Ready for $262/barrel oil?

WoW!!! Plus were 8 trillion dollars in debt----Oh Well


Ready for $262/barrel oil?
Two of the world's most successful investors say oil will be in short supply in the coming months.
By Nelson Schwartz, FORTUNE senior writer
January 27, 2006: 4:40 PM EST


DAVOS, Switzerland (FORTUNE) - Be afraid. Be very afraid.

That's the message from two of the world's most successful investors on the topic of high oil prices. One of them, Hermitage Capital's Bill Browder, has outlined six scenarios that could take oil up to a downright terrifying $262 a barrel.

The other, billionaire investor George Soros, wouldn't make any specific predictions about prices. But as a legendary commodities player, it's worth paying heed to the words of the man who once took on the Bank of England -- and won. "I'm very worried about the supply-demand balance, which is very tight," Soros says.

"U.S. power and influence has declined precipitously because of Iraq and the war on terror and that creates an incentive for anyone who wants to make trouble to go ahead and make it." As an example, Soros pointed to the regime in Iran, which is heading towards a confrontation with the West over its nuclear power program and doesn't show any signs of compromising. "Iran is on a collision course and I have a difficulty seeing how such a collision can be avoided," he says.

Another emboldened troublemaker is Russian president Vladimir Putin, Soros said, citing Putin's recent decision to briefly shut the supply of natural gas to Ukraine. The only bit of optimism Soros could offer was that the next 12 months would be most dangerous in terms of any price shocks, because beginning in 2007 he predicts new oil supplies will come online.

Hermitage's Bill Browder doesn't yet have the stature of George Soros. But his $4 billion Moscow-based Hermitage fund rose 81.5 percent last year and is up a whopping 1780 percent since its inception a decade ago. A veteran of Salomon Bros. and Boston Consulting Group, the 41-year old Browder has been especially successful because of his contrarian take; for example, he continued to invest in Russia when others fled following the Kremlin's assault on Yukos.

Doomsdays 1 through 6
To come up with some likely scenarios in the event of an international crisis, his team performed what's known as a regression analysis, extrapolating the numbers from past oil shocks and then using them to calculate what might happen when the supply from an oil-producing country was cut off in six different situations. The fall of the House of Saud seems the most far-fetched of the six possibilities, and it's the one that generates that $262 a barrel.

More realistic -- and therefore more chilling -- would be the scenario where Iran declares an oil embargo a la OPEC in 1973, which Browder thinks could cause oil to double to $131 a barrel. Other outcomes include an embargo by Venezuelan strongman Hugo Chavez ($111 a barrel), civil war in Nigeria ($98 a barrel), unrest and violence in Algeria ($79 a barrel) and major attacks on infrastructure by the insurgency in Iraq ($88 a barrel).

Regressions analysis may be mathematical but it's an art, not a science. And some of these scenarios are quite dubious, like Venezuela shutting the spigot. (For more on Chavez and Venezuela, click here.)

Energy chiefs at the World Economic Forum in Davos downplayed the likelihood of a serious oil shortage. In a statement Friday, Shell's CEO Jeroen Van der Veer declared, "There is no reason for pessimism." OPEC Acting Secretary General Mohammed Barkindo said "OPEC will step in at any time there is a shortage in the market." But then no one in the industry, including Van der Veer, foresaw an extended run of $65 oil -- or even $55 oil -- like we've been having.

It's clear that there is very, very little wiggle room, and that most consumers, including those in the United States, have acceded so far to the new reality of $60 or even $70 oil. And as Soros points out, the White House has its hands full in Iraq and elsewhere.

Although there are long-term answers like ethanol, what's needed is a crash conservation effort in the United States. This doesn't have to be command-and-control style. Moral suasion counts for a lot, and if the president suggested staying home with family every other Sunday or otherwise cutting back on unnecessary drives, he could please the family values crowd while also changing the psychology of the oil market by showing that the U.S. government is serious about easing any potential bottlenecks.

Similarly, he could finally get the government to tighten fuel-efficiency standards and encourage both Detroit and drivers to end decades of steadily increasing gas consumption. These kinds of steps would create a little headroom until new supplies do become available or threats like Iran's current leadership or the Iraqi insurgency fade.

