Gas Prices

[nc211]

The reason why OPEC doesn't want to increase production, and will probably cut production, is because they know speculation is really driving the problem, along with a scared fed that is walking on egg shells which is helping the dollar continue it's slide. OPEC doesn't want to enter an era like we had in the late 80's and 90's, where they reacted to supply and demand concerns of the early 80's, only to be burned for the following 20 years. But, we all knew this was going to happen this summer anyway....as the Bush Wackers load up their candy sacks as fast as possible before the door closes. Now congress is trying to spook the speculators out of the market, or hoping to anyway, so they don't have to actually do anything that could screw up their 2pm tee-times at the 19th hole. I am 100% convinced of my Bush administration comments of late. I use his position of "it's supply and demand only" causing these problems, even though the oil producers themselves are saying "no it's not. It only costs us $50 a barrell to produce. We have nothing to do with these prices of today." Heck, they're even worried about the damaged reputation of this situation! They're even saying it's too much and there is clearly a problem outside of the oilfields themselves.

This came out today, thought it was interesting. Even if congress doesn't do anything, stories like these will eventually cause enough concern to cause those not comfortable with so much exposure to take their profits and run, I hope!

"Gas could fall to $2 if Congress acts, analysts say

Limiting speculation would push prices to fundamental level, lawmakers told

By Rex Nutting & Michael Kitchen, MarketWatch

Last update: 4:24 p.m. EDT June 23, 2008Comments: 1255WASHINGTON (MarketWatch) -- The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy-futures markets, four energy analysts told Congress on Monday.

Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said that the price of oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135.

Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters' assessment at a hearing on proposed legislation to limit speculation in futures markets.

Krapels said that it wouldn't even take 30 days to drive prices lower, as fund managers quickly liquidated their positions in futures markets.

"Record oil prices are inflated by speculation and not justified by market fundamentals," according to Gheit. "Based on supply and demand fundamentals, crude-oil prices should not be above $60 per barrel."

Futures trading in London has not been a major factor in rising oil prices, testified Sir Bob Reid, chairman of the Chairman of London-based ICE Futures Europe. Rising prices are largely a function of fundamental supply and demand, not manipulation or speculation, he said.

"Energy speculation has become a growth industry and it is time for the government to intervene," said Rep. John Dingell, D-Mich., chairman of the full committee. "We need to consider a full range of options to counter this rapacious speculation." It was Dingell's strongest statement yet on the role of speculators."

But, it's this stuff below that fuels Wall Street. Not the stuff above. When you have a market driven by fear techniques, you're on a one-way path to a dead end road. Markets are like people...when pushed hard enough and long enough, the "fight or flight" instinct kicks in. Either way, once one path is choosen, it's over. Market chooses "flight", bye bye demand, and all you've got are obligations to buy barrels of oil stockpiling at the docks at obscene prices. If it chooses "fight", the big boys come out to play and settle the scores to a more honest level. Today, those big boys are sitting on the side lines, waiting to see what happens.

"Oil prices rose on Thursday, supported by risks to unrest in producer nations and a weak dollar, after sliding a day earlier on easing concerns about US energy supplies, analysts said.

The president of OPEC, Algerian Energy Minister Chakib Khelil, predicted Thursday that oil prices could rise to 150-170 dollars a barrel during the northern hemisphere summer. "

BUT THE PROBLEM is: Where to next? It's obvious those who are speculating up these prices are trying to off-set their losses sustained by the housing mess, like Citibank at the moment with 10's of billions of write-offs to their CDO investments "subprime junk". If oil tanks too quickly, it can act as a double-wammy to these players, and possibly put them down for the count. We don't want that either. When major financial institutions collapse, it causes even bigger problems. It's my theory that many of these financial houses, are also major financial donors to politicians....see the other string of the web?

The problem is: Where to next?

My guess? Commercial Real Estate. Residential tanked, but commercial fundamentals have remained solid, very much so. Sure, some over fluffed stuff here and there, mostly garbage type property classes. A good example of the strengths in CRE: I counted over 13 construction cranes in the central district of Washington, DC yesterday as we were taxing out to the runway at Reagan. More than I've ever seen before, by far. More impressive, it's an election year. Who knows what the next President is going to do to government funded programs??? Cuts, probably...

[SOMEONE ELSE'S GOT MY NAME]

(knock knock knock) Helo in there ... anyone ready for a dose of reality yet? Here's a recent article from CBS:

http://wbztv.com/national/gas.prices.economy.2.758255.html

It's not WHEN will gas be $7 a gallon, but whether it'll be in a year ... or three. Just like it is already in Asia and Europe allready. Speculators? . . . Saudi Conspiracy? . . .

First ~ for every speculator that makes a ton of money in a hedge fund, there are an equal numper of speculators that loose. Add them all together, and surprise surprise surprise ... they zero out. Oh, but our emotions feel so good when we can blame supply & demand factors on ANYTYHING other than supply and demand. Sure ... it's the speculators.

Second: The Saudi conspiracy ~ Saudi wells have been pumping for over 3/4 of a century. Now, the giant fields are on the decline. Geologists have been saying our current scarcity / supply & demand scenerio would hit ... and the only reason it wasn't even more exact, is because geologists couldn't predict how much demand would increase via China & India.

Eventually, the dose of reality will sink in to the hard core denial crowd ~ that the fossle fuel era is nearing its sunset. And WHAHH ... those in denial won't be able to drive their over powered fuel slugs, like there's no tomorrow ... ever bitching at the growing number of people in the slow lane, to "get out of my way & stop making me go around you".

