Besides the disruption of Oil supplies from Iraq I would like to see some figures on how much fuel the Americans and their coalition have been, and are using (wasting), for their military campaigns in Iraq and Afghanistan. Surely the heavy military hardware being used on such a huge scale have been further stressing world supplies? At the end of the day we all pay for their blunders!

I blame the Americans and I am an AMERICAN! I travel outside the US often for work, primarily in Europe. When I come back, I am always shocked that I see the majority of Americans are overweight eating more than they should and driving in their huge SUV’s with 1 person in it! You are right Todd, it is time for Americans to get off their butts! Times have changed and Americans must now get use to the idea we can no longer live to consume, we must now live to conserve. As for me, I am not fat and I have solar energy that powers my home.

Sure enough the US is the largest consumer of oil and barely taps into the reserves it has.As for conservation,i dont see it happening in the immediate future with booming asian economies like India and China.Alternative renewable energy is still not being explored seriously and solar power requires huge investments,even the middle-east where there is an abundance of sunlight,oil rich countries have refrained from investing in solar power primarily because the returns on conventional energy from growing expat populations are huge.Conservation would also depend on educating present and future generations on the repurcussions of a world without oil.The money spent on developing new energy sources is just a meagre fraction of what goes into Hi Tech weaponry.Yes a change in lifestyle not just in the States but world wide will also impact the consumption of oil not to mention a cleaner atmosphere to live in.In the interim lets do what we can as individuals to conserve this precious resource.

Wow…the “Blame America First” crowd is alive and well here.

I love the fact that we use the most oil in America. Its a sign of our successful economy and the drive and hard work of the American people. There’s nothing to be ashamed of. Let the free market work….I’m not afraid of it. I’ll pay for what I use. The higher prices will unleash American ingenuity and will result in the development of newer, cleaner energy sources. There’s no one to blame and I will never “live to conserve”. Way too boring. I like to consume (not waste). Give me technology that enables me to live my life the way I (and now the Chinese and Indians) want to live it.

Where do you think new, clean energy sources will come from? The most exciting, vibrant economy the world has ever seen or a developing country with low oil consumption because the average annual wage is about $1,000/year? I lived in one of those places…not expecting any breakthroughs from there.

PS: Love ya’ Todd but I’ve never seen anyone walk their dog in the way you suggest and as a fellow expat, I can assure you that there’s overweight people all over the world.

Now that the subprime market has collapsed, that type of dubious activity - lending money for house purchase to people who are insolvent, as a French newspaper put it - cannot be repeated for a while. So using leverage (up to 30 times the original capital employed) to drive up the market prices of oil, metals, commodities is a godsend for the finance sector : hedge funds, PE, pension funds as well are also looking to make money that way.

The result is that the “real economy” , and investing in companies which actually employ most of the population, is being deprived of capital. How many IPOs have been cancelled / postponed because capital is going into the “virtual economy” (speculating in oil etc) to make as much money as fast as possible, before each bubble bursts.

Closing the trading floors could cause prices to drop, leaving speculators with open positions, and facing possible losses.
This procedure is used with stock markets, but I doubt if the present US administration at this late stage in its life, is thinking about such measures. There’s a “fin de siècle” mood pervading in the USA , imo, as the GWB administration draws to an end….. to maximize gains because time is running out.

Ok, the U.S. is the largest consumer of oil, but why are we buying from the middle east? We have plenty of oil for ourselves, in Alaska, Texas, Pensylvania, Kansa, Oklahoma, and I’m sure there are many more states. I’m a native of Pennsylvania(where oil was first discovered in the U.S., yet I’ve never seen an oil drill in that state.
I currenty live in korea, where the public transportation is excellent. In the U.S. teh public transportation is very poor, Heck even Mongolia has public transportation, but where I grew up in Pennsylvania there’s no such thing as public transportation.
Yes, let’s explore alternative fuel sources, Yes!!! But, why are we using food as an alternative fuel source when there’s a global food shortage?

Spot on analysis and commentary. Oil will continue to increase due to diminishing returns and an ever increasing demand for oil from China and India. Hubbards Peak-we are well past it. I believe oil will close at years end at 150 a barrel. The US consumes far too much oil, the US automakers dropped the ball-concentrating on developing more and more SUVs, and Americans are too energy dependent of fossil fuels. The next US Presidential administration should seriously develop at a real energy policy-on alternative energy-think wind, solar, and harvesting power from tidal waves-as the Norwegians are developing. Once oil reaches 200 a barrel, conditions of the 1970s will return, with shortages, rationing, and hyperinflation of consumer goods. Get ready…it’s coming.

In general, I agree with your thesis statement. the price driver does appear to be the transportation sector. You might want to look at the fact that the power sector in the US, and in other countries, made a structural shift away from the use of distillates of oil. Given that the stated objective of the G8 countries and the UN is to come up with an alternative, this can only be for the transportation sector. Basic economic theory then would hold that the price (and the pain) needs to be high enough to encourage accelerated Research and Development of such an alternative. Further, it cannot be overstated that the price is set primarily on NYMEX and is pegged on light sweet crude which is a term substituted for West Texas Light Crude which is no longer produced in large enough quantities to be of economic importance.

Let’s blame Americans………Let’s be realistic. The average American is not the problem, it’s the relationships between the politicians and the oild companies and auto manufacturers. The average american has been looking for alternative fuel vehicles since the oil embargo of the 1970’s…. however congress never wanted to force the issue to the manufacturers, and the oil loby would spend billions to defeat any action taken. The auto manufactures roll out a teaser car every now and then, which promises that fuel mileage will be doubled, only to pull back and tell the american public that the cars will be to expensive to manufacture. It seems the oil lobby won that battle. A few more years later, the manufacturer teases the public again with the promise of hydrogen powered vehicles… expected gas milage 60 - 100 mpg. oooppppsss…. it seems that we can’t get this car into the publics hands anytime soon. Oil lobby wins again. Let’s lay the blame at congress, car manufacturers oil industry first, then we can debate the fitness and waist line of americans

On a personal level it is not important to me that oil prices are rising.
When I fill up at the gas station I am paying the tax man, the price per barrel is not very relevant. All products should have Value Added Tax only.

People, let’s get rid of the huge SUV etc. now. If you purchase a standard transmission car, it will give you 4-5 miles more per gallon.

A diesel powered engine is usually more fuel efficient than a gasoline engine. Also, instead of SUVs people should drive minivans. If we all start thinking wisely, the demand will automatically decrease.

Representing the third world and living in Pakistan . I would like to point out that our part of the world is worst affected. True that with a huge population and lesser resources . The current growth of consumerism has severly impacted our budget deficits and the most of it is going in oil. I feel that growing prices of oil apart from speculation is also coming from the fear of safeguarding individual resources against the increase of all the other commodities in this world like wheat , corn and rice etc. My suggestion is that as we are all riding in the same boat being a great nation like America or a third world country like mine i.e. Pakistan and many other nations out there. Instead of pushing our farmers to grow corn for ehanol we should invest and subsidize efforts towards alternate energy like especially solar and wind energy. Being the strongest influencer on the world scene USA should push with World Bank and IMF that all lendings to any economy would be conditional to the requirement that at least 10% of that country’s all power requriements are generated by alternate energy and this contribution should grow to 30-35% at least by 2016 . This if enforced would severly pressurize Third world nations and other developing nations where the population is sizeable and there we see an increasing trend of consumerism reduce the strain on the current resources of oil as well as contribute to lower down the pollution. At the same time subsidized loans should be given to encourage this transformation with a view in mind the opportunity cost of this at this stage. As far as other bigger nations like China and India are concerned ; there should be a stringent policy to enforce the same vide incentives through preferred tarde quota if they adhere to the policy or sanctions through reduction in their trade quota’s propotional to their contribution of the alternate energy ; if it may be required. Whereas same could be a policy for every nation in the world .

I blame the greens. High oil prices means people will use alternatives. This is exactly what the greens want. Arjun N. Murti, the prognosticator from Goldman Sachs, states “I’m actually fairly anti-oil.” He wants oil to be high so that people will use less of it. He even goes so far as to say that he applauds investors for driving up oil prices, since that will spur investment in alternative sources of energy.

