Oil hits another record high as dollar tumbles to record low

Kev_ps3

Oil prices hit all-time highs above $115 a barrel Thursday with reports that oil and gasoline stocks in the United States were lower than expected and as the dollar hit record lows.

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Every day I check the news now im reading this. Where is it heading and what effect will it have on you and me?
Does anyone else get the feeling that this is more than a 'blip' and that this will continue until the US get a big shake up?

mike65

Thank goodness the dollar is so weak, its protected us from the worst of it. It seems the price is quite artificial - a mix of speculative buying/poor infrastructure in the States and noises from the likes of Russia.

Mike.

El Stuntman

well they aren't making any more of it!

Peak Oil anyone?

mike65

True but that is not necessarily the reason for the price hikes right now.

Mike.

yawtin

I don't understand why the Euro zone don't value oil in euros as well.

One barrel of oil is now €72.23, half a year ago it was about €58, the price is rising but not as bad as the media made it out to be.

leninbenjamin

yawtin wrote: »

I don't understand why the Euro zone don't value oil in euros as well.

because we don't set the prices. the producers do.

Manic Moran

Don't see why it matters all that much. The Euro is currently trouncing the Dollar, so while it's killing us in the US to buy oil at 30% more than it was a while ago, since the Euro is 30% more against the dollar than it was a while ago, it should pretty much even out.

Any increase in the price you're paying in Euro per gallon is going to be attributed to the supplier simply raising his prices because (a) he can, and (b) there is increased demand from places like China for the stuff.

NTM

Akrasia

Manic Moran wrote: »

Don't see why it matters all that much. The Euro is currently trouncing the Dollar, so while it's killing us in the US to buy oil at 30% more than it was a while ago, since the Euro is 30% more against the dollar than it was a while ago, it should pretty much even out.

Any increase in the price you're paying in Euro per gallon is going to be attributed to the supplier simply raising his prices because (a) he can, and (b) there is increased demand from places like China for the stuff.

NTM

yup.
There's no justification for the 1.23 a litre prices in Ireland. I don't blame the individual petrol stations, The oil distributors are the ones who set the prices

djpbarry

Akrasia wrote: »

I don't blame the individual petrol stations, The oil distributors are the ones who set the prices

But there is still quite a bit of variation in prices between different stations.

LostinBlanch

Manics post just got me thinking, how many litres in a barrel of oil anyway?

Manic Moran

42 US Gallons in a barrel, comes out at about 160 litres.

Of that lot, you end up with anything from 18-21 gallons of petrol, depending on where you are, local legal requirements and so on.

The rest gets refined into other products.

http://www.energy.ca.gov/gasoline/whats_in_barrel_oil.html

If you think of it, compared to almost any other liquid sold by volume, and considering what has to happen to get it from the ground into your gas tank, petrol is amazingly cheap. (Evian, anyone?)

NTM

djpbarry

Manic Moran wrote: »

If you think of it, compared to almost any other liquid sold by volume, and considering what has to happen to get it from the ground into your gas tank, petrol is amazingly cheap. (Evian, anyone?)

Artificially cheap, I would say.

partholon

anyone wondering why the media isnt really following this anymore?

used to be if it got near $100 a barrel there'd be front page headlines. it went over $116 at one stage during the week and not a peep out of em. i kinda thought that'd be big news, preferential exchange rate or not

LostinBlanch

How much for a barrel of printer ink?

Now that has to be the most expensive liquid known to man.

bonkey

djpbarry wrote: »

Artificially cheap, I would say.

Given that profit is being made on petrol, I'm not sure its artificially cheap.

The cost of processing crude is split across the various products which are generated from it, petrol only being one of those.

Arguably, though, the environmental cost of using petrochemicals isn't factored into its price. Of course, by this reasoning, all petrochemical products, as well as a huge range of other resources, are all artificially cheap....

Mr.Micro

LostinBlanch wrote: »

How much for a barrel of printer ink?

Now that has to be the most expensive liquid known to man.

You got that right. A complete rip off, the replacement cartridges of ink cost as much as the printer in the first place. I refill my own now and save big time.

The price of oil rises daily it seems but here in Ireland none of the increased value of the Euro is passed on. The more the Euro appreciates the more we pay for oil, food everything including printer ink. Now why is that?

mike65

To prove the veracity of that statement you'd need to do a check on prices in other eurozone countries. Price gouging is a feature of life in Ireland but its not always the cause!

Mike.

djpbarry

bonkey wrote: »

Arguably, though, the environmental cost of using petrochemicals isn't factored into its price. Of course, by this reasoning, all petrochemical products, as well as a huge range of other resources, are all artificially cheap....

True. But suppose the cost of US military operations (and those of it's "allies") in the Middle East were factored into the price of oil? Unless of course there is some other reason why they're there?

I would also imagine that profits would take a bit of a knock if commercial airline fuel was to be taxed.

Slippers

yawtin wrote: »

I don't understand why the Euro zone don't value oil in euros as well.

The pricing of oil in euro would be a big deal. Here's an article I found from 2004.

http://www.feasta.org/documents/review2/nunan.htm

"Furthermore, Youssef Ibrahim, a former senior Middle East correspondent for the New York Times and energy editor on the Wall Street Journal, who is a member of the influential Council on Foreign Relations, has called Iraq's switch to the euro 'another reason' for the war, saying that a general move by oil producers to the euro would be a 'catastrophe' for the US."

meathstevie

Folks what about this one as a potential scenario ?

Presidentioal election in November. No matter who wins the White House a viable exit strategie gets developped and stuck to in regards to Iraq and the Fed completes an overhaul of the banking regulations. After Enron and the credit crisis they can't really keep sitting on the fence and deny that there's something fundamentally rotten in corporate USA.

As a result the dollar stabilises and starts a comeback to let's say slightly below parity with the Euro. Would this not result in higher economic confidence and a departure from heavy commodity speculation hence lowering prices of oil and minerals ?

Another approach that wouldn't be unwarranted is a bit of investigation in trading patterns. I strongly have the impression a bunch of people are playing a game of selffulfilling prophesies.