• Jun 9, 2008
It's a complex issue, this business of oil. With stock markets and unemployment numbers taking their lumps, civilian unrest at oil and food prices, and politicians weighing in with all manner of cures and pronouncements, the Group of Eight nations got together to try and figure something out. The result: they want oil producing companies to produce more oil while they work on creating oil-independent fuel sources.
It's the equivalent of Wimpy saying to Popeye, "For a hamburger today I will gladly pay you on Tuesday." The G8 nations, including the U.S., want more of the black stuff to see them through this rough spot. In the mean time, all countries but Germany pledged to begin exploring nuclear power and building reactors, and examining technology like carbon capture and storage. Think of carbon storage as a sealed, underground landfill for coal plant emissions. If they can get it to work -- and find the space -- they can use more coal without creating more emissions.

An OPEC representative said there would be no decision on any production change until it convenes its next meeting in Vienna on September 9. In the mean time, the retail price of oil has passed $4 nationwide in the U.S. for the first time ever, and you can probably expect to pay more for gas as each week of summer passes.

[Source: Detroit Free Press]


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      • 6 Years Ago
      So let oil rise if that's the only way we can ween ourselves off of it (relatively speaking of course). Government seems either unwilling or unable to enact any kind of sane long term policy with regards to energy so maybe we'll just have to do it the hard way.
        • 6 Years Ago
        What, were you expected the profit-racking oil consortiums and corporations to wait for the resource to be completely exploited for them to move onto something else? It really isn't a winning strategy.
        FEW
        • 6 Years Ago
        Chad,

        BP is one of the largest solar players out there, as wafer prices decrease and higher efficiencies become a reality the solar market becomes more lucrative, it's also an intelligent hedge. Did you know BP is one of the worlds largest commercial solar users?
        • 6 Years Ago
        This could really bite the oil companies in the a$$ by forcing use to find alternatives.
        • 6 Years Ago
        Chad, I don't know about that. I read somewhere that oil companies are the biggest researchers in alternative fuel sources in terms of dollar amount spent.

      • 6 Years Ago
      Where is all the talk about a free market economy and how well it works? How about supply and demand? How about Capitalism?

      So big oil makes big profits--so?

      4 dollars a gallon thats about a buck more than last year. If your finances are that bad that you can't afford it, well time to look at finances.

      Yesterday was behind a whiner "another damn 3 cents. When is this going to stop? It's going to break me!"

      Of course the 5 lottery tickets he bought he didn't complain about, or the two packs of gum, the breakfast muffin at 3.50 or the 2 bottles of water. He went out to his shiny new Suburban (2008) model and drove off accelerating hard. Laughable.
        • 6 Years Ago
        +1

        Why take personal responsibility for your actions, when you can scapegoat all those around you?

        As my fourth grade teacher taught me, "Remember whenever you point your finger at someone, you have three of your own pointing back you." Everyone has some partial responsibility fo the current situation (unless of course you've been living in a cave for the last 10 years).
      • 6 Years Ago

      I hope gas goes to $10.00 a gallon so rich people like me can finally drive without all you poor people clogging the roads!
      • 6 Years Ago
      Specially today, hummer sucks. :D
      • 6 Years Ago
      I've heard from pundits and radio casters that the biggest reason for gas prices being high is a bottleneck at the refineries. If that's true, how does whining to OPEC help anything?

        • 6 Years Ago
        It doesn't, but it gives soemone a scapegoat to blame besides themselves.

        But, even an oversupply of refineries likely wouldn't decrease our prices a large amount.

        It's been said that 70% of the cost of gas is from the price of oil. The actual figures may not be that high, but the closest info I found is here http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/primer_on_gasoline_prices/html/petbro.html

        In the 1st image, two years are shown, 2004 and 2005. Notice how the percentage increased from 47 % to 53%. That was in a span where oil went from $36.98/barrel to $50.23/barrel. So, it's not tough to assume that $125/barrel oil might have 70% of it's price reflected into the price of gas.

        Additionally, note that in that same image, refining costs stayed pretty stable. So, even if we increased our refining capacity, we woudn't likely knock more than 10% or so off the cost of gas. I picked that number out of the sky honestly, but we know that it couldn't drop to 0% of the cost, so the decrease would fall between 0 and 19%
      • 6 Years Ago
      Supply isn't the issue, it's the fall of the US dollar and rush to invest in commoditties that's driving the price of oil sky high. Until that is addressed oil will not stop ascending.
        • 6 Years Ago
        +1 on Trishield.

        There is plenty of supply right now. There is no shortage what-so-ever. This is basically an investment bubble.

        The Real Estate market has been decimated the past two years. All the companies associated with the RE industry (building materials, banks, mortgages companies, home improvement stores) are in disarray. Their stock values have plummeted. Billions upon billions have been lost.

        Investors need someplace to stash their money. Oil is it. Now, I hope that gas prices stay high to force our country to actually do something to get us off of foreign oil, however, the bubble will burst at some point. People will find another market to invest in as soon as they think oil has peaked. You will continue to see articles saying that oil prices could hit $200 or $250. Prices will inevitably hit those marks because investors will jump on board. What will happen is prices will rise so high at the pump that people will literally stop driving. Supplies will rise to historic levels, sales will drop to historic lows......and somebody will be caught holding the perverbial hot potato as the oil prices come crashing down to $60 per barrel.

        History repeats itself.....
        • 6 Years Ago
        +1

        Seriously, does the 1 year % hike make any sense to any of you? Sure, supply's diminishing year after year, but not enough to cause such a ridiculous spike.
        • 6 Years Ago
        This isn't about the fall of the dollar, if it were then the EU would be sitting pretty as would Japan. This is a speculator market gone wild.

      • 6 Years Ago
      +1
      • 6 Years Ago
      About time gas prices started to have some value. Too many people wasting too much.
      More alternate technology is now coming out.
      • 6 Years Ago
      This isn't about the fall in the value of the Dollar, which has declined only by approx. 7% against the Euro for example over the past year, while oil has increased by more than 100%
      • 6 Years Ago
      A little something to think about here:
      http://www.americanfreepress.net/html/gull_island_oil.html

      It's worth considering that we may have a massive oil supply on U.S. land sitting there already drilled and capped that natural gas has to be pumped back into to keep it from escaping.
        • 6 Years Ago
        I hope it's true, but it sounds like a concocted conspiracy theory to me.

      • 6 Years Ago
      montoym wrote:

      ""As the dollar has decreased in value, oil has risen along with those decreases, virtually lock-step together""

      No, not at all. The US Dollar has fallen by about 7% against the Euro over the past year, while oil has gone up over 100%.

      This has little if anything to do with the fall in the US Dollar exchange rates.

        • 6 Years Ago
        "The US Dollar has fallen by about 7% against the Euro over the past year, while oil has gone up over 100%." - AngeloD

        You could at least use accurate figures.

        According to xe.com, on June 1st, 2007 the Euro traded for 1.344 US Dollars. As of June 1st, 2008 the Euro traded for 1.554 USD.

        Doing the math, that's 15.6% higher than a year before. Not 7%. Glad you were able to calculate the oil price correctly though.

        I may have overstated slightly when I mentioned that oil prices and the fall in the dollar were moving in lockstep. I did not intend that to mean that a 100% increase in one equaled a 100% increase in the other.

        But, my main point still remains. As the dollar gains ground against the Euro, oil prices fall and vice versa. Check your daily news, it's mentioned virtually every day. It happened again today, the dollar gained against the Euro and oil prices dropped a bit.
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