Will oil go up or down

[ScottA]

I was giving this some thought earlier. These crude oil prices we are seeing on the news are for futures. That is to say for oil to be delivered at some later date. The gas we buy today was made from oil purchaced at an earlier date. So if oil just went down why would we expect gas to go down at the exact same time and rate? The fact that it is going down now leads me to belive that these price moves have been preplanned. If not preplanned are they simply trying to prevent a future surplus by dropping prices ahead of the futures prices? Make any sense?

Another thing I'm wondering is how much of the total volume of oil sold is sold on futures contracts? I would think that major refineries would have purchaced oil contracts months or years in advance and would be unlikely to be trading those contracts on the open markets just weeks before expected delivery. I could be wrong but this seems like recipe for disaster.

[desdawg]

The democrats in the house attempted to pass legislation to release some of the strategic reserve into the market place. The republicans blocked the measure. What I heard was that a 1% increase in available oil would drop the price at the pump 10%. If I heard it right. The dem's were arguing consumer relief and that the taxpayers had already paid for that oil once. The repub's were arguing that this wasn't a good enough reason to get into the strategic reserve. This is one of the few times I actually agreed with the democrats. The oil that would be made available would be sweet crude and it would be replaed later with a  heavier crude of lesser quality.

[benevolance]

It is so funny to me that we spend all this time effort and money stockpiling oil in the strategic reserve...Why not take that time energy and money and  put it into ways to lessen the amount of oil we consume, so as to lessen our dependency on foreign oil.

We have just about all the tech we need... BioDiesel from Seawater Algae is much better alternative than ethanol...It would be very easy and profitable for us to make all of our diesel from Sea water algae...

If we consumed 25% less oil there would be a dramatic drop in the demand worldwide and that would create relief in the price of crude and gas at the pump that we so desperately need.

The powers that be do not want affordable energy or energy that does not come from Coal or Oil

[desdawg]

I would hope that would be what comes out of all this period of high prices would be a shift in that direction. And I think it will eventually.

[benevolance]

Well  this country and the world needs to stop using prime farmland that was used for growing corn and soybean as food and making ethanol...

Considering that most of the low lying desertland in the world is in close proximity to oceans... we can easily produce all the biodiesel the world could ever need... Replacing this retarded ethanol push. It is cheaper to make Sea Algae bio diesel than  it is to make contemporary diesel. Cheaper cleaner pollution free fuel..That does not use farmland.

[desdawg]

Here you go.
http://news.yahoo.com/s/nm/20080727/bs_nm/energy_gasoline_retail_dc_1

[benevolance]

It is a good start...But really we need to see another 20% drop in the price of crude before things can start getting back to normal...

Getting gasoline below $3.00 a gallon for an extended period of time will allow consumers to spending more money into the local economy. Retail sales might rebound a little...And the housing market has shown some signs of life on lower end homes and the purchasing of foreclosures...More people might be willing to buy a house if they were not spending so much of their paycheck on heating oil or gasoline.

The drop in crude is coming just in time for the northeast...Fall is fastly approaching and they need a serious drop in the price of natural gas and home heating oil. Heating oil that costs $5.-- a gallon would have disasterous effects on the economy in the northeast.

[desdawg]

I think natural gas is going up.

[benevolance]

Probably because there is a huge push across america for natural gas powered vehicles...

They did the same thing to diesel... it was half the cost of gasoline for years  so was propane...And now it cost more! All to encourage us to keep using inefficient gasoline to power our automobiles...

nevermind that there is 20% more energy in Natural gas compared to Gasoline for the same amount of fuel. So making new cars specifically to burn natural gas we as consumers would get 20% more mileage...And currently natural gas is half the price of gasoline....So we could fill up for half the money and drive 20% further

Mr Oil does not want any of this to see the light of day

[glenn kangiser]

Rough conversions don't seem to show that much power in NG or propane I don't think.

http://www.eia.doe.gov/kids/energyfacts/science/energy_calculator.html

[ScottA]

I expect all energy to go up or down with the price of oil in the long run. Doesn't matter what form it takes. Gas is down to $3.60 here now.

[Sassy]

Just filled up yesterday - $4.11 for regular - cheapest I've seen in the valley...  California seems to be way more expensive than other places...   

[desdawg]

I hit it at $3.79 in Chino valley yesterday. Then I got back to the Phoenix area and it was $3.85. It's a BS deal and the local guys don't want to take any of the rap. Blame it on big oil.
Propane develops less HP than gasoline. I never really noticed it when driving propane powered vehicles but I don't have a lead foot.

[benevolance]

One thing about propane is that engines can have much higher compression without detination or sprak knock...

Same thing applies for natural gas... We are burning a better fuel in an engine set up for inferior gasoline.. that is half the problem

A Engine designed for propane or natural gas with high compression pistons will deliver more power and better fuel efficiency... the higher the compression the more work done for each cycle of the engines pistons.

High efficiency diesel engines in cars  europe have compression ratios in the 18-20:1 range...Which is why they are so much better on fuel twice the compression means twice the work done... in layman's terms

[muldoon]

I paid 3.64 today at the exxon by work.  So it's coming down as RBOC futures market said it would. 

As for long term, man know knows?  I can see the case for a 70 barrel and I can see the case for 300.  I know not which path we take. 

A 70 per barrel would mean we hit deflation on a global level, and the amount of money and thus consumption globally takes a nose dive.  As consumption delines supply and demand says prices plummet.  A 300 barrel means the US inflates/hyperinflates and our money doesnt go as far in comparison to the rest of the world who merely pick up the slack in anything we elect not to consume.  If we keep seeing congress bailouts this is likely. 

