The 'track the price of Oil' thread

[Ram]

Tis now at $123/barrel, which seems a million times better than the $147/barrel it was, earlier in the month. Dont know exactly what is causing this dip; It could be a combination of factors of falling demand in the US due to higher prices leading to excess supply, to Saudi Arabia announcing that it will pump in more oil into the market, to the Iran and US in principal agreeing to negotiate on the the nuclear issue. Whatever the reasons be, we UNEQUIVOCALLY need oil prices to fall.

[sandtest]

The rising oil prices is nothing but an OPEN ARM TWISTING by OPEC countries and the major players in this are Oil rich Gulf countries like Saudi Arabia. Oil can easily, very easily remain below 100 daalar and cool the inflation in developing countries like India, there is nothing special in this. All this talk of Iraq, fear of Iran war driving oil price up is a hogwash. There is an urgent and serious need to teach lesson to these Gulf countries. I have already posted a new link of Thailand that said, like OPEC, the Rice exporting countries of Asia should form a CARTEL of rice exporting countries and ban export of rice to Arab countries until they bring down the oil price to earlier rate of below 100. No generous and peaceful talk thru UN will help. This is a cruel world.

[Guest dada_rocks]

In that case Pakistan will gladly take all the rice market of arab countries..

[Guest dada_rocks]

still my question about why same price of petrol in india results into loss for the companies in india and windfall profit for companies in usa, remains unanswered.. Koi nahin ho gyani vyakti yahan kya

[Lurker]

The rising oil prices is nothing but an OPEN ARM TWISTING by OPEC countries and the major players in this are Oil rich Gulf countries like Saudi Arabia.

If that is the case then I am glad OPEC countries are kicking the Western world in their nuts. It is simple capitalism at work - market decides the price. If the price is untenable then it shall fall, else people pay for it. This is the simple philosphy on which West(and now modern India) has been raised and it is hilarious to see that argument as being "bad". Heck if tomorrow I have an IT company I will charge the maximum myself. I mean I am not doing a UNICEF am I? But of course you are completely wrong here. The price falling has little to do with OPEC countries. It boils down to falling demand, increased USA debate about new oil drills, agencies coming hard on Speculators etc. The day Bush announced drilling was followed by a large oil price drop.

[Ram]

still my question about why same price of petrol in india results into loss for the companies in india and windfall profit for companies in usa' date=' remains unanswered.. Koi nahin ho gyani vyakti yahan kya[/quote'] I have already pointed out that you calculations and assumptions are wrong DR.

[Ram]

The rising oil prices is nothing but an OPEN ARM TWISTING by OPEC countries and the major players in this are Oil rich Gulf countries like Saudi Arabia. Oil can easily, very easily remain below 100 daalar and cool the inflation in developing countries like India, there is nothing special in this. All this talk of Iraq, fear of Iran war driving oil price up is a hogwash.There is an urgent and serious need to teach lesson to these Gulf countries. I have already posted a new link of Thailand that said, like OPEC, the Rice exporting countries of Asia should form a CARTEL of rice exporting countries and ban export of rice to Arab countries until they bring down the oil price to earlier rate of below 100. No generous and peaceful talk thru UN will help. This is a cruel world.

That is unquivocally incorrect. Please be better informed before making sweeping statements and generalizations.

[Guest dada_rocks]

I have already pointed out that you calculations and assumptions are wrong DR.

Dude whatever the calculation the same holds for both american and indian companies.. ........Both get oil at same price ....... I am not sure which assumption are u talking about.. India pays less in transportation and pays less to its workers.....

[Guest dada_rocks]

That is unquivocally incorrect. Please be better informed before making sweeping statements and generalizations.

I think he is correct since that war oil puming rate has increased and demands too has proprortionally gone up and so price should have stayed the same if not being fixed by someone somewhere..

[Ram]

I think he is correct since that war oil puming rate has increased and demands too has proprortionally gone up and so price should have stayed the same if not being fixed by someone somewhere..