It's been done it before. For all the cracks about Jimmy Carter in a cardigan and his malaise speech, America did reduce its use of oil following the price shocks of the 1970s, and laid the groundwork for low energy prices in the 1980s and 1990s. But it would require spending political capital, and offending traditional White House allies, and that's something this president doesn't seem to want to do.
http://money.cnn.com/2006/01/27/news...ex.htm?cnn=yes

The camel thing is really starting to make sense. And they have what we want and need..haha-they have the oil and ride camels.:smokin:

LoL ---I guess the jokes on us...

http://www.lifeaftertheoilcrash.net/

peak oil

Other experts are predicting decline rates as high as 10%-to-13%. Some geologists expect 2005 to be the last year of the cheap-oil bonanza, while many estimates coming out of the oil industry indicate "a seemingly unbridgeable supply-demand gap opening up after 2007," which will lead to major fuel shortages and increasingly severe blackouts beginning around 2008-2012.


hemp fuel

http://www.equalrights4all.org/bach/Fuel.html

We can be energy independent, without nuclear power.
Biomass is the term to describe all biologically produced matter. World production of biomass is estimated at 146 billion metric tons per year, mostly as wild plant growth. Biomass conversion to fuel has proven economically feasible in laboratory tests and continuous operation of pilot plants since 1973. It has a heating value of 5000-8000 BTU/lb, with virtually no ash or sulfur produced by combustion.

About 6% of contiguous U.S. land area cultivated for biomass could supply all our current demand for oil and gas. This is the basis of the emerging concept of "energy farming," wherein farmers grow and harvest crops for biomass conversion to fuels.There is one farm crop that can fill all our energy needs. Hemp is the only biomass resource capable of making America energy independent. Both Thomas Jefferson and George Washington grew hemp. But, under pressure from the oil and timber industries, our government outlawed it in 1938.

Not to minimize the problem, but these rich oil investers are a part of it... if I own a large stock that responds directly (UPWARD) to natural and geopolitical burps and farts, then I'm writing the apocolyptic news, in volumes. :(

I, for one, am getting a camel. I like the way their eyes look, and they'd fit right into the climate in north Texas. Until he comes in, I'm taking mass transportation.

That would be ridiculous if oil went to $262 with the greater demand for it going on. When people start killing each other at the gas pump, run to the hills!!

Time to get a still and start topping off your tanks

I wonder how much tin-foil hat stocks went up? The sky is NOT falling. :D

What's the tin foil hat allusion you sometimes make, IamP? I don't know it. Or don't recognize it.

Oh my... You've never heard of tin-foil hats and those that wear them? Seriously? I find that hard to believe.

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

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Originally Posted by Euphoric

...Both Thomas Jefferson and George Washington grew hemp. But, under pressure from the oil and timber industries, our government outlawed it in 1938...

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This is greatly oversimplified and has more holes than swiss cheese but, everytime I read this, I can't help wondering how much better off the world would have been had a different President been elected and therefore Anslinger would have never been appointed, would have never told his lies, etc. Of course, we'll never know. Some will never learn and some things will never change. ;)

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Originally Posted by iamapatient

Oh my... You've never heard of tin-foil hats and those that wear them? Seriously? I find that hard to believe.

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

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Seriously! I enjoyed the heck out of that link, but no, I never even knew there was such a "phenomenon"! Amazing. And just so silly!

I've stayed almost shamefully busy for too much of my life, and I've also never been a sci-fi reader/follower. I've now learned of two things on here that I'd never heard of before. Tin-foil hats. And the Tubes, a band. Hope to learn many more!

Thanks!

It's time for those bumper sticker from the last oil crisis in the seventies. Quote ' I own the car, but the petrol's on H P' !!!

And my coworkers think i'm totally out of my mind for spending $1400 on my Mt.bike...No gas,No insurence,No taxes payed to the state for use,No pollution (cept when I eat Pork&Beans) And I get around town faster than most traffic,for a car can't go where I can! I live in the land of Goat-ropers,Big hats,and BIG pickem-ups.

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Originally Posted by birdgirl73

What's the tin foil hat allusion you sometimes make, IamP? I don't know it. Or don't recognize it.

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I had to ask..I didn't know it either..but I do now..and have been putting it to good use..just glad I wasn't the only one in politics that didn't know about tin hats..except for the character in The Wizard of Oz..the tin man I think..

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Originally Posted by Shelbay

I had to ask..I didn't know it either..but I do now..and have been putting it to good use..just glad I wasn't the only one in politics that didn't know about tin hats..except for the character in The Wizard of Oz..the tin man I think..