I predict oil will come down within six months. The supply-demand numbers just don’t support this much of a run-up. The idea that there is not enough supply is manufactured, very speculative, and suprisingly heavily subscribed. IEA figures just don’t support that, and neither does Saudi Arabia’s recent decision to up production.

I want a greener earth too. But I have to believe in the reality of supply and demand, not the wishful thinking of Mr Murti.

Oil is increasingly plentiful on the upslope of the bell curve, increasingly scarce and expensive on the down slope. The peak of the curve coincides with the point at which the endowment of oil has been 50 percent depleted. Once the peak is passed, oil production begins to go down while cost begins to go up. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, oil dependant economies will crumble, and resource wars will explode.

Now let me quote Dick Cheney in 1999 speech while he was still CEO of Halliburton:
‘’By some estimates, there will be an average of two-percent annual growth
in global oil demand over the years ahead, along with, conservatively, a
three-percent natural decline in production from existing reserves. That
means by 2010 we will need n additional 50 million barrels per day.’’

Now if this is right a big up for Cheney-Bush for going to Iraq, for we all know why we’re there. the war in Iraq really a war for the world’s last remaining significant sized deposits of oil?”
Lets remember this: As recently as 1972, the USGS was releasing circulars that estimated US domestic oil production would not peak until well into the 21st century, and possibly not until the 22nd century. (See Theobald, Schweinfurth & Duncan, U.S. Geological Survey Circular 650) .This was despite the fact US production had already peaked in 1970, just as Hubbert had predicted. Richard Heinberg reminds us, “in 1973, Congress demanded an investigation of the USGS for its failure to foresee the 1970 US oil production peak.” In March 2000 the USGS released a report indicating more “reserve growth.” Colin Campbell responded to the report by reminding us of the ludicrous estimates put out by the USGS in the 1960s and early 1970s: Let us not forget that McKelvey, a previous director of the USGS, succumbed to government pressure in the 1960s to discredit Hubbert’s study of depletion, which was subsequently vindicated in the early 1970’s after US production actually peaked as Hubbert had predicted. It did so in a very damaging report that successfully misled many economists and planners for years to come.
These deeply flawed upward estimates were released because the USGS is a political organization and optimistic estimates are looked upon favorably by both politicians and the markets. Source
Another fact: this is how the oil industry is reacting to this.
In addition to lowering their investments in oil exploration and refinery expansion, oil companies have been merging as though the industry is living on borrowed time:

December 1998: BP and Amoco merge;
April 1999: BP-Amoco and Arco agree to merge;
December 1999: Exxon and Mobil merge;
October 2000: Chevron and Texaco agree to merge;
November 2001: Phillips and Conoco agree to merge;
September 2002: Shell acquires Penzoil-Quaker State;
February 2003: Frontier Oil and Holly agree to merge;
March 2004: Marathon acquires 40% of Ashland;
April 2004: Westport Resources acquires Kerr-McGee;
July 2004: Analysts suggest BP and Shell merge;
April 2005: Chevron-Texaco and Unocal merge;
June 2005: Royal Dutch and Shell merge;
July 2005: China begins trying to acquire Unocal
June 2006: Andarko proposes buying Kerr McGee
July 2007: BP-Shell “Mega Merger” rumored

If the actions - rather than the words - of the oil business’s major players provide the best gauge of how they see the future, then ponder the following. Crude oil prices have doubled since 2001, but oil companies have increased their budgets for exploring new oil fields by only a small fraction. Likewise, U.S. refineries are working close to capacity, yet no new refinery has been constructed since 1976. And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built.
My questions are:
1. Is the banking system entirely dependent on ever increasing amounts of cheap oil?
2. Why isn’t media sounding the alarm about this?
3. The unspoken role of peak oil in the current financial crisis, why not speak about this?
4. Does the OPEC don’t want to increase production or simply can’t??

What a nice introduction to “Peak Oil” in “Business 360″. Business (and States) better realize that it’s time to invest in new and clean energy technologies. Otherwise Peak Oil and/or Global Warming will come around 360, and will cause stagflation at the very least.

I have been in the energy market for about 8 months and since the oil prices affect the electricity and gas prices, I felt like I need to share how bad it is at the moment. When I first started to work as an independent utility broker in London, I have seen prices floating around 8.5 ppu. Now in just a few months, the prices have soared to just under 14 ppu. That figure has gone up by 80% in just eight months. Just last week, I have signed a HH client that spends close to 5.5 million kwh per annum. I signed him with a supplier at 12.9 PPU. What I am afraid of is, that the Dhir suppliers will sell at CB rates that they get to choose and the consumers will have to go with those rates because they will have no other choice.

Thank You

American styled capitalism without the requisite infrastructural development is to blame, from my perspective as a Nigerian. The American democracy is well protected unlike the nascent democracies of Africa with Nigeria playing a major role in continental stability. Politicians are the ones that perpetrate the escalation of oil prices. The war in Iraq has it’s effects and the situation could be helped if the Americans would withdraw soon, presumably they’ve achieved the maximum already.

After they may have withdrawn, it will take some time for oil price to stabilise because enough damage has been done and while Iraq rebuilds, it’s only the American foreign reserves that can buffer oil price. However with the depreciating dollar and the American general elections in for this year, I see no light at the end of the tunnel, if any it may an oncoming train.

I agree Todd we are all to blame - but walking more (which I already do) won’t change things fast enough. Shouldn’t our western governments(eg Canada too) also be incenting development and use of alternative energy technolgy ? Maybe considering a future economic transition not continuously propping up a wealthy, but obviously declining industry with tax cuts and subsidies?

No politician has a reason to think beyond the next 4 years nor a corporate board to think beyond the next quarterly/annual results. Our Oilsands are a good example - as fast as we can deliver it, you guys will suck it up and we seem quite happy to let you do that (especially at $200/barrel) - both governments and the industry are full speed ahead on this one and the heck with the consequences.

The type of European style policies we need(eg smaller cars, higher fuel efficiency, alt energies, better transport systems etc) won’t really happen until something immediate and critical happens that drives significant policy change(maybe $200/barrel and food riots are the things?).

The UK and Europeans have different policies because they learned the lessons of excess before us and realize the consequences…in our global world we have been very resource rich and sadly, we seem blind to the lessons of history …if we can’t learn - why would anyone think the up and coming developing world will do it differently?

Bottom line:

You don’t need 8 cylinders to drive 1 guy around.

Greetings from the Netherlands, where 1 gallon of octane 95 fuel is currently 9.92 USD.

I’m afraid this is the end of cheap oil for America. But the main reason for this is not supply/demand. It’s due to the devaluation of the US Dollar. Here in Ireland in 2004 i use to pay 1.05 per litre of petrol. Now I pay 1.24 a litre. The reason that people in the US are seeing such higher jumps in price is due to the FED printing money and making every global commodity more expensive for Americans. But its not for any country with a sound currency, i.e. not pegged to the dollar. Americans are still paying under half the cost of what everyone in Europe pays for gas, yet ye complain about the cost of it the most. If people in the states just drove a normal car as opposed to the SUV’s and junk that pass for luxury over there, then maybe these price increases wouldn’t be so crippling!
If you’re an American with money you better start buying gold before inflation turns your life savings to petty cash. I wonder how many US pesos I will get for my Euro in a few years?……

Hi all! Oil will be the greatest bubble of the economic history. Right now people are panicking and invest in oil. For the timing being, the end consumers (all of us) did not realize the effects of this tremendous soaring in oil prices. Soon enough the consequences will be obvious and people will consume less. Furthermore now its an era of turbulences in Iraq, Nigeria Iran etc and they drive the price up. In the next six months oil will continue rising but suddenly it will crash and go back to 90 dollars. Thanks

Americans thought invading and occupying oil rich nations would solve their fuel thirst. Being the old duffer he is, McCain accidently admitted sending troops into the middle east to secure oil.

America & co have murdered and wounded hundreds of thousands, destroyed homes and infrastructure for precious oil. So when the price goes up at my pump I ask who is stealing our stolen oil ??

