Oil Breaks $135

[phongn]

Of course the price hasn't translated into cutting into demand yet in the US. Even at $4.25 a gallon, I'm only paying ~$200 a month for gas which is significantly less than 5% of my income. I could probably handle gas at $10 a gallon before I'd really start to care.

Actually, US consumption actually has started to drop in reaction. And while you might not notice much at the pump; a lot of other people do.

[His Divine Shadow]

I pay as much as my rent in gas every month Although my rent is smaller than normal as I share it with my girlfriend.

[wautd]

> 1.4€ for diesel now over here

That's 2.21$ for you yanks

per liter, I'm presuming, since it's already far passed that per gallon here.

yes, slight detail

[Rightous Fist Of Heaven]

Just tanked 60l at 1.5€ per liter. Transportation costs currently make up about 10% of my monthly income. I wish I could take the bus to work, would end up saving a lot of cash. Unfortunately, the working hours and the location of my workplace are such that neither bicycling or mass transit are an option. Oh well.

[Natorgator]

I know I'll probably get flamed to hell and back for it, but I personally think this is all market frenzy feeding on itself, and speculators driving the price up. The market isn't that much different than it was a few months ago, and the rapid price increase says to me that the market is panicking at the moment. Mind you, I don't think it will ever go below $100/barrel, but I don't think we're going to see an increase of a dollar per day forever. Of course, I could be wrong.

[J]

A few months ago we were adding inventory, stockpiles of crude oil and petrol products were all going up. Since then inventories have been drawn down on most weeks with marginal increases on some weeks. Imports are dropping, crude inventories are dropping, finished product stores are falling as well, everything's going down.

There's undoubtedly some speculation involved, but it's in no way responsible for a $40 price premium as claimed by quite a few "financial experts".

[Natorgator]

Perhaps not, but the dollar dropping in value every day certainly doesn't help much.

[Admiral Valdemar]

No, but the euro price has also doubled over the last twelve months and it's clear from comments on this very board that EU denizens are also feeling the pinch. Moving the oil pricing index from dollars to euros or rubles or a basket of currencies may solve any inflation/hyper-inflationary pressure, but it will destroy the US' economy.

[Rightous Fist Of Heaven]

No, but the euro price has also doubled over the last twelve months and it's clear from comments on this very board that EU denizens are also feeling the pinch. Moving the oil pricing index from dollars to euros or rubles or a basket of currencies may solve any inflation/hyper-inflationary pressure, but it will destroy the US' economy.

Twelve months ago the cost of Brent crude was 52.95 € per barrel. Today its 82.9 € per barrel. It hasn't doubled. Nevertheless the price increase is significant. EU citizen's are indeed feeling the pinch. I might say Finns are in a somewhat unique position in this regard that we have the most expensive non-leaded regular gasoline in the EU.

[The Kernel]

Of course the price hasn't translated into cutting into demand yet in the US. Even at $4.25 a gallon, I'm only paying ~$200 a month for gas which is significantly less than 5% of my income. I could probably handle gas at $10 a gallon before I'd really start to care.

Actually, US consumption actually has started to drop in reaction. And while you might not notice much at the pump; a lot of other people do.

Funny, I heard a report on NPR the other day that said the exact opposite. They said that demand was actually increasing or staying flat and that Americans were just finding new ways to pay for the gas.

[Admiral Valdemar]

Twelve months ago the cost of Brent crude was 52.95 € per barrel. Today its 82.9 € per barrel. It hasn't doubled. Nevertheless the price increase is significant. EU citizen's are indeed feeling the pinch. I might say Finns are in a somewhat unique position in this regard that we have the most expensive non-leaded regular gasoline in the EU.

The price has gone up considerably and the US spot price went up even when the dollar was gaining on the euro and yen which have only just come around to start biting back again. So it hasn't literally doubled, it's barely off the 100 euro mark with price increases accelerating. The global economies are starting to wake up to the fact that, maybe, just maybe, there isn't enough to sate present demand, leaving future projections hanging by a thread.

If you want to see just how unprepared a developed nation can be, then read the projections Whitehall has based the next 30 years of growth off. Or consider that Congress is trying to sue OPEC for being mean to them.

Funny, I heard a report on NPR the other day that said the exact opposite. They said that demand was actually increasing or staying flat and that Americans were just finding new ways to pay for the gas.