Even as we enter another month ... July of '08 ... there are folks who sadly predicted, "we'll be returning to $2/gallon gas any day now". Meanwhile, in the world of reality, the global market prepares for $150 a barrel prices.

For those not in touch with reality, it's time to wind your predictions off 'till the next month ... August. Maybe it'll be August that gas returns to $2 ?? Dream on ... we'll see you in August. Hope you have an alternat plan ... you know ... just in case.

[Randy&Bonnie]

..

[Frankie_B]

Another thing to factor in is the strength of the Dollar.

I was just looking at the European gas prices. I was in France last summer, and gas would cost an average of EUR 1.35 per liter (EUR 5.13 per gallon). Today's price is floating at around EUR 1.55 a liter (EUR 5.89 per gallon). This gives us an increase of 15%, when dealing in Euro.

Equivelent dollar prices would be $1.82/L ($6.92/Gal) a year ago and $2.44/L ($9.27/Gal) today, giving us an increase of 34%, which is the sort of increase we've seen in North America over the last year.

What actually worries me is that if this were to continue, and gas reached unsustainable prices (over $2/L or $7.60/Gal), we wouldn't be able to simply follow the Europeans and settle for smaller cars, bicycles, mopeds or buses: the American city concept is fundamentally different than the European: lots of suburbia with little public transportation and vast distances to cover. For the most part, you can't even walk to the local Walmart. Europe, on the other hand, is much more compact and dense, and their public transportation system is much more developed. In Paris, I could easily take the Metro and a train to the Airport, arrive in rather short time and be happy. In Toronto, taking public transit to the airport would take me 2.5 hrs (vs. 30 minutes by car) AND the savings are rather small: I'd only save $2.50. My 2.5 hrs are definitely worth more than that!

Personally, I don't see a feasible alternative to my ES: I can't comfortably fit in a Civic or Corolla, taking the bus would cost me an average 2 extra hours of the day, and I'm not within a walking distance to anything, really, especially in the winter. The only thing I can do is suck up the 30% higher gas bill, and spend less on other things. Which, as mentioned before, will have a ripple effect in the Economy.

[nc211]

(knock knock knock) Helo in there ... anyone ready for a dose of reality yet? Here's a recent article from CBS:

http://wbztv.com/national/gas.prices.economy.2.758255.html

It's not WHEN will gas be $7 a gallon, but whether it'll be in a year ... or three. Just like it is already in Asia and Europe allready. Speculators? . . . Saudi Conspiracy? . . .

First ~ for every speculator that makes a ton of money in a hedge fund, there are an equal numper of speculators that loose. Add them all together, and surprise surprise surprise ... they zero out. Oh, but our emotions feel so good when we can blame supply & demand factors on ANYTYHING other than supply and demand. Sure ... it's the speculators.

Second: The Saudi conspiracy ~ Saudi wells have been pumping for over 3/4 of a century. Now, the giant fields are on the decline. Geologists have been saying our current scarcity / supply & demand scenerio would hit ... and the only reason it wasn't even more exact, is because geologists couldn't predict how much demand would increase via China & India.

Eventually, the dose of reality will sink in to the hard core denial crowd ~ that the fossle fuel era is nearing its sunset. And WHAHH ... those in denial won't be able to drive their over powered fuel slugs, like there's no tomorrow ... ever bitching at the growing number of people in the slow lane, to "get out of my way & stop making me go around you".

Even as we enter another month ... July of '08 ... there are folks who sadly predicted, "we'll be returning to $2/gallon gas any day now". Meanwhile, in the world of reality, the global market prepares for $150 a barrel prices.

For those not in touch with reality, it's time to wind your predictions off 'till the next month ... August. Maybe it'll be August that gas returns to $2 ?? Dream on ... we'll see you in August. Hope you have an alternat plan ... you know ... just in case.

Yep. and my house will continue to appreciate. I better buy this computer now before they double in price. The reality is: we're in a cycle. What goes up, must come down. The theory of hedge funds zeroing out against eachother may be true, as in the realm of market balance. But what do you tell those who are constantly on the losing side, Joe Voter American in St. Louis. The school teacher, the constuction contractor, the single mom with 3 kids who can't fit them into their fancy little eco box and needs that minivan, suv. What do you say to them? Tough sh&t, you're screwed? No, I don't think so. That is the problem with having hedge funds and investment banks using commodities as profit centers. It's way too easy to manipulate with spook tactics, not actaul real, hard, proven evidence. Play the game within industry, but not with life sustaining materials for the average american who lives pay check to pay check. Personally, I hope congress and the legal powers that took down Enron run through these hedge funds like a bowling ball of fire, and finally sets some rules of play.

Explain to me why those who produce the oil, keep saying the last barrell of the day costs us $60 to produce. By the way, it's that last barrell that sets the price, not the first, which ultimatly costs less anyway.

I respectfully disagree with you on this one. But time will tell who's right, and who's wrong. I have never said anything will happen this summer. In fact, if you go back a few pages, I predicted this summer would be the worst by far, then as we near the election, it will ease up. I am sticking to that prediction, 100%.

Otherwise, all elements of economic study in terms of price points, elasticisty of availablity, and about 200 other chapters that have been taught throught our history, just went out the window. This country cannot continue if the poverty line is $100k a year. Taxes would be so high, even the lucky folks like many of us, would be enjoying a nice meal of governmnet cheese on the sidewalks. Supply "capacity" is fine, it's the definition of demand that's out of wack. And will continue to be if nobody, as mentioned before, doesn't get control of who's writing that definition.