What is keeping oil prices so high? Despite an emerging global consensus that oil prices are dangerously high, there seems little chance of the cost of oil falling significantly in the near future. Analysts say measures agreed at Sunday's crisis summit in Jeddah are unlikely to have a dramatic impact on market trends. But what is keeping prices close to record levels of almost $140 a barrel? WEAK US DOLLAR

• The sharp jump in prices since 2005 has coincided with the plunge in the value of the dollar against other leading currencies
• Dollar weakness encourages financial investors to look for other more lucrative investment opportunities, with oil top of their list
• As oil is traded in dollars, it also makes it cheaper to buy
• Signs the US economy may be on the brink of recession have undermined the dollar, boosting prices. Prices rose $11 on a single day last month when the unemployment rate rose

SUPPLY CONCERNS

• Analysts say growth in global supplies is worryingly failing to keep pace with growth in demand
• Supplies from countries such as Russia are thought to have peaked and finding new sources of oil is difficult and expensive
• Increasing reliance on members of the Middle-East dominated oil producers group Opec, many of which are already pumping as much oil as they can
• Saudi Arabia is one of few countries with spare capacity but it has been reluctant to boost output substantially

DEMAND GROWTH

• Global thirst for oil is intense. Demand has risen by about 3 million barrels a day since 2005 and is expected to rise by 32 million barrels a day in the next two decades
• The US remains the world's largest oil consumer and high individual fuel usage continues to put pressure on crude stockpiles
• Fast-growing China and India are forecast to account for 40% of the growth in oil demand by 2030, as industry grows and demand for travel increases

POLITICAL INSTABILITY

• Much of the world's oil is concentrated in volatile regions, leading to fears of frequent and unpredictable disruptions to supplies
• Despite oil output being at a six-year high, Iraq is still beset by violence while militant groups in Nigeria's main oil-producing region have recently impeded about a quarter of its output
• Tensions over Iran's nuclear programme. There are fears that an Israeli attack on Iran's nuclear installations could trigger a wider conflict and threaten traffic through the strategically vital Strait of Hormuz, used to ship 40% of the world's oil.

MARKET SPECULATION

• Oil exporters say the price surge cannot be explained by the fundamental ratio of supply to demand and point their fingers at market speculators
• It is claimed that some traders are making huge amounts of money betting on the direction of prices, in turn forcing prices higher
• Others maintain that traders are simply hedging their investments against future market developments to reduce risk
• US regulators are looking for evidence of market manipulation while the IMF is examining the role of traders in the price spike

http://news.bbc.co.uk/2/hi/business/7469124.stm -------------- Ok, so BBC must be wrong then... :giggle:

[Guest dada_rocks]

BBC is not holy grail.. now let us look at each of them Weak Dollar: Now it's chicken and egg scenario; economy slowing due to gas price, resulting into weak dollar can't be touted as reason of gar price hike.. It's other way round. Supply Concern: This concern has been just a concern and supply if anything has been going up all these years Demand Growth: well supply growth takes care of this burden Political instability: When was arab world politically stable anyway that's hinterland.. Again empty concerns I would say Market Speculation: Yes this one is culprit. In fact can be classified as one of the ways of OPEC arm-twisting

[Ram]

^ :D It takes a unfathomable amount of igorance or a unbelievably stubborn amout of denial to say Middle-eastern politics doesnt affect oil. Its a world known fact that most of the oil comes from there and basic market economics dictate that when the sources of supply become unstable, the price is bound to go up. Now, if you arent willing to acknowledge this fundemental market mantra, then thats just living in denial.

[Holysmoke]

[Guest dada_rocks]

^ :D It takes a unfathomable amount of igorance or a unbelievably stubborn amout of denial to say Middle-eastern politics doesnt affect oil. Its a world known fact that most of the oil comes from there and basic market economics dictate that when the sources of supply become unstable, the price is bound to go up. Now, if you arent willing to acknowledge this fundemental market mantra, then thats just living in denial.

It takes some jaundiced eye to see the fact that bottomline is demand supply if thsi equation has not been marred by any of the happenstance then all those speculation about political instability; as if middle-east was stable at any time in distant past; remain an speculation.... Face the fact dude instead of hiding behin icoherent speculative theories.. bottomline is demand and supply and they have been consistent over the years , scare-mongering aside....... Heard the phrase : Could have , should have but didn't.. well the socalled instability didn't impact demand supply equation and there is no reason for price to go up except some arm-twisting tactic or some scare-mongering

[CC1981]

Weak Dollar: Now it's chicken and egg scenario; economy slowing due to gas price, resulting into weak dollar can't be touted as reason of gar price hike.. It's other way round.

Err...NO! Dollar's weaking has much more to do with mushrooming US national debt and budget deficit. So no, its not chicken and egg theory, it is a case of amma comes before beta..dollar started weakening before oil crisis.