On average, driving has kept demand .4% over this time last year. And they are finding new ways to pay, including but not limited to dipping into the 401k fund. Paying basic living costs with your pension or taxes by credit card is only just on this side of totally insane.

[Darth Wong]

People can't cut their gas consumption easily or overnight; a new more fuel-efficient car costs money too, and people have gotten used to buying all kinds of things they don't need, and which they can cut back on before gasoline. But long-term, I have to imagine that people will eventually wake up to the fact that they need to think about gasoline in their decision-making. The imbecile who buys a new house in a planned community 80km away from his place of employment might have to think twice about his commuting costs now.

[Rightous Fist Of Heaven]

Twelve months ago the cost of Brent crude was 52.95 € per barrel. Today its 82.9 € per barrel. It hasn't doubled. Nevertheless the price increase is significant. EU citizen's are indeed feeling the pinch. I might say Finns are in a somewhat unique position in this regard that we have the most expensive non-leaded regular gasoline in the EU.

The price has gone up considerably and the US spot price went up even when the dollar was gaining on the euro and yen which have only just come around to start biting back again. So it hasn't literally doubled, it's barely off the 100 euro mark with price increases accelerating. The global economies are starting to wake up to the fact that, maybe, just maybe, there isn't enough to sate present demand, leaving future projections hanging by a thread.

True. I'm just waiting for the inevitable when the voters here in Finland finally start to think why are we paying roughly 70-80 percent per liter in taxes for all the regular gasoline we tank. That moment will come, and then I'll be a happy beaver. In the meantime, gas will cost 2 € per liter shortly. Luckily, my work travel is only 20 kilometers in one direction (unluckily no bus connection) and personal transportation will still be viable even when gas costs that much.

It should also be noted that today's top mark of 135 $ has dropped to 131.83 $ for the moment as apparently the initial price wasn't justified by stockpiles and demand as demand is down 1.3 percent from the year earlier (in the US as it appears) as reported by the Energy Department. (From Bloomberg).

In addition, I think the effect investors are having on oil prices should not be neglected completely. The commodities market has proven to outperform stocks and bonds and thus investors have moved over. It's an insanely lucrative gamble for anyone willing to bet the big bucks on oil. atm.

[Admiral Valdemar]

In the US that is a big problem simply because people have always had cheap gas and, quite simply, never expected it would ever end. Even in Europe where public transport is far better and efficiency taken seriously, there are many hard pressed to keep pace with price increases. The local stations near me are putting the price up a penny a week near enough, with even those still able to keep their heads above the water being unable to do much else but keep paying. Not many can afford a hybrid, there's practically no decent EV on the market despite many promises and diesel is far more expensive now than petrol. Cutting tax would be the only immediate way of relieving the strain, and that comes with the caveat of reduced public spending.

This is where having a prescient government helps, because we'd have spent our "nice decade" winnings on improving our infrastructure for this eventuality, not squandering it on second homes and holidays.

[Darth Wong]

I actually know a guy who bought a new house about 100km away from his place of work, a few years ago. I questioned the wisdom of this decision at the time, but hey, it's not my life. But he just couldn't stand living in this city any more, according to him. He wanted to live in a nice planned community away from the city (where, I note with some cynicism, everyone is white). So, fuck him.

[Davis 51]

Funny, I was watching Bender's Big Score the other day. Al Gore guest stars, and was offered $100 to help Bender catch Fry in his HybriTaxi in the year 2012. When he accidentally hurls Bender out the window in a crash, he laments "DAMN! That $100 could have bought me...(camera does a close-up) one gallon of gas".

With this news, that scene isn't as funny.

[Admiral Valdemar]

Funny, I was watching Bender's Big Score the other day. Al Gore guest stars, and was offered $100 to help Bender catch Fry in his HybriTaxi in the year 2012. When he accidentally hurls Bender out the window in a crash, he laments "DAMN! That $100 could have bought me...(camera does a close-up) one gallon of gas".

With this news, that scene isn't as funny.

And how. Local news in Dallas is talking about seven buckaroos for a gallon of the watered down piss you call gasoline over there. It's amazing how fast things change, and we're still a week or so from hurricane season starting. What are you betting $5/gal. is going to be the national average easily by the end of August? I'd hate to see what they're paying in NY or CA at that time.

