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Reason For High Oil Prices

Mike

Well-known member
"Demand is greater than supply."

T. Boone Pickens



Another quote:

"If we don't stop sending $700 Billion to foreign nations each year for oil, we will broke soon", if it's not too late now."
 

TSR

Well-known member
Mike said:
"Demand is greater than supply."

T. Boone Pickens



Another quote:

"If we don't stop sending $700 Billion to foreign nations each year for oil, we will broke soon", if it's not too late now."

Kind of what I would expect an oilman/speculator to say with respect to the supply and demand quote. Some interesting reading about Mr. Pickens at Wikipedia. He has given millions to Universities,etc in Oklahoma. But he has thus far reneged on his bet with John kerry concerning the Swift Boat allegations.
 

fff

Well-known member
Mike said:
"Demand is greater than supply."

T. Boone Pickens



Another quote:

"If we don't stop sending $700 Billion to foreign nations each year for oil, we will broke soon", if it's not too late now."

Manure. There was no shortage. There's only greed and the selling out of this country by the Bush Administration and Republican Congress to Corporations.

"But Yabhouni said supply outstripped demand.

"We have to see demand ... if we look at the fundamentals of supply and demand there is more supply than demand," he said. "If you look at fundamentals, we don't have a good explanation or justification for why we see these prices," he said.

Yabhouni said the UAE wanted to see stable prices as volatile markets make it difficult to plan investments in capacity expansion.

"Six months ago the price broke through $100. Prices are still rising but the fundamentals are little changed. Production is steady and stocks are above the five year average. So we're asking the same questions as we did six months ago. Why are prices so high and why are they rising?" (Reuters)

http://www.arabianbusiness.com/520704-world-has-enough-oil-but-price-too-high--uae?ln=en
 

Mike

Well-known member
fff said:
Mike said:
"Demand is greater than supply."

T. Boone Pickens



Another quote:

"If we don't stop sending $700 Billion to foreign nations each year for oil, we will broke soon", if it's not too late now."

Manure. There was no shortage. There's only greed and the selling out of this country by the Bush Administration and Republican Congress to Corporations.

"But Yabhouni said supply outstripped demand.

"We have to see demand ... if we look at the fundamentals of supply and demand there is more supply than demand," he said. "If you look at fundamentals, we don't have a good explanation or justification for why we see these prices," he said.

Yabhouni said the UAE wanted to see stable prices as volatile markets make it difficult to plan investments in capacity expansion.

"Six months ago the price broke through $100. Prices are still rising but the fundamentals are little changed. Production is steady and stocks are above the five year average. So we're asking the same questions as we did six months ago. Why are prices so high and why are they rising?" (Reuters)

http://www.arabianbusiness.com/520704-world-has-enough-oil-but-price-too-high--uae?ln=en

You're a small-minded fool.

9/11/2007 1:44:00 PM


World Oil Outlook: Consumption Increases, Inventories To Decline In 4th Quarter



Consumption. World oil consumption rose by 1.2 million barrels per day (bbl/d) in the second quarter of 2007 compared with year-earlier levels. China, the Middle East, the United States, and India accounted for most of the increase in oil consumption. EIA projects that world oil consumption will increase at a year-over-year rate of 1.8 million bbl/d during the second half of 2007 (World Oil Consumption). Recent volatility in financial markets contributes to uncertainty in the consumption projections, suggesting possible future downward revisions if the situation leads to slower economic growth than currently expected.



Non-OPEC Supply. Non-OPEC oil production is projected to grow by about 600,000 bbl/d during 2007 compared with year-earlier levels, a reduction of roughly 100,000 bbl/d from last month’s Outlook (Non-OPEC Oil Production Growth). A downward revision of 51,000 bbl/d in Mexico’s 2007 oil production is a principal cause of this change. In 2008, EIA estimates that non-OPEC petroleum production will grow by about 1 million bbl/d. The 2008 forecast is about 100,000 bbl/d lower than the last assessment due to a downward revision in projected U.S. ethanol and conventional oil output.



