$200 a barrel for oil is now likely. So is $7 gas. No, I'm not kidding. - Page 16 - PhillyBlog

jizay · #**151** (**permalink**) 09-19-2008, 11:07 AM

Quote:

Originally Posted by phillyaggie

I don't see those two statements as contradictory. In the longer time span, I do see oil going back to $150/bbl, perhaps more. And it won't take very long for that to happen either. But trading happens on a short term basis, and as is often the case, there are bubbles when short term market participants get carried away. That's why when oil was hitting $130 and $140+, I was buying Continental Airlines stock, and I convinced a friend to also buy some. Why? Because my gut feeling was that oil was going up far too quickly and had to come down, thus helping the airline stocks come back up.

Well, if oil is worth $150, perhaps more, in the long term, then it didn't rise too fast. The market was right and is wrong now in that it isn't anticipating future values. I find that unlikely.

The question was whether the high price reflected speculation or scarcity (I think neither; it was right at the time), and whether more generally we are facing "peak" commodities. I don't believe in the Malthusian concept that we can't support this many people. What is demanded, for instance, is energy, not oil. Whenever oil becomes too expensive, the cost of replacement sources of energy is more reasonable. Put differently, demand for everything is price elastic in the long run. And I put no limits on innovation in this regard. Any time commodities run up like they did this summer, I will short the hell from them. If you are confident in your view, stay long. One of us will be rewarded handsomely. History says it will be me, as every other time we were hitting a "peak" commodities returned to historical levels.

You and I are basically rehashing a debate that pops up every generation, see the Simon Ehrlich wager:

http://en.wikipedia.org/wiki/Simon-Ehrlich_wager

Edit: Just reread this myself. What beautiful and timely anecdote. Great quote from Simon:

"More people, and increased income, cause resources to become more scarce in the short run. Heightened scarcity causes prices to rise. The higher prices present opportunity, and prompt inventors and entrepreneurs to search for solutions. Many fail in the search, at cost to themselves. But in a free society, solutions are eventually found. And in the long run the new developments leave us better off than if the problems had not arisen. That is, prices eventually become lower than before the increased scarcity occurred." — Julian Simon

Mixiboi · #**152** (**permalink**) 10-11-2008, 05:44 PM

Falling...................

http://www.time.com/time/business/ar...0.html?cnn=yes

Quote:

How far can it fall? People have been anxiously wondering as they watch the plunging stock market. But increasingly the same question is being asked about another crucial figure: the price of oil. It has plummeted nearly 40% in just three months, from about $147 a barrel in July to below $83 on Friday, with no obvious bottom in sight. If that sounds good, you are probably a driver who winces these days at filling your gas tank. But the downward spiral could mean trouble for oil-rich countries and for the environment.

jonjames · #**153** (**permalink**) 10-11-2008, 06:10 PM

People aren't paying heed to the drop in gas prices. They still are keeping their driving to necessity only.

They believe this drip is just to lure drivers to start buying again so they can spike prices again.

Meanwhile the oil companies are crying about the price being too low. Didn't hear a word from them when they were raking it in hand over fist.

by the by

Farrakhan the leader of the Muslim Nation has declared obama
the messiah.

listen to the very end.

http://www.youtube.com/watch?v=OowxMcVTjTE

IMO obama has 'made a pact with the devil'

BigMel · #**154** (**permalink**) 10-11-2008, 07:35 PM

I guess BUSH made enough money, so now he told the arabs to lower the price.

Ask Michael MOORE...

sugarcoma · #**155** (**permalink**) 10-11-2008, 09:29 PM

The fact that oil has gone so low now is actually NOT a good thing.

Sycamore72 · #**156** (**permalink**) 10-11-2008, 10:34 PM

Maybe, but I'll take it.

xxxTHX1138xxx · #**157** (**permalink**) 10-12-2008, 10:49 AM

easy for you to say, you don't drive.

Quote:

Originally Posted by sugarcoma

The fact that oil has gone so low now is actually NOT a good thing.

sugarcoma · #**158** (**permalink**) 10-12-2008, 12:43 PM

Quote:

Originally Posted by xxxTHX1138xxx

easy for you to say, you don't drive.

And why do you think that is? We sold the car because it's cheaper.

Litter Box · #**159** (**permalink**) 10-12-2008, 01:15 PM

xxxTHX1138xxx · #**160** (**permalink**) 10-12-2008, 01:49 PM

well given you live in Center City and don't venture out much of the center city limits that makes sense. The majority of people like travel out of their boundaries.

you seem to forget most of your food travels by some sort of transportation that relies on oil.
The more oil goes up, so does food.

Quote:

Originally Posted by sugarcoma

And why do you think that is? We sold the car because it's cheaper.