U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Economics
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 07-05-2008, 06:27 AM
 
Location: Ohio
21,311 posts, read 15,089,573 times
Reputation: 17742

Advertisements

Quote:
Originally Posted by victorianpunk View Post
It's a "bubble" in that, over time, the price will go down alittle...demand has not gone up 100% in the last year, yet the prize of a barrel has.
It isn't a 1:1 correlation.

Quote:
Originally Posted by victorianpunk View Post
After awhile, reports of demand going down both here and in China will cause the price of oil to fall back to about $100 a barrel. Keep in mind that the price of fuel in China has gone up 20% as the government no longer subsidises it there, so their demand will also go down.
So, um, according to you, planet Earth consists of two countries, the US and China?

Contrary to your false assertions, in 2007 demand increased 1.1% while production declined 0.2%.

1.1% - (-0.2%) = 1.3% Net Decrease in oil supply.

1.3% may not appear to be a large amount, but consider that typically about 85 Million barrels of oil are produced each day.

1.3% of 85 Million is 1,105,000 barrels.

The increase in demand was due mostly to the fact that the UK is now a net-importer of oil.

In the last few months, Malaysia, Singapore and Indonesia have all become net importers of oil, causing to supplies to decrease even more, and Russian oil production has declined 0.9% in the first 5 months of 2008. Apparently you dismiss that as having no effect on prices.

Quote:
Originally Posted by victorianpunk View Post
Keep in mind that the price of fuel in China has gone up 20% as the government no longer subsidises it there, so their demand will also go down.
That's an extraordinarily ethnocentric view and one that is baseless.

The Chinese do not have a "car culture" like Americans do. China uses mostly heavy oils, which are currently selling for $41/barrel to $104/barrel. While they produce little gasoline, they produce a lot of diesel oil, fuel oil, asphalts, tars and bitumens for construction and naphthas and jellies for industry. Even when China refines light or intermediate oils, it does so not for gasoline, but for feed stocks for industrial and commercial use. Don't expect a noticeable decline in Chinese oil use, since most of the oil China imports is exported to the US in the form of trinkets and gadgets for Americans to consume.
Reply With Quote Quick reply to this message

 
Old 07-05-2008, 07:02 PM
 
Location: WA
5,472 posts, read 21,912,192 times
Reputation: 6157
Quote:
Originally Posted by Mircea View Post
...
The Chinese do not have a "car culture" like Americans do.
...
Don’t underestimate the rate of growth in China…

Most of the 1.3 billion people in China still do not own a car but things are changing. There are already 120 million cars on the road in China (There are an estimated 250 million registered passenger vehicles in the United States.)

Car ownership in China has grown by 300 percent in just six years. Sales will exceed 10 million this year, from 8.7 million in 2007. Next to the U.S., China is the world's biggest car market and it ranks third in the global list of largest vehicle producers, behind the United States.

Artificially low fuel prices may keep the market growing at record pace. The Chinese government has kept the retail price of gasoline at about $2.60 a gallon, up just 9% from January 2007.
Reply With Quote Quick reply to this message
 
Old 07-05-2008, 10:37 PM
 
6,342 posts, read 8,957,423 times
Reputation: 3454
Quote:
Originally Posted by cdelena View Post
Don’t underestimate the rate of growth in China…

Most of the 1.3 billion people in China still do not own a car but things are changing. There are already 120 million cars on the road in China (There are an estimated 250 million registered passenger vehicles in the United States.)

Car ownership in China has grown by 300 percent in just six years. Sales will exceed 10 million this year, from 8.7 million in 2007. Next to the U.S., China is the world's biggest car market and it ranks third in the global list of largest vehicle producers, behind the United States.

Artificially low fuel prices may keep the market growing at record pace. The Chinese government has kept the retail price of gasoline at about $2.60 a gallon, up just 9% from January 2007.

Keep in mind that, a few weeks ago, China removed fuel subsidies so the price of fuel went up 20% overnight. If that doesn't slow growth, nothing will.
Reply With Quote Quick reply to this message
 
Old 07-05-2008, 10:41 PM
 
6,342 posts, read 8,957,423 times
Reputation: 3454
Quote:
Originally Posted by Mircea View Post
It isn't a 1:1 correlation.



So, um, according to you, planet Earth consists of two countries, the US and China?

Contrary to your false assertions, in 2007 demand increased 1.1% while production declined 0.2%.

1.1% - (-0.2%) = 1.3% Net Decrease in oil supply.

1.3% may not appear to be a large amount, but consider that typically about 85 Million barrels of oil are produced each day.

1.3% of 85 Million is 1,105,000 barrels.

The increase in demand was due mostly to the fact that the UK is now a net-importer of oil.

In the last few months, Malaysia, Singapore and Indonesia have all become net importers of oil, causing to supplies to decrease even more, and Russian oil production has declined 0.9% in the first 5 months of 2008. Apparently you dismiss that as having no effect on prices.