OPEC Supply. Announced maintenance at fields in the United Arab Emirates has lowered EIA’s projection for OPEC crude oil production in the fourth quarter by 100,000 bbl/d from last month’s Outlook to 30.9 million bbl/d. In 2008 EIA expects that OPEC will increase production slowly, to an average of 31.4 million bbl/d, in order to manage inventories and maintain prices. The economic uncertainty and risks to oil demand brought on by the turmoil in financial markets will likely reinforce OPEC’s cautious approach to production-target decision-making.



Despite expected increases in production capacity by several OPEC members, the expected gains in demand for OPEC oil will likely keep surplus capacity in the 2-to-3 million bbl/d range through 2008. Most of the surplus will remain concentrated in Saudi Arabia, leaving Riyadh with the flexibility to play a key role in influencing oil market developments. The modest level of worldwide surplus capacity makes the market vulnerable to unexpected supply disruptions.



Inventories. At the end of June 2007, Organization for Economic Cooperation and Development (OECD) inventories stood at 2.66 billion barrels, near the high end of the 5-year range. EIA’s projections of world oil supply and demand indicate that OECD inventories may register a counter-seasonal stock draw in the third quarter. Inventories are expected to decline at a faster-than-average rate in the fourth quarter, leaving inventories at the low end of the last 5-year range through the rest of the forecast period (Days of Supply of OECD Commercial Oil Stocks).
 

fff

Well-known member
Mike said:
fff said:
Mike said:
"Demand is greater than supply."

T. Boone Pickens



Another quote:

"If we don't stop sending $700 Billion to foreign nations each year for oil, we will broke soon", if it's not too late now."

Manure. There was no shortage. There's only greed and the selling out of this country by the Bush Administration and Republican Congress to Corporations.

"But Yabhouni said supply outstripped demand.

"We have to see demand ... if we look at the fundamentals of supply and demand there is more supply than demand," he said. "If you look at fundamentals, we don't have a good explanation or justification for why we see these prices," he said.

Yabhouni said the UAE wanted to see stable prices as volatile markets make it difficult to plan investments in capacity expansion.

"Six months ago the price broke through $100. Prices are still rising but the fundamentals are little changed. Production is steady and stocks are above the five year average. So we're asking the same questions as we did six months ago. Why are prices so high and why are they rising?" (Reuters)

http://www.arabianbusiness.com/520704-world-has-enough-oil-but-price-too-high--uae?ln=en

You're a small-minded fool.

9/11/2007 1:44:00 PM


World Oil Outlook: Consumption Increases, Inventories To Decline In 4th Quarter



Consumption. World oil consumption rose by 1.2 million barrels per day (bbl/d) in the second quarter of 2007 compared with year-earlier levels. China, the Middle East, the United States, and India accounted for most of the increase in oil consumption. EIA projects that world oil consumption will increase at a year-over-year rate of 1.8 million bbl/d during the second half of 2007 (World Oil Consumption). Recent volatility in financial markets contributes to uncertainty in the consumption projections, suggesting possible future downward revisions if the situation leads to slower economic growth than currently expected.



Non-OPEC Supply. Non-OPEC oil production is projected to grow by about 600,000 bbl/d during 2007 compared with year-earlier levels, a reduction of roughly 100,000 bbl/d from last month’s Outlook (Non-OPEC Oil Production Growth). A downward revision of 51,000 bbl/d in Mexico’s 2007 oil production is a principal cause of this change. In 2008, EIA estimates that non-OPEC petroleum production will grow by about 1 million bbl/d. The 2008 forecast is about 100,000 bbl/d lower than the last assessment due to a downward revision in projected U.S. ethanol and conventional oil output.



OPEC Supply. Announced maintenance at fields in the United Arab Emirates has lowered EIA’s projection for OPEC crude oil production in the fourth quarter by 100,000 bbl/d from last month’s Outlook to 30.9 million bbl/d. In 2008 EIA expects that OPEC will increase production slowly, to an average of 31.4 million bbl/d, in order to manage inventories and maintain prices. The economic uncertainty and risks to oil demand brought on by the turmoil in financial markets will likely reinforce OPEC’s cautious approach to production-target decision-making.



Despite expected increases in production capacity by several OPEC members, the expected gains in demand for OPEC oil will likely keep surplus capacity in the 2-to-3 million bbl/d range through 2008. Most of the surplus will remain concentrated in Saudi Arabia, leaving Riyadh with the flexibility to play a key role in influencing oil market developments. The modest level of worldwide surplus capacity makes the market vulnerable to unexpected supply disruptions.



