The Peak
 

I think we've reached the peak in oil prices.

People have changed their behavior. Demand is down. People are not going to go out an guy a new Suburban tomorrow, even if the price at the pump hits $0.99 a gallon--they are too fearful of another price shock and will stay conservative in their use of gasoline for the time-being.

The oil traders have finally caught on. I know that we've reached the peak because they are selling despite the normal supply-concern rumblings from Nigeria and such. A week ago, this would have sent prices up $3 immediately. I expect to see a long decline all summer in crude prices. (Up like a rocket, down like a feather.)

Of course, all of this is just speculation. I fully expect to see another round of saber-rattling from Iran as prices decline. This is the true test of the prevailing mood of oil traders.

You mean sabre-rattling from Bush regarding Iran, right?

I dunno.

While on the one hand I think this is being driven primarily by speculation, with every passing day the dollar gets weaker and international confidence in the current/future strength of the U.S. economy ebbs away. As such, suppliers are likely to turn to other countries, meaning (effectively) less supply coming to the U.S. and continued upward pressure on prices.

I agree there MIGHT (possibly) be some declines coming, but they won't go very deep. I doubt we'll ever see gasoline for < $3.00 a gallon in the U.S. again.

Too early to tell.

You are putting the carriage in front of the horse. It is Iran (probably with encouragement from Russia) that makes aggressive declarations about its nuclear program every time the price of crude starts to fall.

You imply that we should permit countries that call for our destruction--mostly as a means of getting their populace to forget their own suffering--to acquire offensive nuclear capabilities. I'm sure if we just ignore them, they won't do anything bad to us. Better yet, we could try to negotiate. It's always good to make promises and send money to parties that have no intention of living up to any agreements they make.

+1, -$2 this morning, but then the right back to flat.

What do "other countries" need oil for?

Yes, on the surface it is a naive question, but bear with me...

Much of the demand for oil from non-US countries (China, India, for example) is for the production and shipping of goods bound for the U.S.. If the U.S. can't afford those goods because of the high price of oil domestically, the demand for those goods falls. In turn, the demand for oil from those countries also falls.

Of course, all of this is just speculation....off course.

Well put but you can't help stupid.

From chart of spot oil px, seems like $125 next stop ($127 now), then $115. $115 would be a 15% correction - not much at all. If gas px drops 15% (no idea if it will/should match crude) that's $3.40. Personal guess is we will march to higher oil and gas prices over the coming years, but don't think get there in straight line

The USA is not the only game in town.

Until Americans realize that, we'll continue to be puzzled and behind the curve.

Europe, not the US, is China's biggest export market. Domestic Chinese market is developing rapidly too. India similar but 5 years behind.

They don't want to kill the golden goose. i.e - the mostly poor (think about it) oil producing nations of the world ideally do not want to over-tax the productive (rich or getting richer) nations of the world.

My long term prediction is they are addicted to our petro-dollars, euros, rupies, yuan and yen more than we are to their oil. But they are poor and pretty much half baked in their schemes. We will use less, develop other sources of energy and they will still be poor and backward..

Greed 101 - it always bites you back.

OPEC has said themselves that the price/barrel is too high and that it should be around $60-$70 per barrel based on current supply and demand.

I may be crazy, but I think oil/gas prices are going to drop. Probably never to the $1.50 a gallon price range, but I bet we see gas less than $3/gallon once this crazy dust settles. The fact is that there is no logical reason for oil to be greater than $75 a barrel. This bubble will burst just like the housing bubble. It just can't be sustained indefinitely for no reason.

I think Chance said it best:

Yes, but this time is different. ;)

Um, people don't have to buy houses. Pardon the pun, but they kind of have us over a barrel.

You are all nuts. Oil is selling at $130/barrel, if you sell all your oil at that prices, why would you drop the price? Sure it may go down a buck or two, but 50% is naive. It's not like a housing bubble where people are bidding up prices based on interest only, stated income, 40 year notes with adjustable interest rates. This is a pay on the barrel head price situation. Meaning pay me now situation.

Sorry Chris, I misunderstood the subject.

I thought you meant you had peaked your Beach 2008 six pack shape! :D

Lets see now

At one time oil was $50 a barrel and the Pound Sterling was worth a $1.50..so a barrel of oil was apx 33 pounds

Today oil is $125 a barrel and a Pound Sterling is worth $2.00....today a barrel of oil is 62 Pounds...

It has increased by just under 100% in value in GB

In the US a barrel of oil is 150% higher....

A quote:

"Meanwhile, the world's leading producers say oil is too expensive and they plan to increase supplies.

A source at Opec said its 13 members were uncomfortable with the current price of crude, which last week hit a record $135 a barrel.

Based on present supply and demand, he said it should be fetching $60-$70 a barrel."

From:

http://news.sky.com/skynews/article/0,,91211-1317363,00.html