Crude Oil: 3x in 4 years.

[Dzamija]

Well, it happened. The price of crude oil per barrel today crossed $120.

And if I'm not mistaken, only 4 years ago, in 2004, it was $40. At this pace, in 2012 it's either gonna be $200 ($120 + $80), or $360 ($120 * 3). The pace will probably increase though.

Any thoughts on this?

 

[Spunky]

I think the only reason it's so expensive is because there's so much demand for it. If people would quit *****ing and help find an alternative, prices might go down. But I don't really know, that's just a guess since I don't care too much about economics.

 

[KYnetiK]

We all massively depend on oil. Considering the amount left is only going to go down, the next few decades are gonna be real fun. Mad Max springs to mind.

 

[Zeonix]

Current oil prices have absolutely nothing to do with increased demand and everything to do with instability in the Middle East. Sorry Dan, but I'm going to have to mention America. People, both Americans and otherwise, seem to believe Bush and friends invaded Iraq for oil. They don't need oil. They have plenty of it. Their goal was and always has been to increase gas prices while raking in record-breaking profits, which is exactly what has happened. We say, "WE'RE GOING TO BOMB IRAN IF THEY DONT STOP BEING IRANIAN!", everyone freaks out, gas prices go up. A suicide bomber attacks a shopping district in Baghdad, oil prices go up.

And then people say, "Wait. Gas prices are going up, but so are the oil companies' profits. They must be gouging prices!", when in reality they don't even need to.

Whether people want to admit it or not, what America does affects everyone in the world. Unfortunately, we haven't done so in a positive manner in quite some time.

@ Wookie below me: They don't use crude oil for that...

 

[wookie]

I'm pretty sure the price for oil would go down with less body builders
http://forum.esforces.com/showthread.php?t=70169

I'm most positive!

 

[SailorAlea]

And then people say, "Wait. Gas prices are going up, but so are the oil companies' profits. They must be gouging prices!", when in reality they don't even need to.

I agree with you up until this point. The fact that their profit and not just revenue, is going up, means they ARE gouging.

Think about it like this.

Supplier drills oil and sells it for $20.

Manufacturer processes oil and sells it for $30.

Ignoring cost, let's just say "profit=$10."


---

There's instability in the region. Suppliers decides to sell it for $30. Price+$10 over original.

Manufacturers process it and sell it for $40. Price+$10 over original.

Same profit--$10. Price has gone up by $10 down the line, but profit remains the same.

This is what should be happening. Revenue (the total amount of money the oil is sold for) goes up, but PROFIT does not go up.

Increased prices do not mean increased profit. Something is wrong with what's happening.

 

[Zeonix]

I agree with you up until this point. The fact that their profit and not just revenue, is going up, means they ARE gouging.

Think about it like this.

Supplier drills oil and sells it for $20.

Manufacturer processes oil and sells it for $30.

Ignoring cost, let's just say "profit=$10."


---

There's instability in the region. Suppliers decides to sell it for $30. Price+$10 over original.

Manufacturers process it and sell it for $40. Price+$10 over original.

Same profit--$10. Price has gone up by $10 down the line, but profit remains the same.

This is what should be happening. Revenue (the total amount of money the oil is sold for) goes up, but PROFIT does not go up.

Increased prices do not mean increased profit. Something is wrong with what's happening.

I'd be lying if I said I understood economics, so I'll take your word for it.

 

[SailorAlea]

I'm far from an expert; it just seems to me that if the price is going up for their raw materials, and they're in turn charging customers more, they should be actually making about the same amount of profit.

But the gas companies, who have to pay the increased price of the raw materials, are still making more profit at the end of the day. Just think there's something wrong with this picture.

 

[Zeonix]

http://www.msnbc.msn.com/id/10082724/

Hardly the be-all and end-all answer to this particular topic, but it's one explanation.

Some more information: http://www.illinois.gov/gasprices/pgVspv.htm

Sorry to jack your thread, Dan. I'll try to keep this to a minimum, although I think this particular subject is directly related to your original post.

 

[Adaptus]

Basically what Alea was saying is that the increase in price is way too fast and way too high - they're being artificially inflated by someone.

 

[Zeonix]

Basically what Alea was saying is that the increase in price is way too fast and way too high - they're being artificially inflated by someone.

I understand that, but I also understand that's more of a feeling than actual evidence. I watch CNBC quite a bit to force myself to understand this, but from what I understand, there's a lot more going on than meets the eye when it comes to their record profits, and can be explained without coming to the conclusion that the oil industry is ****ing us all over.

Trust me, I would absolutely love to have proof that I'm getting ****ed over so I can gloat, but from what I've read and heard, there's no definitive proof to that end.

 

[Dzamija]

Guys. Don't any of you think that oil prices are influenced by the fact that we're globally running low on oil?

There's more in the Middle East than there is in other parts of the world, sure. I'll have to agree with Zeo on that. But think of this scenario; let's say that the Middle East opens up to the world and starts exporting their oil. Alright, it's all good and dandy for a while, oil prices go down, but the Middle East can't support the whole world for long.

What happens when the Middle East starts running low on oil? A lot of people are acting like there's enough oil on this planet to last us a couple more life times. I'm not so sure. We desperately need an alternative and that means that the whole world, and not just America, needs to severely cut back on oil consumption or we'll all be in for some **** when we simply run out.