Furthermore, as history does repeat itself. Look back upon the major elections of this country in the last 25 years. Mark that time and check the economy of that time.....out...of...whack... 92', 00', 81', 87'. You can't deny the pattern of history there. It's written in stone.

Other country's prices are dictated by where they get their supply. If not, why is gas like .$25 cents in Dubia?

I certainly do agree about the weak dollar! That's a bit of a booger at the moment.

Those scientists, who predict the doom and gloom of fossil fuels. Aren't they the same ones who support these "green" light bulbs? The same light bulbs that have such high levels of mercury in them, that if one breaks in your house, you're too evacuate and call your local EPA to come clean it up. The same ones that if it breaks on your carpet, you're to actually cut the piece of carpet out of your living room and dispose of it at an approved hazmat dump site, which usually are way out in the country, that you have to drive to. And, my favorite: several communities around the country don't even have a hazmat dump site, and can't accept these bulbs. So, what do you think is going to happen to those bulbs when they've burn't out.... Stuffed in that plastic biodegradable trashbag with yesterday's chicken, sent to the land fill, and will most likely seep into the ground. Best hope it's nowhere near a water table... Last time I heard, trees helped scrub carbon from the atmosphere, but nothing helped destroy mercury.

What I'm trying to say, is don't be sold by what's on the front page. The truth is in the back. I think Warren Buffett said it best years ago. He said something like "if I believed the first three pages of a company's annual report, I'd be bankrupt."

[jcrome04]

NC spoken like a true genius. I second that novel right there lol.

And as far as these BS "world-saving" light bulbs. They SUCK! They don't produce effective/decent light, they have to "warm up" and cost 10X more than an incandescent bulb. As far as the mercury levels, you aren't even supposed to BREATHE in the air where it broke for hours upon hours because of mercury vapors.

I think we should all go to our local Walmart, K mart, wherever they sell these bulbs and "accidentally" drop the bulbs and break them IN THE STORE!! and see what kind of a panic this causes. Not to mention the cost for the company to have the haz-mat eco swat team swoop in on zip lines through holes in the roof to save the poor helpless civilians from the life saving light bulbs!!!!

[nc211]

Thanks J' ;)

I don't know man, I guess it probably will hit $7, or worse, before it's all done and said for. I just don't think it'll stay there. It just doesn't seem to add up to me. I read an article in Barrons the other night while waiting for NC jr' to assasinate another diaper about Brazil's HUGE find of oil. Something like 8 billion barrells worth in pretty shallow waters, just a mile or so under the surface. They said they won't be joining OPEC either, which is good for us! I also read about an area 25 miles off the coast of Pensacola, FL called the Destin Dome, which is under the off-shore drilling ban. It's a natural gas pocket the size of like 34 Trillion cubic feet, and has enough natural gas to heat 1,000,000 homes for the next 60 years.

I just think there are so many other avenues that we can take to get off the mid-east's delivery route. Oddly enough, as Bush keeps saying that it's an issue of national security that we erradicate ourselves from foreign oil, he-clinton-bush sr., keep on keeping the rigs out of our own waters. They've been reissuing the same ban document since the mid 80's when Reagan was around.

But, they want more nuclear plants.... That makes no sense to me either. Who in their right mind would choose that route in a worse-case scenario? Especially in today's global environment. That alone is making me rethink McCain. I like him, but I think I have a responsibility to not leave tons and tons of radioactive waste for the next million years behind.

But, you do run the risk of oil spills/accidents.

I don't know fellas... But I'm spooked about it, that's for sure. I do know that if history does repeat itself again with this, the higher the ball bounces, the harder it hits the ground. OPEC knows it too, and I believe they see the writing on the wall of the serious potential of a mega-slide of profits in the future. An oil glut, once Brazil comes on line, and if we decide to start drilling here again.

Eitherway...I gotta' admit, I'm really sick and tired of hearing about it everytime the TV comes on, the radio, the internet. So much ugly stuff being reported these days, I've simply had to stop watching & reading the news shows/sites "other than bloomberg.com", and go outside and play. Humanity makes me sick to my stomach sometimes, especially these days. Some pure evil people on this planet, that's for sure. I wish I knew how to eliminate them all at once, so the good folks could get back to the days of knowing your neighbor's kids names, leaving the door unlocked, and 10 year olds weren't learning about herpes and killing people in graphic detail on the Atari.

I need a beer, and some sleep.

PS: Can't wait to see the "green" light bulb expose' one day on 60 minutes. Some dude saying "Al Gore made me do it." I swear, sometimes we shoot ourselves in the !Removed! to save our shoe laces. I guess I know what happened to Forrest Gump: He's head of the EPA. Stupid is, as stupid does.

[RX in NC]

nc211,

Much as you wish they would, the November elections will not bring oil prices down. They will continue to spiral upwards into 2009 and perhaps even 2010. While I don't like the current $65 credit card fill-up receipts that my wife brings home a couple of times a week, I've been raking in some very serious profits since late April by playing oil options. As long as my charts continue to give me the green light, I'll keep some options money in play in oil and be sure to cash in before Options Expiration Friday rolls around every month. If the global speculators and greedheads can make millions and billions by sticking it to the rest of us, I should at least be allowed to clear a few hundred grand....

