I'm not an investor nor into playing the markets, but I'm staring at a graph right now showing that the price of a barrel of crude oil on the New York Merchantile Index hit $100 shortly after noon EST today, and even I know that's kind of a big thing. This is for the price of crude oil futures for February delivery, which we hope a business major will explain in the comments, but nevertheless marks a new all-time high for the cost of crude oil and that's news. It's been close to $100 a barrel a couple of times in the past few months, so passing this "symbolic level" for the first time doesn't really change anything overnight, especially since it stayed that high for just a bit before falling again. $100 a barrel, though, isn't far off from the all-time inflation-adjusted high of $102 a barrel we were paying for crude oil back in 1980 after the Iranian Revolution.
[Source: International Herald Tribune, Photo by ADEK BERRY/AFP/Getty]
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Reader Comments (Page 1 of 3)
motorman @ Jan 2nd 2008 2:31PM
it the speculators driving up the price.
Jose @ Jan 2nd 2008 3:31PM
What drives up the price is us stuck on our cars in deadstop traffic because the president wastes our money on deadend wars instead of building wider highways and more public transportation. Our government is to blame.
motorman @ Jan 2nd 2008 5:22PM
check and see how many cars only have one person in them in these traffic jams.people need to car pool as i did for 42 years when i was working. we always had 4 or more people in the car.
jeets @ Jan 2nd 2008 11:31PM
Another wonderful legacy of the Bush Administration and his oil buddies and cronies.
motorman @ Jan 3rd 2008 12:32AM
just like hillary said as soon as she is elected gas will be a $1.00 gallon again because the arabs will be afraid of her energy plans. the market determines the price of oil not the arabs,this shows how stupid she is. if you want the price of oil to come down kill off all the people in china who are now driving cars.
Menice @ Jan 2nd 2008 2:36PM
this blows. glad my commute is way down.
and in the home.. I burn wood.
(in an epa rated stove)
renewable, free, natural and thanks to the epa burns cleaner then my oil burner.
must break free from the dependance.. they are building full island resorts and skyscrapers in Dubai with the money we give them.
We in the USA throw money at the middle east and at china.
KEEP IT HERE PEOPLE!!
Harajoshi @ Jan 2nd 2008 2:39PM
COME ON America, conquer those criminal states and make our oil cheaper! Greetings from EUCCR!
Killenmedpirogen @ Jan 2nd 2008 4:18PM
"criminal states" ???? Yeah all those criminal states are the ones invading other nations and killing them off based on lies aren't they?
Frank @ Jan 2nd 2008 2:41PM
Two of the best links imo about the volatility of prices:
http://www.thetruthaboutcars.com/editorials/the-truth-about-oil/
http://www.thetruthaboutcars.com/editorials/the-truth-about-gas/
chrisdavis @ Jan 2nd 2008 4:32PM
Both of those articles have serious flaws:
1) The argument that the increase in cost of "easy drilling" oil causes new technologies to prosper when economically feasible contradicts their notion that the price over time does not change. The onset of new technologies tends to slow the increase in price, but it obviously does not reverse it. The parallel to the '70s is false because that increase was due to an external market force - the chronically ill-fated cartel.
2) "...gasoline will be cheap again within a year or two. The price will return to the $1.00 - $1.50 range, just like it was back in December of ‘02..." This is from an article from 2005. Not the best forecasting.
Frank @ Jan 2nd 2008 11:09PM
Chris, agreed - although the price prediction did not come out the way the author thought it would the underlying principals that affect the price of oil and gas stated in the article are true. The speculators and other external forces (like boutique gas formulas) are keeping the price high. It has nothing to do with supply and demand anymore. Here's a prediction from Time magazine in 1980 about the auto industry "By the 1986 the V8 engine the mainstay of the auto industry since the 1950's will be all but extinct". This of course does not mean they are wrong about everything they print and neither are the articles I linked to.
kevjohn @ Jan 2nd 2008 2:43PM
Meh. That's not that much. I'll take two.
iSpec @ Jan 2nd 2008 2:44PM
Oil is on it's way to $200/barrel, Economic collapse is at hand:
-The Fed will cut interest rates again causing further collapse of the dollar.
- The government will not release strategic oil reserves
-The Fed is printing money causing further collapse of the dollar ($1.8 billion shortfall PER DAY!)
-Foreign investment is drying up and US is faltering on debt service precipitating concerns for future borrowing from foreign government.
-Commodity prices are/will skyrocket as they are a shelter during such times. Note gold, wheat, oil, etc. are skyrocketing.
-OPEC will soon tell us they wan't EUROS and not Dollars and that will cause a major spike for US consumers. $5-$7/gallon is closer than you think. Globally, many transactions are already requiring Euros.