Who is to blame?For the skyrocketing price of the Almighty Oil,nobody but the society,and those who God has bestowed this resource on ,but are using it against mankind.

Let us not be over simplistic. The usual suspect , America and Americans may have a small part on it, but it is not the whole.

People wanting to sell corn or soya for 100 bucks a pound and not
the miniscule price of today are to be blamed.

Hi Todd, love how your questions get people involved!

Who is to blame? Good question. One could say the oil companies. When President Bush asked Opec to increase output, and their responce was, “We will not increase production until our CUSTOMERS request it”, who do they think their customers are? Guess they were saying to a President of a Country representing people, “We will not increase output until the more important President of the oil companies request it”. Sounds like a monopoly to me.

But why put all the blame on the oil companies, for it is our government who allows them this power over us, so it is our Governments fault. But we allow the Government to give these mega-companies power they would never give to the small business man, So is it our fault?

Guess what I am trying to say is, we are all at fault, for allowing the wrong to exsist because our lives (in our minds), are busy enough. When Obama failled to speak up right away about the wrong in some of his preacher’s beliefs, that was the best example of what America has become. Allowing the wrongs that we see as not our problem or in some way, support our needs, and only speak up when it doesn’t.

Maybe we will learn someday, our problems today come from our decisions made yesterday. That including our past decisions not to get involved and stop what we know is wrong. For the more we ignore, the more we learn to ignore and the more that leaves us with only one choice, to learn to blame someone else. The blame game is a cancer that turns man against man, and gives us an escape of responsibility for our decisions to do nothing.

You are absolutly correct in your summary of the situation.
My company, a large oil company is spending more than the enormious profits than our investment in major capital project developments
I guess we could simply keep the profits, but we are doing our best to replace depleting reserves and are doing a good job. It’s not easy.
Cost of executing these project are escalating in all areas… most are not the most friendly places to do business. We go further and in deeper water in the most hositle enviroments. Technolgy is helping to go places that were never before were possible.
I pay for gasoline too - not happy either, buts what is the answer? CONSERVE! Change your driving habits!
Do we turn our profits to the government and do you think they would better invest in opportunities than we do? Yeah right!
Keep up the good work of educating the public. We need to better inform the public, but most think were the problem… think they’ll listen. NOT.

Hey Todd this why driving less isn’t going to help us
Like we all say , big deal if gas prices get high. I’ll drive less, why should I give a damn? Let me tell you why driving less is not going to solve the probem. Because petrochemicals are key components to much more than just the gas in your car. As of the year 2002, approximately 10 calories of fossil fuels are required to produce every 1 calorie of food eaten in the US. Source The size of this ratio stems from the fact that every step of modern food production is fossil fuel and petrochemical powered:
Pesticides and agro-chemicals are made from oil;
Commercial fertilizers are made from ammonia, which is made from natural gas, which is also peaking in the near future.
Most farming implements such as tractors and trailers are constructed and powered using oil-derived fuels.
Food storage systems such as refrigerators are manufactured in oil-powered plants, distributed using oil-powered transportation networks and usually run on electricity, which most often comes from natural gas or coal. Like oil and natural gas, coal too is peaking in the near future.
In the US, the average piece of food is transported almost 1,500 miles before it gets to your plate. Source In Canada, the average piece of food is transported 5,000 miles from where it is produced to where it is consumed. Source
A recent article published by CNN documented just how much fossil fuel energy is used to produce our food. Emphasis added:
In the U.S., up to 20 percent of the country’s fossil fuel consumption goes
into the food chain which points out that fossil fuel use by the food system
in the developed world “often rivals that of automobiles”. To feed an
average family of four in the developed world uses up the equivalent
of 930 gallons of gasoline a year - just shy of the 1,070 gallons that
same family would use up each year to power their cars.
According to the Organic Trade Association, the production of one pair of regular cotton jeans takes three-quarters of a pound of fertilizers and pesticides.
In short, people gobble fossil fuels like two-legged SUVs

To follow up… if government wants to tax us on these “so called windfall profits”, why not focus on taxing the difference between profits vs our capital investment outlays?

is easy to put the blame on Americans and the way they are driven to excess. Lobby groups, big business, and too much of a good thing has made the U.S. complacent. However I think it is up to the government to implement some real world initiatives that would finally make the U.S. less dependent on oil, period. Tough times call for tough measures. As one of your commenter’s has stated, Americans are very resourceful people. It is going to take a real “ballsy” leader to institute measures that will be very hard to swallow in the beginning, but lead to greater independence in the end. It is the worlds dependence on oil that is causing our problems and we need a leader that has the vision, fortitude, and independence to make decisions that will rattle the cages of many. Can this, will this be done? I really really hope so. It is time to bite the bullet.

STOP ALL MOTOR SPORTS! These ’sports’ consumes incredible amount of fuels and for what, to entertain a few. They do not accomplish anything but damages a lot of things including the environment.

Todd, you are obviously a westerner and not from the United States. Your stupid comments to inflame people against people from the US don’t help anything. I’ve never seen anyone in the US walking a dog on a leash while driving a car. The US is an easy target when people are frustrated about the rising cost of oil. There are two factors at work. The demand for oil is increasing because the world’s population is increasing. Second, the greed of the world’s oil producers is increasing. Why does Dubai need an indoor downhill ski area in the middle of the desert? Todd, you are a smart guy, name calling and whining don’t become you.

I think oil prices will rice untill a truly new source of energy will be developed - i.e. thermonuclear reactor ( tocamac) .This one built currently in Southern France is still in preliminary stage and I think won’t be finished before 2050 .So untill 2050 we can expect oil prices to rice .Besides naural reserves of oil also suffice circe till 2050 .

Well you have all done a good job of blaming China, India,Exxon, Shell and all the other oil people, and the fat guy walking his dog. I’m sure T. Bone Pickens heart bleeds for all of us poor saps.
How long is he on oil and is it worth his while to proclaim $150.00 to the world to reap some benefits.
Our beloved members of Congress continually insist on whipping US oil companies before their hearings.
Maybe it’s time to question the folks at the commodity markets and see just who is bidding this stuff up. Terrorist’s have many faces, and I’m beginning to wonder who they really are and are we after the right ones.
Fuel prices are one thing, but somebody had better start worrying about the price of #2 heating fuel. It’s going to be tough for us working chumps to pay $6.00+ a gallon to stay warm in 6 months.

Re the fast and persistent rise in oil prices…
When just about anyone can speculate in oil futures by putting down $9800 to buy a contract worth $133,560 at this moment….a contract that rises (or falls) $1,000 for each 1$ in the price of the future, you can bet that a lot of big money and small will speculate. Most of these speculators have npothing whatsoever to do with oil other than as a consumer. The original purpose of the futures market was to all producers to hedge the thier inventories. But because of accessibility, the futures market is open to all comers, incuding billionnaires of all kinds, who can and are playing with the lives of all of us. Isn’t it time to raise the margin requirements to specilation in oil futures? Would that thake the edge off a lttle. In fact, one might see a considerable fall.

Before I served a 5 1/2 year diplomatic assignment for the US Gov’t, in London (UK), I did not understand why the rest of the world saw us (Americans) as anything other than the best of the best in everything we set our mind at. Let me be clear, until we catch up with the rest of the world, i.e., our automobiles deliver 50+ mpg, petrol prices double, we incentivise the development and use of mass transit (yes, get the bus stations into safer areas) such that it is more convenient and less expensive than to own or drive one person per car, and hedge fund managers are deplored (and not adored) for their obscene pay packages, we will rightly continue to be seen as glutonous, monocular, and pious. We must reduce our dependency on oil, dispel our belief that we will continue to be leaders in technology and creation of wealth, and be hungry. For our unequal distribution of wealth and belief in “Democracy or else” will be our Rome.

