bmacleod
Posts: 2498
Joined: Sat Aug 25, 2001 3:10 am

Oil Closes At $80

Wed Sep 19, 2007 2:30 am

Yesterday crude oil closed at $80 after briefly hitting $81 and some analysts are saying it will hit $100 by next year. Here in Canada that should work out to 1.50-2.00 per litre of unleaded gas. In the U.S. 4.00-5.00 a gallon.

This combined with the housing and credit mess could result in a big crash on Wall Street leading to another Depression?
The engine is the heart of an airplane, but the pilot is its soul.
 
cfalk
Posts: 10221
Joined: Mon Dec 04, 2000 6:38 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 2:43 am

Quoting Bmacleod (Thread starter):
This combined with the housing and credit mess could result in a big crash on Wall Street leading to another Depression?

It'll put the brakes on a bit, but I would hardly call it a crash. The real estate market will be a bit slow for a while, and will recover like it always has - particularly if rates are brought further down. Sky-high oil prices will hurt a few specific industries and maybe force them to restructure faster than they might have wanted to, but will not be damaged long term. People will still need to drive and fly.

The only thing that can cause a depression today is the media - just as happened in 1929. There was nothing technically wrong with the markets back then - a tiny liquidity crunch in one bank snowballed into a huge one affecting everyone due to sensationalist reporting and a mob mentaility. If the media can convince enough people that the sky is falling, we can have another crash, but it would again be the result of a stampede mentality overcoming all reason.
The only thing you should feel when shooting a terrorist: Recoil.
 
trekster
Posts: 4319
Joined: Fri Dec 26, 2003 2:47 am

RE: Oil Closes At $80

Wed Sep 19, 2007 3:08 am

Just been reading 2 books, one on Easyjet, one on Ryanair.

Both talking about the early days, when the airline industry was talking about the end when it hit $30 a barrel, now were on $80
Where does the time go???
 
N1120A
Posts: 26467
Joined: Sun Dec 14, 2003 5:40 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 3:57 am

Quoting Cfalk (Reply 1):
The real estate market will be a bit slow for a while

The real estate market has already been slow for a while.

Quoting Cfalk (Reply 1):

It'll put the brakes on a bit

The brakes? The foot hasn't been on the accelerator pedal for quite a while.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
Emirates773ER
Posts: 1318
Joined: Mon Jun 27, 2005 9:10 am

RE: Oil Closes At $80

Wed Sep 19, 2007 4:18 am

Quoting Bmacleod (Thread starter):
This combined with the housing and credit mess could result in a big crash on Wall Street leading to another Depression?

It will hurt the american markets but not the canadian ones, with alberta being the future of oil exports the canadian economy is at an all time high, infact the lonnie is now giving the dollar a run for its money.
The Truth is Out There ---- Face It!!!!!
 
User avatar
scbriml
Posts: 13351
Joined: Wed Jul 02, 2003 10:37 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 4:23 am

Quoting Emirates773er (Reply 4):
infact the lonnie is now giving the dollar a run for its money

If the $ goes much lower, Monopoly money would give it a good scrap.  wink  duck 
Time flies like an arrow. Fruit flies like a banana!
 
N1120A
Posts: 26467
Joined: Sun Dec 14, 2003 5:40 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 4:32 am

Quoting Emirates773er (Reply 4):
infact the lonnie is now giving the dollar a run for its money.

Yes, the Loonie is kicking the hell out of the Greenback at this point.

Quoting Scbriml (Reply 5):

If the $ goes much lower, Monopoly money would give it a good scrap.

Pretty much.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
Emirates773ER
Posts: 1318
Joined: Mon Jun 27, 2005 9:10 am

RE: Oil Closes At $80

Wed Sep 19, 2007 4:46 am

Quoting N1120A (Reply 6):
Yes, the Loonie is kicking the hell out of the Greenback at this point.