Also, there's another scenario I should mention. The less oil there is, the more energy it takes to harvest it. However, the harvested oil can also provide us with energy. As long as the energy we get from the oil is greater than the energy we use to harvest it, we're fine.

The less oil there is, the more energy it takes, as I said. Naturally, the more we harvest, the less there is. What happens when the amount of energy required to harvest the oil becomes equivalent to the amount of energy we get from the harvested oil? Then there's no more point in even harvesting it, because we get nothing.

 

[SailorAlea]

Guys. Don't any of you think that oil prices are influenced by the fact that we're globally running low on oil?

There's more in the Middle East than there is in other parts of the world, sure. I'll have to agree with Zeo on that. But think of this scenario; let's say that the Middle East opens up to the world and starts exporting their oil. Alright, it's all good and dandy for a while, oil prices go down, but the Middle East can't support the whole world for long.

What happens when the Middle East starts running low on oil? A lot of people are acting like there's enough oil on this planet to last us a couple more life times. I'm not so sure. We desperately need an alternative and that means that the whole world, and not just America, needs to severely cut back on oil consumption or we'll all be in for some **** when we simply run out.

Also, there's another scenario I should mention. The less oil there is, the more energy it takes to harvest it. However, the harvested oil can also provide us with energy. As long as the energy we get from the oil is greater than the energy we use to harvest it, we're fine.

The less oil there is, the more energy it takes, as I said. Naturally, the more we harvest, the less there is. What happens when the amount of energy required to harvest the oil becomes equivalent to the amount of energy we get from the harvested oil? Then there's no more point in even harvesting it, because we get nothing.

It's not an end of the world situation. As oil becomes rarer, it'll become more expensive; you're right. However, it'll get to a point where oil will be more expensive than putting the money into researching more efficient, greener technologies. At that point, we're going to overcome our need for oil.

People are trying to think ahead and invest in green technologies now, BEFORE we come to that point. We're going to need oil in the future, to make plastics, rubber, etc--not for transportation.

I don't think it'll ever reach the desperation point where the world goes crazy for oil. We just need to focus on fuel cells, hybrid technology, fusion, etc.

 

[Zeonix]

It'd be nice if we could forget about biofuels while on the road to alternative energy. Doesn't really make sense to starve ourselves so that we can drive.

 

[SailorAlea]

It'd be nice if we could forget about biofuels while on the road to alternative energy. Doesn't really make sense to starve ourselves so that we can drive.

Well, it doesn't matter if people starve so I can drive my SUV as long as they're brown people. Right? That's how it works, apparently.

 

[Deman]

We all massively depend on oil. Considering the amount left is only going to go down, the next few decades are gonna be real fun. Mad Max springs to mind.

Mankind is greater than that now. With knowledge as free as it is now, we'll definitely be able to come up with other fuel sources. The unfortunate thing is it will take us almost running out of oil before other sources of power are widely used and accepted :/

 

[sub]

Well, it doesn't matter if people starve so I can drive my SUV as long as they're brown people. Right? That's how it works, apparently.

 

[SailorAlea]

Mankind is greater than that now. With knowledge as free as it is now, we'll definitely be able to come up with other fuel sources. The unfortunate thing is it will take us almost running out of oil before other sources of power are widely used and accepted :/

Don't think it'll come to that. For investment companies, all it takes is for oil to become slightly less viable than any kind of alternative energy. The second that happens, massive investment will take place.

No doubt the transfer will be rough, but thinking that these people who analyze risk and cost/benefit comparisons for a living are going to roll over and let something akin to "Mad Max" happen is just silly and naive.

 

[Dzamija]

It's not an end of the world situation. As oil becomes rarer, it'll become more expensive; you're right. However, it'll get to a point where oil will be more expensive than putting the money into researching more efficient, greener technologies. At that point, we're going to overcome our need for oil.

People are trying to think ahead and invest in green technologies now, BEFORE we come to that point. We're going to need oil in the future, to make plastics, rubber, etc--not for transportation.

I don't think it'll ever reach the desperation point where the world goes crazy for oil. We just need to focus on fuel cells, hybrid technology, fusion, etc.

That's why we need to act now. The more we put off researching alternative energies, the more expensive it'll become to research them. If we look at the world as a whole, 70% of our electrical energy comes from oil. And I'm pretty sure no research can be done without electricity. That's one thing.

Oil is the basis of many necessities for research, and the less there is, the harder it'll be to research. Infact, I think that we're already a bit late when it comes to searching for alternative energies, but not too late. Now is the time to get serious. Not tommorow, not in a year, not in a decade, now. While we can still afford it without people starving (yeah I know I'm exaggerating, just trying to demonstrate the significance and seriousness of the matter.)

 

[Zeonix]

That's why we need to act now. The more we put off researching alternative energies, the more expensive it'll become to research them. If we look at the world as a whole, 70% of our electrical energy comes from oil. And I'm pretty sure no research can be done without electricity. That's one thing.

Oil is the basis of many necessities for research, and the less there is, the harder it'll be to research. Infact, I think that we're already a bit late when it comes to searching for alternative energies, but not too late. Now is the time to get serious. Not tommorow, not in a year, not in a decade, now. While we can still afford it without people starving (yeah I know I'm exaggerating, just trying to demonstrate the significance and seriousness of the matter.)

I don't know if you've noticed but there have been food shortages around the globe which can probably be attributed to our ethanol policy.