[nc211]

They're setting the stage...... Straight from Bloomberg today, and I've seen similar chatter since 4th of July. I think it'll spike again towards Memorial Day before anything serious takes hold. But, just passing along what I'm seeing, you guys think for yourselves on your own opinions, God knows I've spewed mine already (and I'm not budging)! Just remember, these are the same analysts who said (it'll be $150 by 4th of July, and it went up $11 in 5 hours)..... FYI: I bolded the highpoints...

July 14 (Bloomberg) -- Jet fuel's 100 percent rise over the past year to a record $4.36 a gallon is setting the stage for its decline in the next six months.

AMR Corp.'s American Airlines Inc. and UAL Corp.'s United Air Lines Inc. are among carriers readying their biggest cutback in fuel use since 1991 because of the price. The U.S. airline industry plans to ground 413 aircraft, eliminating 8.8 percent of seating capacity, as increasing fuel costs spur losses of as much as $13 billion, the Air Transport Association says.

Fuel demand will fall 7.5 percent this year, or 95,000 barrels a day, and 104,000 barrels a day in 2009, according to the U.S. Energy Department. That will spur as much as a 90 percent decline in the fuel's premium to heating oil futures, said Mike Busby, manager of oil and refined-products trading for Northville Industries Corp. in Melville, New York.

``People are responding to a doubling of prices and the airline industry is one industry that is responding,'' said Edward Morse, chief energy economist at Lehman Brothers Holdings Inc. ``The markets will weaken significantly after the third quarter.''

The decline in airline fuel consumption parallels the drop in gasoline sales to a five-year low as drivers take vacations closer to home and use mass transit. Crude oil declined 35 percent in the three months after Sept. 11, 2001, a time when airline traffic plummeted 30 percent.

Jet fuel, along with diesel, is traded at a differential to heating oil futures because the fuels are made from similar components of crude oil at the refinery.

Jet fuel, a form of kerosene used to power jets, sold for 19.5 cents a gallon more than the heating oil contract in the New York Harbor market today, twice the average during the past five years, according to data compiled by Bloomberg.

The fuel's premium should decline to 2 to 8 cents a gallon by the fourth quarter, Busby said.

Price Decline

The airline cutbacks ``should help bring the price down,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. The current premium is because of ``more than anything the summer demand, the peak demand.''

In 1991, when U.S. jet fuel consumption slid 8.2 percent, crude oil fell 40 percent from a high of $32 a barrel in January to $19.12 by the end of the year. Jet fuel traded at a 1.55 cent discount to heating oil by Dec. 11 of that year, down from a 3.85 cent premium six months earlier.

Lehman Brothers expects crude oil to average about $90 in the first quarter of next year. Oil climbed to a record $147.27 a barrel on July 11 amid rising fuel demand in China and India, and the potential threat of an Israeli air strike on Iran. Airline cutbacks may help send the price to $107 a barrel in 2009, Merrill Lynch & Co. said in a July 7 report.

Demand for oil will be less than half of initial forecasts, increasing by 616,000 barrels a day, because of the slide in transportation use, Merrill Lynch said.

``There is definitely demand destruction going on,'' Sung Yoo, an oil analyst at JPMorgan Chase & Co., said in a telephone interview. ``We could see a bit of a pullback of the entire oil complex after the summer.''

Refiners have operated at an average of 86.4 percent capacity this year, the lowest since 2001, Energy Department data show.

The most interesting part to me in this report is the underlined part about demand for oil being less than half of the initial forecast. If this is true, the oil futures contracts that are running so high today, could easily get spooked by more talk of this nature, causing a dump. Who wants to buy a barrel of oil at $147 bucks, if demand is starting to fade?

[Alexander the o.k.]

But hasn't the bread and butter of speculators pretty much been " There is new unrest in the region as _______ attacked _______ today sparking fears of an unstable supply, or reduced production capabilty in the months to come"... blah blah blah.

It seems that 1 or 2 'news' stories like that, and oops, there go prices again.

The above story, is invariably followed by " Speculators became nervous and drove the price of light sweet crude today to an all time high"...blah, blah, blah.

That is what I used to see every day before I got smart, and turned it off in disgust.

I cannot say what the fundamental cost/bbl is, but it is hard to believe that it can double in 1 year or so. It seems as tho we're plateauing at ever higher, more unfounded levels with each new "news" story in the mid east. There seems to no longer be a connection between production cost, markup, and retail cost anymore. In 2003 oil traded in the $25-30/bbl. range. In 6 years it has quintupled? 500% ?

And what about all of the other oil producing nations? Indonesia, Mexico, Nigeria, Norway, the United Kingdom, and Venezuela, and Russia (isn't Russia one of the largest?) Pretty stable by comparison if you ask me.

So commodity prices seem no longer driven by supply and demand.

They are now "news" driven.

But yet the bulk of oil produced is not produced in the mid east, and we get only a small portion of our imports from them. (Anyone have stats?).

There seems to be a dis-connect somewhere.

[jcrome04]

To a previous post about people "bitching" and driving "over-powered fuel slugs"

Under powered gas-sipping tin cans run on..you guess it.. gas as well as the large vehicles!

This isn't just a problem for 25mpg vehicles. It's also a problem for 50mpg hybrids. (IMO just go buy an early 90's civic)

The world runs on petroleum products. Until a viable alternative is available that is just as effective as oil.... nothing is going to change worldwide.

