oil prices

[2952-0-0]

As you can see, oil prices are reaching record highs. Sooner or later we will be seeing a global recession if they don't drop soon. Unfortunately, insurgents are blowing up Iraqi pipelines every week, Nigeria is on the brink of civil war, Saudi Arabia is experiencing social unrest, and who knows what Venezuela will see. And don't forget the Iran nuke crisis!! If this goes on whoever is elected in November faces the difficult task of lowering oil prices.

[shankbear]

Those prices are definitely felt worldwide, not just here.  No president nor any other leader in a net importing nation can do anything about prices.  Well need to drill where there is oil here in this country.  Wherever it is, punch a hole and get it.

[zachman]

I see the President of the next term having to deal with the next big oil crisis. Sooner or later the opposition in Venezuela will try to overthrow Chavez and there will be either an oil strike or a civil war. There is a lesser likelihood that Nigeria will do the same. The Arab block will likely remain a mess and demand will continue to grow in China, India, Pakistan, Indonesia, Brazil etc. I say prices will reach 65 within a year.

[A18]

Alaska

[Wakie]

The simple reality is that China and India are both becoming HUGE consumers of oil.  And the United States simply doesn't have enough oil to meet its needs (even if we were drilling ANWR, the entire Gulf of Mexico, and whole state of Texas).

We need to look at improving our current fuel economy and research alternative fuel sources.

The simple fact is that demand will ALWAYS continue to increase until we have a viable alternative energy source.

[A18]

That's already happening.

Drilling in ANWR will help. Also keep in mind Iraqi oil.

[Wakie]

Drilling in ANWR will not move the price of gas by even 1 penny.  I've posted this before but I'll do it again.

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

The economics of drilling ANWR.

On any given day, the world produces about 55.7 million barrels of oil.  Currently the United States produces 5.9 million barrels of oil per day.  This is roughly 10.5% of the world supply of oil.  Of this, Alaska yields approximately 25% of the oil produced by the United States, or 1.475 million barrels per day.  95% of Alaska is open to drilling by oil companies.  ANWR is the protected 5%.

Statistically speaking, ANWR should yield approximately 77,631 barrels of oil per day.
This raises Alaska's total to 1.55 million barrels per day.
This raises the United States total to 6.5 million barrels per day.
It raises the world total output of oil to 56.3 million barrels per day (or about 1%).

The price of gasoline is set by many things, but it breaks down at these #'s:
Fixed Costs
Production Cost = $0.58
Refining Cost = $0.13
US Taxes = $0.19
Avg State Taxes = $0.23

Variable Costs
Transportation Cost = $0.15
Producer Profit = $0.51
Marketing Cost = $0.05
Retailer Cost = $0.06
Refiner, marketer, transp. & retailer profit = $0.10

Now, let us assume that all oil produced goes toward gasoline (it doesn't, but doing such is actually favorable to the oil companies who want to drill ANWR).  Drilling ANWR should reduce variable costs by 1%.  Or a grand total of $0.0087 per gallon.  Yep, that's right ... less than 1 cent.

[A18]

When you say that 95% of Alaska is open for drilling, I can't tell you how stupid that sounds. They are not drilling at every square inch of land in Alaska.

ANWR is the one SPOT WITH OIL they aren't drilling at. You make it sound as if there's this one spot in Alaska where wildlife is safe.

[opebo]

Drilling in ANWR will not move the price of gas by even 1 penny.  I've posted this before but I'll do it again.

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

The economics of drilling ANWR.

On any given day, the world produces about 55.7 million barrels of oil.  Currently the United States produces 5.9 million barrels of oil per day.  This is roughly 10.5% of the world supply of oil.  Of this, Alaska yields approximately 25% of the oil produced by the United States, or 1.475 million barrels per day.  95% of Alaska is open to drilling by oil companies.  ANWR is the protected 5%.

Statistically speaking, ANWR should yield approximately 77,631 barrels of oil per day.
This raises Alaska's total to 1.55 million barrels per day.
This raises the United States total to 6.5 million barrels per day.
It raises the world total output of oil to 56.3 million barrels per day (or about 1%).

The price of gasoline is set by many things, but it breaks down at these #'s:
Fixed Costs
Production Cost = $0.58
Refining Cost = $0.13
US Taxes = $0.19
Avg State Taxes = $0.23

Variable Costs
Transportation Cost = $0.15
Producer Profit = $0.51
Marketing Cost = $0.05
Retailer Cost = $0.06
Refiner, marketer, transp. & retailer profit = $0.10

Now, let us assume that all oil produced goes toward gasoline (it doesn't, but doing such is actually favorable to the oil companies who want to drill ANWR).  Drilling ANWR should reduce variable costs by 1%.  Or a grand total of $0.0087 per gallon.  Yep, that's right ... less than 1 cent.

Actually this is wrong, ANWR is comparable to the exsisting fields up there - what's it called?  Prudhoe Bay?  Anyway in a best case scenario lets say Anwr would double Alaskas production - a lot more likely than what you just outlined above. 

