Its what I've been saying all along. Finally someone backs me!

http://heraldsun.news.com.au/c....html (http://heraldsun.news.com.au/common/story_page/0,5478,16441087%5E664,00.html)

This might be a great time to buy an Escalade. :D

I'm holding on to my 6.0L Denali.

Go for it Jesda! And throw some 22's on there as well! Haha, this is good news to hear. It's about time someone came to their senses. All my business professors have been talking about the oil bubble for some time now, but finally someone with a voice that's heard says it.

Brian

Bubble smubble, wake up and take a bong hit of reality. The cold hard fact is that all the easy oil has been harvested. Oil fields in Saudi fields have been pumping for 40 years. Now they’re pumping up 50% oil and 50% sea water. Yes they have other fields, but the capitol investment to make those new fields productive is incredible. As is the expenditures necessary to recover crude in other locations.

There is a speculative factor, aside from real demand, that is driving oil prices and it is based on fear of supply, long ad short term, and that an ever increasing demand will further drive up the price. Also, a very important feature to consider is that for world oil dependency (demand) to change it takes time and capital expenditures to develop the alternative methods. They don’t call it Oil Dependency for nothing!

I think the biggest factor in the increase of oil is that the market is willing to stand in line to pay any price for it. If the demand would respond by dropping off at short term increases, consumers might stand a chance. The free market will test higher and higher levels in the coming months. Will gasoline prices fluctuate, sure, but get ready for $5 per gallon prices by next summer and possibly sooner. If not, you’re just another oil addict that is helping raise oil prices higher.

Marijuana does not induce reality!

Here's my posts on this topic from another forum:
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At first, REAL factors cause prices to justifiably rise. Then, a psychological frenzy among speculators sends the price to stratospheric levels. You then have a bubble. The bigger a bubble gets, the more likely it is to pop.
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OPEC, which supplies 1/4th of the crude oil that is imported to the US, does not set prices. They only determine supply, which in turn influences prices on the open market.

Below is a visual example of [see attachment]:
1) Change in demand resulting in an increased price.
2) Futures speculation resulting in prices that do not respect actual demand.

It is a social phenomenon that can affect quantity demanded but not actual demand, and is temporary because it does not properly fall on actual demand or actual supply curves. Its called a "balloon" because the prices are "inflated" beyond where they should be, which is along the curve I labeled as "D2"

You can see here [see attachment] that during a balloon, prices do not increase with respect to the increase in actual demand. The rate of price increase is not in conjunction with the rate of demand increase.
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Prices that fall inside the bubble zone are not sustainable because they do not reflect actual supply and actual demand. There's nothing to hold them up because they are exaggerations of what the price should be, based on demand.

Analogy:
Think of curve "D2" as being the floor of your house. Lets say the price points in the shaded 'price bubble' area are elephants jumping in the air.

Now, when an elephant jumps, it has to eventually come back down and land on the floor. And the harder and higher it jumps, the harder it will hit the floor. If it jumps too high and too hard, it will fall through the floor (or "crash") and land in the basement (curve "D1"). Then the elephant will have to climb back up the stairs and hang out on the main floor (curve "D2") where it rightfully belongs until actual demand increases.
----------------

My cousin has done research on this subject, and I thought I would copy and paste what he said elsewhere......

"I just had a conversation with Ralph about this very subject, so he thought I should add some ideas here. I've been doing some historical research on the petroleum industry (and I used to be an Economics dude).

Anyway, I was discussing the petroleum situation with a Royal Dutch Shell executive in Calgary. Shell's projections for a yearly crude high suggest oil might hit $130 per barrel, which is US terms would mean just below $4.00 a gallon. An extreme projection would be $180 per barrel - if factors conspired to produce a superspike.

The good news is that new refineries should be on line in Russia and Alberta in the coming year, which along with a probable decline in speculation means crude prices should level out at about $55-60 per barrell in 2006/2007. But he figured it wouldn't go down any lower than that.

Historically, if you look at the 1970s and early '80s, when oil prices were higher, relatively-speaking, than now, the immediate effect was inflation, unfortunately combined with economic stagnation (which old Jimmy Carter had to deal with). Oil is an "inelastic good": there is virtually no substitute, so consumers (esp. plastics companies and airlines) HAVE to buy it. So 25 years ago this led to the gigantic interest rate rises under Reagan.

We got out of that one when OPEC members started bickering and overpumped their quotas, leading to $11 per barrel prices in 1985. The difference now is that demand is much, much higher, thanks to the exploding economies of India and China.

MAYBE oil will become too expensive for the Chinese and Indians and their economies will cool off, but that's unlikely.

The most likely scenario for us in North America is that we'll have an economic situation like Europe and Japan have had for the past few years. Expensive, high-cost living, but if the economy keeps growing you won't see serious problems. But ... that middle-class crunch could happen. Washington would seriously have to reexamine its social welfare programmes - higher taxes to prevent a social imbalance. There would be more poorer voters who could force the situation.

