's oil minister on Thursday in an effort to avert an all-out strike that could cut output.uk.news.yahoo.com... [Bold edited for emphasis]


The Master of Preemptive Strikes offers us no help. The New Brits lap dog can't find the fire hydrant. France's Nick Sarkozy is still flummoxed by the Israeli IDF suicide. Germany’s Angela Merkel is suddenly either deaf or dumb. The Pope refuses to either ask GOD or to tell GOD to lower oil prices. VP Cheney is silent for a change. His big $70 million bonus from Hallilburton is probably fully in the futures market. The CFTC - Commodities Futures Trading Commission - is staffed by 405 men, according to their website. To do a half job they need 4,000 men. Like the CPSC - Consumer Product Safety Commission - which had but one man looking for lead paint. And etc.

I assume you know this mess including the mortgage meltdown is the FRUIT of the REAGAN REVOLUTION? Reagan laid out his simple plan: “Government is the problem, not the solution” And a bunch of thoughtless people shouted TELL US MORE! Thank you Ronnie, you have screwed us once again.

[edit on 6/27/2008 by donwhite]




posted on Jun, 26 2008 @ 10:07 PM
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I guess this means oil companies would be smart to buy oil futures now at $140 and lock in the price before it goes up, right?

Oh wait a minute, Congress and Obama don't want them doing that. They'd rather they not speculate and be required to pay $170 a barrel later.

Yeah, that makes a lot of sense.



posted on Jun, 26 2008 @ 10:14 PM
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People are already at the breaking point with $4.00 gas.

$5 or 6 will crash the economy like a rock.



posted on Jun, 26 2008 @ 10:33 PM
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Originally posted by bismarcksea
People are already at the breaking point with $4.00 gas.

$5 or 6 will crash the economy like a rock.


Not likely. The economy grew last quarter even with gas at $4. Do the math.

Say people drive 10,000 miles a year. Say thay get 20 mpg. That means 500 gallons of gas purchased a year. At $4 a gallon that's $2000 a year in gas. At $6 a gallon that's $3000 a year in gas.

This will mean people will drive less, get more fuel efficient cars, and make better use of their driving time. In other words, people might have to cut back a little on what they're used to doing.

FYI... there were 37,000 people a night a three baseball games between the Pirates and the Yankees. They probably spent around $50 a person on average to watch guys play baseball. I don't think the ecomony is close to crashing if that many people still pay that much money to watch baseball games.



posted on Jun, 26 2008 @ 10:52 PM
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reply to post by donwhite
 


Just like to add that when Harry Reid (D-NV) recently tried to move for a vote on the Dodd housing bill, Senator John Ensign (R-NV) objected as the bill will not contain extended tax credits for renewable energy purchase/production.

Partisan state politics aside, I do not accept the strangle hold the status quo has over the common person, both internationally and domestic.

The sun rises every day, the wind blows, waves crash, and we miss out on the capture of this resource again and again and again. OPEC, Speculators, the weak dollar... on and on and on. Until humans awake to the total and entire shackle of dependence which our leaders and own ignorance impose upon us - we will continue to cry like the little wus babies we truly are.


[edit on 26-6-2008 by Pawnhaus]



posted on Jun, 27 2008 @ 08:02 AM
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reply to post by Pawnhaus
 



Just like to add that when Harry Reid (D-NV) recently tried to move for a vote on the Dodd housing bill, Senator John Ensign (R-NV) objected as the bill will not contain extended tax credits for renewable energy purchase/production. Partisan state politics aside, I do not accept the strangle hold the status quo has over the common person, both internationally and domestic.


I don’t know when the Senate adopted the 2/3rds vote to STOP debate. It certainly was present after the Civil War as the South managed to regain control of Congress. Or at least a veto in the Senate. The rule was modified in the 1960s civil rights era, to the current 3/5ths vote - 60 - required to shut off debate. Cloture. We have by consensus agreed to take no serious actions that are not approved by 3/5ths of the Senate. That gives disproportionate power to smaller states over larger states.