Todd,
your blog is coming more and more difficoult and interesting also because of the mervallous comments you can find into it.
Talking about petrol my opinion is that Arabs did play the game in the past as the real starring. Now it’s price is really made more by others. (Who the hell, are these one?).
But it is not a question of consuming petrol with the dog. Poor animals, we won’t blame on theme, but maybe on a luxurious and more expensive boat!
Maria Giovanna
ps dog’s food, running with a dog, or others maybe expensive but very human things, should be allowed and appriciated!
pps I’m using my car less and less, though!

I feel what is happening to oil prices is nature’s BALANCING ACT. This way oil prices will reach to unaffordable level, hence LOWER CONSUMPTION or ALTERNATIVE FUEL. This way it will lower the GREEN HOUSE effect which will save the EARTH from DISASTER to happen. It will also force people to change their LIFE STYLE for good, thus making them healthier. THANKS NATURE

Can anybody really refuse the president of the only superpower in the world? When Bush “requested” the Saudis to increase production, he winked, “Hey, guys, I’m on the way out; let’s make hay while we may!” The whole world knows Bush’s connection with the oil industry.

It is human Psyche to act with required efforts only when we are pushed into crisis. May be the price levels of oil ease a bit or people will simply accpet the high prices and “discount” the fear of high oil prices. Even though OPEC decides to flood the market with higher volumes and drive the prices down to $100 , still at the end of the day , we all realise , this is a depleting commodity … if not in our geneneration , next generation would be less dependent on oil. it is now companies will be really forced to invent using new energy sources , technologies. Economic progress must not be at the cost of damage to our home planet.
I see an increasing serious commercial sense of using alternete Green energy source playing into energy producer companies as time goes by.

I dont think oil prices well ever drop again, I also believe everyone is just sort of waiting on the next big thing to come along and ease the burden of rising oil prices…its not goin to happen, there well never be a true alternative for oil and the price will continue to rise, out of panic, demand, what have you, the fact is, our world has far overshot its carrying capacity with oil to the point that when the valves shut off, or the price is truly to high for anyone to afford we will be entering a whole new era..the age after oil. All of the alternatives coming in to focus now are all still at their core roots, dependent on oil. This coming age after oil is going to be an incredibly difficult time especially in the now serivce based economy and surburbanized u.s. who may have the hardest time living without it, than all of the developing nations will. I dont want to sound so pessimistic, but the truth is, that the average person walking around right now complaining about oil prices and just assuming that an alternative will arise in time, is completely oblivious of the fact that we have passed the earth’s peak oil output, we’ve been on the back half of the curve for years, there is no reliable non-oil dependent super source coming to save us and its all just going to keep spiralling down.

The green solution would be nice, but probably governments will rush into nuclear energy now, don’t you think? We keep our cars, but fuel them with hydrogen, produced with the help of nuclear power. What do you think?

So far I have read many emotional arguments about who is to blame. It’s as if our system which led to so much propserity for so many of us for so long, has now turned out to be rotten on the inside after we have to come to examine how it really works.

Blame the Chinese and Indians for wanting to raise their standard of living? I don’t think we westerners are doing too much of that. Of course we can understand why they would want to do so.

Blame the Americans for being consumeristic and ‘lazy’? The same groups of experts, Mr. Benjamin included, who are now blaming the consumeristic Americans are also the ones who during the boom years talked about how critical it was that America’s consumer market stay intact to provide the needed consumer marketplace for global goods. Of course Americans aren’t going to change their lifestyles, -not overnight anyway. They, like everyone else, need a real possibility/the resources to effect tthis change.

No, if anyone can be at least be partially held responsible it is the investor-expert group (the rich investors working together with national reserve banks and large commercial investment institutions) who have led us through decades of sometimes double-digit growth and raised investor expectations to the point that now they have to get their junkee-fix of a huge return. Because of the US investment market and real estate and currency collapse - they now use oil as the new standard to guarantee return.

Only this guarantee cannot go on indefinitely. I guarantee you the bottom will drop out - because a recession/depression will come. The global ‘demand’ for oil is based on mass demand. When this demand is no longer there (because there is no money or capital moving about, no investment or commerce), the investors can stock up on all of the oil (or sand or whatever) they want. No one will need it.

With US economy being the largest economy of the world, the maximum oil consumption is within US itself. Though people need to tend their habits but what if Korea and Iran are making nuclear powered stations for civil use. Atleast they are trying to minimise the use of oil in their own way and Americans have problem in that as well by making an excuse that they would use these weapons against America or its allies. Number of tanks running and jet planes flying in Iraq and Afghanistan does not run urine or water. The maximum number of domestic flights run in America. Excess expenditure by Americans is keeping the prices soar not just of oil but even of food prices. If u calculate the average American consumes 30-40 times more than what its counterpart in India or China consumes. George W Bush is the man who i would make responsible for all this hell. Its easy Mr. Bush to term someone as a terrorist but what Americans are doing in Iraq is more and above than terrorism. Rather i would call it propaganda terrorism..

When Todd Benjamin refers to T. Boone Pickens, Goldman Sachs as bearer of the truth about oil he is simply mentioning few of the entities who have a stake in the rise of oil prices, speculating on commodity markets at the expense of the majority.
Of course there is more demand for oil but speculators have a big impact in the rise of oil prices and demand didn’t rise 100% in a year time, so why we have more then 100% in rise in a short period of time? All businesses are jumping on the band wagon of increasing prices, regardless of real cost rises. If politicians would impose more stringent regulations on rules governing futures we would see a major drop in the cost of many commodities.
This would be just a short term measure the real problem is a political one. The West started the Industrial Revolution, the greatest shift in human activities in history of man kind, three hundred years ago.. Was a reflection of creative thinking , a projection of our societies (democracy, equal rights, human dignity etc) no other system in the world has had the same impact. Today we see an unparalleled shift of wealth from the West to countries not only unfriendly to the west core values but some bent in destroying them. Most of these countries are driven by sterile systems with parasitic tendencies. Basically taking the wealth out of established economies and directing to passive investments or redirecting them to speculative means to extract more wealth from our economies.
China wouldn’t have this growth if was not for multinational giving them work to lower prices on goods. The price for this strategy of indiscriminate low cost will in the long run create very risky imbalances in the world. The west will be economically weaker and our wealth will be not only transferred outside the sphere of creative economies and societies but will be used to make us less and less influential in the world. The question is: do we want very cheap goods and see our system undermined or pay a little more and keep our wealth in the sphere of our control?
Few examples , China has trillion of dollars in US bonds, enormous economic leverage.
Dubai International Capital, uses our money to build skyscraper in the desert and finance our biggest banks like Citigroup, having their people on the Board with direct influence in decision making.
Russia is rebuilding a confrontational attitude with the west.
Venezuela wannabe Cuban model.
Personally I only spend my money for goods and services originating in the west, that is my contribution to our future .

Can we place some of the blame for the Super Spike onto Murti and his team at Goldman Sachs?
I have to wonder if, Mr Murti and his colleagues had not made the prediction of Crude being $100 a barrel by 2009, then would it be? I also have to wonder that if, Mr Murti had not suggested that Crude will be between $150 and $200 a barrel by 2016, then would it be so?
The question that I am putting out there……Is Mr Murti just fuelling the fire by making these predictions, and therefore giving oil producers the opportunity to increase the price of the barrel, simply because the worlds’ community now “expects it”?

You are so right on. The only thing that may end is the world. World depression 1st, chaos 2nd and your guess is as good as mine. GOD created a beautiful recylcle bin called earth but the amount of garbage is beginning to overwhelm the system. It just can’t handle it much more. Nobody can see the forrest through the trees. The whole system is dying and the speculators are in heaven partying down, down, down. Does a speculator care about Global Warming? No, everyone is into “short term” gain. It’s human nature. I hope I’m still alive to watch it all come tumbling down. History has proven this “doomsday” theory wrong time and time again but we can’t learn much too from the dinosaures can we? Adjustments are only a matter of time, who wins and who loses, in this case we all lose. Go figure!

What about all the alternative sources for fossil liquid fuels we’ve all heard about.
Coal liquefaction, Oil shale, Tar Sands, supposedly these extraction methods should make sense at 90$ per barrel. Why aren’t they being exploited more intensely?
Bio Diesel from algae is also supposedly competitive with oil at 100$ per barrel.
If this is an issue with supply not meeting demand and the price is expected to coninue rising why then new (old) immediate sources are being so slowly developed. Where are the market forces at work?