That's an extraordinarily ethnocentric view and one that is baseless.

The Chinese do not have a "car culture" like Americans do. China uses mostly heavy oils, which are currently selling for $41/barrel to $104/barrel. While they produce little gasoline, they produce a lot of diesel oil, fuel oil, asphalts, tars and bitumens for construction and naphthas and jellies for industry. Even when China refines light or intermediate oils, it does so not for gasoline, but for feed stocks for industrial and commercial use. Don't expect a noticeable decline in Chinese oil use, since most of the oil China imports is exported to the US in the form of trinkets and gadgets for Americans to consume.

Bare in mind that Brazil, a few years ago, stopped importing oil...PERIOD! Their cars now run on sugar-cane ethanol/gasoline mix and what little oil they need, they pump themselves....and did the market notice? NOOOO...

I don't buy this "China is drinking it all" nonsesnse one bit. Sooner or later, the price will stabilize as demand goes down and more countries go oil free....Sweeden is going to go next in a few years.

Supply and demand: Already Ireland is upping ethanol production from an old crop, beats, and the UK is going to have to take steps to ease fuel use in diesel vehichles.

3.00-3.50 a gallon should be the norm, not 4.15.
Reply With Quote Quick reply to this message
 
Old 07-06-2008, 10:09 AM
 
Location: WA
5,472 posts, read 21,912,192 times
Reputation: 6157
The $2.60 a gallon in China includes the latest increase and all numbers quoted are current.

Brazil still imports some oil as the economy creates a large need for diesel and oil in industrial use... passenger cars account for only a percentage of oil consumption even in this country and in South America many are powered by natural gas.

Keep in mind that current spot price is greatly influenced by future prices (true in all non-perishable commodities) so that the trends of less production and greater use will drive up prices regardless of immediate supply and demand.
Reply With Quote Quick reply to this message
 
Old 07-06-2008, 04:04 PM
 
6,342 posts, read 8,957,423 times
Reputation: 3454
Quote:
Originally Posted by cdelena View Post
The $2.60 a gallon in China includes the latest increase and all numbers quoted are current.

Brazil still imports some oil as the economy creates a large need for diesel and oil in industrial use... passenger cars account for only a percentage of oil consumption even in this country and in South America many are powered by natural gas.

Actually, Brazil is now a net exporter of oil and will soon export even more, as they just found a few hundred billion barrels off it's shore. The only oil they need is what they need for diesel, and what little they add to gasoline ( overwhelm amount of fuel sold there is E85, or 85% ethanol)

Also, the average wage in China is 77 cents and hour. When a gallon of gasoline cost three times the average hourly wage, you can be guaranteed that demand will go down...that would be the equivalent of $55 a gallon in the US.

The price of oil will indeed go down, either next year or the year after, and allot of people in the commodity's market are going to loose their shirts, as always happens when people are too greedy. The price of gas will never again fall bellow 3.00-3.50, but four dollars a gallon now will cause the demand to fall, as it already is, and the price will have to go down. Oil has not yet peaked, and we may even see some oil come out of Iraq for the first time in years pretty soon.

This oil market will fall for the time being, trust me, and allot of those speculators are going to be crying...




Once upon a time, people were on internet forums saying there is no way Enron will ever go out of business....
Reply With Quote Quick reply to this message
 
Old 07-06-2008, 05:30 PM
 
Location: WA
5,472 posts, read 21,912,192 times
Reputation: 6157
Quote:
Originally Posted by victorianpunk View Post
Actually, Brazil is now a net exporter of oil and will soon export even more, as they just found a few hundred billion barrels off it's shore. The only oil they need is what they need for diesel, and what little they add to gasoline ( overwhelm amount of fuel sold there is E85, or 85% ethanol)

Also, the average wage in China is 77 cents and hour. When a gallon of gasoline cost three times the average hourly wage, you can be guaranteed that demand will go down...that would be the equivalent of $55 a gallon in the US.

The price of oil will indeed go down, either next year or the year after, and allot of people in the commodity's market are going to loose their shirts, as always happens when people are too greedy. The price of gas will never again fall bellow 3.00-3.50, but four dollars a gallon now will cause the demand to fall, as it already is, and the price will have to go down. Oil has not yet peaked, and we may even see some oil come out of Iraq for the first time in years pretty soon.

This oil market will fall for the time being, trust me, and allot of those speculators are going to be crying...




Once upon a time, people were on internet forums saying there is no way Enron will ever go out of business....
All reliable information I can find shows that Brazil is projected to be an oil exporter in the future IF their new finds are greater than domestic growth BUT that is not yet fact. They do in fact export Ethanol now. Please post any real data (rather than projections or unsupported conclusions) that show net exports.
Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6. The time now is 06:54 PM.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top