Yup, pretty close to parity infact.
The Truth is Out There ---- Face It!!!!!
 
dl021
Posts: 10836
Joined: Fri May 21, 2004 12:04 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 4:57 am

What's the price of oil relative to inflation indexing from say 50 years ago?
Is my Pan Am ticket to the moon still good?
 
jutes85
Posts: 1854
Joined: Thu Dec 11, 2003 12:50 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 4:58 am

I think it's time to buy some oil stock.
nothing
 
cfalk
Posts: 10221
Joined: Mon Dec 04, 2000 6:38 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 5:11 am

Quoting N1120A (Reply 3):
The brakes? The foot hasn't been on the accelerator pedal for quite a while.

Good. Growth is best when it is modest. An economy is like street racing - Going flat out for a while may be fun for a while until you crash. Driving more sedately won't be as exciting but is a lot safer, and will get you further in the long run.

Look at all the indicators. Employment is near full employment. While there is a slowdown, it is nothing like previous slowdowns in 2000 or 1992. And if you look at the comparative data, the US economy has outstripped nearly every other major economy in terms of standard of living measures, employment, CPIs etc. over the past decade.

http://frwebgate.access.gpo.gov/cgi-..._indicators&docid=f:00au07.txt.pdf
The only thing you should feel when shooting a terrorist: Recoil.
 
MadameConcorde
Posts: 9201
Joined: Fri Feb 23, 2007 5:08 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 5:11 am

Well better it is 80 US Dollars than 80 Euros a barrel.
I stilll can't understand why the US Dollar was chosen as the currency of reference for crude oil sales.  Confused
Also I wonder what makes it go up so high. Must be artificial?
How much will it be if the US attacks Iran? $100? Higher?
I bet this would be causing great damage to world economies.
Some say this oil price hyke is the will of the Bilderberg group or some other such powerful occult organisations?  Wow!
There was a better way to fly it was called Concorde
 
N1120A
Posts: 26467
Joined: Sun Dec 14, 2003 5:40 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 5:14 am

Quoting DL021 (Reply 8):
What's the price of oil relative to inflation indexing from say 50 years ago?

In constant, 2006 dollars, the price of oil is at its highest point since the early 1980s. Further, the price of oil is more than $40 more per barrel compared to 50 years ago.

These numbers are as of August 2007, when the price was lower.

http://www.wtrg.com/prices.htm
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
rammstein
Posts: 697
Joined: Wed Jul 26, 2006 6:05 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 5:32 am

Today USD/EUR was near 1.40 USD per EUR. Great time for buying new software quoted in USD  Wink

Mac Mini 1.83GHz in USA is 599$, in Italy still 599EUR  Angry
He who wishes to be rich in a day will be hanged in a day. --Leonardo Da Vinci
 
dl021
Posts: 10836
Joined: Fri May 21, 2004 12:04 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 12:50 pm

Quoting N1120A (Reply 12):
In constant, 2006 dollars, the price of oil is at its highest point since the early 1980s. Further, the price of oil is more than $40 more per barrel compared to 50 years ago.

Dollar value, and all other currencies, is not constant. The value of the dollar has been impacted by inflation and other factors over the years. It's well accepted that the value of the dollar has changed significantly since 50 years ago when a dollar bought significantly more than it does now.

Here are some examples:
a postage stamp in the 1950s cost 3 cents; today's cost is 39 cents - 1,300% inflation

a gallon of full-service gasoline cost 18 cents before; today it is $2.28 for self-service - 1,267 % inflation

a new house in 1959 averaged $14,900; today it's $282,300 - 1,795% inflation (+1,510% if quality-adjusted)

a dental crown used to cost $40; today it's $740 - 1,750% inflation

an ice cream cone in 1950 cost 5 cents; today its $2.50 - 4,900% inflation

monthly government Medicare insurance premiums paid by seniors was $5.30 in 1970; its now $88.50 - 1,664% inflation

So...my real question is this....50 years ago what did a barrel of oil cost and what was that dollar worth in true purchasing power compared to now?

What is the 1957 dollar worth today?

Here's what the Federal Reserve Bank of Minneapolis says on their website

"If in 1957
I bought goods or services for $ 1 ,
then in 2007
the same goods or services would cost $ 7.31

here, go check it for yourself if you doubt
http://www.minneapolisfed.org/research/data/us/calc/

Which means that if a barrell of oil only cost $40 fifty years ago that inflation should have driven up the cost (since inflation affects the entire supply chain for the petroleum industry) to..... wait...I'm and English and History major...gotta do math on paper....$40 x 7.31 = $292.40 per barrel.

