Oil Price Surging

[Tinordi]

Originally Posted by macker

Hopefully these uprisings don't drag into the "driving season" and summer months! AAA says the American gas price on average right now is at $3.37. For every $10 increase in crude if sustained for an entire year Americans spend $96 billion more on gas. If crude gets to $120 and stays there for a period of 6 months or more it would cause a lot of damage. Oil has surged recently but it has to sustain the higher levels for it to really threaten the recovery.

Hopefully they do. High time we started paying alot more for oil.

[macker]

^
I would say it is approaching "high time" as Americans are paying $0.72 more per gallon vs last year. In 2010 Americans drove enough to burn 138 billion gallons of gas so right there you are looking at $100 billion tax on consumers that wasn't there last year. Not trivial at all....compare it to the one year payrol tax that was passed in December that will cut $120 in taxes this year.....Gasoline increases have almost all but smothered that boost and this is only factoring in at current levels....

Energy consumption as a % of consumer spending is getting close to levels that previously became unsustainable and pushed the economy into trouble. The problem with spending more on energy is that much of the benefit ends up abroad and cuts into local spending that helps the economy continue to recover. I guess from a Canadian short term perspective this is good news?

[Tinordi]

From an environmental perspective it's great news. We need price signals to start the painful decoupling process of oil consumption from growth.

Also, why are high prices disproportionately burdensome for the U.S. The rest of the developed world has much higher prices (and lower rates of consumption).

http://www.economist.com/blogs/freee.../energy_prices

There are any number of good reasons to raise the petrol tax rate. The current rate no longer brings in enough money to cover current highway spending. Petrol taxes are an efficient way to raise revenue, and the government needs revenue; President Obama's deficit commission recommended an increase in the federal petrol tax rate. Burning oil produces carbon emissions, and dearer fuel would reduce America's sky-high per capita carbon footprint. But a higher tax rate would also diminish the possibility that a sudden rise in oil prices would throw the economy into recession. That would be a nice risk to minimise! And yes, higher tax rates would hit consumers just like rising oil prices. But those prices are rising anyway; better to capture the revenue and use it, all while improving behaviour.

[PIMking]

great, time to fill up tonight....

[Bill Bumface]

Originally Posted by Tinordi

From an environmental perspective it's great news. We need price signals to start the painful decoupling process of oil consumption from growth.

Also, why are high prices disproportionately burdensome for the U.S. The rest of the developed world has much higher prices (and lower rates of consumption).

Didn't you get the memo? People only care about alternative energy when they have more money than they know what to do with, you know, about 5 years ago.

[macker]

[QUOTE=Tinordi;2992146]From an environmental perspective it's great news. We need price signals to start the painful decoupling process of oil consumption from growth.

Also, why are high prices disproportionately burdensome for the U.S.




Because they consume 25% of the worlds oil or 20 million barrels per day. They have shown signs of easing consumption and the dependence to oil if you look at auto production as they are now producing about 10 million cars per year and this has come down from a high of 17 million cars per year....

[TylerSVT]

meh, $1 gas isnt that different from $1.15 dollar gas, just an extra couple bucks here and there, If it went up to $2 than i would probably complain.

Would be nice to see Nat Gas back over 6 bucks though.

[macker]

^
It has a much farther reach than the simple cost of gas for your car. Take any product around you and consider how it got to you....at each point in the transport fuel is used and it adds to the overall price, nevermind the fuel used in the production of that product.....A direct way you can watch the impact of this is the FSC - fuel surcharge...it was 18% in 2009-2010, and now up to 26%....The way it can play out from here is you have the price of a given product rapidly increasing, resulting in lower demand, resulting in lower quantities ordered or shipped, resulting in product scarcity, resulting in higher prices yet, resulting in lower demand, resulting in lower revenue, resulting in workforce reductions. That is how the price of oil plays out in the big picture....

[anyonebutedmonton]

We have a live feed through a software company... Not sure how else to get live NYMEX quotes.

Oil companies sometimes track the commodity price but it is a reach to call it universal.

[macker]

Originally Posted by fotze

Here's a stupid question. Where is the best place to track "the oil price", brent and west texas? All the headlines seem out of date, there is no ticker symbol.

Oil company stock prices almost universally mirror the oil price but the last week or so this has not been the case? Oil up stock down, something odd going on.

http://www.bloomberg.com/markets/commodities/futures/

[Tinordi]

http://www.cmegroup.com/trading/ener...eet-crude.html

NYMEX Futures on sweet light crude.