Inventories. At the end of June 2007, Organization for Economic Cooperation and Development (OECD) inventories stood at 2.66 billion barrels, near the high end of the 5-year range. EIA’s projections of world oil supply and demand indicate that OECD inventories may register a counter-seasonal stock draw in the third quarter. Inventories are expected to decline at a faster-than-average rate in the fourth quarter, leaving inventories at the low end of the last 5-year range through the rest of the forecast period (Days of Supply of OECD Commercial Oil Stocks).

ROTFLMAO! You quote year old Inventories and claim I'm a "fool." But that's typical for you. When you can't make a point, change the subject or launch personal attacks. Too funny. :lol:
 

Mike

Well-known member
fff said:
Mike said:
fff said:
Manure. There was no shortage. There's only greed and the selling out of this country by the Bush Administration and Republican Congress to Corporations.

You're a small-minded fool.

9/11/2007 1:44:00 PM


World Oil Outlook: Consumption Increases, Inventories To Decline In 4th Quarter



Consumption. World oil consumption rose by 1.2 million barrels per day (bbl/d) in the second quarter of 2007 compared with year-earlier levels. China, the Middle East, the United States, and India accounted for most of the increase in oil consumption. EIA projects that world oil consumption will increase at a year-over-year rate of 1.8 million bbl/d during the second half of 2007 (World Oil Consumption). Recent volatility in financial markets contributes to uncertainty in the consumption projections, suggesting possible future downward revisions if the situation leads to slower economic growth than currently expected.



Non-OPEC Supply. Non-OPEC oil production is projected to grow by about 600,000 bbl/d during 2007 compared with year-earlier levels, a reduction of roughly 100,000 bbl/d from last month’s Outlook (Non-OPEC Oil Production Growth). A downward revision of 51,000 bbl/d in Mexico’s 2007 oil production is a principal cause of this change. In 2008, EIA estimates that non-OPEC petroleum production will grow by about 1 million bbl/d. The 2008 forecast is about 100,000 bbl/d lower than the last assessment due to a downward revision in projected U.S. ethanol and conventional oil output.



OPEC Supply. Announced maintenance at fields in the United Arab Emirates has lowered EIA’s projection for OPEC crude oil production in the fourth quarter by 100,000 bbl/d from last month’s Outlook to 30.9 million bbl/d. In 2008 EIA expects that OPEC will increase production slowly, to an average of 31.4 million bbl/d, in order to manage inventories and maintain prices. The economic uncertainty and risks to oil demand brought on by the turmoil in financial markets will likely reinforce OPEC’s cautious approach to production-target decision-making.



Despite expected increases in production capacity by several OPEC members, the expected gains in demand for OPEC oil will likely keep surplus capacity in the 2-to-3 million bbl/d range through 2008. Most of the surplus will remain concentrated in Saudi Arabia, leaving Riyadh with the flexibility to play a key role in influencing oil market developments. The modest level of worldwide surplus capacity makes the market vulnerable to unexpected supply disruptions.



Inventories. At the end of June 2007, Organization for Economic Cooperation and Development (OECD) inventories stood at 2.66 billion barrels, near the high end of the 5-year range. EIA’s projections of world oil supply and demand indicate that OECD inventories may register a counter-seasonal stock draw in the third quarter. Inventories are expected to decline at a faster-than-average rate in the fourth quarter, leaving inventories at the low end of the last 5-year range through the rest of the forecast period (Days of Supply of OECD Commercial Oil Stocks).

ROTFLMAO! You quote year old Inventories and claim I'm a "fool." But that's typical for you. When you can't make a point, change the subject or launch personal attacks. Too funny. :lol:

I purposely put the 2007 report up just to show you how the predictions would play out.

Do you see the last part in bold? :roll:
 

Goodpasture

Well-known member
A petroleum Engineer friend explained the current run up in price in this manner: The excess price of oil has to do with two things. 1) geopolitical risk, and 2) speculation.

Natural gas in politically stable & self-sufficient North America is selling for about $10 per MCF. There is 6 - 8 x the BTUs in oil as gas (bbl vs MCF). Therefore, the oil price should be no more than $80, or more likely, about $60 per BBL.