Supply Concern: This concern has been just a concern and supply if anything has been going up all these years

FALSE and rather simplistic. The 'supply' aspect is simply not a question of how many wells are in place pumping xyz quantity of oil per day. The supply here very much relates to the TOTAL ESTIMATED GLOBAL OIL SUPPLY. Which has been dwindling steadily because new oil prospects have largely run dry in the last 10-15 years. To a point where relatively minor oil finds at offshore brazil hits world headlines. 10 years ago, there was the prevailing mentality that 'look,we keep finding new oil patches every 1-2 years, so nothing to worry about, plenty of undiscovered oil awaits our survey teams to stumble upon them'. With hardly any new field discovered in the last 5-6 years, the speculators are getting increasingly nervous that we might've found all the tappable oil in the world or the overwhelming bulk of it. Suddenly, your supply equation becomes 'finite and dwindling' instead of a piggy bank that keeps getting bigger every 1-2 yrs due to new prospectus. Therefore, supply/supplies have genuine reasons to treat the current oil crisis as much more serious than in the past.

Demand Growth: well supply growth takes care of this burden

Try to understand this. If you have a finite cache of oil and most of your lands prospected and no new finds, you will NOT want to keep drilling more wells into your patch and pumping out more oil. oil is a huge income earner for most exporting nations. If you are king of Saudi and you KNOW that your net oil reserves will last you 80 years at current production level, WHY would you want to drill more wells, pump out more oil and cut that estimate down from 80 yrs to 50 ?!? There is HUGE resistance to upping the export from oil producing nations because they KNOW that as time goes on, oil will keep getting more and more expensive and they are better off producing at current levels/lowering production and stretching it out than upping production ( which came after HUGE US pressure and military concessions to Saudi).

Market Speculation: Yes this one is culprit. In fact can be classified as one of the ways of OPEC arm-twisting

You should learn to not comment on issues you know naught about. One day you are asking about gyaani vyekti explaining this to you and then 2 hrs later you are suddenly babbling as if you know the nitty gritty. MOST market speculators are from western nations. NOT OPEC nations.

[sandtest]

That is unquivocally incorrect. Please be better informed before making sweeping statements and generalizations.

So, you should better inform we heathens first about your new found "gyan" in this area and give your refutation instead one liner personal statements.

[sandtest]

It is very evident that oil price was staying below even Dollar 60-70 at start of 2007!! And continous price rise has a lot to do with OIL PRODUCTION CUT from OPEC and not fullfilling the rise in demand. Here is a 2007 report ahow Saudi Barbria and how they did this --