Of course that still wouldn't make much of a difference in world oil prices - Asian demand growth alone would swallow even a 1.5 million barrel a day increase in no time.

[shankbear]

So let me get this straight....it's not Cheney and Halliburton making the gas and oil prices to go up??

[○∙◄☻¥tπ[╪AV┼cVê└]

That's already happening.

Drilling in ANWR will help. Also keep in mind Iraqi oil.

We were using more Iraqi oil before we invaded Iraq. In case you haven't realized, we've lost control of a lot of Iraq, and that includes a lot of the oilfields

[A18]

In case you haven't realized, you're a stupid piece of sh**t and need to quit pretending otherwise.

You think MAYBE, POSSIBLY the situation could change IN SOME WAY over the next few years?

[Donovan]

In case you haven't realized, you're a stupid piece of sh**t and need to quit pretending otherwise.

You think MAYBE, POSSIBLY the situation could change IN SOME WAY over the next few years?

That is not polite Philip. What did they say to you?

Yes, the situation should change over the next three years, but that doesn't mean for the better.

[Wakie]

When you say that 95% of Alaska is open for drilling, I can't tell you how stupid that sounds. They are not drilling at every square inch of land in Alaska.

ANWR is the one SPOT WITH OIL they aren't drilling at. You make it sound as if there's this one spot in Alaska where wildlife is safe.

Actually no one knows EXACTLY how much oil is available in ANWR because a complete survey has never been done.  This means it could be as much as Prudhoe Bay or as little as relatively oil barren other areas of Alaska.  As I said, STATISTICALLY SPEAKING, ANWR should yield 77,631 barrels per day.  It may be a little more or a little less.  But honestly, it isn't going to change the price of gas buddy.  It is pretty darn sad that you can't leave 5% of a state as large as Alaska alone.

The real solution to the oil crunch is a Manhattan Project on alternative energy.

[A18]

I just said. Way more than 5% of Alaska is being left alone.

You mean 5% of oil spots.

[KEmperor]

The industrialization of China had driven the demand for oil much higher in recent years.  I agree that something will need to be done as the price continues to go up.  The market will eventually adjust to alternative fuel sources if the prices get too high.  There is no need for concern.

[2952-0-0]

Bush is responsible for the war in Iraq and he is funding the opposition in Venezuela. And I forgot about the strategic oil reserves that could lower the price by $5-10.

[MN-Troy]

...Insurgents are blowing up Iraqi pipelines every week, Nigeria is on the brink of civil war, Saudi Arabia is experiencing social unrest, and who knows what Venezuela will see. And don't forget the Iran nuke crisis...

First and foremost, Insurgents are not destroying Iraqi oil pipeline every week. Iraqi oil production is up 78% or 900,000 barrels per day from the end of major combat. Now the Iraq oil production stands at 2.5 million barrels per day. Currently the 'social' unrest in Saudi Arabia has not hindered the oil output in that country and the oil production in that country has risen 1 million barrels per day.

Domestic quarrels in Colombia and Nigeria have been relatively less volatile on the oil production in those countries.

It's hard to speculate where oil prices will be in six months as anything could occur. But a decent speculator in the oil market should take note that oil inventories have risen all over the world. At any given time, the price of oil will fall to more moderate levels.

[Niles Caulder]

As you can see, oil prices are reaching record highs. Sooner or later we will be seeing a global recession if they don't drop soon. Unfortunately, insurgents are blowing up Iraqi pipelines every week, Nigeria is on the brink of civil war, Saudi Arabia is experiencing social unrest, and who knows what Venezuela will see. And don't forget the Iran nuke crisis!! If this goes on whoever is elected in November faces the difficult task of lowering oil prices.

I have to say it...the economics of my fantasy plot seemed to be a little prophetic, if I do say so myself.

I have many musings on this subject, but I can't exactly share them without tipping my hand to the Fantasy Forum government.

But I will say I disagree with His Honor KEmperor that there's nothing to worry about.  I'll also say I hope this thread continues, as it will be a great brainstorming resource for the present and future Administrations and Senates.

[freedomburns]

I read this article on the subject earlier today.  I agree with zachman, oil will rise to $65-75.00 per barrel within a year.

This article was written yesterday by Michael Rupert.

http://www.fromthewilderness.com/free/ww3/100404_we_did_it.shtml

There are many excellent articles on the subject of peak oil on this site.  It might wind up being a really, really huge problem.  Some are predicting serious recessions and worse.  I think we tend to be pretty inventive when the chips are down, if it comes to that.

freedomburns

[Angel of Death]

Thank you for finally mentioning Peak Oil in this thread.

[Angel of Death]

The increase rate of oil prices seems to have become 1 dollar per day. Starting to sweat yet?

[A18]

I for one don't care

[shankbear]

Death Angel, I guess your ilk take glee in seeing oil go up.  You think your bud sKerry could do squat different?  NO!!  Oil is market driven.

[Angel of Death]

Death Angel, I guess your ilk take glee in seeing oil go up.  You think your bud sKerry could do squat different?  NO!!  Oil is market driven.

Have I ever implied that (at least in this case) it does matter who is president?