rude oil prices

In the past when gasoline was well over $2.00 a gallon in the US, the price of a barrel of crude was well under $50.00 a barrel.
Obviously, something has changed. Cheap oil is gonna be a thing of the past:

Analysts say an unusual confluence of long-term energy trends, coupled with some short-term disruptions, are changing - perhaps permanently - the psychology of the oil markets. At the least, they believe prices are going to remain high, and swing more sharply, for some time to come.

"With several consistent years of risk, people are starting to feel like the old world of $18-a-barrel oil is really gone," says Amy Jaffe, an energy expert at Rice University in Houston. "And that's created a different mind-set about everything."

Certainly the most basic laws of supply and demand lie behind much of the current run-up in prices. There is barely enough crude to fuel the world's factories, cars, and power plants at the moment. Nor is Saudi Arabia or any other country able to draw up enough oil from the subterranean depths to offset the rising world demand.

read the whole article

The problem is not really oil so much as the US dollars it is valued in.

If you look at how much oil costs in other currencies it has not really increased all that much. As more OPEC countries demand to be paid in Euros, the US dollar will sink even faster.

This is the big problem, the rest of the world can still afford oil, whereas the US is finding it increasingly difficult to do so.

and if the united states didn't have its lips so firmly planted on oil producers buttocks we'd have had alternative energy plans YEARS ago and wouldn't be experiencing this crisis now (which i fear will be worse than the one in the 70s).

$3.00 a gallon here we come. Gotta love it how everyone says the US is the most powerful country on the planet yet we still bow and beg from the OPEC nations.

To those of you who think that we went into Iraq to "steal the oil" from those kindhearted members of Saddam's government, now that we have control of the country, the prices are still in the sky aren't they?

Originally posted by Warpspeed
The problem is not really oil so much as the US dollars it is valued in.

If you look at how much oil costs in other currencies it has not really increased all that much. As more OPEC countries demand to be paid in Euros, the US dollar will sink even faster.

Ironic Saddam was selling his oil in Euros, now the Iraqi oil is sold in dollars! Now an ex CIA informent is Iraqi president I am sure he will do his best to ensure Iraqi oil is sold in dollars. (sigh, such a bogus war)

Originally posted by Warpspeed
The problem is not really oil so much as the US dollars it is valued in.

If you look at how much oil costs in other currencies it has not really increased all that much. As more OPEC countries demand to be paid in Euros, the US dollar will sink even faster.

Warp, could you elaborate on this idea a bit? It does sound like a good explanation, but I don't fully understand
I am currency-challenged and would appreciate it if you could give more details here.

7th,

what has your claim done for the US? I'm still paying $2.50 at the pump, and the cash is still going to the middle east. by your accounts who is making the money?

Originally posted by DontTreadOnMe
I am currency-challenged and would appreciate it if you could give more details here.

If you want more information on the PetroDollar check out my thread Conditions Ripe for Recession/Depression?.

Hope that helps.

Originally posted by Djarums
7th,

what has your claim done for the US? I'm still paying $2.50 at the pump, and the cash is still going to the middle east. by your accounts who is making the money?

I am not sure who is making the money but If Saddam countinued to sell one of the biggest oil reserves in Euros, the dollar would become very very weak, much like warpspeed said.

As I understand the more a currancy is used to trade the stronger it is against other currancies.