Well, now the oil-price crisis is not just the US but the Universal problem. The humanity on this planet shall think , propose and initiate action in terms of reducing consumption of oil. With several economies getting into doldrums due to unimaginable sudden spurt in their oil consumption expenditure, the crisis is now ‘world crisis’. It has to be addressed accordingly. Each Nation should work for a customised solution in relation to their economic, socio, political and cultural background. In the emerging (rather prevailing) scenario the BRICS as well the Oil-Giants have to be accommodated in the “developed” space, better to realise the realities, otherwise unbearable ruptures may be the reality. Look back to the History, it just repeats. The oil crisis has to be addressed by the whole comity of Nations taking upon the onerous responsiblity. Discipline, restraint and regulation are the urgent need rather individual freedom
to save the planet from the war, i.e., the offshoots of poverty and deepening and widening imbalances in human living, just as such.

There is only one solution to this crisis. Increase production of oil and decrease its price. i dont think the oil in this world will run out, this is just the technique of oil producing countries in order to get rich. Or we could always let them starve to death if they wont lower the prices. Food for Oil….?

I agree with the comment above from the Netherlands. I was also calculating/converting how bad the prices are in Europe right now. I’m an American in Italy and an SUV would pretty much mean not driving anymore. Diesel prices have also now evened out with gas prices. My husband drives a small car and notwithstanding installed a GPL (LPG, Liquid Propane) tank to save on gas costs. Is anyone exploring that in the US?

Who is to blame? Ourselves obviously — our very-young, egocentric, short-sighted human race.

Americans, Europeans, Chinese, Indians, Africans, etc. - all of us think we can consume as much as we can afford and only make drastic changes in our lifestyles when there is no other choice. And most of us who have a high or improving lifestyle are proud to consume and consider it is our unalienable privilege to maintain or increase our level of material comfort.

However, there is only one earth and its size and resources are finite. We have to make best use of them or our lifestyle or even our species are doomed. It is very clear that we have to curtail or at the very least optimize our use of existing resources and work very hard at developing alternative scenarios. To name a few directions: population control, less intensive use of energy, optimization of transport infrastructure, re-thinking of our lifestyles and obviously emphasize the development of alternative energies, preferably the “cleaner” ones: sun, wind, wave, wind and geothermal based.

Who can stir us in the right direction?
Governments are elected to be wise but they are often ineffective as they easily bow under the pressure of lobbying groups, populist political short-term imperatives or simply nationalistic pride and prejudice. International oil companies, big or small, do not fix the oil price anymore. They definitely benefit from high oil prices as any business based on a particular commodity would. But I believe the oil price is driven mainly by 2 factors: (1) a long-term trend driven by basic supply-and-demand and there is an overwhelming likelihood that EASY oil has peaked already, therefore it is becoming more and more difficult to produce enough cheap oil to satisfy demand and (2) short-term variations due the highly complex and volatile combination of public perception, speculation on oil futures, political events, small or large scale economic up-or-downturns. The majority of oil today is not produced by private oil companies but by national oil companies: it is no surprise that governments of oil-rich countries prefer to fully control themselves the use of a resource that provides up to 99% of their revenues. It may seem a digression but we cannot insist enough how foolhardy it was of Bush to think that he could with impunity grab control of the Iraq oil resource, hiding behind bogus altruistic or fight-the-rise-of-fundamentalist-Islamic-type-of-terrorism sort of reasons. If anything, the outcome has been a huge humanitarian disaster, the destabilization of a whole region and an exacerbation of religious tensions both within Islam and between Islam and the other religions – not to mention a definite loss of image for America.

Human foolhardiness is to blame for the current oil price crisis: against all evidence to the contrary, we had assumed that cheap oil would last forever. It very much reminds me of the story of the mid-Pacific Easter Island where a few thousand years ago some intrepid seafarers landed and found a beautiful wooded island where they happily settled and developed elaborate cultural and art forms (the famous statues). They also made liberal use of the natural woodland probably for fuel, construction, and by clearing to create grazing land. As a result they drove themselves to extinction: soon enough the natural resources were insufficient to support the population and as collateral, they could not even emigrate somewhere else as there were no more trees to build ships. I hope we do not repeat the same story at the scale of the whole earth.

Let’s face it, hard changes in our values and lifestyles mostly happen when they become unavoidable. Let’s see our huge problem today as a fantastic opportunity. Let’s hope the common challenge does not drive nations against each other but on the contrary provides a common higher goal. Let’s stop blaming “others” for our common problems.

Let’s emphasize research and education and try to become wiser by developing a better understanding of the world ecosystem, its energy equilibriums, its economic, social and political interactions. Let’s build a better world and it will naturally become a safer world.

I hope this is a realistic view of things and I wish my dream of a better world may come true.

The price of oil has not doubled in the last year on the back of the developing world’s increased use of oil during that period; rather, the markets have developed an understanding of the impact of the ongoing consumption increase of China, India etc to world supplies.

Add to this the ongoing instability in the middle East over this period, and the continued irresponsible oil useage by the West, and the US in particular - something had to give, and the price ceilings will continue to give.

I would suggest that legislation and meaningful government funding to promote and develop alternatives to oil are long overdue… but perhaps the current US administration has a different perspective?

If you want to know who is to blame, go look in a mirror. We are all to blame for building our economy around a non-renewable resource. And now we need to figure out how to reverse this, as it looks like we will be entering an era where total global oil production decreases from year to year.

When you understand something …. then suddenly you understood it !
It cannot be erased from your mind, it will be with you for a long time. Depending on the gravity to the issue of understanding , it will follow you till the grave.

The consequenses of Peak Oil is a such …… It will not go away!

Oil is an import. The dollar is much weaker. The dollar is weaker due to GW’s huge deficits. Therefore, GW is to blame for the increase in the cost of oil, in terms of US dollars.

The daily increase in oil prices remind me of the movie about Enron where speculators were driving up the prices and laughing their heads off at grandma having to pay ..
Is this happening now? Are speculators getting rich off the backs of hard-working people?A comment on Cnn yesterday is burning..that hedge funds and endowment funds are buying heavily..is it like the stock market bubble..the housing bubble?
Yes stop driving those big cars and walk a bit more..it feels good.
My other concern is food prices..the world shortage because we make food prices so high because of the cost of transportation. Are people starving because some companies and people are so greedy?

Who’s to Blame for the price of Oil !

The Bush administration and the neocon’s, Stupid.

They have cause immeasurable problems by going to war in Iraq, and thereby destabilising the whole Middle East.

Take a look at how they planned it long before 9/11.
http://zfacts.com/p/775.html

Look at the bright sides: Gas price spikes up could incentivise people to drive less and back to bicycling. Less carbondioxide or toxic waste contribute to the air. Air will become cleaner. Global warming problem solved!!

This will adjust people’s habits and walk more or run more and becomes healthier.

wow, an heated debate. lets face facts, oil is an unreplenishable resource and we are consuming far too much of it. Finally, the price of oil is showing its real cost in terms of damage to our environment and the eventual depletion of known reserves.

Whether we like it or not, we have to develop other sources of energy. Countries like the US, with huge untapped reserves should quit their selfish policies and begin to explore their reserves in Alaska and other northern states, establishing military bases in Iraq and the middle east only guarantee future instability and would not benefit the whole world.

The only real beneficiaries of the current prices are the millionaire wall street traders and their cohorts in power.

I wonder what is to become of the billions of the world’s poor as oil prices cause increase in costs of living.

Inasmuch as playing the blame game would not bring down the price of oil, I would think that the US should do some soul searching, as their global influence, rather than bring peace and stability to oil producing regions in the world, is muted at best, and at worst, we have skyward spiral of prices. There is a lot in-between. I believe that building a global culture of trust goes a long way in stabilizing prices, and only very few nations in the world today consider America as a ‘friend’. If America’ does not negotiate’, then OPEC is not likely to negotiate.

what about lowering the tax on diesal fuel and at the same time promoting natural gas powered cars???? since we have an almost unexhaustable supply naturally and cane turn coal into natural gas and we do have the worlds largest supply of coal .natural gas is less than one third the cost of gasoline and even if we were to charge half the price of gasoline to finance development,building service statios etc we could reduce our usage of oil by 60 to 70 percent.

