Article: 60% of oil price is speculation

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Helius
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Re: Speculation

Postby Helius » Tue May 20, 2008 3:23 am

Roger wrote:
Helius wrote: We're gonna reach about $175 - $200 /bbl in a year or two by best estimates,


At what point does a world depression impinge on those estimates ? Or are you refering to the falling dollar, and not the world price for oil ?


World price. Goldman Sachs got it right, and they're telling us again.

" Earlier this month, a Goldman Sachs analyst predicted that oil prices could reach $150-$200 a barrel over the next 6 months to two years.

There has been a growing belief that the investment bank is "going to be correct again," said Pervan. "It was a contentious call when they called for $100 oil, but this second call has a lot more credit," he said."


They don't see a correction any larger than 15%, and see that as an oportunity for futures traders to re-establish their long positions. That keeps us in deep resession territory even under the best conditions.

http://tinyurl.com/6blflu

"June contract hit a trading record of $127.82a barrel..." Yikes! We're on our way...

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Postby MSimon » Tue May 20, 2008 3:47 am

At what price does an economic down turn come?

And if there is a down turn the price of oil crashes.

My guess - still - war with Iran.
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drmike
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Postby drmike » Tue May 20, 2008 12:47 pm

MSimon wrote:At what price does an economic down turn come?

And if there is a down turn the price of oil crashes.

My guess - still - war with Iran.


Not if Russia or China have any say in the matter. Russia wants Iran to pay for the reactor they built and China wants the oil they've invested hardware in. Russia started flying nukes on bombers again "just in case". Both Russia and China have done joint maneuvers in the last year too. Dealing with Iran while the US is weak and bogged down in Iraq is one thing. Dealing with both a bear and a dragon is another.

jmc
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Postby jmc » Tue May 20, 2008 2:52 pm

Roger,

That was an interesting post, high petroleum distillate inventories suggests that drivers have got the message and are driving less, refineries operating at 85% capacity suggest that refineries are starting to get the messages that demand for petrol has gone down and are buying less crude, which in turn should cause crude inventories to increase and they do seem to be aproaching the average level, and will probably overshoot and create a slight glut, then the price might fall somewhat.

I still don't think 60% of all price is speculation though. I think that the recent rise in production may well be a frenzied response of those who drill for oil to get as much of it out and sell as much of it as they can while the price is high. They're probably depleting oil reserves all the faster in the process. I'd say in the next 5 years if prices stay this high, heavy oil production will increase significantly. Maybe we have overshot the mark somewhat, but I still don't see oil falling below $110.

Spikey prices are also good for alternative sources of energy. People will be willing to pay slightly more for a reliable energy source where the price won't hop up and down all the time, thn for and energy source whose supply and priceis uncertain.

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Postby MSimon » Tue May 20, 2008 3:00 pm

drmike wrote:
MSimon wrote:At what price does an economic down turn come?

And if there is a down turn the price of oil crashes.

My guess - still - war with Iran.


Not if Russia or China have any say in the matter. Russia wants Iran to pay for the reactor they built and China wants the oil they've invested hardware in. Russia started flying nukes on bombers again "just in case". Both Russia and China have done joint maneuvers in the last year too. Dealing with Iran while the US is weak and bogged down in Iraq is one thing. Dealing with both a bear and a dragon is another.


A lot of the bog in Iraq is due to Iran. In any case we are almost out of the bog and we have a lot of battle tested troops. And 6 CVNs coming on line towards the end of summer with 2 more available 90 days there after. What are the Russians and Chinese going to do? Start a nuclear war over what for them is a commercial dispute? Doubtful.
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drmike
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Postby drmike » Wed May 21, 2008 3:25 am

No need for fighting - there is plenty of practice all around for cold war tit for tat. That's my point - the US won't have an excuse that is valid enough and the US military doesn't really want the over extension. It will pretty easy for the Joint Chiefs to point out where the nukes of both sides are and why it would be a bad thing to do something "provocative".

4 or 5 years ago I was pretty convinced the US would invade Iran. Now I'm pretty sure they can't. But you never know, it's pretty hard to over estimated stupidity.

