Down with the evil Gas lords. (yes, i am brave enough to post another from myspace)

[Darius871]

This thread just HAS to be archived.

[TCO]

Kaak, from your picture, you seem to have a very small head.

[Kidlicious]

Originally posted by Adam Smith
When demand increases, costs, prices, and profits all go up, no conspiracy necessary.

well, why does your graph show that unlimited supply is possible.

[Kaak]

OPEC believes oil prices are too high: delegate

DUBAI (Reuters) - OPEC believes oil prices are too steep, after setting a fresh record high above $70 a barrel, and the rise is not justified by market fundamentals, a senior OPEC delegate said on Tuesday.

http://cnn.netscape.cnn.com/news/story.jsp?idq=/ff/story/0002/20060418/0512430251.htm

[Lawrence of Arabia]

well, why does your graph show that unlimited supply is possible.

because peak oil is a myth.

[Darius871]

Originally posted by Kaak
http://cnn.netscape.cnn.com/news/sto...0512430251.htm

Wait, I thought your point was that an oligopoly led by ExxonMobil has control from importation all the way to the gas pump, so they can manipulate gas prices paid in America with impunity. Now you're saying they're using their sliver of the world market to manipulate the global price of crude? Which one is it?

[Kidlicious]

Originally posted by Lawrence of Arabia


because peak oil is a myth.

You're great LoA. Never change.

[Flubber]

As a person actually working at a major oil company (not my dad) my view on the the arguments put forth by Kaak

[Kidlicious]

Originally posted by Adam Smith
What is their capacity and utilization?

The utilization could be decreasing because the capacity has increased as of late. I read that there was to much capacity until that Asian Financial Crisis, and that the industry was suprised by such a large increase in demand.

[Kidlicious]

Originally posted by Kaak
http://cnn.netscape.cnn.com/news/sto...0512430251.htm

The Saudis might just be putting out false information. The market believes so. That's why the price is high.

[Kaak]

Flubber, i'm not sure being a janitor actually counts

Darius - it is true that Exxon controls almost a Billion gallons of oil from the time it is in the ground until it hits your gas tank. Which would also make it true that the price of crude doesn't significantly affect exxon's expense for these 1 billion gallons.

However, it is also true that OPEC can look at the oil supply, realize there is a big difference between what the price should be, and what it is, and comment about it. One doesn't really affect the other.

But like i said before, it doesn't really matter to me. If you guys want to continue to be gouged at the pump, be my guest

[Flubber]

Originally posted by Kaak
Flubber, i'm not sure being a janitor actually counts

Nope -- lawyer responsible for joint venture agreements, procurement even some regulatory matters--

I am exposed to lots of things and I can TELL you that these folks don't feel they have any control over price. Projects still aren't getting done that would demand a long-term price of $45. You might think thats crazy given that oil is touching $70 but in the 20 year windows that these people HAVE to look at, it also touched $12.

[Flubber]

Originally posted by Kaak
it is true that Exxon controls almost a Billion gallons of oil from the time it is in the ground until it hits your gas tank. Which would also make it true that the price of crude doesn't significantly affect exxon's expense for these 1 billion gallons.

True that the price oil garners does not automatically increase the cost of extraction. However what HAS happened is that everyone is so eagar to get production on line as quickly as possible that there is a huge demand for the service industries. Rig costs, tubulars, drilling fluids etc are all in high demand and the prices have skyrocketed. Supply boats and helicopter contracts are commanding rates at double what they did a few years ago.

So while the oil price itself doesn't increase costs that much, the exploration and production frenzy of parties wanting to cash in has increased costs by quite a bit. In this cost environment, many oilfields that were economic at a certain price level now probably NEED a somewhat higher price to stay economic

[Kontiki]

Ignoring all the other issues, why do you keep bringing up this 1 billion barrel figure (not gallons, as per your last post) - which is actually overstating Exxon's production a little. Is it that you think this is a significant amount, or that you think everyone else assumes it is?

Oh, and this:

it is true that Exxon controls almost a Billion gallons of oil from the time it is in the ground until it hits your gas tank. Which would also make it true that the price of crude doesn't significantly affect exxon's expense for these 1 billion gallons.

is just insanely wrong. You have absolutely no idea how royalties work, do you?

[Imran Siddiqui]

Originally posted by Kidicious
The Saudis might just be putting out false information. The market believes so. That's why the price is high.

Bingo. And I'm convinced that OPEC is trying to put on a friendly face (as well as slam the US for its talk of invading the 4th largest oil producer in the world). If it wanted to, it could release more oil to get the price to where they think it should be. Though they aren't going to do it.