I still think Airlines, shipping companies, and everyone in the big transportation business should just stop buying gas, go on strike!!!! hahahahah B)

I believe it's something like #1 Canada, #2 Mexico, #3 Mid-East??? I don't know any percentages though.

It's all getting ssssooooooooo ridiculous!

[SW03ES]

You operate on the incorrect assertion that its not worth doing anything unless it will be the silver bullet and fix the problem.

This is just dumb, it makes no sense. I have a "fuel slug" and a Hybrid. It costs me $75 to fill the Lexus up...$40 to fill the Prius. Same range (Prius is more actually). You don't think if everyone drove more efficient cars we would use less gas as a country? If not you need to take freshman math again.

Using LESS OIL is not as good as NO OIL, but the logic you're using which is "if we can't use no oil, we might as well use as much oil as we want!" is tragicly flawed. Less oil is better than more oil!

[nc211]

I do think the world is gaining a valuable lesson with this oil crisis, especially the US. I think demand levels will be lowered for quite some time too. I think this because of the same lesson from the gas crunch of the late 70's, which introduced us to the Datson 210, the Honda Accord, Civic, Mazda 323, etc... The shift then was from the ineffecient Chevy Nova/Malibu/Delta88 type car to the more effecient imports, and it took hold and has lasted for quite some time. Now, with the population boom of the past 25+years, a new version of the import vehicle is being introduced...the hybrid. And I think it will forever change the automotive landscape. It's such an infant technology that I'm very confident time will play in it's favor and only continue to grow. If we could just get the gas engines to just shut off while at the stop lights or crawling in traffic, that would help tremendously!

Match this new technology with Brazil's new 8 billion barrells of oil they just discovered, Iraq's pipelines coming back to the market, and the possibility of the US starting up the pumps again, I'd have to say we could face an over-supply in the next 3 years. In fact, I would almost have to say the sheer idea of the US pumping more oil, considering how much we have, could spook the market enough to stop !Removed! with it. We're one of the main players of the economic balance of the world, which isn't suprising considering we're also the world's #1 consumer. But, that's pretty far out, but it is there. However, I doubt the scholars of the 80's - 90's in the oil business will make that mistake again.

[jcrome04]

I think if something that comes along to replace oil that works JUST as well (maybe hydrogen) that will be fine. But NOTHING is going to happen overnight (new energy source, lower gas prices, etc)

Just look at all this ethanol crap has produced. An inefficient fuel that uses more fuel to create than it produces, and has skyrocketed the price of corn. I think more research should go into more promising lines of development (ie: hydrogen fuel cell. the Honda FCX clarity is a huge step in a new direction)

"This isn't just a problem for 25mpg vehicles. It's also a problem for 50mpg hybrids." -jcrome04

How is that dumb? If you're getting 25mpg or 50mpg you're still paying the same price for gas. Driving a hybrid doesn't make gas $2 a gallon.

Yes it is overall cheaper to fill up a hybrid or any small 4cyl car than a large car, but tiny underpowered cars aren't practical for everybody.

US demand for oil has dropped but other nations (China, India) are picking up our slack.

"if we can't use no oil, we might as well use as much oil as we want!" -SW03ES*

I never said that...come on man seriously.....

Using less oil is a good thing to bring prices down, but as I said before other countries are still using MORE while we use LESS.

As for everything I'm saying these are just my opinions and this is the internet. Feel free to think what you want but please don't put words in my mouth* and take my opinions for hardened fact. Just because we disagree on certain topics like Al Gore, the environment, and human impact doesn't mean you have to bring an attitude into a different thread and call my opinions dumb. You're the Forum Manager.. represent the company. I may disagree with you on a few topics, but I still respect you as a person and the ideas you have, and wouldn't come out calling you dumb or an idiot for an opinion you have. That's what this place is for. To throw ideas and opinions around, and offer help where help is needed. If you have a problem with something I will still try my best to help if I have a solution. Just as I would expect the same from you.

I hope you don't take offense to any of this as none of it is intended to do so. I still respect you as much as any other member on this forum, and would buy you a beer as quick as I would for anyone else, as you have added a ton of helpful information to members of this forum, and have much more to add to it as well.

But if there is any malice I just want you to know there is none coming from me man. Have a good one

[jcrome04]

NC why is everything that comes out of your mouth so perfect? hahahahahahha

I totally agree with that about the 210, civics, corollas, etc...

Just like speaking of "new energy crunch" The FCX Clarity, and some chevy hydrogen vehicle (i forget the name of it) are starting to pop up on the charts.

I think the new hybrids are great and help squeeze a lot of mileage out of engines. But the little one's just aren't practical for everyone. And like the new LS hybrid I'd like to see some more impressive MPG numbers coming out of bigger engine hybrids.

Just think of what kind of technology we will see in only 10years!

I can't wait until the oil starts flowing out of Brazil and these other places. These oil prices are getting ridiculous!!

[nc211]

I think that new Chevy is called the Volt. I think I saw it in an article in Barrons a few months ago. I'm really excited to see what the automotive makers are going to do with all of this hybrid technology. I think we're really in for a treat! To justify the impact of just turning off the gas engine at the light and in slow moving traffic, just check out the Suburban Hybrid. MotorWeek gave it some kind of award a few weeks ago for being one the best and most useful hybrid vehicles available. In all honesty, I'm seriously thinking about buying some GM stock right now, for a longterm investment. It's soo cheap, and you know they're not going to go under. Plus, they've really invested in this hybrid technology over the past year or so.

