Contradictory Facts

Paul Borg said:

This graph appears to refute the claim that oil is at an all time high:

http://www.wtrg.com/oil_graphs/oilprice1869.gif

Either the graph is wrong, or the recent hysteria over $80 a barrell oil is
being overstated, probably funded through a dis-information campaign funded
by a major bicycle maker.

I think if you read carefully, most responsible journalists the claim is
"near" an all time high if adjusted for inflation. As to cause, well
let's think about that.

What other commodity's pricing recently deviated widely from the reality
of the fundamentals the same way crude oil has? And what was the cause
of that deviation in pricing? And didn't most people eventually think
that there was only one way the prices could go? All sorts of business
shenanigans happened and we don't even know about most of them.

Stumped? Check it out:
http://www.palmbeachpost.com/business/content/business/epaper/2007/09/15/a8b_oilprices_0915.html

Paul Borg said:

This graph appears to refute the claim that oil is at an all time high:
http://www.wtrg.com/oil_graphs/oilprice1869.gif
Either the graph is wrong, or the recent hysteria over $80 a barrell oil is
being overstated, probably funded through a dis-information campaign funded
by a major bicycle maker.

Look at the cost of oil in gold and you'll stop being excited by
would-be Cassandras.
--
Andrew Muzi
www.yellowjersey.org
Open every day since 1 April, 1971

Quoted message said:

Paul Borg said:

This graph appears to refute the claim that oil is at an all time high:
http://www.wtrg.com/oil_graphs/oilprice1869.gif
Either the graph is wrong, or the recent hysteria over $80 a barrell
oil is
being overstated, probably funded through a dis-information campaign
funded
by a major bicycle maker.

vey said:

I think if you read carefully, most responsible journalists the claim is
"near" an all time high if adjusted for inflation. As to cause, well
let's think about that.
What other commodity's pricing recently deviated widely from the reality
of the fundamentals the same way crude oil has? And what was the cause
of that deviation in pricing? And didn't most people eventually think
that there was only one way the prices could go? All sorts of business
shenanigans happened and we don't even know about most of them.
Stumped? Check it out:
http://www.palmbeachpost.com/business/content/business/epaper/2007/09/15/a8b_oilprices_0915.html

from that link:
"calling on Congress for more oversight of the so-called "dark markets"
- unregulated, over-the-counter commodities markets"
Maybe the feds could completely control oil price/availability - like
heroin, where they do such a great job.

"If government could control the price and supply of anything communism
would have worked"
--
Andrew Muzi
www.yellowjersey.org
Open every day since 1 April, 1971

Paul Borg said:

This graph appears to refute the claim that oil is at an all time high:

http://www.wtrg.com/oil_graphs/oilprice1869.gif

Either the graph is wrong, or the recent hysteria over $80 a barrell oil is
being overstated, probably funded through a dis-information campaign funded
by a major bicycle maker.

If we believe that graph, oil is pretty expensive compared to
a few years ago, which has consequences. Whether or not it's
as high as the first barrel pumped from Titusville is immaterial.

But anyway, that's irrelevant. Peak oil conspiracy theories
are nothing compared to a conspiracy theory in which bicycle
manufacturers are funding major disinformation campaigns!
The bike biz is much too small to do that. It's like
saying that the kids down the street with a lemonade
stand financed medical studies against saccharin and
Nutrasweet.