But as related to the 2 senators from NV, why create useless turmoil and risk injured personal feelings when you know at the start you cannot have it your way? It is a Senate tradition that 2 senators of differing parties but from the same state present a united front to the world. It would not be politic for the two who are to represent the interests of the same state to have sharp public divisions.

Another Senate custom used infrequently is that presidential appointees are put on HOLD if a senator from the president’s own party objects to the appointment within his state. This gives the some senate leverage with the president.

Except for rare intervals, Federal political power was considered to be primarily in the Congress. Washington and Adams were both strong central government advocates. But in 1800, the Federalists lost to the Jeffersonians and never regained power. Lincoln was exception number 1, and exercised strong executive power but even Lincoln was not sure he could FIRE a member of his cabinet. An unspoken theory was that if it required a Senate vote to confirm, it required a Senate concurrence to fire the man. Of course today we regard Cabinet posts as serving at the PLEASURE of the president.

Theodore Roosevelt wanted to be a strong president but Congress won all the battles. Woodrow Wilson also struggled against Congress but he also lost the final battle of his presidency, the League of Nations vote.

With the onset of the Great Depression, Pres. Herbert Hoover proved completely incapable of addressing the dire economic issues faced by the general populace. Hoover was sworn in on March 4, 1929 and the Stock Market crashed October 24, 1929, barely 6 months into his term. Americans were STUCK with a man philosophically incapable of dealing with the issues wrecking the country. From the market Crash until the next president took office was 3 years and six months!

Similarly the voters voted for decisive anti-war policies in November, 2006. Yet, Congress is NOT Commander in Chief of the Armed Forces. And no real consequential action can be taken until January 20, 2009. 2 years , 2 months! The public’s will is both ignored and thwarted. A very long time to wait. It is not easy for the public to understand this. THIS IS A SERIOUS DEFECT IN OUR SYSTEM.

All of these 'facts of political life' are based on compromises made in 1787. Those compromises had to be made or there would not have been a Constitution to debate. I say it is now PAST TIME to have another Constitutional Convention to get us better prepared to deal with the 21st century.

For the sake of tradition, I say the Convention should meet in Philadelphia. There should be 2 delegates from each state and 1 from the DC. 101 in total. The governor of each state and the Mayor of DC should choose one. The second delegate would be chosen by the state legislature sitting in a joint session and as a committee of the whole. One of the 2 delegates from each state must be a minority person or a female. Any person of good repute over the age of 21 and a resident (note necessarily a citizen) of the state from which chosen for 10 years would be eligible. Convention proceedings would be closed to the public. And etc.

[edit on 6/27/2008 by donwhite]



posted on Jun, 27 2008 @ 08:17 AM
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"Not likely. The economy grew last quarter even with gas at $4. Do the math.

Say people drive 10,000 miles a year. Say thay get 20 mpg. That means 500 gallons of gas purchased a year. At $4 a gallon that's $2000 a year in gas. At $6 a gallon that's $3000 a year in gas.

This will mean people will drive less, get more fuel efficient cars, and make better use of their driving time. In other words, people might have to cut back a little on what they're used to doing.

FYI... there were 37,000 people a night a three baseball games between the Pirates and the Yankees. They probably spent around $50 a person on average to watch guys play baseball. I don't think the ecomony is close to crashing if that many people still pay that much money to watch baseball games. "


$4 to $6 dollar gas will crash it Economy......here's why:


1-80% of the American population lives paycheck to paycheck and have ~$9K CC debt.
2- Their getting by with $4 gas right now ( and the Exponential factor across the rest of their needs ie. Food, utilities, etc) by charging it.

3-When that well drys up (crashes) the SHTF..........

4- Your analogy of the $1k increase in gas is only ~20% of the total increase across the board of what the avg family will see.
Heating oil will be $6/gal this winter, NG is ecpected ~50% increase
and food will be double.

