Why Oil Really Fell Today—and Could Keep Falling

Heroic capitalism strikes again?

Does that mean we can stop subsidizing oil sometime soon?

http://preview.tinyurl.com/6dp9qb

http://preview.tinyurl.com/3pedhg

Bryan Hord of CA @ Aug 04, 2008 22:08:16 PM

I hope big oil doesn't destroy this!!!

This is great news for me and my family; really bad news for the oil families. I just hope the scientist involved have some serious protection because the oil mafias are not going to take this lying down. God bless you!

Tim of TX @ Aug 04, 2008 18:46:49 PM

From the 'fringe mentality'

Of course, the possibilities are that the oil companies have colluded with oil producers to fix oil prices to their heavy advantage, manipulating the market through futures speculation and mock 'shortages' (When was the last time you heard about gas prices going up because the refineries were shut down due to 'routine maintenance'?). They've been doing this for the last eight or nine years, playing with the markets, pumping up the price through fake or unnecessary 'shortages', profit taking and other minor manipulations.

This year, though, they ended up miscalculating the market, the weak dollar and the strong surge of demand in Asia and saw prices skyrocket beyond their control. This resulted in insane profits for them, of course, but also in an extremely strong surge in alternative fuel research (the MIT folks being one example), making alternative fuels more viable and cost-effective against the artificially inflated price of oil.

So, in an effort to reduce the interest in oil alternatives, and to stop the talk of 'weaning America off the oil habit', they're lowering prices through profit decreases, cutting margins and lowering the price so that we all go back to our oil-sucking ways.

(I DO love conspiracy theories, but this one sounds almost true)

While I'd like to think oil prices have crashed due to a belated regaining of control over their manipulation, I tend to think a combination of a reduction in demand from China (They cut government subsidies of oil 25% in May), a 2% DROP in demand in the US during a time when demand typically rises 5-10% (summer travel season), and an overall air of getting away from oil in general has done more than burgeoning alternative energy research (The MIT process for extracting Hydrogen, while exciting and MUCH more cost effective, has 2 more stages to complete and THEN 10 years before it becomes commercially feasible to replace oil). It's not one single causal factor, but a combination of them.

And it's TEMPORARY.

Oil is, after all, a finite resource. The oil that's left is becoming harder and harder to extract and costlier to refine. There will be ups and downs in the price of oil, but I expect the overall trend in price will be inexorably upward.

This is just a short-term downswing. Enjoy it while it lasts.

Fatesrider of CA @ Aug 04, 2008 18:29:34 PM

Oil Prices

I doubt this little publicized discovery has had an effect on current oil prices, so far you have to be looking for this type of information to find it. In the near term there should be an effect, in my opinion. The carbon based economy shortens significantly if this is real (30 to 50 years to 10ish hopefully). Based on the 10 year assumption, which I understand is unvalidated at this point, the pricing power of suppliers will be greatly reduced from a market psychology perspective.

I look forward to watching the how this news impacts the oil market going forward, and am hopeful this is real.

Jon

Jon of CO @ Aug 04, 2008 17:08:03 PM

Cracking water, etc,

What is required for a stable world is the full array of technologies that will assist in power production. All of the alrernatives need to be funded for research and utilization.

To allow a bottleneck in energy production that may be exploited in the future by unstable politics, war, scarcity, etc, is sheer folly. Do it all! Solar, hydrogen, lpg, geothermal, tidal, wave energy, wind, whilst relegating coal and oil to the lesser degree. It is healthy for future generations all over the world!

Gary of CO @ Aug 04, 2008 16:50:29 PM