Comments on: Analysts Ponder If Oil Bubble's Burst

Oil Recorded Another Drop Friday, Placing It Almost $20 A Barrel Lower Than Its Peak

[starleo146]

The deal just taking shape between Iraq''s Oil Ministry and four Western oil companies raises critical questions about the nature of the U.S. invasion and occupation of Iraq -- questions that should certainly be addressed by presidential candidates and seriously discussed in the United States, and of course in occupied Iraq, where it appears that the population has little if any role in determining the future of its country.

Negotiations are under way for Exxon Mobil, Shell, Total and BP -- the original partners decades ago in the Iraq Petroleum Company, now joined by Chevron and other smaller oil companies -- to renew the oil concession they lost to nationalization during the years when the oil producers took over their own resources. The no-bid contracts, apparently written by the oil corporations with the help of U.S. officials, prevailed over offers from more than 40 other companies, including companies in China, India and Russia.

[daysrnumbrd]

Publish a story about what Obama or McCain supposedly said, and you''''ll have cockroaches all over the board. Talk about oil prices and... amazingly, things remain a tad quiet.

We are exporting our economy, dollar by dollar, to the very countries that would be the first to step up and kill us to a man if given the opportunity.

Our response is to... just be quiet.

Posted by sincityq at 05:11 PM : Jul 19, 2008
.............

For many, it may just be easier to parse one''s words than to intellectually view the the macro economic situation facing this country. Sadly, too many people confuse their own micro-economic world to the larger macro-economic situation that is currently, adversely affecting our country. With that confusion and/or lack of economic understanding, it is easy for some to feel disenfranchised by stories like these. Thus, it is easier to argue about political stories, parsing the words of the candidates, as I had earlier mentioned.

[slim1h2o]

starleo14672 at 05:31 PM : Jul 19, 2008

The one thing they don''t really control;,, is demand.
And we should demand that we take over the energy system. We can no longer afford to have our national security at the whim of some oilarchy, and wealthy CEOs.

Our lives could depend on it.

[starleo146]

And let''s remember that this is what countries around the world are doing. They''re using this moment of high oil prices to invest in alternative energy and alternative infrastructure. The way to make solar and wind work, you know, is not just to do venture capitalism for startup solar and wind companies. These companies need major investment, need states to make major investments in infrastructure that can carry these new energy sources, new grids. This can only be done by the public sector. And this is actually a moment of opportunity, when there is such high prices, when people are so angry at the oil companies, to actually take some of this money and invest it in the public sphere, so that alternative energy becomes viable.

[starleo146]

What''s actually going on is the oil companies may not even bother drilling. What they''re doing is they''re stockpiling leases. And what that means is that the oil companies will have a much greater control over the oil supply. When the oil companies have a much larger control over the oil supply, they can turn it on and off. They can control price. They can fix the price. So, in fact, what this is doing is the opposite of what they''re saying. It''s actually giving the oil industry much more power to drive the price of oil up by controlling supply, by just giving them all of these leases. And we keep hearing, well, they have all these leases already, and they''re not using them, and they want more. Why? Why do they want all these leases? Because that is what gives them control over supply. That''s what allows them to fix prices.

[nordeck52]

Quite funny how few comments there are here. It seems to me that whenever there is a positive story, people don''t bother to comment as much, or even care, but when it''s a negative story, people jump off the deep end and comment like crazy. Such bias.

Kinda like how the only climate change news that gets reported by our ever-so-biased media is the human-caused global warming alarmism. You never hear anything about the skepticism, other than to write them off as lunatics and blind fools ignorant to the so-called truth. The witch hunt concerning climate change has got to stop.

As far as oil prices are concerned, I wouldn''t get comfortable just yet. The worst tends to happen when people get too complacent. Best to be ready for anything.

[starleo146]

we heard this just now from President Bush -- it was, we need to drill offshore to get away from our dependence on foreign oil, and there is still an overwhelming perception that most of the oil in the United States is coming from countries like Saudi Arabia. There has been, since the invasion of Iraq -- and this is the period where the price of oil has skyrocketed -- this has already changed. The number one supplier of oil to the United States is not Saudi Arabia, it''s not Mexico -- it''s Canada

[samthetvcat]

pt 1

---"Also, Americans reduced their driving and fuel consumption over the summer enough that the tourism industry took a big hit. Yet some want to claim that we still had a supply problem? Yeah, right."---
Posted by buttonjockey

I''ve read some analysts reports, and that''s apparently what''s gotten them collectively so wigged out - the fact that there ARE limits to our insatiable demands for oil such that we''re willing to make long-term investments to change our consumption habits.

They''re also wigged out because the economy''s become stagnant, which means less demand on that front too.

The thing is that when prices go down, consumption always goes up such that there''s like a cut-off point of what people are willing to put up with, but there''s also a boundary demarcation on the low end such that when it gets cheaper people start to buy again. People aren''t giving it up for good, because greater access means greater convenience (?)

Okay, so like wouldn''t that mean that once we figure out that lower boundary which when hit drives up demand, we''ll have a lower bound and an upper bound and we''ll probably bounce around in that price region until we break out of the period of stagflation, but that shocks will tend to push gas prices into the upper regions, with a cumulation of a series of shocks or big shocks being the wildcard that most fund managers really aren''t COUNTING on as part of their investment strategy.

[samthetvcat]

pt 2

We don''t yet know where the lower boundary is, but isn''t there like a ''psychological shift'' when the costs of a barrel of oil trickles down to gas being less than $4 a pump (?) What was the price of a barrel of oil last time that happened - that may be the lower limit . . . and if limits can be set, isn''t that a short-seller''s dream? Maybe rather than speculation the hedgers''ll start to short-sell and there''ll be more volatility?

