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Old 07-19-2008, 08:36 AM
 
Location: The Woods
17,199 posts, read 22,939,721 times
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Quote:
Originally Posted by Niners fan View Post
Based on this argument then why drill for any of our own oil of OPEC could simply offset it. This argument really just highlights how important it is for us to develop our own resources - oil, coal, and natural gas - and develop alternatives so that we become less beholden to foreign nations.

I have to agree with bchris above that is not an accurate analysis. It is a static analysis that fails to account for the effect on the futures market.
U.S. domestic oil reserves are quite small, relatively speaking (considering our demand and what other countries have currently as we've used much of our oil up already). We need to become energy independent from these foreign countries but we need to find something other than oil to use, as we just don't have enough to last on our own for too long, with our demand of 7 billion barrels a year (and population projected to perhaps double in the next century). We have some oil sources we could develop as part of a long term plan to get off oil, but simply drilling it with no plan for when it runs out (or rather begins to flow at a trickle) just to help the present is poor and short-sighted planning (and I do not support drilling in ANWR for many reasons but it's pretty small anyways compared to other sources in the U.S.). Reining in the futures markets could help in the interim as that is a significant factor in the current prices (and before someone whines about capitalism and government: we haven't had a truly capitalist/free economy since the 1800's so you've already lost that battle, and if things only continue to get worse I suspect the violence that could ensue will be much less desirable).
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Old 07-19-2008, 09:20 AM
 
8,890 posts, read 7,872,064 times
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Offshore drilling in the US won't have much impact. How many times have we had announcements about major oil discoveries in the last two years only to see the price of oil march steadily higher? The amount of recoverable oil being found isn't sufficient to offset the demand. Foreign demand for oil is more than offsetting demand destruction in the OECD. Exports of gasoline from the United States has risen nearly 50% in the past two years.

U.S. Weekly Total Crude Oil and Petroleum Products Exports (Thousand Barrels per Day)
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Old 07-19-2008, 02:57 PM
 
523 posts, read 1,309,251 times
Reputation: 134
This thread is useless. It is nothing but speculation.

I've said it before, and I'll say it again, oil prices are directly related the US Dollar. How can we have an entire thread that talks about the future of oil prices without anybody mentioning what the value of the US Dollar will be? The Dollar is in a virtual free-fall and could see another substantial decline in the very near future because of the FED and treasury trying to inflate our way out of this mess.

Inflation = devalued Dollar = higher oil prices
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Old 07-19-2008, 03:19 PM
 
8,890 posts, read 7,872,064 times
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It's not always a cause-and-effect between the Dollar and Oil. Oil selling off is also due to its paried trade with Financials. The SEC issued the naked short enforcement letter to boost the banks and the other trade was reversed to long financials and sell oils. One could've made a case that the massive financial support promised by the federal government for Fannie and Freddie should've smacked the dollar and boosted the price of oil.
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Old 07-19-2008, 03:22 PM
 
6,743 posts, read 8,469,133 times
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Quote:
Originally Posted by KevK View Post
I predict that, on Christmas Day, oil will be in the $80 to $90 range.
Most of the people that I've talked to said the same thing.
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Old 07-19-2008, 03:24 PM
 
Location: WA
5,471 posts, read 21,898,832 times
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Quote:
Originally Posted by mojo_1979 View Post
This thread is useless. It is nothing but speculation.

I've said it before, and I'll say it again, oil prices are directly related the US Dollar. How can we have an entire thread that talks about the future of oil prices without anybody mentioning what the value of the US Dollar will be? The Dollar is in a virtual free-fall and could see another substantial decline in the very near future because of the FED and treasury trying to inflate our way out of this mess.

Inflation = devalued Dollar = higher oil prices
In the recent few years with a 16% drop in the US dollar we have seen a 60% increase in the price of oil. There is more to it than just dollar inflation.
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Old 07-19-2008, 03:29 PM
 
Location: Raleigh, NC
9,043 posts, read 11,811,237 times
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Quote:
Originally Posted by cdelena View Post
In the recent few years with a 16% drop in the US dollar we have seen a 60% increase in the price of oil. There is more to it than just dollar inflation.
There is. People don't want to buy up mortgage security crap anymore with the massive amount of dollars flooding the market and are turning to the next safe investment.

Since M3 isn't published anymore, the dollar's rather minor fall might be mitigated for now because no one really knows how many virtual dollars there are.
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Old 07-20-2008, 09:07 AM
 
Location: Heartland Florida
9,324 posts, read 24,255,603 times
Reputation: 4927
//www.city-data.com/forum/busin...er-gallon.html It is amazing how those who benefit from a bubble try and hype it up. Good thing some of us are not easily fooled. Don't forget that energy prices are still high and every year the lows are higher than last year's. The long-term trend is like inflation...UP!
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Old 07-20-2008, 10:06 AM
 
Location: Ohio
21,262 posts, read 15,055,899 times
Reputation: 17676
Quote:
Originally Posted by mojo_1979 View Post
I've said it before, and I'll say it again, oil prices are directly related the US Dollar.
But supply and demand have the greatest impact. Even at $1 = 1 Euro, oil would still be $65/barrel.

Quote:
Originally Posted by mojo_1979 View Post
How can we have an entire thread that talks about the future of oil prices without anybody mentioning what the value of the US Dollar will be?
That's a good question, especially since former OPEC Associate Member Indonesia is preparing an oil bourse in Euros, Rubles and basket currencies, Singapore and Malaysia are looking into it, and OPEC Associate Members Algeria, Angola, Nigeria and Venezuela will probably leave OPEC at the end of 2008 if they aren't allowed to sell oil in other currencies.

Quote:
Originally Posted by mojo_1979 View Post
The Dollar is in a virtual free-fall and could see another substantial decline in the very near future because of the FED and treasury trying to inflate our way out of this mess.
Except the Fed and the US Treasury Department aren't trying to do that. M1 + M2 was 4% greater during the 8 years of the Clinton Administration than it has been under the Bush Administration. If we accept you're argument as true, the German D-Mark should have been higher in value than the US$, but at $1 = DM 1.42 that obviously wasn't the case.

What really dooms your argument is that M1 + M2 + M3 was significantly higher under Clinton. M3 is significantly lower now since more than 100 countries no longer hold US$ currency reserves and many countries that still do have reduced their holds by 50% or more.

Quote:
Originally Posted by mojo_1979 View Post
Inflation = devalued Dollar = higher oil prices
Lower US$ Demand = devalued US$ = higher oil prices.
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Old 07-20-2008, 10:15 AM
 
Location: Ohio
21,262 posts, read 15,055,899 times
Reputation: 17676
Quote:
Originally Posted by ViewFromThePeak View Post
Since M3 isn't published anymore, the dollar's rather minor fall might be mitigated for now because no one really knows how many virtual dollars there are.
Sure we do. We just have to look at M1 and M2.

M3 was the amount of US$ currency held by foreign banks (mostly central banks). The US ceased publication of the M3 in March 2006 claiming it was too costly to collect the data, but it was really because other countries were dumping US$ and the US didn't want other countries to be influenced to dump theirs.

It's true that the data was costly to collect because some countries stopped publishing the amount of US$ they are holding after Clinton and his buddy George Soros manipulated the economies of Malaysia and a few other countries and destroyed them. Many countries now consider their foreign currency reserves to be a matter of national security, and even purchase foreign currency reserves through 3rd parties to make it difficult to track how much of a given foreign currency they're holding.

The US$ dropped 39 points during the Clinton Administration and another 23 points during the Bush Administration.

Altogether, the US$ has lost more than 50% of its value against the Euro. I'd hardly call that minor.
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