Ben

A Muzi said:

Quoted message said:

Paul Borg said:

This graph appears to refute the claim that oil is at an all time high:
http://www.wtrg.com/oil_graphs/oilprice1869.gif
Either the graph is wrong, or the recent hysteria over $80 a barrell
oil is
being overstated, probably funded through a dis-information campaign
funded
by a major bicycle maker.

vey said:

I think if you read carefully, most responsible journalists the claim
is "near" an all time high if adjusted for inflation. As to cause,
well let's think about that.
What other commodity's pricing recently deviated widely from the
reality of the fundamentals the same way crude oil has? And what was
the cause of that deviation in pricing? And didn't most people
eventually think that there was only one way the prices could go? All
sorts of business shenanigans happened and we don't even know about
most of them.
Stumped? Check it out:
http://www.palmbeachpost.com/business/content/business/epaper/2007/09/15/a8b_oilprices_0915.html

from that link:
"calling on Congress for more oversight of the so-called "dark markets"
- unregulated, over-the-counter commodities markets"
Maybe the feds could completely control oil price/availability - like
heroin, where they do such a great job.

"If government could control the price and supply of anything communism
would have worked"

The problem is that oil is a heavily subsidized commodity. In this way,
the Feds already control the prices and availability.

If you want to take off all the subsidies, then maybe your argument
would hold some water. To take off the subsidies we would have to:
1. Stop spending any more money in the Middle East. That means no more
money to Israel, stop patrolling the Persian Gulf, and stop selling arms
to the Saudis among "other things." If the oil companies want security,
then they will have to hire it.
2. Stop subsidizing barge and ocean shipping (no more Army Corp dredging
projects) and start taxing trucks at what it actually costs to maintain
the highways they pound into rubble with their (often over) weight.
3. No more ethanol subsidies.
4. No more government owned and operated airports.
5. People would be able to sue if a refinery fouled their breathing
space. The "smells like money" bunch wouldn't have to join in since they
like emphysema.

These are just the ones off the top of my head. I'm sure that I and
others can think of other subsidies that the "free market" you pretend
is there should control.

[email hidden] wrote:
It's like

Quoted message said:

saying that the kids down the street with a lemonade
stand financed medical studies against saccharin and
Nutrasweet.

Well? Didn't they? Can you prove that they didn't? I heard their father
was a doctor and we all know that doctors are loaded, so maybe they had
some "help"?

A Muzi said:

Paul Borg said:

This graph appears to refute the claim that oil is at an all time high:
http://www.wtrg.com/oil_graphs/oilprice1869.gif
Either the graph is wrong, or the recent hysteria over $80 a barrell
oil is
being overstated, probably funded through a dis-information campaign
funded
by a major bicycle maker.

Look at the cost of oil in gold and you'll stop being excited by
would-be Cassandras.

Why don't you provide us with a link? Or do you make a habit of making
bald assertions? And are you aware that the "price" of gold is directly
determined by how much "money" the Fed decides to print? So much for
"free market" theories.

Paul Borg said:

This graph appears to refute the claim that oil is at an all time high:

http://www.wtrg.com/oil_graphs/oilprice1869.gif

Either the graph is wrong, or the recent hysteria over $80 a barrell oil is
being overstated, probably funded through a dis-information campaign funded
by a major bicycle maker.

Yeah, sure, Trek is out to produce a world-wide propaganda campaign to
get us to abandon our cars for their bikes.

But before you read any sort of conspiracy theory into this graph,
consider that the equating of "2006 dollars" over a hundred-year span is
at best an inexact science, and at worst utter BS. Going back to the
60s is more reasonable, and there we see that, aside from Nixon's time,
we are indeed facing unprecedented gas prices.

--

David L. Johnson

Arguing with an engineer is like mud wrestling with a pig...
You soon find out the pig likes it!

In article <[email hidden]>, vey <[email hidden]>

Quoted message said:

A Muzi said:

Quoted message said:

Paul Borg wrote:
> This graph appears to refute the claim that oil is at an all time high:
> http://www.wtrg.com/oil_graphs/oilprice1869.gif
> Either the graph is wrong, or the recent hysteria over $80 a barrell
> oil is
> being overstated, probably funded through a dis-information campaign
> funded
> by a major bicycle maker.

vey said:

I think if you read carefully, most responsible journalists the claim
is "near" an all time high if adjusted for inflation. As to cause,
well let's think about that.
What other commodity's pricing recently deviated widely from the
reality of the fundamentals the same way crude oil has? And what was
the cause of that deviation in pricing? And didn't most people
eventually think that there was only one way the prices could go? All
sorts of business shenanigans happened and we don't even know about
most of them.
Stumped? Check it out:

http://www.palmbeachpost.com/business/content/business/epaper/2007/09/15/a8
b_oilprices_0915.html

from that link:
"calling on Congress for more oversight of the so-called "dark markets"
- unregulated, over-the-counter commodities markets"
Maybe the feds could completely control oil price/availability - like
heroin, where they do such a great job.

"If government could control the price and supply of anything communism
would have worked"

The problem is that oil is a heavily subsidized commodity. In this way,
the Feds already control the prices and availability.

Hardly. Sordid geopolitics and armed incursions notwithstanding the
price and availability of oil has been largely beyond the control of
the Americans for over a generation. OPEC proved that 34 years ago.

Oil is now a fungible global commodity following the laws of supply and
demand and subject to the vagaries of the market.

Quoted message said:

If you want to take off all the subsidies, then maybe your argument
would hold some water. To take off the subsidies we would have to:
1. Stop spending any more money in the Middle East. That means no more
money to Israel, stop patrolling the Persian Gulf, and stop selling arms
to the Saudis among "other things." If the oil companies want security,
then they will have to hire it.
2. Stop subsidizing barge and ocean shipping (no more Army Corp dredging
projects) and start taxing trucks at what it actually costs to maintain
the highways they pound into rubble with their (often over) weight.
3. No more ethanol subsidies.
4. No more government owned and operated airports.
5. People would be able to sue if a refinery fouled their breathing
space. The "smells like money" bunch wouldn't have to join in since they
like emphysema.

These are just the ones off the top of my head. I'm sure that I and
others can think of other subsidies that the "free market" you pretend
is there should control.

It's not a newsflash: The free market ain't free at all. Vis oil, why
try to control what you can't? Better that you embark on a sane energy
policy and direct the subsidies where they will do most good.

<excerpt>
"
.....Let me conclude by restating our overall objective...our
independence will depend on maintaining and achieving self-sufficiency
in energy...

....The capacity for self-sufficiency in energy is a great goal. It is
also an essential goal, and we are going to achieve it.

Tonight I ask all of you to join together in moving toward that goal,
with the spirit of discipline, self-restraint, and unity which is the
cornerstone of our great and good country."

</excerpt>

Tricky Dicky
Address to the Nation About National Energy Policy.
November 25th, 1973

Didn't Carter say the same? And Clinton? And Bush II?

Luke said:

Hardly. Sordid geopolitics and armed incursions notwithstanding the
price and availability of oil has been largely beyond the control of
the Americans for over a generation. OPEC proved that 34 years ago.

Can you even *imagine* what the true price would be if oil wasn't
subsidized? Think about it: one small ship with a crew of 300 in the
Persian Gulf costs over a million dollars a day to operate and we
routinely keep at least twenty of them there. Never mind the costs of
operating an A/C with a crew of 5,000 and right now there are at least
two of them there. If there was no subsidy, the oil companies would be
paying for that and oil prices would reflect it. After all, if it can't
be moved to a place it can be sold, it's pretty much worthless.

Quoted message said:

Oil is now a fungible global commodity following the laws of supply and
demand and subject to the vagaries of the market.

Not when the speculators take over.

You didn't see that when house prices went crazy? You think that "Flip
That House" and all of it's TV derivatives weren't really happening all
over the US? Right now, my taxes reflect these nutty prices and what
fools paid for "investments" that are now empty, that they can't unload
for half of what they paid.

You didn't see that with the crazy dot com fiasco? When there were
people telling us (with a straight face) on the Today Show, that the
reason the fundamentals "didn't work anymore" was because we had "new
economy."