AS AN AMERICAN CITIZEN WITH NOTHING TO LOSE LIKE, EMPLOYMENT, FUTURE PROSPECTS, CURRENT HOLDINGS, ETC., I’LL SAY IT. WITH GAS PRICES REACHING $4.00 PER GALLON, I SEE A PRESIDENT AND HIS OIL CRONIES LAUGHING ALL THE WAY TO0 THE BANK. CAN ANYONE SAY “CONFLICT OF INTEREST”?

The excuses for the skyrocketing oil price ie high demand from developing countries,middle-east crisis , nigeria sabotage,weather changes, usd weakening, inflation-hedge etc are really rubbish. Even if the traders and the analysts blamed it on supply and demand one hundred times,THE only answer is speculation. Many big US funds are making a hell lot of profit from oil speculation,which explained the unwillingness of the politicians in seriously addressing this issue.Never mind if america public is suffering. I challenge the commodity exchange to impose regulation to force the buyers to take delivery of their trades,and otherwise,in order to accurately reflect the true picture of the so-called supply and demand. Do not quote me of free market trading because there isn’t any, thanks to the well-known fact that the speculators are the ones controlling the media.

It will be not only price & availability of oil that will get worse, so will be for other minerals in the world with current rapid growth of India & China for the next 20years & then South America & Africa & significant developments towards the Arctic & Antartic at a later future. We are today talking about a solution to these by means of switching to renewable, alternative & multiple sources. By the the world will be with at least 9 or 10billion population. Once we find a means to contain or reduce the current impacts our tendency is to call for more manpower/ population to man our increased desire & wealth. The world’s focus for absolute financial wealth has not been so rampant in the past & we need to get back to the past days where we have a sustainable population in a worst case scenario whereby even the endangered & to be endangered & other species are not unfairly stressed out like they are increasingly today. One of the basic problem or source of problem is human population. If we are willing to act forcefully on that [like we are trying to do about climate change] we will pleasantly see that many of the current problems are solved or improved & those more and more people are urning for [time, quality of life, values, space, prosperity, harmony] are realised in a balanced way. But does mankind have the will for that; or to say, does the power brokers [with political & financial & business/ economic power & interests] have the will for that. What do mankind really want over the long term?

Todd,
I’m frustrated, and jelous. Once I could interact with you like in a small group. Now there are all these new bloggers, giving their best comments on the oil topic. Sad.
To distinguish myself and find my right place in this blog, I’ll talk about Gore Vidal (a friend of mine, of course!) and his excellent book “the last empire”.
The author is able to represent the real dangerous situation, right now, by talking about his small and qualificate circle of friends, and explaning us how the problem only comes from the others: REPUBLICANS !
So, Let’s vote for Barak!
Maria Giovanna
ps It’s a joke! You know it…!

Many interesting opinions. I liked that of Marios mostly. Yes, we are very much dependant on stock exchange and probably this will be a great bubble ! In the same time the great USA has to change the policy with the oil. In our Europe nobody subsidize the oil prices, or at least in such dimentions like Americans do. America needs a brave man or woman, as President to say stop to that ! Public transport like in Germany / Austria / Netherlands etc., market prices of gas and oil, nuclear paower stations, solar investments. Than the stock exchange speculators, Russian oligarchs and Arabian multimiliarders will be in different position and the whole world will be different.
The world badly needs a brave USA President………

I’m an American living in Germany since 99 and I’ve seen many changes in the economy here since the arrival of the Euro Dollar and the rising gas prices. I’ve also noticed how the governments all over the world bully the oil execs for their record profits but the subject of how much the price at the pump is taxes is never mentioned. Does gas really need to be taxed so heavily? Americans are taxed for the gas and then taxed again at the supermarket for items that are rising in price due to the increasing fuel cost to transport the food. I find it all very confusing and unfair. We are all to blame !!

We are being blinded with garbage of low oil supplies. Enough oil has been found in Alaska to keep the US supplied for the next 100 years. The Government owns large investments in oil companies.
There has been some major progress in the production of cars which run on Hydrogen and/or water. The Cartels are lining their pockets before fuel is no longer an important part of a vehicle. The large Motor Companies have many inventions (as early as the 1950’s) which reduce fuel consumption drastically but have bought them out and continue to gouge the public. A known fact is that many additives included with fuel purchases actually reduce gas consumption. They work on fear and will continue to line their pockets with our money.

Whether it’s a question of supply and demand and/or speculation, I would agree that high oil prices are here to stay. The fundamental question is how to replace “black gold” with something sustainable and environmentally friendly. In the short term, policies such as obligatory solar panels on rooftops (possibly government subsidized on the basis of gasoline tax)) and a move back to lighter cars (the VW Golf 1 “rabbit” weighed app.800 kg, the Golf 5 around 1200 Kg), and expanding as well as encouraging the use of public transport, particularly in the USA, should help.

In the long term, the international economy will probably have to adapt to potentially severely limited energy supplies until something new becomes as widely available as oil (forget about biofuels and the nuclear option). The unfortunate reality is that current energy alternatives will probably not prevent an economic crisis in the future that will make the 1929 Depression look relatively harmless. I personally feel that it is safer to assume that oil will be a non-entity sooner than later, and that now is the time to start thinking and acting differently.

Absolutely! Prices are going higher.
There are two forces that drives gas price to the sky (ironic).
First, a weak dollar that I think it won´t recover until US change its goverment.
And the second one, there are many many oil producers that know that their source of money is about to end.
So it is now to make the most of it!

I am afraid we are all to witness a new age, we like it or not.
Thanks.

I think that bush is to blaim for everything. If he wouldnt have sent so much money over sea’s, then we wouldnt be in this stage. We are heading for a depression very fast. Everything is going up and up but our wages. Bush said that everthing will be okay, but only for him when he cashes out on the gas stocks. What he has done or doing to the world,He should not be able to hold his head up high.

I surrender! Maybe it’s the martians…
Much too much blame going on. Would it not me better to work on a solution rather than pointing fingers?
I am a middle class American (Massachusetts-Republican) and proud of it. The problem is my pride and my small savings are melting away as quickliy as the “liquid gold” prices rise. Are we heading backwards? Will we see soup kitchens, bread rationing and no jobs like our grandparents saw in the 1930’s depression?
What have we done?
Mother Earth, she is our only option…There is no where else to run. It’s up to all of us to regardless of religion, color, sex or beliefs to make a positive change. In the perfect world, we would not see each other as “the bad guy” or the enemy. I realize we will never see the “perfect world” globally, yet, it just takes a few to truly start the ball in motion to get there and make a positive change for all.

I’m no religious fanatic, in fact, I’m a clergy rape survivor, I’m no political extremist nor am I an out of touch lunatic, I’m just an average Massachusetts resident trying to provide for my family, put a little away for my wife and I to retire comfortably and help our children get their lives off the ground.
The world has gone way off track…We are destroying ourselves and our futures. Enough is enough!

Oil prices started soaring when the Americans invaded Iraq in 2003 which was beginning of this catastrophe.Its is now further aggravated by higher demands from developing countries like China and India.In addition to this , terrorist attacks in Nigeria is adding to the pressure.To sum it all , oil prices will break the 200$ barrier within few months unless OPEC decides to increase their production.The ultimate gainers of this increase is the Middle East especially United Arab Emirates where the oil boom has transformed the desert into an oasis.

The price of gasoline has minimal impact on oil profits

Everyone in the industry knows that “upstream”, i.e., crude oil production is where the big profits are, as well as the risks. The “downstream” side of the market, i.e., refining, has historically been the loser of the industry.

Several years ago Unocal totally abandoned the refining side of the business to focus on the upstream sector. More recently, Shell has dumped 2 of its 3 California refineries, selling one to Tesoro and the other to Big West, neither of which have any upstream revenues to help them as the cost of crude oil keeps rising.

