Oil heading for $100 a barrel

[qtman]

http://www.ft.com/cms/s/0/02ada850-7bbc ... fd2ac.html

Edit by Andrew
Old title surpassed: Oil heading for $90 a barrel
New title: Oil heading for $100 a barrel

[seabhcan]

But what's in Euro? Only €61

This is really due to a falling dollar rather than rising oil prices.

[Ard-Taoiseach]

Yes, as long as the dollar falls eternal, we'll be grand.

[youngdan]

Seabhcan. We had a good discussion a while back on oil. I believe in Peak Oil as I have said. 2 points. The weather is still nice and mild for the time of year here in New England so that bump has yet to come. Also the price of juice is still very low relative to oil at 2.60 a gallon. A sign again of the consumer being tapped out.

[Trasna-na-dTonnta]

Up in Pennsylvannia the price of oil has gone down in the last week oddly enough?!!

[youngdan]

I have allways used my trip for a fill up to gauge the economy. When I see the amount of people buying say 6 dollars of gas you know they have zero money. An attendant once told me you would not believe how often it happens.

[Ard-Taoiseach]

I have allways used my trip for a fill up to gauge the economy. When I see the amount of people buying say 6 dollars of gas you know they have zero money. An attendant once told me you would not believe how often it happens.

but petrol prices are about half European norms in the US, surely that $6 would go a lot further in the US?

[seabhcan]

Seabhcan. We had a good discussion a while back on oil. I believe in Peak Oil as I have said. 2 points. The weather is still nice and mild for the time of year here in New England so that bump has yet to come. Also the price of juice is still very low relative to oil at 2.60 a gallon. A sign again of the consumer being tapped out.

I don't see a global peak oil coming any time soon. But I agree with everything else.

Really what's happening is that the US economy has been run into the ground. Federal borrowing is nearing 100% of GDP. Add in another private borrowing and it reaches maybe 200% of GDP. For an ecomony so indebted the interest rate (bond's and foreign borrowing) is artificially low and set to rise drastically.

Added to this is the hollowing out of US industry = inability to repay that dept long term.

One advantage the US has is that its dept is demoninated in US currency. Thus the US policy is to devalue to reduce the dept. This policy equals increasing inflation and screwing the poor.

I expect to see gas in the US go to 5 or 10$ quite soon, while only rising slightly in Europe. The Dollar will probably fall below 1.60/€ before next summer.

As for Peak Oil - there's plenty of oil, for better or worse. Whats lacking is refining capacity.

[seabhcan]

but petrol prices are about half European norms in the US, surely that $6 would go a lot further in the US?

6$ buys you about 8 litres of petrol (a US gallon is 3.9l)

That amount costs 9€ here (12.58$) but the difference is mostly tax.

[qtman]

This is really due to a falling dollar rather than rising oil prices.

Em, I quoted a dollar price.

How does the value of the dollar effect the dollar price of a barrel of oil?

What is true is that the EU is being shielded from hikes in oil prices, because of the euro/dollar exchange rate.

That doesn't mean that demand for oil is isn't increasing or that oil reserves aren't decreasing.