Originally posted by ColettiTHe reason why prices are rising is becuase of rising demand mainly from china and india. And supply concerns mainly from fears about stability in Iraq- which has the 2nd largest reserves of oil in the world.
I'd want to know how much their gross sales were - and how that compares to previous quarters, what their price to earning ratio is, etc. 7.8 billion doesn't mean anything with nothing to compare it too. Next quarter they may take a loss - I don't know. How many shareholders do they have? How many grandmothers are going to get a bigger dividend. If n ...[text shortened]... oil investments years ago.
P.S. All recycling gets you is longer lasting landfills - that it.
So this serves to push prices up. GIven rising demand and concerns about future supply if prices did not go up, there would be shortages in supply and rationing of petrol.
So prices are high, although the price jump relative to the 1970s is nowhere near as high- where oil prices tripled in value. Of course, the oil companies make huge profits, since costs remain the same, but prices increase. What it should do lead to oil production in places, which were unprofitable, and cause oil companies to produce more in the pursuit of higher profits. This will eventually bring oil prices down in relative terms. But don't expect it to fall by too much- remember global oil reserves are falling substantially. Plus, i actually think higher oil prices are a good thing if it weans people off petrol driven cars- better for the environment.
Jayhayman is on the money, but it appears the problem is going to become long term, rather than the brief peak in the 1970's (this had more to do with OPEC cornering a substantial portion of the global oil market than a real supply shortage.
Increased global demand from China and India particularly, mean any respite in oil prices from the Iraq adventure is likely to be measured in the space of a few years.
Here are some links for you...
International Energy agency accepts peak oil and puts it's official estimate at 2015-2030 (depending on reserves)
http://www.peakoil.net/uhdsg/weo2004/TheUppsalaCode.html
Pop-culture catches on
http://www.rollingstone.com/news/story/_/id/7203633?rnd=1113439994015&has-player=true
Don't misunderstand the concept of a peak in oil production, it's unlikely we'll ever 'run out of oil' in our lifetime anyway. I'ts simply the law of demand and supply regarding a vital commodity. Oil is used in the production of plastics, fertilisers as well as the obvious vehicles (it's very important, http://www.energybulletin.net/newswire.php?id=624). Any drop in oil supply will simply push up it's cost, since people will still need it, it's not like a nice jacket that doubles in price, now knowone buys it, demand for oil at double the cost would still have strong demand. Another important point to remember about oil is that after a well hits below a 40% capacity, the cost of extracting the oil approaches and eventually becomes more than what it' worth so it isn't done (in terms of manpower, the price of the oil to run the heavy machinery, etc).
An advisor in vice president Cheney's 2001 energy taskforce, illustrates the scenario in an interesting fashion, giving it a sense of urgency
http://www.peakoil.net/iwood2003/MatSim.html
Debate and enjoy!