That wasn't "the market" at work. That was the Fed fiddling with the
money supply.

The fundamentals aren't working with oil either. Time to find out why.

Quoted message said:

It's not a newsflash: The free market ain't free at all. Vis oil, why
try to control what you can't? Better that you embark on a sane energy
policy and direct the subsidies where they will do most good.

Then why pretend there is a "free market" when there hasn't been one
since the 1880's? The reason that the subsidies will continue is because
the corporations and the rich want them to. Sanity has nothing to do
with it.

vey said:

I think if you read carefully, most responsible journalists the claim is
"near" an all time high if adjusted for inflation. As to cause, well
let's think about that.

"near" an all time high in 2004 but surpassing it now. The graph
doesn't show what happened in the past three years. 80$ oil is going
to seem pretty cheap five or ten years from now, I'd bet.

R.

Quoted message said:

vey said:

I think if you read carefully, most responsible journalists the claim is
"near" an all time high if adjusted for inflation. As to cause, well
let's think about that.

"near" an all time high in 2004 but surpassing it now. The graph
doesn't show what happened in the past three years. 80$ oil is going
to seem pretty cheap five or ten years from now, I'd bet.

R.

Good for you. Sharp eyes. I thought better of the OP. Guess that will
teach me to trust but verify.

In article <[email hidden]>, vey <[email hidden]>

Quoted message said:

Luke said:

Hardly. Sordid geopolitics and armed incursions notwithstanding the
price and availability of oil has been largely beyond the control of
the Americans for over a generation. OPEC proved that 34 years ago.

Can you even *imagine* what the true price would be if oil wasn't
subsidized? Think about it: one small ship with a crew of 300 in the
Persian Gulf costs over a million dollars a day to operate and we
routinely keep at least twenty of them there. Never mind the costs of
operating an A/C with a crew of 5,000 and right now there are at least
two of them there. If there was no subsidy, the oil companies would be
paying for that and oil prices would reflect it. After all, if it can't
be moved to a place it can be sold, it's pretty much worthless.

The price of extracting oil varies widely. I've read of estimates
ranging from a few dollars per barrel (Ghawar, Saudia Arabia, but since
Aramco is tight-lipped about production specifics who really knows?) to
close to $30 (Alberta tar sands) and beyond.

And excellent book on the subject is "Twilight in the Desert" by
Matthew Simmons. The author heads an investment bank specializing in
the energy sector.

I'm not equipped to comment on specific subsidies (U.S.) oil companies
receive courtesy of the American taxpayer, but history has well
documented that American foreign policy initiatives, covert and overt,
from Mossadegh to the current debacle in Iraq, have long sought to
secure oil supplies, intentionally or otherwise enriching big oil in
the process.

This is a most pernicious, inhumane form of subsidy paid in blood and
brutality. But it's a strategy yielding diminishing returns: petroleum
prices and supply lines are as volatile as ever.

Quoted message said:

Quoted message said:

Oil is now a fungible global commodity following the laws of supply and
demand and subject to the vagaries of the market.

Not when the speculators take over.

I reiterate: "subject to the vagaries of the market" Speculating on
commodities is a facet of the marketplace, it's not limited to oil.
You're free to participate.

Quoted message said:

You didn't see that when house prices went crazy? You think that "Flip
That House" and all of it's TV derivatives weren't really happening all
over the US? Right now, my taxes reflect these nutty prices and what
fools paid for "investments" that are now empty, that they can't unload
for half of what they paid.

You didn't see that with the crazy dot com fiasco? When there were
people telling us (with a straight face) on the Today Show, that the
reason the fundamentals "didn't work anymore" was because we had "new
economy."

Cyclical binges of mass avarice are a great American past time. Your
due for a hangover.

Quoted message said:

That wasn't "the market" at work. That was the Fed fiddling with the
money supply.

Quoted message said:

The fundamentals aren't working with oil either. Time to find out why.