-Turn on your TV and they are reporting we aren't even in a recession yet. What numbers are you looking at. The ISM is already below 50 and gold is way above $800. Wake-up, the media and financial channels are not reporting Be warned 1929 is going to look like a party.
-Be concerned when the fed prints another $90 billion to bail out the banks. Write-downs? The banking industry is hemorhoraging and run on them is immanent. Get your money out even though it is more worthless everyday.
Jason @ Jan 2nd 2008 2:55PM
I agree with the basics of what you are saying. I don't think we are about to see a repeat of 1929, but we are about to see the biggest financial crisis since then. The reasons:
- inflation
- consumer spending
- consumer credit crunch
- consumer debt loads
- govt debt loads
- artificially lowering interest rates
- weakening dollar
- forclosures
- falling home values
- falling stock market
- increase in oil prices
- terrorism
- war
- govt expenditures
Why is Ron Paul the only candidate talking about this?
2004m3driver @ Jan 2nd 2008 3:15PM
The scary thing is a seemingly large majority of American's are sheepish (2 time bush voters). With the media controlling a large portion of the information we're getting I can't really blame all those ignorant folks at home as much as those elite few who control all these things. It's just too damn easy to make people hear and do what you want them to when you have money. I hate to be the one that says conspiracy, but how could it not be? Its too easy to take advantage of the masses and when everyone starts to want a piece then it gets ugly and sloppy. Soon enough of it will get out and hopefully a revolution!
Billy C. @ Jan 2nd 2008 6:22PM
Ah, Chicken Little has arrived to tell us about impending doom. Welcome!
WetheSheeple @ Jan 3rd 2008 1:35AM
THE FEDERAL RESERVE IS UNCONSTITUTIONAL.
The Federal Reserve is a partnership between the federal government and private banks. When you look at it deeper, its essence is neither a government agency or a private company. In reality it is a CARTEL. It's a grouping of the large private corporations in the field, banking, who have come together to create an agreement between themselves to limit competition and preserve their profits and to make sure no newcomers come in to take away their position. Most people spend the bulk of their money on taxes, interest, and inflation. And all of that money goes to 2 groups that comprise of the cartel (Federal Reserve) and their partner the federal government. It's not a coincidence.
Our elected officials and media have turned a blind eye to the laws of the Constitution and refuse to address the biggest problem that has bankrupted our nation. An article entitled “Is the United States Bankrupt?,” in the Federal Reserve Bank of St. Louis Review of July/August 2006 (page 235), provides rather disturbing evidence supporting this prediction. The author shows that the difference between the General Government’s future expenditures and its future receipts over a economically realistic period—the so-called “fiscal gap”—is some $65.9 trillion (page 239). Yes, TRILLION. Estimates of this astronomical magnitude can be confirmed elsewhere. See, e.g., the data collected by John Williams, Shadow Government Statistics, http://www.shadowstats.com/ . And even the Comptroller General of the United States (in a letter attached to the 2006 Financial Report of the United States) has calculated that the government’s negative net worth as of 2006—which he acknowledges to be about $53 trillion—amounts to an hypothecated burden of debt of some $170,000 on every single American. This is no “conspiracy theory,” but a set of undeniable financial facts. It is also no smokey prognostication about an uncertain future, but a fully documented description of harsh reality right here and now.
The people have to realize why the Federal Reserve System, fiat currency (paper money backed by NOTHING, esp. of something of intrinsic value like gold and silver), fractional-reserve banking, and unlimited "monetization" of governmental debt are extraordinarily bad things-America and the world are about to be given another opportunity to learn what they did not learn in 1932.
The mainstream media and our elected officials will not do the right and lawful thing (as they are controlled by the Establishment) and tell the American people that the banking system that we have relied upon for almost a century is the very thing that has bankrupted us and turned us into a nation of serfs to the credit masters. Unfortunately, the powers that run our financial institution and the world's other central banks, are working on establishing a New World Order. Our money will soon be nothing but digitized credits, as it is already here with the use of RFID chips. Our debit cards we use are just one step away from having an RFID chip in your hand. WAKE UP PEOPLE!!! IT'S TIME WE TAKE BACK OUR COUNTRY.
Ron Paul 2008
WetheSheeple @ Jan 3rd 2008 1:39AM
Inflation is not an increase in prices, but in increase in the money supply, which as a result causes prices to go up. Watch this video if you want to know what money is and how it is created. (Fiat Empire)
http://video.google.com/videoplay?docid=5232639329002339531
Jose @ Jan 2nd 2008 2:46PM
Stop complaining about the gulf countries. We would be doing the same thing had we had so much oil. Oil for decades was cheaper then bottled water. Thats unfair. The answer, move closer to work and take the train.
John Cressy @ Jan 2nd 2008 7:54PM
Oil is still cheaper than bottled water and bottled water isn't taxed like oil.