Interestingly, most of that upstream revenue for Chevron, bp, Shell, and Exxon is from crude oil production sources outside the United States. Their counterparts that control 77% of the industry are Saudi Aramco, Russia’s Gazprom, CNPC of China (parent of PetroChina), NIOC of Iran, Venezuela’s PDVSA, Brazil’s Petrobras, and Petronas of Malaysia are also reaping the rewards of higher crude oil prices.

It would be a major mistake to penalize the 4 example companies for windfall profits coming from offshore oil production, while the 7 countries that dominate the industry continue to reap the benefits of our dependency on foreign sources for our energy needs.

Companies that have no upstream income, like Valero and Tesoro and Big West, have only one chance to make a profit and that’s to refine thatexpensive crude oil coming in from offshore sources. The stock of these refinery companies have seen recent disastrous stock performances of companies that try to focus only on refining.
Offshore crude oil production is driving the profits of Chevron, bp, Shell, and Exxon and the 7 foreign countries that dominate the crude oil production. It’s the cost of crude oil that causes the cost of gasoline to rise.

According to the California Energy Commission’s (CEC) Integrated Energy Policy Report of 2007, the 14 California refineries are only producing about 90% of the gasoline needs of our 37 million citizens, with 3.5 million gallons of gasoline per DAY being imported from foreign countries to meet the current demand.

To make matters worse than our dependency of foreign crude oil for our refineries to process into usable gasoline and diesel fuels, we are growing more and more dependent on foreign refineries to process crude oil for our gasoline and diesel fuels needs.

According to the California Energy Commission’s (CEC) Integrated Energy Policy Report of 2007, the 14 California refineries are only producing about 90% of the gasoline needs of our 37 million citizens, with 3.5 million gallons of gasoline per DAY being imported from foreign countries to meet the current demand.

There is some hope that alternative fuels, like ethanol, and/or more efficient cars will lessen our growing dependency on foreign countries for our gasoline and diesel needs. The CEC however, is projecting the CA population growth over the next 20 to 30 years will far exceed any potential contributions from alternative fuels and/or energy efficient cars. Population growth, per the CEC, may grow further to 60 million by 2050.

In summary, the cost of crude oil from foreign countries is the major cost of refining into usable gasoline and diesel fuels. And now, the trend is to rely more and more on foreign country refineries to refine the crude oil into the usable gasoline and diesel demands of our growing population and the USA gets the opportunity to compete in the world market not only for crude oil, but for our gasoline and diesel needs.

Pricing Forecast Note: The Goldman Sachs Group has projected crude oil to rise to $200 in the next 2 years (http://www.prisonplanet.com/articles/may2008/050608_bilderberg_target.htm ). As the cost of the crude oil going into the few refineries that remain in the USA, the raw material costs will be passed through to the consumers of gasoline refined from the crude oil. As crude approaches $200 a barrel, gasoline will most likely approach the range of $6 to $8 per gallon.

Todd,
Oil is priced at $135/barrel because it is bought and sold on less than 10% margin. On May 6, 2008, the CFTC, Commodities Futures Trading Commission, raised the margin from $8,500 to $9,500 so the regulatory agency responsible for volatile commodity markets acknowledge their is a problem. The CFTC is composed of 5 commissioners, all appointed by the President [confirmed by the Senate], and they serve 5 year staggered terms. The CFTC can change the rules of trading to require 100% or more margin. That measure, raising margin to a full 100% in 1979, killed the runaway silver market brought on by the Hunt families’ attempt to corner the silver market. Silver crashed. A similar measure or even going further by only allowing selling of long positions would send the oil market to $70/barrel overnight. Their are other commodity exchanges in the world trading oil, but they would quickly raise margins also. To suggest that speculation is not the cause of high oil prices such as T. Boone Pickens did last night on Glenn Beck’s show is kindly,”disingenious”. What is absolutely astounding to me is that so few persons with a forum, e.g. Bill OReilly, Glenn Beck, Congress, understand this and don’t know the questions to ask of oil executives or the CFTC. There are so many agendas, e.g. oil cos. want to drill in ANWR, costal Florida, East Coast, that in addition to huge profits they want to keep oil high so the govt. agencies, state and federal will relent and allow them to drill in those areas. The big mistake was allowing oil to be traded on the commodity markets. That was in 1983. Oil is a non-renewable, essential resource. Our social and economic structure is dependent on oil at a stable and manageable price. A radical increase in the price, as we are currently experiencing, can’t be accomodated rapidly without some economic chaos. The CFTC can fix this. So why don’t they? Well, I wasn’t a believer in “to the victor go the spoils” but allowing a federal agency, the CFTC, to go without significant action by the Bush administration, speaks volumes. The oil business is receiving windfall profits and they should be taxed heavily. T.Boone Pickens said that would be punishing the shareholders. Wrong. The dividend hasn’t gone up with the huge profits. I own oil stocks. I would like OBama to suggest he wil examine the CFTC’s role in the high oil prices. If he merely suggests this, he can capture middle America. Of course, this will be after the oil price has fallen to $70, just because he “suggests” he will visit the issue. If you have a forum, ask Walter Lukker, acting chairman of the CFTC, why he hasn’t gone to 50% margin at least. If you don’t know about oil in the commodity market, please email, and we can go over the topic. You can also call up any brokerage firm which trades commodities and verify my history. Everybody just seems to blabber supply/demand, war in Iraq, etc. Its like a mantra. We have the mechanism in place to fix the problem temporarily. I understand the long term issues, e.g., we need 50 nuclear power plants to go 85% electric to sustain our social and economic structure. In the meantime, we need $70 oil.

Who’s to Blame? Congress! We have plenty of oil right underneath our feet. Alaska is just waiting to be tapped. What does Congress do? We want to sue OPEC and reduce CO2 emissions. Good one. Tapping into Alaska is the key to reducing our dependency on Foriegn Oil and reduce ridiculous gas prices.

And who is to blame. I see Rice on CNN and Bussh at the white house saying it is our addition to foreing oil but let me ask you this. Hw much oil do you think his war is costing us?

I’m surprise, everybody talking about oil price and lack of oil. Nobody mention the day when the oil not exist anymore!!!
What will happened with our world, our globe. Earth cracks and more ?
Just try to think the earth are a giant chock absorber, like you have in your car. Replace the oil with water and see it’s going, it will never work. Put that in perspective to the earth, the oil take up the chock wave of all earth cracks around the globe. When all oil is gone, what will then happened? I tell you..the earth will one day just explode in million of peaces or in best case, we will have the same disaster all over the earth like we seen in Chine, but now it will be most every week or maybe day. We know there are hundred of earth cracks every day around the world, every 12 hours, most of them we don’t even know it happened exempt the Government watch dog around the world.
But the big earth cracks and Burma disaster will appear more often because of the lack of oil inside the globe, who protect the world.
And to the end, we the western world don’t want the Muslims to control the world, but they in fact do it via the most important part of our need, the oil. The US currency hit the low against any other currency, and the Arabs don’t want anything else than USD. If we may
convince the Arabs to accept Euro instead, the oil price may keep a
lower price. Nobody even mention the profit some people gain because of the down USD, change the price tag on oil to Euro and let the USD sail it’s own way. The will one day come down to earth and do the right things for the rest of the world, not only to profit for the own pocket.

People, please,
GM, Bush/congress,CARB/Allan Loyd,Texaco/Chevron, killed the best chance to meaningfully reduce our world wide consumption of oil back in 2001. They had in the palm of thier hands, the world’s first truly successful electric car that would have been a major step forward in reducing the loss of our precious black gold. Ask yourself, what do we need to do? Many have written here about a miriad of potential and who, what, where, why, but honestly, we were set up a century ago for this fall and by God the reality of greed and power have finally stepped up to kick us in the bag.

If better than 90% of the world’s population could drive to work less than 50 miles per day, without using ONE SINGLE DROP OF PETROL, then why in the name of good common sence would any one NOT go for that? Imagine that, there would likely be enough oil for another century or more for the thousand million big rigs, busses, trains, planes, tanks, helicoptors, boats ships, construction vehicles, not to mention the BILLIONS of goods and services world wide, that will always depend on OIL. And, at the same time reduce emissions by 75% or MORE world WIDE.