The common denomintor is the value of the dollar is still going down and there is nothing the Fed can do about it........

IMHO, the Avg American has NOT woken up yet or they do not want to face reality of what coming in the near future so it is business as usual.



posted on Jun, 27 2008 @ 01:56 PM
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reply to post by Pinktio
 




$4 to $6 gas will crash the Economy ...... here's why:

1- 80% of the American population lives paycheck to paycheck and have ~$9K CC debt.


At 24.99% APR, that works out to $167.00 a month on interest alone. And a lot of those good folk will be paying MORE than 24.99% due to LACK of Federal Regulations per Ronnie Reagan.



2- They’re getting by with $4 gas right now (and the Exponential factor across the rest of their needs i.e. Food, utilities, etc) by charging it.


That’s right. The pay the MINIMUM payment every other month. Say $95.00. That does not even cover the interest on prior debt. Tennessee Ernie Ford sang it: Another day older and deeper in debt . . I owe my soul to the company store!“



3- When that well drys up (crashes) the SHTF ..........


And it will not be pretty to see either. I do hate to see grown men cry. I’m reminded of that disturbing question so many well educated men asked strangers in the early 1930s “Buddy, can you spare a dime?”



4-Your analogy of the $1k increase in gas is only ~20% of the total increase across the board of what the avg family will see. Heating oil will be $6/gal this winter, NG is expecting ~50% increase and food will be double.


I have a niece that makes $70K bu t works 50-60 hours a week to do it. She lives in an old house and uses LPG as her heat source. Her mother sent her a grand last spring - March - but she still owes a grand from the last winter. Her LPG company really wants its customers to begin the heating season with a ZERO balance. If her fuel rises 50% this year, it will be less than I expect it to rise.

Two-three years ago she took a ride and got a HOME EQUITY LOAN on her credit card. Now that’s all gone. And nothing to show for it. Hmm? She and her live -in part-time working roommate and their 13 year old daughter may be facing hard times this winter?



The common denominator is the value of the dollar is still going down and there is nothing the Fed can do about it ........ IMHO, the Avg American has NOT awakened yet or they do not want to face reality of what is coming in the near future so it is business as usual.


People are beginning to wake up and they are SCARED. Bush43 may join with Herbert Hoover as a MOST disliked American president. And not for Iraq. Or James Buchanan and Franklin Pierce as NON performing presidents.

US military deaths in Iraq war at 4,113 Friday, June 27, 2008. Three Marines were killed by a suicide bomber Thursday west of Baghdad.178 were KIA on April 30, 2003. Since Bush43 boasted on the deck of the carrier USS Lincoln, 3,935 more men and women have gone KIA under the Bush/Cheney/Rumsfeld/Tenant leadership. Thank you George! You have finally finished your Air National Guard OJT training period. OJT - On the Job Training.

[edit on 6/27/2008 by donwhite]



posted on Jun, 27 2008 @ 10:40 PM
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He will have ready to put into place an Executive Order just after he is sworn in as president, 12 Noon, Tuesday, January 20, 2009.

From America’s 900 million barrels of stored crude oil in our National Strategic Reserve, he orders the release of 2-3 million barrels a day for 60 days, to be sold to domestic refineries at HALF the world price for that day. Those refiners would in turn put the product into the distribution network and the prices followed closely to be sure the impact of the lower cost crude oil is passed on to the ultimate consumer.

This would lower our National Strategic Reserve to about 750 million barrels. As the price of crude falls, the Reserve could be replenished.

People who have a long commute - ie, more than 25 miles in one direction, and people who have incomes below the poverty level, could be given plastic “paid-up” cards (as is now done in the case of food stamps) set for 5, 10 or 20 gallons per week depending on the individuals circumstance. An excess profits tax on oil companies - 20% on the amount exceeding that reported 3 years prior, would go to pay for this HELP to the POOR working people.