The differential can be allocated to Geopolitics and speculation. Before the massive run up started last year (just as mortgage hedges were winding down btw) oil was selling for about 10 x gas...thus, we can speculate that 20% or so of the price for oil was geopolitical. That situation is basically unchanged. As an appraiser I would make the adjustment like this.

$10 natural gas = $60/bbl oil + $20 per bbl for geopoliticl risk = $80, therefore, speculation = $135 - 80 = $55.

55 ÷ 135 = 40%± speculation.
20 ÷ 135 = 15%± geopolitical risk
 

TSR

Well-known member
Mike said:
But he has thus far reneged on his bet with John kerry concerning the Swift Boat allegations.

Has Kerry proven the Swift Boat Vets wrong? :lol: :lol: :lol:

He says so. According to the article he is waiting for Pickens to set the date and time of their meeting place so he can collect his million. The article says Pickens, who btw was one of 23 who donated 250,000 to the Bush campaign, has yet to repond. Of course a million to Pickens or Kerry is chicken feed.

An interesting side note, Pickens was instrumental in getting legislation passed banning the slaughter of horses. Now is Pickens a conservative or a liberal?? :? :wink: :)
 

fff

Well-known member
Mike said:
fff said:
Mike said

I purposely put the 2007 report up just to show you how the predictions would play out.

Sure you did. :roll: :lol: :lol: :lol:

You want to debate supply and demand of oil, or do want to play your silly games? :???:

What's to debate? I have no doubt you can find some oil industry lacky who will tell you it's all about supply and demand. Demand has dropped and OPEC believes it will continue to drop, yet prices continue at or near record levels. OPEC can lower the supply whenever they want by cutting production.

OPEC lowers oil demand forecast for 2008

OPEC today cut its oil consumption forecast for the year largely because of high prices and a slowing U.S. economy, but said demand in developing nations continues to grow.

The outlook, contained in the oil cartel’s monthly market report, mirrors forecasts by the U.S. Energy Department and the International Energy Agency earlier this week. Both agencies lowered their 2008 forecasts Tuesday.

The Organization of Petroleum Exporting Countries said it now expects demand to increase by 1.28 percent to an average of 86.9 million barrels per day, down from a previous forecast of 1.35 percent. The reduction translates into a difference of 60,000 barrels a day.

OPEC said demand for gasoline and other transportation fuels in relatively rich nations that make up the Organization for Economic Co-operation and Development, particularly the U.S., did not grow as expected because of the slumping economy and high oil prices.

"The slowing U.S. economy and the current price environment will affect oil demand not only in the U.S. but also across the OECD in the second half of the year," OPEC said.

Increased demand in developing countries in Asia and elsewhere should help offset declines in the West, but will not be enough to make up for all of the falloff in demand.

The string of downward revisions this week underscores concerns some market observers have about the current price of oil, which remains near record levels following a stunning two-day spike of more than 13 percent in just two days late last week.

"It tells me that demand is slowing and it could accelerate if prices don’t come down soon," Phil Flynn, analyst at Alaron Trading Corp. in Chicago, said of the revised forecasts. "They’re saying it is slowing and it’s spreading, almost like a disease."

Over the past week, oil prices have swung wildly in a $10 range. Not long ago, a movement of just a couple of dollars would have been severe.

OPEC said recent volatility confirms its view that current prices "do not reflect supply and demand realities." Prices last month were dominated, OPEC said, not just by fundamental factors such as supply worries and a fluctuating dollar, but also "speculative pressure."

"A review of prospects for the remainder of the year also shows little support for prices to remain at current levels," OPEC added.

Kevin Saville, managing editor for the Americas energy desk at Platts, the energy research arm of McGraw-Hill Cos., said the downward revisions could continue if energy prices continue to soar.

"Unless we see some significant falloff in prices, this may be the norm over the next few months," he said.

On the New York Mercantile Exchange, light, sweet crude for July delivery sank $1.84 to $134.90 in Friday afternoon trading.

http://www.bostonherald.com/business/general/view/2008_06_13_OPEC_lowers_oil_demand_forecast_for_2008/
 
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