Saudi oil production cuts This is a potentially huge story that is not being adequately investigated by the financial press. The future of world oil depends critically on what happens in Saudi Arabia. The country's importance comes not just because it accounts for more than 10% of global production, but moreover from the fact that it produces almost a quarter of the oil globally available for export. Furthermore, nearly a third of the increase in global production by 2010 that is assumed in the EIA's reference case forecast is supposed to come from Saudi Arabia. And the Saudis are once again in the news this week. From last Monday's Wall Street Journal (subscription required): The world oil market is in "much, much better health and balance" now and, if trends hold, there will be no need for further production cuts or increases in supply when members of the Organization of Petroleum Exporting Countries meet next month, Saudi Arabian Oil Minister Ali Naimi said yesterday. In an interview, Mr. Naimi said the kingdom's production is now 8.5 million to 8.6 million barrels a day, confirming its reduction by one million barrels a day from its output about six months ago. The reduction is part of a push by OPEC to shrink stockpiles of oil that climbed sharply last year as demand growth stumbled. The U.S. benchmark crude price fell through the turn of the year to a 20-month low in mid-January of $49.90 a barrel. It has since rebounded to settle Friday at $59.89 a barrel.... Data sources: Jan 04 through Nov 06: EIA; Dec 06 and Jan 07: estimates from Platts; Feb 07: latest statement from Ali Naimi . "If you are asking me are we going to take additional cuts or increase supply, I do not know," said Mr. Naimi, the oil cartel's de facto leader. "But, most probably if the trend is like what it is like today, with the market getting in much, much better health and balance, there may not be any reason to change." He added that the situation can still change: "I would not be surprised to see different figures and a different situation on the 15th of March. That is the benefit of getting together with 12 other oil ministers to review the data." Saudi Arabia's one-million-barrel-a-day reduction, reported in The Wall Street Journal last month, is nearly double what it agreed to under two OPEC output cuts hammered out by the cartel at meetings in Doha, Qatar, in October and in Abuja, Nigeria, in December. The Wall Street Journal's assumption that these production cuts represent a deliberate effort by the Saudis to stabilize the price is a reasonable one to make. But one problem with that hypothesis is that the trajectory followed by prices really doesn't jibe with the story: Data source: FRED . That price doesn't look to me like it's being stabilized by the Saudis or by anybody else. In particular, the cuts in Saudi production began in October 2005, when oil was selling for $62 a barrel, and those cuts continued as oil rose to a new high over $75 last summer. For that matter, the Saudi production numbers themselves don't look to me like they're under the precise control of anybody. Up through the first half of 2005, the Saudis hit 9.5 mbd or 9.6 mbd month after month. I interpreted the stability of those numbers as signaling that the Saudis could hit any target they wanted, and they happened to be picking 9.5 or 9.6. By contrast, the erratic path since is much harder to view as the outcome of some careful manipulations. We do know that concomitant with this decrease in Saudi production has been a huge increase in the effort they're making to find and produce new oil, as evidenced by the number of oil rigs the Saudis are employing: Number of oil rigs in use in Saudi Arabia. Source: Baker Hughes We also know that the decrease in production has coincided with a deterioration in the quality of oil that the Saudis are trying to sell and develop. For example, there was this story from Reuters last summer: China will extend a 50,000 barrel per day (bpd) cut in Saudi crude oil imports into July and August after some refiners struggled to cope with new higher-sulphur supplies, industry officials said. China contracted to buy 500,000 bpd of Saudi crude in 2006, but cut that back by 10 percent in the second quarter after refiners ill-equipped to handle the kingdom's mainly heavy-sour oil were forced to slow production after running the grades, the officials said. As another example, an important part of the Saudi's new production plans evidently involve the Manifa oilfield, which the Saudis had discovered in 1957, but up to now had decided not to try to develop because existing refineries were unable to process its high-sulfur oil [1], [2]. There's some fascinating speculation as to what this all means at the Peak Oil News & Message Boards in a discussion thread that's now been running for a year and a half. Here are the two possibilities that I find most plausible. The first possibility is that the Saudis could still pump 10 mbd or more today if they wanted to, but they are cutting back production and exploring like mad because they put an extremely high value on having 2-3 mbd of excess capacity. If so, the recent price behavior suggests that the reason they would seek such capacity is not because they want to stabilize the price, but because it puts them in an incredibly powerful negotiating position. For example, the ability at any time to flood the market could be used at an opportune moment to undercut expensive alternatives such as oil sands that require an oil price over $50. The second and more natural interpretation is even more disturbing: the mighty Ghawar oil field is already in decline, and the Saudis don't want anyone to know. Now this would be a simple enough hypothesis for anyone to test, if the Saudis published field-by-field numbers for production and water cut. But instead, those numbers are a closely guarded secret, leaving people like me simply to guess as to what the truth might be. But, if you'll indulge me in a bit of cloak-and-daggerism, there are others who must know. This data cannot be something that would be that difficult for American or Russian intelligence operatives to collect. So, I find myself wondering the following-- suppose that someone in the CIA knew for a fact that Ghawar was in decline-- what would we be observing out of Washington? The ramifications are so enormous, many, many decision-makers would surely need to be informed. It's hard for me to imagine that something so widely disseminated could remain a secret in Washington. According to this reasoning, perhaps we should read the fact that the story hasn't yet been leaked as an indication that it hasn't yet happened. Unless the spooks don't understand the full implications of the facts they are sitting on. Perhaps not unlike the Wall Street Journal http://www.econbrowser.com/archives/2007/02/saudi_oil_produ_1.html

[CC1981]

^ :D It takes a unfathomable amount of igorance or a unbelievably stubborn amout of denial to say Middle-eastern politics doesnt affect oil. Its a world known fact that most of the oil comes from there and basic market economics dictate that when the sources of supply become unstable, the price is bound to go up. Now, if you arent willing to acknowledge this fundemental market mantra, then thats just living in denial.

