Oil Spikes Again

Paul Pollets

from today's NYTimes (3/31/05):

"The report from Goldman Sachs warned oil was entering a ``super spike'' period that could drive prices as high as $105 per barrel, but many on Wall Street were skeptical about the call. The only thing that could take crude to such high levels would be a major disruption in supply from Iran, Iraq or Saudi Arabia, which seems unlikely at this point, said Tracy Herrick, chief economist for the Private Bank of the Peninsula, in Palo Alto, Calif..."

Wonder what this will do to next week's gas prices...



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Constantin

For all the talk,

I think a good bunch of it is simple hype and speculation to make the markets frothy. Those of us who locked into supplier agreements sigh with relief, the rest look at their tank meters and wonder if they'll make it into July.

Despite these (what I believe are temporary) conditions, I still think that oil is the better fuel source for my area. Time will tell.

eleft_4

Gripe

The January issue of Oilheating has an article on an organization who's support came from a congressional act to mandate oil dealers to send them a fixed portion of the price per gallon. The sunset law on this came into effect February 7, '05.

If you already use oil why should you have to pay a levy to support an organization, including it's executives, to stay in business?

It's claim is to no longer be able to advertise for the fuel oil dealers benefits, but has 8 million dollars to continue in business for two years, in which it will lobby to get congress to re instate the mandate to impose a tax to all oil users.

Did I miss something, what advertising?

wow!

al

Joe Brix

Wild speculation like that

Only fuels the volitility of prices. Only 2 days ago prices dropped because US reservers had climbed. I guess Goldman was looking to drive prices back up for their own portfolio so they put out an unsupported statement. I think analysts should be fined for making such statements.

Jaitch

NORA

The National Oilheat Research Alliance has been around for half a dozen years and is a checkoff program that oil dealers pay into for certain benefits. One of them is an advertising campaign and is similar in nature to the BEEF - it's whats for dinner - and GOT MILK? campaign. Another portion of the monies are spent for nation-wide education of oilheat technicians and certification of same. Money is also spent on research. Check out NORA.org for more information.
I don't know if you've seen the advertising in your area, but our local oilheat association here in central Pennsylvania has been advertising to the benefit of all the oil dealers in the area. Those monies are administered through the local and state associations - if you haven't seen any ads check with your local oilheat assoication - they're in charge of the funds locally. If there is no association and you're intersted, maybe you should consider organizing and starting one. :>)

Regards:
JOHN

eleft_4

I get the idea of what it's intentions are.


The intent of the post is bring awareness of the fact a congressional mandate to tax an individual to support an organization that benefits private businesses to proliferate their existence.

A business that needs to have training or r&d to make a profit should be paying for this as part of overhead without the benefit of protectionism of congress to allow taxing of every oil user.

Looking at their training, it's far from a free public service!

al

Jaitch

Al, you may be right!

Someone somewhere needs to stop the oil industry,the propane industry, the beef farmers, the milk producers and the cheese makers from starting these checkoff programs! I'm sure that the technology in bringing a quart of milk to your table hasen't really changed that much in the last 100 years. And certainly these farms and co-ops are still private businesses.
I suppose if it's good enough for the American farmer (a ground of small businesses banded together) then the small INDEPENDENT oil and propane dealers might as well jump on the bandwagon. The training NORA offers is the only voluntary traning in my area for oil heat. Unlike many areas of the country there is NO licensing of techs in my area. That means any Billy-Bob with a pickup and some tools can adjust your combsution heating appliance.
I guess it helps keep the Funeral Directors in business.....

Just my thoughts - is it worth even ONE needless death?

JOHN

eleft_4

My gripe

is based on the article that shows redistribution of wealth, 8 million from the oil consumer, aka socialism.

Where did the theatrical "is it worth even ONE needless death?", come in to this issue.

And because everybody is doing it makes it right?

Training :It's voluntary but it's not free. I learned with out an association that needs to be carried on the back of the oil customer/user and charges for what is already been paid for.

Big organizations should not impose on the gracious little people!

I believe in paying my own way. And you?

al

Unknown

I still have not yet a thing that points to any of this being a "temporary" condition Constantin. What are you using to justify your optimism there?

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Constantin

Supply and Demand

Oil prices have gone up and down like a rollercoaster over the years. Speculation typically is the root cause for spikes, not a supply constraint. For example, look at oil prices in the run up to the 1991 Iraq war, they went from something like $19/barrel to $30... and then plummeted just as quickly back down again when the speculation didn't pan out. Never mind the price spikes during the embargo. See this page for an interesting perspective on the price of oil over time.

Don't get me wrong, the supply seems to have gotten tighter. The Saudis have much less clout in terms of influencing oil prices as they used to because they don't have as much spare capacity lying around. On the other hand, as prices rise, there will be a reduction in demand, just as the US industry moved from being highly oil-fueled in the pre-embargo days to being dual-fuel, etc. The process may take a while, but the end result is inevitable.

Emerging economies like India and China that are currently accounting for much of the increase of consumption are likely to be more sensitive to the effects of oil prices increases than the US. Nevermind the many African states where government subsidies for gasoline prices are going to come under increasing pressue as the oil prices continue to climb. Perhaps Brazil will finally have the last laugh with respect to its ethanol experiment.

Anyway, considering how high the natural gas prices are in the NE of the US, even the $50/barrel price point is not prohibitive... yet. However, it makes me happy I chose R19 walls, a sealed, insulated attic, etc. Perhaps it is time I supplement the first array of Vitosols with a second row

Paul Pollets

\"Old Arab Saying\"

There's an Arab saying that goes..."My father rode a camel, I drive a car...my son flies a jet plane...his son will ride a camel..."

I wonder if I can find a camel in Seattle??

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Constantin

Wouldn't an Elk, Bison, or Moose be more appropriate?

I wonder how quickly camels would get the sniffles in a place as wet as the NW of America.

So I say: Buy American! Who cares if they need more water or grass, everyone respects a Bison-rider more than a horse-rider, right? See esuvee.com...

I need to get some coffee. :-)