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Postby Jccarlton » Wed May 21, 2008 4:31 am

I think that both Russia and China have too much to lose if Iran goes nutjob. Achmadinijad is a very loose cannon and if Iran should actually test a nuclear device then the stakes go way up. An Iranian nuclear device means that Israel will have to be prepared to burn Iran to the ground on a moment's notice. Iran will be in a position where even to test a long range missile will likely initiate a nuclear exchange with a country with over 250 warheads. For a guide book here's nuclear war 101, 102 and 103
http://homepage.mac.com/msb/163x/faqs/n ... e_101.html
http://homepage.mac.com/msb/163x/faqs/n ... e_102.html
http://homepage.mac.com/msb/163x/faqs/n ... e_103.html

Now Israel has both nuclear warheads and antimissile defenses. But Israel has no "B" country. A hit by even a small nuclear device will probably do enough damage that Israel will not be able to restrain Hezbollah or Hamas without essentially wiping Gaza and Southern Lebanon of the map and converting them to wastelands. I think its safe to say that Damascus and the Syrian ports will go too as well as possibly Cairo and the Egyptian, Syrian and Lebanonese armies as well as who knows how many civilians. It's also likely that one side or the other will put warheads over most of the oil terminals in the Gulf or the terminals will be torched by collateral damage fires. To say nothing of the tanker wrecks clogging the gulf. I think that faced with this kind of scenario neutralizing Achmadinijad starts to look really cheap.

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Postby MSimon » Wed May 21, 2008 7:01 am

My friend Wretchard (Richard Hernandez) of The Belmont Club posted on the Three Conjectures.

http://www.belmontclub.blogspot.com/200 ... 1003484059

The short version - some one sets off a nuke in another country and there is no return address. Result: all the Muslim nations get presents. Iran and Pakistan are the prime beneficiaries with North Korea added to the prime list for good measure.

I don't care who is President. The forces set in motion will be irresistible.

From the link:

The threshold had almost been crossed. However that may be, we now know from National Security Presidential Directive 17 that a terrorist WMD attack, including biologicals and chemicals, will go over the line:

"terrorist groups are seeking to acquire WMD with the stated purpose of killing large numbers of our people and those of friends and allies -- without compunction and without warning. ... The United States ... reserves the right to respond with overwhelming force -- including through resort to all of our options -- to the use of WMD against the United States, our forces abroad, and friends and allies."

Some reports have suggested that the US would preemptively use tactical nuclear weapons -- bunker busters -- to destroy terrorist WMDs. We're no longer in Kansas. In the halcyon days of the Cold War Soviet boomers would cruise the American coast with hundreds of nuclear weapons unmolested by the US Navy. Now a single Al Qaeda tramp freighter bound for New York carrying a uranium fission weapon would be ruthlessly attacked. The taboo which held back generations from mass murder has been mentally crossed by radical Islam and their hand gropes uncertainly for the dagger.
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Jccarlton
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Postby Jccarlton » Wed May 21, 2008 6:42 pm

If I could send copies of "The Grave of The Fireflies"
http://www.youtube.com/watch?v=9_KCRIDbEXM
http://www.amazon.com/exec/obidos/ASIN/ ... db-button/
combined with copies of "Superfortress" by Curtiss Lemay
http://books.google.com/books?id=9ciDAA ... _r&cad=1_0
to all the leaders of Islamic countries I would. I think that the leaders of the Islamic movement just do not understand what the possible consequences of their actions are. Its one thing to talk about Jihad and unlimited warfare when it is unlikely that millions of your people will die. But keep carrying on and eventually a Lemay will emerge with the same cold logic and the means to quite literally remove Islam by killing all of its adherents. It's amazing how little it took to virtually annihilate Japan. I have been to Japan, including Osaka and Tokyo and the monotony of construction, with almost nothing before 1945 is stark. I think that one reason that both the Soviets and the US were careful to not go over the brink is that we had already been there. Islam has not.

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Postby MSimon » Wed May 21, 2008 7:16 pm

JCC,

I posted this based on our discussions here:

http://powerandcontrol.blogspot.com/200 ... ssons.html

also at Classical Values

Thanks for Nuke War 101, 102, and 103. I knew a lot of that. The recovery scenario was new to me.
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THE OPEN POLYWELL FUSION CONSORTIUM

djolds1
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Postby djolds1 » Thu May 22, 2008 5:40 am

drmike wrote:No need for fighting - there is plenty of practice all around for cold war tit for tat. That's my point - the US won't have an excuse that is valid enough and the US military doesn't really want the over extension. It will pretty easy for the Joint Chiefs to point out where the nukes of both sides are and why it would be a bad thing to do something "provocative".

