Oil Prices

[Mr. Ski]

Canoe.ca Article

The September light sweet crude contract on the New York Mercantile Exchange rose 42 cents to trade at $44.24 US a barrel -- the highest level since crude futures began trading on Nymex in 1983.

Wow. Getting up there in price. Still lower than the highest highs of the past when adjusted for inflation, but it's getting pricy none the less.

Any guesses on where it tops out this time, and how long it stays up?

[calf]

I'm gonna take a wild guess that it tops out around $47, but for the forseeable future hovers in the high 30's to low 40's. But that's a completely arbitrary guess.

Nothing but good things for Alberta though!

[the_only_turek_fan]

You sure Brad?

The high oil prices are a direct indication of low supply right?

If that is the case there should be reason for panic in this province?

[Cowperson]

It could hit $50 I think.

Relative to the oil crisis of 1973 when OPEC embargoed the West over policies in Israel, and even relative to the 1980's, the price of oil is actually still comparitively cheap.

I think I saw a study a while ago that said oil would need to be about $80 a barrel to have the same impact on the economy it had in those days.

It was only about 4 years ago the cover of The Economist wondered if oil would go under $10 a barrel. That was the low point for the commodity.

Cowperson

[calf]

Originally posted by the_only_turek_fan@Aug 3 2004, 11:27 AM
You sure Brad?

If the high oil prices are a direct indication of low supply right?

If that is the case there should be reason for panic in this province?

Actually, from my understanding, the high oil prices are more a result of what's happening in the world/high demand than low supply. Terror uncertainties/war, high demand in the US and China etc.

There's no reason to panic in this province of running out of oil since the Athabasca Tar sands have TONS of oil in them.

[Cowperson]

Originally posted by calf+Aug 3 2004, 05:33 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (calf @ Aug 3 2004, 05:33 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-the_only_turek_fan@Aug 3 2004, 11:27 AM
You sure Brad?

If the high oil prices are a direct indication of low supply right?

If that is the case there should be reason for panic in this province?

Actually, from my understanding, the high oil prices are more a result of what's happening in the world. Terror uncertainties, high demand in the US and China etc.

There's no reason to panic in this province of running out of oil since the Athabasca Tar sands have TONS of oil in them. [/b][/quote]
Demand from developing countries like India and China seems to be a demand variable that wasn't there in previous cycles. It seems to be showing up in other commodities as well.

From what I've seen, it looks like Iraqi oil production is at or has exceeded pre-war levels so that's probably not a factor on the supply side.

Lastly, future prices aren't necessarily a reflection of supply/demand reality as emotion and guessing does play a part. Then again, they might be dead on.

Cowperson

[calf]

Originally posted by Cowperson+Aug 3 2004, 11:39 AM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Cowperson @ Aug 3 2004, 11:39 AM)</td></tr><tr><td id='QUOTE'>

Actually, from my understanding, the high oil prices are more a result of what's happening in the world. Terror uncertainties, high demand in the US and China etc.

There's no reason to panic in this province of running out of oil since the Athabasca Tar sands have TONS of oil in them.

Demand from developing countries like India and China seems to be a demand variable that wasn't there in previous cycles. It seems to be showing up in other commodities as well.

From what I've seen, it looks like Iraqi oil production is at or has exceeded pre-war levels so that's probably not a factor on the supply side.

Lastly, future prices aren't necessarily a reflection of supply/demand reality as emotion and guessing does play a part. Then again, they might be dead on.

Cowperson [/b][/quote]
Thanks for putting it more eloquantly than I could have

[JohnnyO]

Barring no terrorist attacks I think the prices have peaked and should come down to high $30's low $40's as Russia gets back on track. The Saudis can turn on the tap if they want to and exploration will be higher with this price level.

How does that sound? I have no idea, and very few actually do. The Oil Sands are looking like a pretty good investment if you ask me.

[Cowperson]

Originally posted by JohnnyO@Aug 3 2004, 06:25 PM
Barring no terrorist attacks I think the prices have peaked and should come down to high $30's low $40's as Russia gets back on track. The Saudis can turn on the tap if they want to and exploration will be higher with this price level.

How does that sound? I have no idea, and very few actually do. The Oil Sands are looking like a pretty good investment if you ask me.

Coincidentally, an excellent article below looking at "why oil prices are so high."

It also cites demand from China and India as an unexpected variable in this cycle. It mentions that OPEC is reaching its maximum production capacity. More production might require more infrastructure.

http://edition.cnn.com/2004/BUSINESS/08/03...reut/index.html

Cowperson