[edit on 6/27/2008 by donwhite]



posted on Jun, 28 2008 @ 06:55 AM
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reply to post by jamie83
 


Oh well hey, we are all capitalists right? (yeah, about 5% of us) so go ahead and raise it up to $15 a gallon. Free market right? Yeah....we're lovin' it!



posted on Jun, 28 2008 @ 07:17 AM
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$170 by the end of summer would cause a major change in life as we know it. Dangerous and drastic changes, like food not being delivered to stores, homes without heating oil for winter, and services stopping. Right?

I get this sinking feeling that the Presidential Election 2008 is going to be "postponed".



posted on Jun, 28 2008 @ 08:13 AM
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This all seems like market manipulation by some certain greedy people if we put the pieces together. It suggests peak oil and supply and demand, but, the demand was to not produce enough oil so the supply would be effected enough to raise the price.

I had heard a while ago that global warming may have increased even faster due to the changes in that these underground oil wells had previously acted as an insulator from core heat. Now that they are depleting, the planet will get even warmer and eventually bring us into a major climate shift sooner. The need for highly advanced technologies will be even greater at that point. I suspect the elite have theirs already?


This has probably been in the works for years and they're all in on it. Although it's sorta exciting to be forced into a new golden age without fossil fuels and fuel guzzling vehicles, these other people are apparently taking every step they can for securing themselves during this major shift.

From another point of view; we do actually need China to put the brakes on it's own growth. So, less demand for China's goods will put them back closer to where they should be.

Then we'll see what other tricks these people use to keep the prices up. So, from a certain point of view, we have reached peak oil. Unfortunatey, they seem to be planing their next choke hold with hydrogen fuel so they maintain their control and profits.



posted on Jun, 28 2008 @ 08:40 AM
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reply to post by windwaker
 



$170 by the end of summer would cause a major change in life as we know it. Dangerous and drastic changes, like food not being delivered to stores, homes without heating oil for winter, and services stopping. Right? I get this sinking feeling that the Presidential Election 2008 is going to be "postponed".


Oil and Food. Two commodities we cannot live without. I have an old thread floating around out there, in which I faced this very issue. On the assumption we will not let a couple hundred speculators in 5-6 trading exchanges destroy our country and our own futures, I said that as many of the oil producing countries formed a combine of sellers, we the users or consumers would form a combine of users. I called it the World Allotment Method.

The allotting part is easy: each country is entitled to the same amount of crude it used in the second year preceding the year of adopting the WAM. For example, if we launched WAM this year, calendar 2006 would be the reference year. The price would be the same price paid in 2006.

Now, producers like OPEC would have a very simple choice. Pump the oil you pumped in 2007 on your own, OR the wAM would send in its Special Forces to take control of the oil fields and the associated industry to get the crude to port for shipment.

If producing countries should threaten harm to the oil fields as a form of defense against take-over, the leaders of the country and the operators of the oil infrastructure would be warned, that we do not have time for niceties, so ALL of you will be taken into custody and HELD in secure places including your families until we get the fields back up and running. That could be one day, one week, one month or one year or one decade. We would employ our own RICO - Racketeer Influenced Criminal Organization - law so that the property of any person interfering with our acquisition of oil will loose ALL his or her property in the process.

Of course, rationing would be necessary at home. We’ve done it before, so it’s not all that hard to do and people can survive it. In World War 2, everyone with a car got an “A” sticker that allowed a very small amount of gasoline. Let’s just say an “A” sticker would get you 20 gallons a month for a small car. 30 gallons for a medium size and 40 gallons for all others.

“B” stickers were given to people who traveled as part of their employment. Police and firemen and doctors going to and from their place of employment. They received a “B” sticker and a local rationing board would calculated the number of gallons each person was entitled to based on the miles to drive, frequency and performance of the car in question.

A “C” sticker could be offered to people who would be required to car pool and always have extra passengers in the car.

After a year or two, we could get a handle on the situation and make new and more equitable rules of the road for the buying and selling of crude oil and food products.

