Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Here's an estimate on the extent of the temporary reduction in demand from China.
Quote:
Chinese officials have reduced industrial activity by as much as 30 percent and mandated cuts in automobile use by half, to safeguard the health of competing athletes.
Oil is clearly back in bubble territory. Its gaining a few dollars per day without cease and for no real reason whatsoever (though they are blaming Libya). Speculators priced in a worst-case Libya scenario when they ran it from $80 to $95. Now it is continuing to rise on momentum only and traders are completely ignoring the fundamentals, such as ample supply and demand destruction in many countries. Barring some sort of unforeseen uprising in a major oil producing nation such as Saudi Arabia, how long will it be before this pops and how high will it go before it reaches tipping point?
I agree. No argument here. The world will NEVER see peak oil because something called the market will replace oil as a transportation fuel when it becomes too expensive..
That's not necessarily so. The market can't replace oil overnight, there is a lag time of at least several years, because of the intensive infrastructure that is already in place, for the production and distribution of oil fuels. In order to "replace" it, first there needs to be a duplication of that infrastructure, to accommodate the replacement energy source, and that is going to cost much much more than you can imagine, and the users of the energy will bear the cost for that.
Until then, oil fuels are going to cost the consumers a substantial part of their life savings, and when the replacement fuels are available to reduce the daily cost of consumption, most families' fortunes will already have been expended waiting out the lag. Assume that $10 gas for five years will mean a payout by the driver of about 15 times, in total, what he is spending this year on gas. Which, at 12K miles @ 24 mpg, about $2,000 a year. So the wait time cost for an alternative fuel will be about $30,000 per driver, which will either be accumulated as debt, or extracted from savings/earnings. Not even counting the transportation costs build into other consumer goods.
And, not even counting the fact that the alternative fuel will cost more than predicted, because the price will need to include the cost of building an infrastructure up front, similar to that already in place for gasoline. That infrastructure for gas had already become so efficient, that even today, a gallon of gas is cheaper than a gallon of soda or iced tea at the convenience store fountain. It's that cheap because the infrastructure is already in place, bought and paid for---drilling technology, site surveys, tankers, refineries, gas stations, and the fleet of a quarter of a billion gas-fueled cars already in your driveways.
Our love for fossil fuels has been a blessing, not a curse. Our quality of life is a bargain, considering how cheaply oil-based energy has been for the past century. It has only become a problem today, after we've depleted the resource. Oil has built a great, leisure lifestyle for us, far beyond what anyone could have imagined at the dawn of the gasoline era, at little cost. Because of oil, you are living in a mansion on the mountain-top. Be content with what has already been bought for you with oil. If you can't be content with it, and must always have more than somebody else, then nothing else will please you, regardless of the cost, and you will spend the rest of your life in the prison of your own selfishness and greed.
The bubble may burst, but the price increases will stick. Lets use diesel as an example, since corps track it, last wk avg $3.97, barrel up about $8 since than, so we should hit post Katrina high of around $4.30 with barrel prices at $113, while post Katrina was $130+ (same $4.30).
Some of the pump price increase = refineries cutting output capability, plus Asia needing more. Same as arilines hiked prices pre oil bubble by cutting supply-grounding fleet.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