But over time, wouldn''t you expect the upper and lower boundaries of what prices alter consumption behavior to shift as demand grows abroad and the economy grows at home? As a long-term investment, oil still seems like the best bet in town, wouldn''t you think?

Anybody else have any areas they''re keeping an eye on?

[starleo146]

And not only have companies like BP and Texaco been offered these no-bid contracts, but what''s strange about it is that they''re service contracts, and these are not oil service companies. So what''s significant about these contracts is that they appear to be giving these oil companies the right of first refusal on future, more significant contracts. So, one week after these smaller service agreements were announced, the Iraqi Oil Ministry announced that they also will be handing out longer-term management agreements, which will give oil companies the ability to manage existing fields in Iraq and hold onto 75 percent of the worth of those contracts and leave only 25 percent for Iraqis, which is absolutely unheard of in the region, where 51 percent for the country is the baseline for new exploration, for new fields. These are existing fields. They''re already working. The technology is already there. And these foreign companies are going to be taking 75 percent of the worth of those existing fields in Iraq. So it''s daylight robbery. It''s armed robbery, actually.

[starleo146]

I think we''re seeing the Bush administration in its final months just handing out a series of gifts to the oil and gas industry, both at home, pushing for opening up the Arctic National Wildlife Refuge, and then in Iraq, the prize, the biggest prize of all, which is allowing foreign multinationals to gain control of Iraq''s oil fields. And we''re seeing a two-stage process now, and it isn''t over yet, where first there was the service -- the short-term service agreements, no-bid contracts, that were announced. They haven''t been signed yet, but they''re going to the big oil companies that were kicked out of Iraq in the ''70s. They''re coming back.

[starleo146]

Well, first of all, I think it''s really important for people to understand that we are being subjected to an incredibly aggressive media campaign sponsored by the oil and gas industry. And, you know, it''s to the point where it really is impossible to tell the difference between the paid advertisements, which we''re being bombarded with on cable news from the oil and gas industry, talking about how they can solve the problem of high prices with more drilling, and all of these commentators, from Larry Kudlow to Sean Hannity, repeating these talking points, and not to mention *** Cheney, who just propagated a complete lie, saying that China was drilling off the coast of Cuba, and the Vice President''s office actually had to retract that. It turns out his source was George Will, who also had to issue a correction. China is not drilling off of Cuba. And so, there''s a very aggressive campaign going on.

[rudy2281]

"peak oil is a liberel hoax"
If memory serves correct, it was a centrist administration that pulled off the greatest economic recovery of the 20th century 92-2000. We had a surplus at the end of 2000, people were coming off welfare, unemployment was extremely low. Now we''re so far in the red and down in a hole that air has to be pumped down. Our foreign relations are in a shambles, the ME is a mess, the economy has nearly tanked and a few folks who must be a few cards short of a deck still blame ''liberals'' for all of our problems.

The extremists in this country have caused a host of problems and hopefully, the thinking center will get a grip on things and put us back on the right track.

[jydavis1]

oil will be back to $2 a gallon by mid 2009 - all election year/speculation stuff - guaranteed.. peak oil is a liberel hoax to divert tgaxpayer money into other technologies that don''t work

[clc811]

bush is finally doing some of the things he should have been doing for the last 7 1/2 years, must be an election coming up and mccain promised to keep him out of prison !

[txgrouch2006]

BTW, don''t forget to SELL ALL YOUR OIL COMPANY STOCK before the oil industry crashes when the bubble bursts.

[txgrouch2006]

Here''s the good part - the sooner people realize it''s a bubble, the sooner it will BURST when buyers refuse to pay the inflated price anymore.

That will cause the price to fall sooner, and cause a sooner end to the harm to the economy from the high price.

[buttonjockey]

: President Bush lifted the Ban on drilling for Oil.
: That sent the Oil Market plummenting.

Ridiculous. The problem is the bubble that the analysts already have talked about and that it may be popping. It''s a bubble, not a supply problem. Bush did nothing of any effect. The U.S. stopped being a swing producer of oil in the 1970s. You can''t manipulate the world markets when your ace-in-the-hole is less than 2% of the world potential.

Also, Americans reduced their driving and fuel consumption over the summer enough that the tourism industry took a big hit. Yet some want to claim that we still had a supply problem? Yeah, right.

We should keep our oil in the ground and be one of the last countries on earth to have it because in 20 years we might find out that the biggest military on the planet is useless if it sits idle on the runway.

[elz523]

President Bush lifted the Ban on drilling for Oil. That sent the Oil Market plummenting. Just imagine if the Democrats and Obama jump on this opportunity and start drilling while simultaneously investing in alternative energys. Look at France they have nucleur power and there doing fine.

If Obama and the democrats do not change there position, we will be living a Jimmy Carter era with Obama as President.


--------------------------------------------------------------------------------

Posted by Obama8years at 09:48 AM : Jul 19, 2008

Yeah I am sure Bush''s oil friends, who are holding he country and world hostage so that they can get drilling rights, will lower the cost of oil at any sign they are getting their way, but that doesn''t make it right. Let''s let the next Congress and President make these decisions. Let''s not let Bush and his friends manipulate the country one more time so they can line their pockets.

[rudy654-2009]

But the Bush administration told us repeatedly that no speculation was involved in the oil price run up!

Is it possible that the Bush administration is stupid, lied, or both?

Could it be?


--------------------------------------------------------------------------------

Posted by jmurrieta1 at 07:36 AM

Exactly!