I'd love to see a company, even maybe the manufacturers themselves, come out with an "adaptive kit" for those who don't have a hybrid, don't want to give up their current car, but would like to enjoy at least some of the hybrid benefits. If Toyota came out with an accessory for 4.7 V8, that cost about $1,000 to buy and have installed, that would allow the engine to shut down/start up flawlessly at the stoplights, and run on just 4 cylinders at cruising speed, I'd be all over it! I think there is a real niche' market there for some smart guys to corner. Hopefully they won't call it the Hurricane, the big brother to the Tornado "Turdnogo".

SWO: $75 to fill up the ES! OUCH! Knowing your business, I bet you're not happy to see the Exxon station across the street 3 times a week!

[SW03ES]

See, its pretty frustrating when people take what you're saying and then use it to make generalizations about you and your attitudes towards a given subject...isn't it?

I find in completely hilarious that things that you're saying

I never said that...come on man seriously.....

Feel free to think what you want but please don't put words in my mouth

Are exactly what I said to you in the Gore guzzling energy thread when you twisted what I was saying and made an assumption that I was a human-hater. Pretty frustrating huh?

I may disagree with you on a few topics, but I still respect you as a person and the ideas you have, and wouldn't come out calling you dumb

You called me anti-human, negative, accused me of being disgusted and loathing the human race, and painted me as bitter. You also said I have a one-track negative mind.

If you can't handle people making judgements about you because of your opinions, don't make judgements about others because of their opinions.

I think I made my point, so I'll drop it.

Yes it is overall cheaper to fill up a hybrid or any small 4cyl car than a large car, but tiny underpowered cars aren't practical for everybody.

I think you have to rework your idea of underpowered. In terms of small, would it surprise you to know that a Prius is in the same passenger size class as an LS and has more cargo volume? The Camry is a very well sized car and comes in a Hybrid.

What I'm saying is companies need to engineer larger cars that get better mileage while at the same time Americans need to figure out that they don't need vehicles as large as they think they do. Why do you need a vehicle as large as an LS for instance?

How is that dumb? If you're getting 25mpg or 50mpg you're still paying the same price for gas. Driving a hybrid doesn't make gas $2 a gallon.

But driving a hybrid makes gas CHEAPER for you, and if everyone drove more efficient vehicles demand for oil would go down and prices would go down. Thats supply and demand.

Using less oil is a good thing to bring prices down, but as I said before other countries are still using MORE while we use LESS.

But what is your point? Because other countries are using more we may as well use more? If other countries are using more and we use more, prices will go HIGHER. Again, supply and demand.

SWO: $75 to fill up the ES! OUCH! Knowing your business, I bet you're not happy to see the Exxon station across the street 3 times a week!

A tank lasts me about 5 days, so I have to fill up about 6 times a month. If I didn't loathe driving thePrius so much, I'd drive it for work...

[jcrome04]

Hey buddy I'm just going to send you a PM since this is obscenely off-topic ;)

[SW03ES]

Its really not off topic:

Yes it is overall cheaper to fill up a hybrid or any small 4cyl car than a large car, but tiny underpowered cars aren't practical for everybody.

I think you have to rework your idea of underpowered. In terms of small, would it surprise you to know that a Prius is in the same passenger size class as an LS and has more cargo volume? The Camry is a very well sized car and comes in a Hybrid.

What I'm saying is companies need to engineer larger cars that get better mileage while at the same time Americans need to figure out that they don't need vehicles as large as they think they do. Why do you need a vehicle as large as an LS for instance?

Whats the answer? If you want to have a discussion lets have a discussion about our viewpoints.

How is that dumb? If you're getting 25mpg or 50mpg you're still paying the same price for gas. Driving a hybrid doesn't make gas $2 a gallon.

But driving a hybrid makes gas CHEAPER for you, and if everyone drove more efficient vehicles demand for oil would go down and prices would go down. Thats supply and demand.

Using less oil is a good thing to bring prices down, but as I said before other countries are still using MORE while we use LESS.

But what is your point? Because other countries are using more we may as well use more? If other countries are using more and we use more, prices will go HIGHER. Again, supply and demand.

This is all very much on-topic. The topic is gas prices, and all of this has to do with gas prices.

[jcrome04]

So Auburn VW up here in WA Decided to do this little comparison with the new Jetta TDI vs. a Prius.

They filled both up, had the Manager of the VW dealership drive the Jetta TDI, and the manager of a Toyota dealership drive the Prius, and took off for a trip to San Francisco.

http://www.auburnvw.com/MiscPage_3

I heard the Prius ran out of gas somewhere around Lake Shasta...or Mount Shasta... Shasta something! haha..

And the Jetta TDI went something like 793 miles and made it into San Fran i guess!! My buddy who got his GLI from Auburn VW told me all about it. I haven't been about to find any other details about it other than that but that's pretty amazing!

I think it was like 50.5mpg on a 15-16gal tank or something along those lines!

[nc211]

The VW probably would've made it to LA, had it not broken down! Hahaha...

The Prius's strength though is in an urban setting, city driving etc. Diesel is the ideal over-the-road fuel by far in general. But, none the less, over 700 miles on a tank is quite impressive! I'd have to fill up the 4runner more than twice to cover that distance! $160+ in today's prices.