I'd say that the true cost of a barrel of oil has been subsidized by the incredible amount of government interference in the open market and someone owes all those poor Arabs, Africans and Latin Americans alot of money. We'll leave out the Americans, Canadians and Russians from the oil producers who deserve compensation because everyone knows they don't need the help.


What the hell is everyone bitching about? It's a non-issue that a finite supply of oil is gonna cost more through the years as we use more and more of it up. Ask the Kingdom of Tonga about finite supplies of national revenue producing resources.

The cost of a barrel of oil is going to get higher, and we're going to be economically forced into developing alternative energy tech FASTER!!!

Isn't that what everyone wants? Stop using it as a tool to bludgeon the current administration when evidently the cost of oil has climbed on every administration and will do so faster as we run closer to being out.

Oh..and stop being disengenuous with the arguments. The left is bitching about the cost of oil, and they're bitching about using it. Make up your minds and pick a side.
Is my Pan Am ticket to the moon still good?
 
AeroWesty
Posts: 19551
Joined: Sat Oct 30, 2004 7:37 am

RE: Oil Closes At $80

Wed Sep 19, 2007 3:43 pm

Quoting Cfalk (Reply 1):
The only thing that can cause a depression today is the media - just as happened in 1929. There was nothing technically wrong with the markets back then - a tiny liquidity crunch in one bank snowballed into a huge one affecting everyone due to sensationalist reporting and a mob mentaility.

Yes, there was something technically wrong with the markets back then--it was that the margin requirement was only 10%. When the bubble began to burst, banks which held their deposits in the form of stock market investments lost substantial assets (as did people who bought on margin). (That's the quick and dirty version.)
International Homo of Mystery
 
N1120A
Posts: 26467
Joined: Sun Dec 14, 2003 5:40 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 3:45 pm

Quoting Cfalk (Reply 10):
Employment is near full employment.

In what sense? When you remove the outlying top 5%, the average person earns the same in nominal dollars as they were over a decade ago. Accounting for inflation, that means even people who are employed are earning less in real dollars. Hence, while employment numbers may have been growing for a time (they have gone down, despite predictions of growth) that growth hasn't been accompanied by any more economy driving purchasing power.

Quoting DL021 (Reply 14):

Which means that if a barrell of oil only cost $40 fifty years ago that inflation should have driven up the cost (since inflation affects the entire supply chain for the petroleum industry) to..... wait...I'm and English and History major...gotta do math on paper....$40 x 7.31 = $292.40 per barrel.

Incorrect. Those numbers used constant dollars as to avoid issues with inflation.

Quoting DL021 (Reply 14):

Oh..and stop being disengenuous with the arguments. The left is bitching about the cost of oil, and they're bitching about using it. Make up your minds and pick a side.

No side necessary. Both the cost of oil and the consumption rate are ridiculous
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
baroque
Posts: 12302
Joined: Thu Apr 27, 2006 2:15 pm

RE: Oil Closes At $80

Wed Sep 19, 2007 7:17 pm

Quoting MadameConcorde (Reply 11):
I still can't understand why the US Dollar was chosen as the currency of reference for crude oil sales.

A free carry of who knows how many billion of US dollars, essentially a world subsidy paid the the US. Which was why the US did not want Saddam to go to using Euros.

Quoting DL021 (Reply 14):
So...my real question is this....50 years ago what did a barrel of oil cost and what was that dollar worth in true purchasing power compared to now?

What is the 1957 dollar worth today?