4 or 5 years ago I was pretty convinced the US would invade Iran. Now I'm pretty sure they can't. But you never know, it's pretty hard to over estimated stupidity.


US public is exhausted. No new significant adventures for at least five years.

Tho its possible that Our Glorious Shrub might create a tarbaby and drop it in Obama's lap, much like Daddy did with Somalia. Shrub has proven to be very good with petty vengeance ever since the base turned on and spanked him over amnesty. His non-effort for fundraising, boosting GOP candidates, and refusing to mend fences with the base is breathtaking.
Vae Victis

djolds1
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Postby djolds1 » Thu May 22, 2008 5:59 am

Jccarlton wrote:I think that both Russia and China have too much to lose if Iran goes nutjob. Achmadinijad is a very loose cannon and if Iran should actually test a nuclear device then the stakes go way up. An Iranian nuclear device means that Israel will have to be prepared to burn Iran to the ground on a moment's notice.


I wonder if Iran already has one or two untested in the stockpile already. It would explain Ahmadinejad's swagger for the last few years, and U235 gun bombs are brain dead simple, requiring no testing unlike a Pu239 implosion bomb. Gun bombs can even be boosted in theory. The South Africans worked out how but never built one.

Jccarlton wrote:Iran will be in a position where even to test a long range missile will likely initiate a nuclear exchange with a country with over 250 warheads.


Iran doesn't need to test. That's the malignant beauty of the Iranian-Pakistani-Nork WMD axis. The Norks are doing the testing for the IRBMs.




I loved those when a friend brought them to my attention 2 years ago.

Jccarlton wrote:Now Israel has both nuclear warheads and antimissile defenses. But Israel has no "B" country. A hit by even a small nuclear device will probably do enough damage


I call Israel a three nuke country. Hit it with three strategic nuclear weapons and it essentially ceases to exist. :|

Nukes + demographics, the long term, h*ll, medium term prospects for the survival of the Israeli state do not look good. I doubt it endures as long as the Crusader States did. :(

Jccarlton wrote:that Israel will not be able to restrain Hezbollah or Hamas without essentially wiping Gaza and Southern Lebanon of the map and converting them to wastelands. I think its safe to say that Damascus and the Syrian ports will go too as well as possibly Cairo and the Egyptian, Syrian and Lebanonese armies as well as who knows how many civilians. It's also likely that one side or the other will put warheads over most of the oil terminals in the Gulf or the terminals will be torched by collateral damage fires. To say nothing of the tanker wrecks clogging the gulf. I think that faced with this kind of scenario neutralizing Achmadinijad starts to look really cheap.


Its called the Samson Option.

http://en.wikipedia.org/wiki/Samson_Option

Israel has made it quietly known in the region and world since the '70s. If Israel is going down it will drag the entire region with it. Samson bringing down the temple on top of himself.

Damascus. Lebanon. Gaza. The West Bank. Jordan. Riyadh. Mecca. Medina. Tehran. Baghdad. Qum. Possibly the Temple Mount itself (Dome of the Rock). The Aswan High Dam (90% of Egypt in the flood of Lake Nasser down river). Etcetera.

The political leadership may punk at the end, but if the military leadership know that they and their families are not getting out, bye bye Middle East. The only way to dodge it would be for Israel to go out with a whimper, Soviet style.
Vae Victis

djolds1
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Postby djolds1 » Thu May 22, 2008 6:06 am

MSimon wrote:My friend Wretchard (Richard Hernandez) of The Belmont Club posted on the Three Conjectures.

http://www.belmontclub.blogspot.com/200 ... 1003484059

The short version - some one sets off a nuke in another country and there is no return address. Result: all the Muslim nations get presents. Iran and Pakistan are the prime beneficiaries with North Korea added to the prime list for good measure.


The weakness of the Three Conjectures is that it assumes a large and replenishable supply of nukes in the hands of jihadis. Pakistan and Iran may flush some to Jihadis if their regimes go down, but not enough IMO to go into Three Conjectures level auto-genocide responses.