Indeed. The sabre-rattling between Iran and USA is the singular biggest political reason for oil prices going bonkers. And its pretty simple as to why (but our saffron-tinted hinduvta buddies have no clue on this aspect): 1. Instability in north Arabia is inconsequential to oil. Israel, Palestine, Jordan,Egypt etc. can rip each other apart for rest of time and it matters not a jot: they dont produce oil, they do not lie near major shipping routes for oil, they are inconsequential to oil price. 2. When a major oil producing nation like Kuwait or Iraq gets into a war, it creates some instability and some jump in price (go look up, during gulf war, oil did surge in price) because a major production source is giving diminished output or no output. 3. However, the MOST influential country in that region- hands down- is Iran. Simply because of the geography of the land. Over 40% of the oil exported in the ENTIRE WORLD goes through the narrow 60-70km wide strait of Hormuz, one side of which is Iran and the other, Oman. When Iran-Iraq war happened, Hormuz was not a theatre of operation and oil prices remained largely stable because both nations exported significant amount of oil and the strait of hormuz was functional. However, with the Iran-USA sabre rattling, oil exporting nations are panicked and so are the speculators. Because Hormuz is an ace up Iran's sleeve like none other. For, if America declares war on Iran, Iran still has enough military firepower to block the straight of hormuz for atleast a couple of weeks before America 'liberates it'. But what happens for those two weeks ? 40% of world's oil supply gets halted, because practically ALL oil exports from Saudi, Kuwait,Iraq,Iran,Qatar,UAE and Bahrain transit through the strait of hormuz. And this supply route CANNOT be re-routed. Where are you gonna re-route it and how ? the nearest exit is either in the extremely volatile mediterranean arabia (israel-lebanon) or the red sea coast of Saudi. Either involves laying thousands of kms worth of oil pipeline through barren desert- something that'd be enormously expensive and take a HUGE amount of time ( a decade to re-route all oil to Jiddah from the gulf for eg).. So bottomline is, if Iran-USA war happens, even if Iran gets crushed ultimately, the whole world is FRACKED, because for atleast two weeks, the world will be lacking 40% of its oil imports. If you think oil is expensive now, just wait till Iran blockades the Hormuz strait or makes shipping impossible through barrages of their rocket launchers destroying shipping. THIS is why, the current middle east political crisis (or i should rather say, Iran-US political crisis) is far more consequential to oil and its being reflected in price. You can garantee that economies the world over will collapse if a two week blockade of Hormuz happens- something that ONLY IRAN can pull off in the area and thus, cannot be equated with any other previous middle eastern crisises.

[CC1981]

And continous price rise has a lot to do with OIL PRODUCTION CUT from OPEC and not fullfilling the rise in demend.

DUH. As i said- you have something the whole world wants (oil). You havnt found ANY new source in the last 10 yrs and your current supply & production amount is estimated to last you 80 years. As time goes, everyone becomes more and more aware of diminishing oil and its price goes up and up...so WHY would you speed up your production now ? What the Saudis are doing, is what everyone else would do- its called Capitalism 101. Instead of whinging in their direction, we should be far more proactive in reducing our dependency on oil- we need more solar power, wind power, nuke power, tidal power, etc.

[sandtest]

The sabre-rattling between Iran and USA is the singular biggest political reason for oil prices going bonkers. And its pretty simple as to why (but our saffron-tinted hinduvta buddies have no clue on this aspect):

Don't behave like a eunuch by hiding behind some other issue to take pot-shots on Hindutva. What has Hindutva got to do with this??...you will remain a moron forever. I can see, why well known jeehadi sympathizers, soar loosers like you are p!ssed with hindutva. :finger:

2. When a major oil producing nation like Kuwait or Iraq gets into a war, it creates some instability and some jump in price (go look up, during gulf war, oil did surge in price) because a major production source is giving diminished output or no output.

Speaking from rear stinking orfice again without knowing the data. Show me how Kuwait's oil production is affected because of Iraq invasion first before your any statement is taken with even a pinch of salt. As far as Iraq is concerned, agauin you have no clue! Iraq before invasion was living under tough sanctions of Amreeka. Saddam regime was never allowed to export oil in bulk quantity and generate much foreign exchange so much so that they can affect OIL PRICE by even a fraction of precentage. Much of Iraq oil under Saddam was exported as OIL FOR FOOD that too thru United Nation supervision. In fact Iraq invasion and toppling of Saddam has freed Iraq from US sanctions and now if they can protect Iraqi oilfields from insurgents/Islamic jeehadis then they can really pump much more oil to world market than they were ever allowed during Saddam. As said before, much of world's oil price rise is due to production cuts/refusal to increase production with rising demand by OPEC countries particularly Saudi Arabia. And this is why it is a clear ARM-TWISTING. And why Gulf countries would like to increase the production when it will cause less revenue generation due to fall in Oil prices?? Simple!!