Meanwhile, we'll be imploding quietly on the other side of the pond.

[Rightous Fist Of Heaven]

In the US that is a big problem simply because people have always had cheap gas and, quite simply, never expected it would ever end. Even in Europe where public transport is far better and efficiency taken seriously, there are many hard pressed to keep pace with price increases. The local stations near me are putting the price up a penny a week near enough, with even those still able to keep their heads above the water being unable to do much else but keep paying. Not many can afford a hybrid, there's practically no decent EV on the market despite many promises and diesel is far more expensive now than petrol. Cutting tax would be the only immediate way of relieving the strain, and that comes with the caveat of reduced public spending.

This is where having a prescient government helps, because we'd have spent our "nice decade" winnings on improving our infrastructure for this eventuality, not squandering it on second homes and holidays.

Tax revenues will drop eventually when transportation costs start driving people out of work and to collecting unemployment support while businesses start going bankrupt due to the aforementioned transportation costs. I think the Government here in Finland will have to suck it up eventually and drop taxes on fuels or end up being seriously fucked. The situation here in Finland is worsened by the fact that we have a separate tax on diesel-operayed vehicles. The tax is paid once every year and is relative to the vehicles mass. For example, for a regular mid-sized family sedan the tax is about 400€ a year. There currently exists heavy pressure in favor of removing the tax entirely.

[Sharp-kun]

This is going to hit gas and electric prices too.

I was working on a contract today for one of our clients, a moderately sized hotel. They've had their electricity cost jump by about 100% for the year ahead due to the increases. That's an increase of £50k per annum. That kind of money isn't easy to find for some companies.

That was the best offer we got....

[Surlethe]

Of course the price hasn't translated into cutting into demand yet in the US. Even at $4.25 a gallon, I'm only paying ~$200 a month for gas which is significantly less than 5% of my income. I could probably handle gas at $10 a gallon before I'd really start to care.

Actually, US consumption actually has started to drop in reaction. And while you might not notice much at the pump; a lot of other people do.

Funny, I heard a report on NPR the other day that said the exact opposite. They said that demand was actually increasing or staying flat and that Americans were just finding new ways to pay for the gas.

Just last week, I read an article in my newspaper (which I posted in N&P) saying that gas consumption was down, cutting into state revenues. Regardless, if demand is increasing, it's doing so very slowly; it'll probably flatline before the summer is out and start to contract (taking the rest of the economy with it) by fall. Gas and oil consumption are not perfectly inelastic; they do react to price increases.

[Kanastrous]

Meanwhile, we'll be imploding quietly on the other side of the pond.

You're so much better served by rail and public transit, though...

[Admiral Valdemar]

You're so much better served by rail and public transit, though...

Clearly you have never set foot on this land then. It's costing me $120 return to get to Lancashire from Cambridgeshire, which is around 300 klicks. And that was the cheapest pre-booked ticket. The village my folks live in is served by one train every couple of hours, not on Sundays and with zero real bus service. It's not even like they're in the middle of nowhere, it's just not an economical route without council subsidies.

[Sharp-kun]

Clearly you have never set foot on this land then. It's costing me $120 return to get to Lancashire from Cambridgeshire, which is around 300 klicks.

O_O!

I get from Glasgow to Brum for about £25 return if I prebook...

[Admiral Valdemar]

Via the main northern line, no doubt. Ergo, cheaper. The same cost I pay for my trip applies to from where I am now to Bristol, but getting to London or Edinburgh is a cinch.

[Alferd Packer]

In the US that is a big problem simply because people have always had cheap gas and, quite simply, never expected it would ever end.

This is especially evident once you get west of, say Chicago. Everything gets bigger out west, and with the exception of a few cities, everything is designed with the automobile in mind. Which makes sense, because the population of the Western half the country really exploded after the invention of the automobile. The South is fucked, too, because their population exploded with the advent of air conditioning, which came, of course, after the car.

Meanwhile, as we continue to cram ourselves together here on the East Coast, cold and miserable though we may be, it turns out we were doing it right all along. Well, not exactly right, but certainly better. Even in my urban suburb in central NJ, I can actually get shit done without a car. Not all of my shit, but a lot of it.