Here is the fundamental fact: the supply of *cheap, easily extractable
oil* is diminishing; world demand is increasing. Its price will
continue to rise as long as that equation persists. Fed
intervention/policy can only mitigate the effects of this trend, it
cannot overturn it. And if the trend continues apace $100 per barrel in
a couple of years is a reasonable expectation.

<snip>

Luke said:

The price of extracting oil varies widely. I've read of estimates
ranging from a few dollars per barrel (Ghawar, Saudia Arabia, but since
Aramco is tight-lipped about production specifics who really knows?)

There are a lot of folks that don't even know about ARAMCO. That doesn't
stop them from having an opinion, though.

to

Quoted message said:

close to $30 (Alberta tar sands) and beyond.

Quoted message said:

And excellent book on the subject is "Twilight in the Desert" by
Matthew Simmons. The author heads an investment bank specializing in
the energy sector.

Not heard of it, thanks.

Quoted message said:

I'm not equipped to comment on specific subsidies (U.S.) oil companies

Not just US companies benefiting. BP and RD Shell are also well
represented. The Royal Navy keeps a small, but present force down there
and it's not for nothing.

Quoted message said:

receive courtesy of the American taxpayer, but history has well
documented that American foreign policy initiatives,

Don't forget British initiatives

Quoted message said:

covert and overt,
from Mossadegh to the current debacle in Iraq, have long sought to
secure oil supplies, intentionally or otherwise enriching big oil in
the process.

This is a most pernicious, inhumane form of subsidy paid in blood and
brutality. But it's a strategy yielding diminishing returns: petroleum
prices and supply lines are as volatile as ever.

I reiterate: "subject to the vagaries of the market" Speculating on
commodities is a facet of the marketplace, it's not limited to oil.
You're free to participate.

And I reiterate. Things have changed. The vagaries of the market have
little to do with the "new" speculative methods. Sadly, I am not and you
are not free to participate in these new energy exchanges. I say again,
there are new, since 2002, private energy markets now in the US.
Unregulated (I am and you are too stupid to know we could lose money)
they are manipulating the entire world market since the majority of
energy use is in the US.

Quoted message said:

Cyclical binges of mass avarice are a great American past time. Your
due for a hangover.

The manipulation of the energy market, after 5 years, can't be explained
as a cyclical binge. It should have corrected by now.

Quoted message said:

Here is the fundamental fact: the supply of *cheap, easily extractable
oil* is diminishing; world demand is increasing. Its price will
continue to rise as long as that equation persists. Fed
intervention/policy can only mitigate the effects of this trend, it
cannot overturn it. And if the trend continues apace $100 per barrel in
a couple of years is a reasonable expectation.

Quite true, but there is a layer of excess of about 33% that has been
showing for some time. No one seems to be able to account for it. Demand
has *not* been exceeding supply, yet it has been constantly there and
doesn't seem to want to go away. Co-incidentally, it was about the time
that the private energy exchanges appeared that the extra layer
appeared. Can anyone say that one caused the other, of course not. Why?
Because there is no info available, it's private.

A Muzi said:

Look at the cost of oil in gold and you'll stop being excited by
would-be Cassandras.

For those of us who don't get paid in gold or oil, it is still of
concern. Been thinking of turning my nest egg into somebody else's
currency. Bushbucks are smelling worse by the day.

Chalo

Quoted message said:

A Muzi said:

Look at the cost of oil in gold and you'll stop being excited by
would-be Cassandras.

Chalo said:

For those of us who don't get paid in gold or oil, it is still of
concern. Been thinking of turning my nest egg into somebody else's
currency. Bushbucks are smelling worse by the day.

It is what it is.
'Cheap oil' was a different complaint with another set of whining.
Adjust, buy what you need and/or change what you 'need'. Just like any
other commodity. The loudest complaints I hear about fuel prices are
from people who damned near live in the car - to no apparent purpose.
That is not a 'necessity'.

