Sunbeltblog comments
Very well said Alex... as usual.
Alex, what you say is 100%! I see so much nonsense out there that totally avoids the "core" problem, which you have stated here.
What irks me is insistence that additional drilling or additional refinery capacity will solve the problem. While there is no doubt that some of this will be needed sometime in the future, simply making it happen now will not give us any reasonable return until YEARS later, and does nothing to solve the current problem.
Just a couple of points...hopefully if you respond I will be better informed than before I read your article 
You talk about the dollar - but surely that would only affect the price America pays, rather than the world price? Note - petrol prices have got more expensive everywhere, not just in America.
I agree about the commodities and people investing in them, but it is also about supply and demand. The supply of oil is controlled in quite a big way, by OPEC...essentially a cartel, so when they keep decreasing their oil production, then obviously prices are going to go up. Even if, as you suggest, the reality of the situation does not match the price. Perception matters more than the reality, as was illustrated by the dot.com bubble.
(Much like dutch tulips http://www.holland.nl/uk/holland...s-history.html)
Every share type goes through periods of peaks and troughs (eg finance, construction, checmical etc), but that does not neccessarily lead to an alteration of the price of the product. I have rarely seen the price of food commodities come down. They go up, but hardly ever come down at least not by the same rate and certainly not to the consumer.
ie If Joe bloggs is paying £1.40 for 4 pints of milk now, it is not very likely, that even when all the crises have have passed and things return to normal that the prices will come down. Instead, the supermarkets and everyone else, will sit on that price raking in the extra profits.
So I fear, that even though the prices of oil may drop, I very much doubt the consumer will see much of a drop in price.
Unless external pressure is applied?
K1, the shopkeepers are the guys getting shafted. The guys making the money are way, way upstream -- the actual producers. Those, and the investors making money on speculative bets.
The reason why food prices don't come down is that there's inflation, and that's a GOOD thing. A small amount of inflation is healthy in an economy, it provides incentives for producers to continue to produce. Deflation would be a bad thing -- imagine if you were a lettuce grower, and you grew lettuce, and every year, you had to sell it for less? You'd be out of business.
Thanks for the insight.
Speculators = Pickpockets, and we're all victims.
Though I don't doubt that speculators and the volatilies associated with investment markets combined with the decline in value of the dollar have a role in the steep increase, I think worry about demand is far larger. Whether it's wells running dry, our cars getting fatter and less efficient, or the rising demand for oil from what used to be called the third world - the worry about demand that is keeping it above a hundred dollars a barrel - I don't think that's going away.
Alex
You miss the point. There may be "..plenty of the stuff." but what is left is increasingly difficult to find and extract cheaply.
The point about 'Peak Oil' (for this is what we are seeing) is not that we're running out of oil...but rather that we're running out of cheap oil. This is a huge problem as virtually our entire modern Western civilization is predicated upon the continual availability of cheap oil.
When oil ceases to become cheap, things start to break down...and that's what we're starting to see.
The reality is that we in the West in general and North America in particular have become gluttonous consumers of energy.
Whether we like it or not, we are going to have to live a more frugal lifstyle and Peak Oil will force this change upon us.
This will be a huge psychological shock to most Americans as they seem to assume that it's their right to indulge, consume and waste energy and other resources regardless of the consequences.
Sorry - but that's just how it is.
Nick
Nick that view is simply not borne out by the facts. Click the reference links in my blog post.
Alex
The embedded link in 'nonsense' in your blog seems to be broken.
In terms of the issues you raise, yes, speculation, large hedge fund movements, the collapsing dollar and increasing demand from India & China are all significant factors and there's no doubt that the price of oil has spiked up beyond reason recently. The bellicose rhetoric that your government is directing towards Iran is also not helping and is disturbingly familiar to what happened leading up to the Iraq war.
However, the elephgant in the room that nobody is really addressing is that oil production is peaking. The question of whether the peak is upon us or whether it is still 10 years away is somewhat irrelevant. Oil is a finite resource and therefore by definition, it must peak at some point.
To dismiss Peak Oil as 'nonsense' seems illogical therefore.
However, beyond that, I suspect we'll have to agree to disagree!
Keep up the good work on the malware front. You're one of the good guys and there doesn't seem to be enough of you out there!
Nick
Nick, sorry, the link is this one:
http://www.runet.edu/~wkovarik/oil/
It refers to this:
http://www.opec.org/home/
multime...ullahsjumah.htm
Hmmm...so who am I going to believe? The CEO of a national oil company - the oil reserves and production capacity of which are a state secret ....or dozens of highly respected geologists who concur that we are at, or very close to, the peak of oil production?
He gave that speech in 2006. Since 2005, global oil production has been absolutely flat at 85 mbpd whilst the price has shot straight up. Production in Mexico has collapsed in the last few months and Russia has also peaked. No super-giant fields have been discovered since the 1960's and most of current consumption comes from these aging fields.
Economic logic tells us that if we could ramp up production, we would do so to take advantage of the huge price spike. We haven't because we can't.
Sorry...but I'm listening to the geologists - not one voice in wilderness with a political agenda reassuring us that everything will be fine.
Let's compare notes in a couple of years and if I'm wrong, and oil is below $100 a barrel, I'll come down to Florida and buy you a pint. 
)
Nick
Nick -- deal.
Alex
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