From BP for Dubai crude

1972t1.90
1973t2.83 73 to 74 Yom Kippur war effect
1974t10.41
1975t10.70
1976t11.63
1977t12.38
1978t13.03 78 to 79 the Ayatollah effect.
1979t29.75
1980t35.69
1981t34.32

Prior to 1972, essentially low although the variation was greater than you might expect bearing in mind the seven sister colluded on price with the agreement at Achnacarry in 1928.
http://en.wikipedia.org/wiki/Achnacarry

Also BP
Year Dollars of the day 2006 dollars
1919t2.01t23.59
1920t3.07t31.11
1921t1.73t19.64
1926t1.88t21.57
1927t1.30t15.20
1928t1.17t13.86
1929t1.27t15.05
1930t1.19t14.46
1931t0.65t8.66
1933t0.67t10.49
1934t1.00t15.14
1935t0.97t14.33
1937t1.18t16.65
1940t1.02t14.74
1941t1.14t15.69
1945t1.05t11.83
1946t1.12t11.63
1947t1.90t17.24
1950t1.71t14.39
1953t1.93t14.61
1954t1.93t14.54

I guess you could comment that not even Adolf Hitler or the Ayatollah have had quite the effect on oil prices as GWB!

BP gives data back to 1861 by the way.

The peak - to date
1864t8.06t104.35
 
CupraIbiza
Posts: 547
Joined: Mon Feb 26, 2007 1:55 pm

RE: Oil Closes At $80

Thu Sep 20, 2007 8:41 am

Quoting Baroque (Reply 17):
A free carry of who knows how many billion of US dollars, essentially a world subsidy paid the the US. Which was why the US did not want Saddam to go to using Euros.

The real reason for the Iraq war. I know it sounds very "conspiracy theory", but if you look at all the reasons that have been bandied about, to me this is the most plausible.
Everyday is a gift…… but why does it have to be a pair of socks?
 
baroque
Posts: 12302
Joined: Thu Apr 27, 2006 2:15 pm

RE: Oil Closes At $80

Thu Sep 20, 2007 11:42 pm

Quoting CupraIbiza (Reply 18):
Quoting Baroque (Reply 17):
A free carry of who knows how many billion of US dollars, essentially a world subsidy paid the the US. Which was why the US did not want Saddam to go to using Euros.

The real reason for the Iraq war. I know it sounds very "conspiracy theory", but if you look at all the reasons that have been bandied about, to me this is the most plausible.

Well it definitely beats the "want the oil for the US" theory as even they knew if you want oil for consumers, you BUY it! The residual bit over and above the dollar, is that they probably thought (and may still do, hence the Oil Law the US is complaining about) they could give away a couple of 5 billion barrel fields to their mates or even themselves.

A 5 billion barrel field in 2003 was worth a net 100 billion dollars and would now be worth about a net 300 billion or so, just assuming your friendly neighbourhood insurgent did not blow up the pipelines every couple of days. That could have been tempting. And it might also explain the persistence of the insurgency which has, I have to admit, exceeded my expectations by quite a bit. As in I thought it would be very bad, but really not THIS bad.
 
wingnut767
Posts: 762
Joined: Wed Nov 22, 2006 7:50 am

RE: Oil Closes At $80

Fri Sep 21, 2007 12:00 am

Quoting Jutes85 (Reply 9):
I think it's time to buy some oil stock.

My BP and XOM pay enough dividends to keep my tank full al year.  Smile

Quoting Emirates773er (Reply 4):
It will hurt the american markets but not the canadian ones, with alberta being the future of oil exports the canadian economy is at an all time high, infact the lonnie is now giving the dollar a run for its money.

I recently invested in some of your currency. You have to diversify.
Yakum purkan min shmaya
 
baroque
Posts: 12302
Joined: Thu Apr 27, 2006 2:15 pm

RE: Oil Closes At $80

Fri Sep 21, 2007 7:08 pm

Quoting Wingnut767 (Reply 20):
Quoting Emirates773er (Reply 4):
It will hurt the american markets but not the canadian ones, with alberta being the future of oil exports the canadian economy is at an all time high, infact the lonnie is now giving the dollar a run for its money.

I recently invested in some of your currency. You have to diversify.

Now the loonie has gone past parity. Oil seems quite happy well above US80.

What I want to know is why the Aus $ was at 88 c two weeks before I went to Canada, fell in about 10 days to 78c while I was there and is now back at 87c - all in a matter of 5 weeks. OK, I know the US sub-prime, but apparently the most direct reason for the Aus $ gymnastics was an abundance of female Japanese investors who fled our market due to being caught in short positions and needing cash, but who have now come back, in spades as you might say. What a strange world!!

Who is online

Users browsing this forum: aerlingus747, pu, SOBHI51 and 9 guests