On a positive note, sustained high fuel costs may eventually spur a
nuclear/hydrogen economy , pretty cool concept IMHO.
--
Andrew Muzi
www.yellowjersey.org
Open every day since 1 April, 1971

A Muzi wrote:
The loudest complaints I hear about fuel prices are

Quoted message said:

from people who damned near live in the car - to no apparent purpose.
That is not a 'necessity'.

Been to the food store lately? Notice anything different there? Shipping
costs are going sky-high because diesel is up, too.

A Muzi said:

Quoted message said:

A Muzi said:

Look at the cost of oil in gold and you'll stop being excited by
would-be Cassandras.

Chalo said:

For those of us who don't get paid in gold or oil, it is still of
concern. Been thinking of turning my nest egg into somebody else's
currency. Bushbucks are smelling worse by the day.

It is what it is.
'Cheap oil' was a different complaint with another set of whining.
Adjust, buy what you need and/or change what you 'need'. Just like any
other commodity. The loudest complaints I hear about fuel prices are
from people who damned near live in the car - to no apparent purpose.
That is not a 'necessity'.

Unfortunately, change in the price of oil has an almost directly
proportional effect on the cost of food, electricity. and natural gas,
and it has a less direct effect on the cost of goods that require much
energy to produce, or those that must be transported to where they are
consumed. In other words, the price of oil dictates the cost of
practically everything. For regular folks, the effect of an increase
in the price of oil is almost the same as the effect of a decrease in
the value of the dollar, making it almost immaterial which of those
two things is actually happening.

Quoted message said:

On a positive note, sustained high fuel costs may eventually spur a
nuclear/hydrogen economy , pretty cool concept IMHO.

We'll see. The folks in charge of nuclear power have a pretty strong
track record of turning gold into lead, but who knows? Maybe our
society has become more efficient and less corrupt since the golden
age of nuclear plant cost overruns and safety scares. ;^)

Chalo

In article <[email hidden]>, vey <[email hidden]>

Quoted message said:

Quoted message said:

Here is the fundamental fact: the supply of *cheap, easily extractable
oil* is diminishing; world demand is increasing. Its price will
continue to rise as long as that equation persists. Fed
intervention/policy can only mitigate the effects of this trend, it
cannot overturn it. And if the trend continues apace $100 per barrel in
a couple of years is a reasonable expectation.

Quite true, but there is a layer of excess of about 33% that has been
showing for some time. No one seems to be able to account for it. Demand
has *not* been exceeding supply, yet it has been constantly there and
doesn't seem to want to go away. Co-incidentally, it was about the time
that the private energy exchanges appeared that the extra layer
appeared. Can anyone say that one caused the other, of course not. Why?
Because there is no info available, it's private.

I don't know what this '33%' excess layer refers to. I take it to mean
the margin by which capacity exceeds demand. Is that it? If so I should
think it can be readily accounted for. Nations and enterprises whose
welfares are bound to the fortunes of the oil industry are behaving in
a predictable manner: they are bent on furthering their interests and
maximizing their profits. It is the prerogative of Russia, Venezuela,
Saudi Arabia, Exxon, BP, Private Equity, etc... to manage and
manipulate the resource so that they may extract the most value. If you
were in their position wouldn't you do the same?

That these interests engage in transactions employing ever opaque
mechanisms and exclusive associations is, again, neither new or
surprising. Robber Barons of the Gilded Age did the same; wealth at
such a rarified level seeks its own, in proceedings beyond public
scrutiny.

When I wrote 'you're free to participate' it wasn't meant to imply the
involvement would be of the same tenor as that restrictive club. I
meant as Joe Sixpack, at the bottom of the food chain, buying oil
stocks or investing in mortgage backed securities -- not a good idea
right now! ;-)

But in spite of all this, the most important determinant of the price
of oil, like any tradeable commodity, is the supply/demand
relationship.