FYI: Oil has dropped nearly $20 this week alone... Bush has lifted the executive order of banning off-shore drilling, and the FBI is starting to raid some investment houses for illegal market manipulation. In fact they just raided the HQ of Wachovia Securities today in St. Louis. I'm wondering if perception is starting to take to the stage and we've finally entered into the Fight or Flight instincts. It may spike again for Memorial Day, I wouldn't be one bit suprised, but I think this week has definetely hurt the creditability of the "it can't be stopped" arguement. Especially since stocks have gone down sooo much. In the past, when capital "money" exited the stock side, it went to the commodities side to hide "oil". But this week, both have tanked. Maybe some of that oil money is finally exiting the commodity section (hiding out) and coming back into the stock side while prices are down. Who knows, but it certainly goes to show the influence of the speculator has on oil prices, versus just supply and demand alone. Remember, oil trading is based on the future, not the current. So today's excessive supply doesn't necessarily mean tomorrow's supply will be above demand "for argument sakes", which is what oil trading is all about. Prices at the pump today were set yesterday, not today. And since we just had two+ weeks of record highs, be ready for a bit more of an upward tick at the pump before current prices can get cycled through the market and to our wallets.

But the supply and demand alone guys could form an argument against my case as well. Saying high inventories matched with the current conservatism thinking of drivers could let that high inventory watermark roll forward a few weeks. But, again, it's all about who is defining the future decption of demand. That's the "X" factor. It's been the "analysts" in the big investment houses of late.

[jcrome04]

True my buddies GLI has been in for warranty work probably 5-7 times.

And HIS buddies GTI has been in even more than his, already has a new clutch (his driving mostly lol) and what do you know he's already had his ECU replaced and throttle set-up since his drive-by-wire already went out! lol. And the tech replacing his ECU dropped it on his windshield so now he's getting a new windshield! hahaha but the tech won't do it yet cause he "Doesn't want to write up any more warranty claims for the month" Can you believe that??? hahahaha. He's so *BLEEP*ed about it. I always let them know they should have gone with Lexus instead! Since my 97 LS with +147k miles hasn't had any of the problems they have had, or any problems in general! **knock on wood**

As for the Diesel vs. hybrid I know they slanted the field in their favor since Prius's do better city, but just as you said NC, almost 800 miles to a tank is amazing! Still too bad it's a VW.

I wonder if any other companies are going to try and emulate this "new diesel technology" they have.

[Lexusfreak]

A few of the Japanese's automakers will introduce diesel to the NA market starting next year including Subaru, Nissan & Honda......If Subaru puts their diesel into the new Forester......I think that just we would have to add that to our 'short list' when we replace the wife's car. B)

I'd also like to drive the 2009 VW Jetta Wagon this fall with their new clean diesel.......I don't think I'll drop my hard earned cash on a VW product however because of their poor reliability history in recent years......but want to feel how these things drive as I love the torque & fuel economy ratings of diesels. B)

[nc211]

FYI: Oil has now slipped below the "new base" of $120 a barrel floor! Just another $55 more to go over the next 8 months! The stage is set, keep the off-shore drilling issue on the front pages and on people's minds! I think it'll stay between $110 - $120 for the next several weeks, then after the election we'll see it dump pretty quickly. Especially when most Americans are angry over the quarterly profits of big oil these days, creating a very negative stigma against all oil investors. Furthermore, just because things cost more, doesn't mean tax breaks. Granted, several institutions will have huge negative write-downs to defer tax liability, they also know the american consumer drives the flow of capital. In a nut shell, all other investments will fail too if Joe American can't afford to go anywhere, buy anything, do anything, but sit and wait. No money flows, no profits to be made. So, they'll sell their positions for losses, back off from ramping up chatter of oil costs, and let thing settle back down. Because if everything they have is in the red, they still have to pay taxes on assets. Remember, historical charts show the markets usually dwindle down around the ramp-up towards tax season. People sell to raise money to pay the tax man.

The theory of oil speculators driving the prices will soon be proven if it's correct or not, when quarterly earnings are posted for the financial houses. With slides like these in oil, and more predicted by analysts, I have a feeling deep losses could be reported by investors. That will be the tell-all on how heavy big-house investors were/are tied into oil futures. Funny, anyone heard any chatter lately about oil being $200 a barrel soon? Anyone hearing predictions of $150 barrels, or even ANY price predictions in general? Hmmm...I wonder why.... ;)

I think the worm has turned, at least in perception anyway. People aren't talking about oil prices, but instead about how to fight them. Fight or flight has taken hold, and as America does time and time again, it fights!

[nc211]

Finally, someone who sees this the same way I've been seeing it, and flappin' my gums about on here for the past several months..... This comes from UK's Telegraph newspaper. I think he's off a bit on government causing the credit crunch, but over there, it could be a different ballgame than here. Over here, it's from b/s investment strategies that mimic the Junk Bond era of the 80's. Here's the link,

http://www.telegraph.co.uk/opinion/main.jh...8/08/do0801.xml

But here is the cut n' paste text too. His timing of when prices will dump, is right around when I predicted they would tank too.... Now, it's just a waiting game to see if we're right! But nonetheless, more chatter along these lines can only serve the good of the economy! Shall I dare say, a light at the end of the tunnel is beginning to shine? Iraq turning the corner to peace, troop withdrawl on the table, etc... My my my, we just might be at the very door step of enjoying some of the benefits of the struggles of the past several years! Let's hope so!