Neither are pretty in the global economy.  A deflationary 50-70 dollar barrel will kill oil companies.  some may smile on that, however myself being employed by one I would prefer not.  It also would go along way to kill nationalized oil nations like Saudi, UAE, USSR, Venezuela, Iran...  they in turn (especially Saudi) would have a high likely hood of not buying continuing US debt.  The 300 barrel indicates a declining US dollar, where the rest of world continues paying roughly the same in their currency while it gets more expensive for us.  This has far reaching repercussions on the global economy as well.... 

See, think of it like this.  there are five guys on a deserted island.  specifically there are 4 chinese guys and one American.  Heres the breakdown.  One Chinese guy says, I will fish.  Another says I will grow food, another says I will gather and filter water, another says I will hunt providing fresh meat.  The american says I will eat. 

From an economics perspective the American has the most important job.  If he did not consume, the other 4 would be out of a job.  However, if the American was not in the picture the Chinese might need to work less and enjoy the fruits of their labor more.  ... 

So, what will they do here?  Thats what decides where oil is headed I believe. 

It's rather ironic that the future of democratic America lies in the hands of red china continuing to pay our bills.   

[peternap]

I'm still going with my prediction that it will be up. Eventually, it will settle between now and then, but not for a while.

I am convinced that the futures market we are seeing now, is being allowed to settle.

The entire market is still drunk although, I am seeing faint signs of some leveling out. I bought astock inb a makeup company today that has tumbled on the flimsiest reasons. Earnings were very good, management is good. They have some long term debt that comes due in 2012 but is well within the ability of the company to repay. It was just shorted down.

I expect an immediate bounce. The Financial s I bought have already produced thousands of dollars of profit, which I happily took today. No reason for them to bounce. They were just NOT shorted.

[desdawg]

I keep hearing more and more about natural gas as a motor fuel. I started buying back some of the domestic energy stocks I had when the dip began towards the end of July. The prices are coming down to below where I sold them. So I am betting it will go back up when the winter heating season begins for the majority of this country. JMO but I am betting on it. If Boon Pickens plan is implemented he called for using the NG that was is being used to generate electricity as motor fuel through the transition to alternative (wind) energy. If everyone starts competing for the NG resources that are available there will be a big push to get more out of the ground and that will push the price higher. So I am looking at domestic companies that produce both NG and oil. If NG becomes a viable motor fuel that should relieve some demand for oil and lower the gasoline price at the pump I would think. It's a mixed bag but I am looking at the stock prices.

[glenn kangiser]

I think there is to much infrastructure change and expensive modifications for NG to become a viable vehicle fuel option in the near future.  Just my opinion.  Major agencies like cities - gov agencies maybe where money is not an option. Maybe that is enough

[desdawg]

You could be right Glenn. Boone Pickens had addressed that in his presentation. I don't remember what price tag he put on it. I am hearing that in some South American countries NG is being used extensively for a motor fuel. The biggest problem is that it is not a liquid and has to be compressed into the fuel tank. That takes time so a fill up could take a while. It would be best suited for fleet situations where the night crew could see to it IMO. Tanks could be filling all day and be switched out at night. And I am hearing about it starting with government fleet situations. I don't think it would be an inexpensive proposition.

[benevolance]

It takes a little longer to fill up a NG car

There are commercial filling stations open to the public in the northeast...And you take your bi fuel car in and they fill it up...Takes 15 minutes or so.... Not that big a deal

Considering that most people do not burn more than one tank of fuel a week most people can fill up on the week-end or one night after supper...No big deal.

Propane filling is quick and easy...Does not really take much longer than gasoline... low pressure for propane the fuel is not liquified which is why it is so quick and easy

[apaknad]

honda civic has/had a NG car and you could buy a filling station to have in your garage($2,000 i think for the station) and fill overnight. shorter range but equivalent to about 1/2 the cost of gas.

jack roush(the race car owner) has a propane conversion for rhe F150 p.u. truck for $10,000. i forget how much you save on propane not counting conversion. his building is in my general area so i always pay attention to news about him. he, big at ford mo. co. and i drive an F150.

[desdawg]

Propane pumps as a liquid and burns as a vapor. Out here in the country I don't have natural gas available. Electricity would be an option if it could handle the loads I carry. For any kind of heavy hauling I think we will be using fossil fuels for some time. Propane would work but I don't think it will replace diesel fuel.

[Redoverfarm]

Can remember in the early 70's that my uncle in MS converted his delivery vehicles to propane.  Drove them forever until he shut his buisness down.  Wasn't much on long trips as the availability of stations to fill up on the way was uncertain. Here all the propane delivery trucks use their own product to run.  By the way propane now here is $2.90 delivered.  Suppose to be a $.10 discount for summer fills.  Still high.  Hope mine will not need that much.  On average it has ben runing 115-140 gallons a winter.  500 gallon tank indicates that it is somewher between 50-60% so if they only fill to 80%-90% (normal) then I don't think it will be too bad.

[desdawg]

Supposed to only fill to 80% of liquid capacity. The remaining 20% allows room for vaporization to occur. Propane will vaporize at any temperature above -44 F. The little spitter valve that gets opened when filling releases liquid when the tank is filled to 80%.

[desdawg]

And so it begins. Synthetic diesel and jet fuel with a NG base.
http://biz.yahoo.com/ap/080806/rentech_synthetic_fuel.html?.v=2