For the world of the Three Conjectures you need a known, workable and relatively easily built design for a pure fusion nuclear weapon, also known as a 4th generation nuclear weapon. Something that bypasses the need for weapons grade fissionables. Some known options for development have the nonproliferation people scared spitless, but nonproliferation is dead now anyways.
Vae Victis

MSimon
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Postby MSimon » Thu May 22, 2008 6:37 am

djolds1 wrote:
drmike wrote:No need for fighting - there is plenty of practice all around for cold war tit for tat. That's my point - the US won't have an excuse that is valid enough and the US military doesn't really want the over extension. It will pretty easy for the Joint Chiefs to point out where the nukes of both sides are and why it would be a bad thing to do something "provocative".

4 or 5 years ago I was pretty convinced the US would invade Iran. Now I'm pretty sure they can't. But you never know, it's pretty hard to over estimated stupidity.


US public is exhausted. No new significant adventures for at least five years.

Tho its possible that Our Glorious Shrub might create a tarbaby and drop it in Obama's lap, much like Daddy did with Somalia. Shrub has proven to be very good with petty vengeance ever since the base turned on and spanked him over amnesty. His non-effort for fundraising, boosting GOP candidates, and refusing to mend fences with the base is breathtaking.


The parties no longer represent the electorate.

I blame the base. The base has done a piss poor job of selling their ideals. However, I can tell you the root cause of that. They are confused. They thought that being strong on defense and economical government required a religious basis. The Terry Schiavo debacle is where they first started going wrong. And the public is fed up. The public would rather be ruled by Communists than people who think religion should be the basis of government. They are mistaken to a certain extent, but not totally. Yahoos like the preacher who ran in the Republican primaries may be popular with the base, but they will never sell in a nationwide election.

The '04 Illinois Senate election debacle should have wised up the base. Leave religion out of politics. Stick to common principles. In fact I voted for the communist over the religious nutter. I knew what I was doing.

The way to solve the border problem is to make it easier for people to come and go from this country. Right now we have a one way valve. Is the base listening? Nope. Ultimately (if we survive for another 100 years) North America will be one big open border area. It is inevitable. The only viable choke point is the Isthmus. In the mean time instead of holding back integration we need to figure out how to best accomplish it. Instead of the haphazard way we are doing it now.

Right now the American electorate leans center right.

http://powerandcontrol.blogspot.com/200 ... s-are.html

The base can't abide that. They can't be patient and work to move the electorate in their direction (if they only knew how). The base is out of air speed and out of ideas. Why? They no longer appeal to the basically libertarian (leave us alone) middle. When a certain RR was running for office they knew how to do that. When a newt presented his plan they knew what to do. Have you seen his current plan? Thinner than water soup.

The American public IMO is not tired. The parties are.

Well, if the current trajectories continue we will have a nuke war with Iran. That should sober everyone up. My hope is that the Decider will take matters into his own hands and do the right thing. He will have 80 days. Better a war that Americans hate than a nuke conflagration. YMMV.
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MSimon
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Postby MSimon » Thu May 22, 2008 6:39 am

djolds1 wrote:
MSimon wrote:My friend Wretchard (Richard Hernandez) of The Belmont Club posted on the Three Conjectures.

http://www.belmontclub.blogspot.com/200 ... 1003484059

The short version - some one sets off a nuke in another country and there is no return address. Result: all the Muslim nations get presents. Iran and Pakistan are the prime beneficiaries with North Korea added to the prime list for good measure.


The weakness of the Three Conjectures is that it assumes a large and replenishable supply of nukes in the hands of jihadis. Pakistan and Iran may flush some to Jihadis if their regimes go down, but not enough IMO to go into Three Conjectures level auto-genocide responses.

For the world of the Three Conjectures you need a known, workable and relatively easily built design for a pure fusion nuclear weapon, also known as a 4th generation nuclear weapon. Something that bypasses the need for weapons grade fissionables. Some known options for development have the nonproliferation people scared spitless, but nonproliferation is dead now anyways.


Once the bombing starts there is no way to be sure there is no steady supply. And off we go.
Engineering is the art of making what you want from what you can get at a profit.
http://protonboron.com/
THE OPEN POLYWELL FUSION CONSORTIUM


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