CANCEL the November 4 election? Make Bush43 Commander in Chief for Life? He obviously got a lot more fun out of the C in C job than being president. If Bush43 was half as popular as he imagines himself to be, he might get away with that. But not now.

[edit on 6/28/2008 by donwhite]



posted on Jul, 3 2008 @ 07:04 AM
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reply to post by windwaker
 


It's already happening dude! There is a huge laundry list of companies like Macy's, Starbucks, Home Depot....dozens and dozens of companies laying off thousands and thousands of people and closing thousands of outlets. Food shortages already are happening around the globe, oil shortages even here in the usa...elderly have to choose between heat or medicine because we have a broken health care system and a goverment who sees it's ok to deregulate infrastructure items like energy. Some are even going hungry just to stay warm, and that was last winter when prices were lower. All forcasts show sharp increases.

If you can, buy extra food and store it up, hard times are coming. Multi-trillian dollar deficits under Bush Republicans and oil buddies, and sky rocketing energy prices...how's that gay marriage bill doin' for ya now? (If you didn't vote for these a*!$#oles, then I am not talking to you, because you are informed and know better.

Time to get out of bed and put the coffee on America (the other half) before they cut the power off!



posted on Jul, 3 2008 @ 05:55 PM
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Its game time, this is how it works, opec pumps oil for demand, the stock market sets a price for a barrel six months ahead, then if the opec countrys like the price, they start cutting output, when they get the price set they pump again, this is ongoing for eightteen months check the market for that time period. plus some countrys that went anti-american cut their supplys to the U.S. So do the math.



posted on Jul, 6 2008 @ 10:16 PM
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I'm an American, but live in Japan and feel the need to add my two cents to the
conversation.

*****RANT ALERT*****

It's bad enough that I have to spend the next few days on the same island as W, but would you people in the US bitching and moaning about $4.50/gal unleaded stop crying already?

Oh my God! Gas might hit 5.50 or God forbid...*in hushed tones*...$6! The sky's falling! We're all doomed! The economy's gonna go bust and we'll all be homeless and die!

Please...

Yes, there's cheaper gas elsewhere, but compared to pretty much every developed nation on earth, the US has some of the cheapest gas in the world. Hell, it's already the equivalent of $6.70 a gallon here in Hokkaido, but there's just as many cars on the road as this time last year and it's almost $9 in the UK right now.

I know that there will be those of you who'll say, "but it's our right as Americans to cheaper fuel prices!" Um, no it's not. Not the last time I read the US Constitution in any case.

Stop crying, America. You have no idea how much better off you have it than so many other places in the world and more than that, it's just embarrassing.

*****END RANT*****

edit for clarification
[edit on 6-7-2008 by HokkaidoHillbilly]

[edit on 6-7-2008 by HokkaidoHillbilly]



posted on Jul, 7 2008 @ 07:44 AM
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While I think there is something to your point mate, a major part of the US economy with regards to fuel is based on the sheer size of the country - and the inefficiency of our distribution for basically everything. That's a major part of why the rising gas prices, while not as high as in other developed countries, has a large knock on effect.



posted on Jul, 7 2008 @ 12:34 PM
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reply to post by HokkaidoHillbilly
 



Yes, there's cheaper gas elsewhere, but compared to pretty much every developed nation on earth, the US has some of the cheapest gas in the world. Hell, it's already the equivalent of $6.70 a gallon here in Hokkaido, but there's just as many cars on the road as this time last year and it's almost $9 in the UK right now. I know that there will be those of you who'll say, "but it's our right as Americans to cheaper fuel prices!" Um, no it's not. Not the last time I read the US Constitution in any case. Stop crying, America. You have no idea how much better off you have it than so many other places in the world and more than that, it's just embarrassing.



