Bet oil prices will drop today, and continue to drop for a while to come

[ThomWV]

People who are C-Span junkies and pay a lot of attention to little things that are said on the Senate floor will know why. The rest can stare and wonder.

[liberal N proud]

1. Please clue us in

What little things do you mention that will provide the reasons for your forecast.

I do hope that your prediction is right and the prices do come down. I have a driving trip coming up in March that I am already dreading the fuel bill for.

[ThomWV]

7. Filling the Strategic Petroleum Reserve will be stopped

People should listen. Byron Dorgan, who heads the appropriate subcommittee vowed that no more oil would be pumped into the ground at the Strategic Petroleum Reserve. That means a continued cut in effective consumption from domestic supplies, which means, along with pump-shock that is finally setting in, that our need to import will be reduced by a corresponding amount, which in this case is between 125,000 and 250,000 barrels per day of light sweet - the best.

Also, this is oil for which there is no cash outlay into the market - we get this oil in exchange for tax credits from domestic drilling, primarily from the gulf. So you get reduced consumption matched with no change in cash going into the market - a double it on Price and not just a one-day event, this would be simi permanent.

[Angela Shelley]

8. Thanks for the highly informative insight!

:-)

[Trajan]

10. A local news story in Portland Oregon

Gasoline prices have skyrocketed in Oregon .... 11 cents in one week, 16 cents the next ....

The reason ? .... Prices were rising in anticipation of prices rising this coming spring ....

Yes ..... Prices should always increase when they might increase later ...

It has NOTHING to do with rich petroleum moguls stuffing the pockets as fast as they can to achieve the highest profit rates known to mankind .... Nope .....

Prices gotta raise because they will raise later ....

[HereSince1628]

2. House Votes To Repeal Oil Tax Breaks, Finance Renewables

Wednesday 02/27/2008 4:46 PM ET - Dow Jones News
By Siobhan Hughes
Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- The U.S. House of Representatives on Wednesday voted to repeal $18 billion of tax breaks for oil and gas producers and use the savings to finance tax incentives for wind-power projects, solar panels, and more energy-efficient cars.

[liberal N proud]

3. But bu$h promises to keep his oil buddies protected with a VETO

Congress knows this and this is just a gesture to the people, See we care stunt

[ThomWV]

4. Nope, better than that - on the Senate side, not the House.

[Angela Shelley]

11. Hi ThomWV, is the SPR issue

anything like when a private household decides to "have a garage sale" and sell off its year supply of mac and cheese?

[ThomWV]

13. Almost the opposite actually

We do not pay the oil companies directly for the oil we get from them to inject into the underground salt domes which make up the reserve. We give them credit on taxes due instead of cash. So the oil flows in but additional cash in not put in the market. If we quit pumping - and that is what Bryon Dorgan promissed yesterday - that means that there is more oil available on the market but it also means that no less money is going into the market. Double whammy, both of which drive prices down. Also, Dorgan pointed out what the world knows and dupe Americans pay for, that is the enormous effect of speculation on the market. His estimate, which matches the one I've been posting here for a year, is that the inherent value of the oil on the market today isn't more than $50~60 per barrel, and that almost all of the rest of the price is based on speculation. That could evaporate overnight.

[HereSince1628]

6. I think this is what the OP is referring to...it might effect stock prices

but I don't see it doing anything to demand for oil and so I don't see a change in the price because of this.

If lil Boots gets someone to punch up production that might be different, but I don't know that there is anyone willing to do that. I see the usual pattern--moving to the end of heating season followed by refinery maintenance and switch-overs creating shortages and driving the price of gasoline up until mid to late June.

[Junkdrawer]

5. During the late 70s, alternate energy was all the rage....

and just as investment was starting to flow, oil prices dropped like a rock. Alternate energy companies went bust. Then oil prices rose again.

Why, if I didn't know any better, I'd swear Big Oil was using classic monopolistic tactics.

[sendero]

9. It might...

.. but I doubt it will ever go below $75-$80 again.

[ThomWV]

14. $50~$60 max

How quickly people forget, do you recall what the OPEC top end target price was before the invasion of Iraq? $24.

[KharmaTrain]

12. $4 A Gallon Will Shut Down The Economy

The costs are getting too expensive and starting to really bite the corporate bottom lines. The increase in the stock prices are soon to be offset by less consumption due to a business slow-down induced by companies that can no longer compete with these high prices.

We're just starting to really feel the ripples of surges in oil prices in recent years and another jolt could easily put this economy flat on its ass. People already are cutting back on travel, taking money used for consumer spending into their gas tanks and the debt crunch will prevent people and businesses from defering todays costs with tomorrow's debt.