Of course, there are a lot of unknowns - if Hugo Chavez turns off the taps, if the House of Saud collapses in Saudi Arabia and there's anarchy, if China invades Taiwan (or Siberia) ... Then again: if oil prices go too high, ultimately, it makes synthetic petroleum (like the Germans toyed with in WWII) a more feasible proposition."

Bubble smubble, wake up and take a bong hit of reality. The cold hard fact is that all the easy oil has been harvested. Oil fields in Saudi fields have been pumping for 40 years. Now they’re pumping up 50% oil and 50% sea water. Yes they have other fields, but the capitol investment to make those new fields productive is incredible. As is the expenditures necessary to recover crude in other locations.

There is a speculative factor, aside from real demand, that is driving oil prices and it is based on fear of supply, long ad short term, and that an ever increasing demand will further drive up the price. Also, a very important feature to consider is that for world oil dependency (demand) to change it takes time and capital expenditures to develop the alternative methods. They don’t call it Oil Dependency for nothing!

I think the biggest factor in the increase of oil is that the market is willing to stand in line to pay any price for it. If the demand would respond by dropping off at short term increases, consumers might stand a chance. The free market will test higher and higher levels in the coming months. Will gasoline prices fluctuate, sure, but get ready for $5 per gallon prices by next summer and possibly sooner. If not, you’re just another oil addict that is helping raise oil prices higher.

I KNOW for a FACT. That Kuwait has enough Oil to last it for another 200 years ATLEAST.

Bubble smubble, wake up and take a bong hit of reality. The cold hard fact is that all the easy oil has been harvested. Oil fields in Saudi fields have been pumping for 40 years. Now they’re pumping up 50% oil and 50% sea water. Yes they have other fields, but the capitol investment to make those new fields productive is incredible. As is the expenditures necessary to recover crude in other locations.

There is a speculative factor, aside from real demand, that is driving oil prices and it is based on fear of supply, long ad short term, and that an ever increasing demand will further drive up the price. Also, a very important feature to consider is that for world oil dependency (demand) to change it takes time and capital expenditures to develop the alternative methods. They don’t call it Oil Dependency for nothing!

I think the biggest factor in the increase of oil is that the market is willing to stand in line to pay any price for it. If the demand would respond by dropping off at short term increases, consumers might stand a chance. The free market will test higher and higher levels in the coming months. Will gasoline prices fluctuate, sure, but get ready for $5 per gallon prices by next summer and possibly sooner. If not, you’re just another oil addict that is helping raise oil prices higher.

We have enough oil for another 200 years also.....(at least)

"The number of barrels of proven Oil reserves in Canada is 180 billion; second only to Saudi Arabia (U.S. Department of Energy). Actual reserves may be 315 billion barrels alone in Canada's Tar Sands Oil Field according the Canadian Association of Petroleum Producers"

http://www.canadianally.com/ca/about/facts-res-en.asp

We have so much it's gushing out of the ground where it's capped! There isn't any shortage, but they cannot refine and transport it quick enough like back in the 1970's, as an example. There is no "shortage."

I agree, like all great stock market crashes, like in 1929, it will pop, and prices will hit the 1.30-1.50 range.

I'm keeping my truck, but making plans for a new motor.

I agree, like all great stock market crashes, like in 1929, it will pop, and prices will hit the 1.30-1.50 range.

I'm keeping my truck, but making plans for a new motor.

Considering taxes and such, those rates are a little friendly, but I suppose at or slightly above the $2.00 per gallon mark will be the norm. Just not this year...

You optimistic people better be right.

I dont think it will pop because there is such a demand. but Im hoping it will prove me wrong.

http://q.spilky.com/nicothread/price-bubble.jpg
http://q.spilky.com/nicothread/stacy-keibler-bubble.jpg

http://q.spilky.com/nicothread/price-bubble.jpg
http://q.spilky.com/nicothread/stacy-keibler-bubble.jpg

Boobies?

:p

YES! Boobies! :) hehehe Excellent work!

hahaha exactly!

Boobies yes Boobies. Thanks Jesda!!:D

I'd like to be the first to say...I approve of the boobie curve illustrated above :D

The real issue isn't the oil in the ground, its the damn refining capacity. We in the US haven't built a new refinery in almost 20 years due to environmental litigation and such. Once the refining capacity increases, the price will come down because more refined petroleum products will be getting to market. There are some market influences for crude sucha s China and India ramping up imports in a big way, but the amout being produced should be able to take that in stride. I am predicting oil will level off in the next year or so at about $40 a barrel.

The main bitch I have is with the goddamn traders...they are so damn skittish that every time something may remotely effect the oil production of a region, they freak out and run up the price.

I'm thinking about getting this installed in my truck. Any thoughts?

I'm thinking about getting this installed in my truck. Any thoughts?

i like it, i need one for an 83 fleetwood though

Hehehe...last friday afternoon I put a hundred and fifteen bucks in my truck...of the cheap stuff...and come tomorrow I'll be doing the same again...granted, I drove an extra hundred and thirty miles this week... :)