Actually, there is a bit of history in the higher prices of gasoline abroad. Back in the 1920s and 1930s when cars became more numerous in Europe and Japan, ownership was limited to the RICH and RICHER. It was too good an opportunity to miss not to lay on heavy taxes on gasoline. And therein you have the reason for most of the price differential of gasoline around the world. The average combined gas tax - state and Federal - in the US is 58 cents - I've heard that from 2 sources. It costs about 40-70 cents a gallon to get the crude oil to the pump. That price is the same around the world. The cost of crude is the same around the world. Pump prices reflect local tax policies.

When Bush43 declared HIS war on terror, I wrote we should impose a 75 cents a gallon tax on gasoline. For the duration, as in WW2. We should post a notice on every pump, "That you are helping PAY for the WAR" as you pump! In 2001 a penny a gallon would have brought in about ONE billion $ a year to the Federal treasury. So far we've spent about $600 b. in Iraq and Afghan. It will cost $200 b. to get OUT of Iraq. Another $200 b. to replace the equipment we have used up. Add an uncertain amount for war related Veterans Administration costs. Maybe $200 b. Add interest on the national debt attributable to WAR borrowing. $80 b. a year. The 75 cents gas tax would have produced about $400 b. by 2008. Not enough to pay for the WoT but it would have gone a long way!

But alas, Bush43 was not as he is known by his friends - Dumbya - after all. When he launched his WoT, and the futile search for the non-existent WMDs, he issued TWO orders. 1) Close Dover AFB and let no press cameras in to show pics of the dead bodies draped in flags coming home. He knew that went far to "kill" public support for the Vietnam War. 2) CUT taxes, don't raise taxes. Put the cost of THIS WoT OFF budget and OUT of sight. Let their #^@*! grandchildren pay for OUR FUN! It is us and not George who is so Dumbya after all!

HE HAS HAD HIS LEGACY WAR FOR EIGHT YEARS AND WE WILL HAVE HIS DEBT FOR EIGHTY YEARS!

[edit on 7/7/2008 by donwhite]



posted on Jul, 7 2008 @ 03:59 PM
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reply to post by Inannamute
 



While I think there is something to your point mate, (1) a major part of the US economy with regards to fuel is based on the sheer size of the country - and the inefficiency of our distribution for basically everything. (2) That's a major part of why the rising gas prices, while not as high as in other developed countries, has a large knock on effect.


1) I disagree. I once lived in Louisville, Ky. The major airport is located 5-6 miles from the Ohio River. That airport has 2 underground fuel storage tanks of 1.5 million gallons capacity. There are several other tanks but of much smaller capacity. ExxonMobil has a terminal - along with other oil companies - along the Ohio River. 300,000 gallon barges are brought upriver from Louisiana - via the Mississippi - or down river from refineries in southern Ohio, western Pennsylvania or eastern Kentucky on the Ohio River, where the barges are unloaded and PIPED directly to the airport. There are 1000s of miles of pipelines across the eastern United States. I cannot argue that we are MORE efficient than say France or Germany, but I can say, we are as good as any country in that regard. I have heard that the cost of distribution from refinery to pump is 2 cents a gallon.

2) The cost of distribution has not changed. Well, in no other respect than the cost of diesel fuel. And that would never be more than a small fraction of the total cost.

SCRATCH distribution costs as a possible explanation for the SUDDEN increase in the cost of oil rising from $70 a bbl last year to $140 a bbl this year.



posted on Jul, 7 2008 @ 07:28 PM
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Um, you entirely missed my point..

I wasn't talking about the cost of distributing oil, I was talking about the cost of using that oil to distribute basically everything else, e.g. food. It's those things that are part of the knock on effect in the economy, those extra miles from farm to plate. While obviously this is an issue in many developed countries, I believe the effects are felt more in larger countries..

While much of the hand waving freak-outery is just that, people freaking out not so much over the absolute price of gas and oil, but the percentage increase in those prices, there is at least some justification for saying that it will adversely impact the economy more than countries who have far more efficient goods distribution systems, for example, those countries which use trains rather than trucks..





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