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How funny! That's exactly what I thought it was a reference to before I asked--the tin man's hat. OK, good. I feel much better now!

they have recently doscovered the biggest source of oil ever and it right under the Colorado mountains.

but they are greedy fucks

"Conservatives who are afraid of those messages from their imaginary liberal media, or others just looking to avoid alien mind control, will be pleased to see that thereâ??s now a wide variety of styles of choose from in tinfoil hats. Pictured here is an Audrey Hepburn-esque â??My Fair Alienâ?? number in foil and pink construction paper. This one only came in third in the Tinfoil Hat Contest. The LA TIMES shows all the winners."


DemocraticDaily

How perfectly marvelous! A Tin Foil Hat contest! Thanks for that link, Breukelen. I really think the third-place winner pictured above should have won first. The whole Royal Ascot-like styling certainly captured my fancy.

Wonder why it is that everyone still calls it tin foil when it's been aluminum foil for 45 years or longer?

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Originally Posted by birdgirl73

I, for one, am getting a camel. I like the way their eyes look, and they'd fit right into the climate in north Texas. Until he comes in, I'm taking mass transportation.

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Don't get a camel unless you plan on riding in a desert - they don't do well on other terrain. The U.S. Army bought some camels in the 19th century, and found them to be useless.

There's an excellent episide or the old TV western series on a DVD box set that I have (which you may be familiar with), called Have Gun Will Travel,, c. 1958 which stars Richard Boone as a hired gunfighter named Paladin, who buys one of these ex-U.S. Army Camels for a job he's hired for.

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Originally Posted by Breukelen advocaat

Don't get a camel unless you plan on riding in a desert - they don't do well on other terrain. The U.S. Army bought some camels in the 19th century, and found them to be useless.

There's an excellent episide or the old TV western series on a DVD box set that I have (which you may be familiar with), called Have Gun Will Travel,, c. 1958 which stars Richard Boone as a hired gunfighter named Paladin, who buys one of these ex-U.S. Army Camels for a job he's hired for.

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This is awesome.

Thanks for the info :thumbsup:

Well, all this crap about Oil, it's our own damn fault for being oil titty suckers!

We, like Brazil should have kicked the Oil Habit long ago.

If oil goes up that high, so what. It will surely collapse our economy and millions will sufer because of it.

I think that it is long overdue for the Car Makers and the U.S. to increase the CAIFA standards to at least 100 miles to the gallon.

Our own Govt. has been Phuking the public for years! They want all that tax money, they will not budge. So who's fault is it? OURS!

Thats right! Fianlly someone that takes responsibility instead of just blaming President Bush,,the Emirates..etc..we are spoiled and arrogant..I think your right about the economic collapse..I need to go buy some more bottled water and stock it you think?

I just can't imagine people not knowing about tin-foil hats. Inconceivable!

While it's true we ARE dependent on foriegn oil, we don't have to be. If the environMENTAList whackjobs (tm) would pull their collective heads out, they'd stop blocking windfarms, domestic drilling and nuke power plants and we wouldn't need their oil. That said we get most of our oil from North and South America, not the middle east. However, there is still the matter of GLOBAL supply and demand too. Energy is a fairly complex issue. ;)

Complex for who? Its really easy to me..either cut down on consumption or quit bitching about the price and just pay it.

Oil has become a lot like ice-nine... those who posses it can have great fortune, but in the end its spread kills everyone (minus Bokonon, of course).

On a more serious note, $262/barrel is insane, and (by my really quick math) would yeild gas prices between 10 and 12 dollars on the gallon. I do not know if there could be any signifcant consumer demand considering it would cost around $150 for an average size full tank. Most people buy gas between once or twice a week (observation I made when I worked at a 76), so in average month people could be spending around $600 to go places. Also, public transit can not function (even without taxes on fuel) if prices are so high because the only real way to break even is increasing the rider fees to such high levels. When oil gets around to $150 or $200 I think you'll begin to see large scale movements towards alternative fuel quickly because everyone will see the impending shitstorm if we don't.

What happens when it doesn't hit the hypothetical 262.00 mark though? The sky isn't falling and alternative energy becomes more cost effective the higher energy prices go. Just one reason I'm thinking about starting a biodiesel production facility. ;)