GM the only US auto manufacturer to honestly build a true ZEV with next to no problems in several years of leased driving of over 1000 vehicles, was esentially forced by smart legislation in the late 90’s, mandated by the California Air Recources Board/CARB which stated that no auto co. may sell cars in California, unless they produced at least 10% of thier cars sold in Cal. with zero emissions. All manufactureres were obligated but GM actually did it right with the deliberately little known EV-1. GW, the republican congress, Allan Loyd of CARB and Texaco colluded to kill the mandate and ultimately the EV-1. Bush set up a 1.2 BILLION $ program to research hydrogen, the ….Bush: “Wave Of The Future” scam and viola! Allen Loyd resigned from the CARB and became the director of Bush’ new Hydrogen bait-n-switch. GOLLLLY . GM sold the essential needs equipment of the EV-1 to Texaco and snatched back ALL the EV-1s and crushed them all.

What a short sighted , stupid, greedy bunch of corporate losers. That tech-knowlegy stood to launch GM to the forefront of automotive history with a future of manufacturing profits and prestige to leap ahead of all the rest for an eternity. Not to mention setting the bar for the world’s remaining manufacturers and setting the greatest example for green techknowlegy the planet has ever seen. World wide corporate greed and stupitiy are to blame. We MUST get back to common sense legislation and collective efforts globally if we will ever stand a chance. Stop blaming everyone for now and start making a difference today before it’s too late.

Only way to reduce demand is to increase prices. Why hasn’t any ecomonist suggest countries such as Saudi, India, China and USA reduce the level of subsidies or increase taxes on fuel. This will increase people’s attention on finding alternative energy and reduce fuel consumption.

Do you know it cost 20cent per litre for petrol in Saudi. That’s why just about everyone drives V8 - 5 litre plus size SUV’s to consumes petrol like there’s no tomorrow. Let’s insist petrol by expensive to focus people on reducing consumption. While Im on Saudi. Guess how many solar panels are installed in houses. Virtually zero. Saudi has the most amount of sun light in the world but no one uses it.

I say lets tax petrol more to get the right attention. Problem is that Politicians are too weak to comtemplate this cos it will ruin their chances for re-election.

Aloha: I exspect that with the use of all the generators, and new tent villages in China and Myranma the price for oil will top $150 a barrel before end of June and the price of gas will be about $4:50 a gal. If this doesn’t give the oil companies incentives to invest in both alternatives and new types of ways to produce oil in this country,nothing will.

The average price for a US gallon of unleaded fuel is $3.79 Here in the UK we are paying £1.25 a litre which is $8.99 US a gallon. That is the here and now, 25th May 2008. And the price of fuel is increasing daily. It is front page news in the UK. Our economy has not collapsed but things are tough.

We don’t drive the distances you do in the US but on the other hand we have learnt that you can’t drive a car that does 20 MPG around town.
The US is extremely inefficient with fuel, probably because fuel has always been (and still is by the way) relatively cheap.
When your fuel prices hit the $9 a gallon mark I bet there will be a significant improvement in fuel efficiency across all US business, not just domestic car use. That is not a bad thing, the US has been the biggest polluter in the world for too many years, it’s about time you as a nation took responsibility for this, and it would appear that the only way to focus attention is to hit the consumers hard, where it hurts, in the wallet.

I don’t think blaming anyone in particular is of use - it does not solve anything and it provides little, if any, relief. We should instead focus on our needs as a global community, say maybe a Six Sigma project or the kind headed up by the U.N., to get more minds working towards alternative fuels and establishing guidelines for smarter use of energy.

For us Americans, and please forgive this next wide brush, but we have been raised in the general terms of “To be big, you have to live big” - of course some of us take that literally as we start to choose sweatpants over jeans. We must come to the realization as a nation that we have become complacent in some aspects of leading by example and being a good neighbor to the global community. Even with all the bad press we generally receive these days, people still look to our nation for an example, and people still come here to visit and/or live. Unfortunately, it usually take a major negative impacting event at times to rouse us as a nation to move in solidarity. We should have been acting quicker once we saw our allies in Europe dealing with higher fuel prices; only now is our nation waking to this reality and waking up pissed about it. Is it too late for us to band together and deal with the larger issue of our energy consumption and how to live/work smarter with our resources so that we are not impacted in the future? Can we band together with our global community to take these issues head-on?

So where do we start? Can us in the trenches do it? Do we have to rely on our government? Can we rely on them?

At this point, I have more questions than answers. And I was originally going to close with a smart-aleck comment like “Well, I’m off to drive my H1 Hummer while walking my dog and choking down a ‘Big Mac’!” Or something like that, but now I’m actually thinking… and that is really dangerous… the monkeys in my head have stopped swinging and are now writing on the chalkboard ideas on what I can do to help. Great - just great.

I beleive that We ,the “people” can change or better the situation by
boycotting major oil companies such as Shell or Exxon for say…a week.
Have The USA top oil brass , sit down with our Canadian freinds and
Hugo Chavez to negociate and ask for help.There is no shame in asking for help when you need to.

Johnny

I follow the price of oil just like eveyone else and am also concerned. I can’t and won’t place the blame on china. How can we begrudge a nation the same benefits of developement as we ourselves have enjoyed.

I am a united states citizen living in Norway and have some experience of life on both sides of the atlantic. I am also concerned about rising prices at the gas pumps but, I am able to put it in perspective. The reports on cnn are very good and not biased but, at the same time they give a very distorted account and maybe help feed the panic.

In Norway gas is about $2.35 a liter. That is about $9.00 dollars a gallon. It sounds astronaumical but, the key is that you have to compare it against earnings. Most laborors is Norway have about $32.00 an hour in salary compared to $13.00 an hour in the United states. This is equivelant to approximately 1/3 of the hourly wage.

The only differance is that in Norway and other european countries, you get something back for that money. Much of what we pay in taxes goes to subsidize socialized medicine, schools, roads etc. In Norway the oil money makes it possible for Norwegians to live a life free from worries of medical insurance and other major concerns in the United States. Norway and other european countries have excellent public transportation. It is not only affordable but, it is reliable and very encompassing. It is possible for europeans to take a bus to work, school, shopping etc.

I, as a housewife, am concerned that I have to pay $1.50 lb for potatoes or carrots. It bothers me that everything in the grocery store has gone up. Right now it has not impacted my household substantially. I admit that I think twice now about some of my purchases and that I have started switching over to generic brands in some areas. We’ll get through it. We’ll just have to cut back.

There are countries out there that have it worse. They have to pay more than 1/2 their hourly wage for a liter of gas or diesel. We need to stop panicing because it makes the situation worse.

The most irritating thing about this is that it seems the people that are complaining the most are the ones living a lifestyle that is excessive to begin with and they are unwilling to make changes or cutbacks. How can someone complain that $4.00 a gallon is going to cause them financial ruin when they can still afford to eat at Mcdonalds, Burger King or pizza hut! Maybe they are afraid they won’t be able to afford the drive to costco’s to get their 4 20lb bags of rice before the shortage reaches a crisis.

Let’s put things in perspective here. Maybe the word crisis needs to be defined better. Crisis is what is going to happen to the people in myanmar and china. Crisis was what happened to people in New Orleans after hurricane Katrine. Crisis is not $4.00 a gallon in gas.

So, seeing the US was able to curtail the rise in the cost of a barrel of oil back in the mid-80’s by starting the ’synthetic’ oil projects, why do we not pursue that option again?

All I have to say is that I can go out and buy more gasoline that the store can supply if I had the money… If there was a shortage, it would mean that we are limited to buy only a certain amount if our consumption is greater that the production output (but go down to your local gas station and buy 2000 gallons… you can buy it if you have the money!

Seriously, the reason oil is going up and not going down are a few things. One you must be a moron if you don’t realize who controls the majority of our (USA) oil supply. Oil tankers sitting of the coast taking advantage of risi