"The great oil bubble has burst

By Martin Vander Weyer

Last Updated: 12:01am BST 08/08/2008

Have your say Read comments

Bad news from the Baku-Tbilisi-Ceyhan pipeline - an installation that may not normally draw much of your attention, but which is a throbbing artery of global energy supply, carrying vital oil supplies from Central Asia towards a tanker terminal on the Turkish coast. On some remote, sun-baked plain of Anatolia, an explosion sparked a fire earlier this week, temporarily cutting the flow through the pipeline.

News: Supply gap could mean oil hits $200 a barrel

Ambrose Evans-Pritchard: Government caused the credit crisis

But guess what? Here's the good news: the oil price did not zoom upwards in response, not a blip, barely a flicker. Actually the price of a barrel of crude has been falling: from a peak of $145 in early July, it came down to $117 and was trading yesterday at $120. That's almost a 20 per cent drop in little more than three weeks.

A return to relatively normal oil prices would take the sting out of inflation

If the trend continues into September at anything like the same rate of descent, most of the inflationary spike of the past 12 months will miraculously have been sliced away. This is a dramatic reversal, and it is worth trying to work out why it is happening and what it means.

Just possibly, it means that what investors refer to in shorthand as the great "oil up" story has finally revealed itself not as the fundamental reflection of scarce supply that its adherents liked to claim, but as a simple, speculative bubble that was always going to burst.

The market's conviction that oil prices were set on an unstoppable upswing was underpinned by a set of mantras to be chanted daily before breakfast by anyone hoping to make money by following the crowd: insatiable demand from China; indolent Opec sheikhs unwilling to open the supply taps; that nasty Vladimir Putin playing political hardball with Russia's oil and gas resources; those mad Iranian mullahs hell-bent on nuclear conflict; and beyond all these, the looming threat of "peak oil", the inevitable moment when Mother Earth's carbon-fuel gauge starts pointing towards empty.

One way or another, said the fundamentalists, the only destination for oil prices in the medium term was somewhere north of $200 a barrel. And hooray to that, chorused the green lobby, because it may be the only thing that will ever make us wake up to the need to stop cooking the planet with carbon emissions.

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Layered on top of these long-term factors were the short-term headlines. As a matter of market psychology for the past several years, any news item suggesting temporary disruption of supply - rebel activity around Nigerian refineries, strikes in Venezuela, hurricane warnings in the Gulf of Mexico, Anatolian shepherds lighting their cooking fires beside a leaking pipeline - has motivated oil traders to push prices upwards: sometimes just long enough to turn a quick buck before settling back for the next jump, but always trending higher.

Now the psychological tide seems to be turning. On the supply side, Saudi Arabia, the dominant member of Opec, is now signalling greater willingness to open the oil taps. When the princes of the desert made a rather smaller gesture of willingness in that direction in June, the market took no notice and prices marched on. But in the new mood, any hint of an increase in Saudi supply is a reason to mark down prices.

As for the Russians and the Iranians, the pundits have remembered that even the most externally truculent or internally turbulent of energy-exporting nations can feed its people at home only by selling its natural resources abroad, so must ultimately stay on good terms with its customers.

And meanwhile, five years of rising oil prices have provoked a wave of investment in new drilling and refinery capacity - including the opening up of inaccessible oil sources that no one wanted to tackle when prices were low. Whether it is deep under the Arctic ice-cap or soaked into the tar-sands of northern Alberta, there turns out to be quite a lot more oil waiting to be exploited before we really approach the peak-oil apocalypse. More than that, high oil prices have encouraged rapid development of such alternative energy sources as wind and solar power, and more efficient engine and heating technologies.

On the demand side, a shuddering deceleration in economic activity across the industrialised world is starting to take pressure away. Many economists think the downturn will be deep and painful, and Opec (whose predictions are naturally at the low end of the range) thinks demand for its output could be lower in the early part of the next decade than it was in 2006.

In the motor industry, the talk is of plunging sales of gas-guzzlers, as drivers on both sides of the Atlantic switch to smaller, fuel-efficient cars - or simply cut out non-essential mileage. Even in China, for all the Olympic razzamatazz, a fall-off in Western demand for cheap manufactured exports must soon lead to at least a tempering of growth in energy demand.

Reading these tea leaves, if you are a hedge-fund manager who has spent the past year smugly amassing "oil up" positions in sophisticated financial instruments, you will certainly be trying to get out of them now: hence the sheer speed of the recent falls.

There is a long-running argument as to just what proportion of any commodity price movement can be traced to speculative activity by hedge funds and others, and what proportion to physical demand. But when the oil price swings up or down by $5 or more in a single day, you may be sure that the fluctuation is not being caused by a sheikh on one end of the line arguing with the manager of your local petrol station on the other: it is the financial parasites in between who are moving the market.

Less sophisticated, perhaps, are the more traditional oil players, who have simply been holding tankers full of the sticky stuff offshore while the barrel price was rising. They will now be instructing their captains to steam into port sharp-ish and unload at the best cash price they can get.

And where will that price be by mid-autumn, after a couple more months of gloom-laden statistics from the industrialised economies? Perhaps, with all the speculative fizz taken out of it, down by as much as a half from its June peak. That's not to say it won't go up again when the signals change and all those long-term factors loom large once more.

But for the time being, a return to a relatively "normal" oil price in the $60 to $80 range would take the sting out of the current inflationary surge, and that in turn would allow the Bank of England to contemplate cutting interest rates to stave off recession and help the housing market. Keep your fingers crossed, and keep your eye on how oil traders react to titbits of bad news.

Martin Vander Weyer is editor of Spectator Business

Jeff Randall is away"