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View Full Version : Oil price hits 100$ a barrel for the first time



Nicko999
Jan 3, 2008, 3:20 AM
January 3 2008 | Larry Elliott | The Guardian

Petrol prices were heading for new record levels last night after the price of oil broke through the $100-a-barrel barrier for the first time in New York trading.

With motorists already paying more than 103 pence a litre on forecourts in the UK, the AA warned that the $4 increase in crude prices yesterday signalled even dearer fuel in the weeks ahead.

The sharp increase in the price of crude on futures markets pushed it above the previous record of $99.21 a barrel reached in November and to within sight of its inflation-adjusted peak of $101.70 hit at the beginning of the Iran-Iraq war in 1980.

Strong speculative buying of oil has been pushing prices higher over the past few weeks, despite concerns that a slowdown in the US will spill over into the rest of the global economy and reduce demand for energy.

Analysts said investors had responded to the seizing-up of credit markets in recent months by seeking other outlets for their funds.

Yesterday's rapid increase in the cost of crude was prompted by a sudden drop in the value of the dollar amid concern that the US economy is heading for recession. Oil is priced in dollars and when the US currency falls, producers seek to compensate by pushing up their prices.

Shokri Ghanem, Libya's leading oil official warned: "The age of cheap oil is not there any more. What we need to do to try to get more oil is to get more investment. We should encourage investment and avoid this policy of boycotts and sanctions applied by big countries.

"Also, bring peace to the areas where there is fighting and injustice in the Middle East," he added.

The AA said it now costs motorists over £7 more than a year ago for a 50-litre tank of unleaded petrol, adding that the current price had yet to reflect the recent $10 a barrel increase from $90 to $100.

"Oil could rise further from here," said Kris Voorspools, analyst at Fortis in Brussels. "It's simple supply and demand fundamentals.

"Demand is going up and I think there is a structural problem with the refining sector. There's higher demand for higher-quality products and refineries are simply not up to making those kinds of products."

That's getting redicoulus, 100$ for one barrel!

Halifax Hillbilly
Jan 3, 2008, 3:48 AM
Wow. As if the credit crunch wasn't enough for the American economy, the fallout of said credit crunch helps jack oil prices even higher.

Could be a rough year in 2008. I'm glad I don't own a car.

ScottFromCalgary
Jan 3, 2008, 4:31 AM
:tomato: :tomato: :tomato: :tomato: :tomato:

http://i162.photobucket.com/albums/t279/scottr49/champagne.jpg

I know that the energy industry is actually on a downturn in Alberta, but I'm still going to briefly celebrate this event.

worldwide
Jan 3, 2008, 8:15 AM
word. and this is why i wonder why Metro Vancouver is building a gazillion highways south of the river but no commuter rail or even express busses

cornholio
Jan 3, 2008, 8:59 AM
Remember that the price per barrel is in american dollars, and we all know what has hapend to the ameircan dollar. So really the number $100 makes it seem worse then it really is thanks to the recent fall of the american dollar. They touched on it in the article but still it didnt make it much easier in showing us the real price of oil over say the last few years which has gone up, but not as sharply as some might think.

vid
Jan 3, 2008, 12:29 PM
Yes, it actually costs $99.47!

MolsonExport
Jan 3, 2008, 1:52 PM
Remember that the price per barrel is in american dollars, and we all know what has hapend to the ameircan dollar. So really the number $100 makes it seem worse then it really is thanks to the recent fall of the american dollar. They touched on it in the article but still it didnt make it much easier in showing us the real price of oil over say the last few years which has gone up, but not as sharply as some might think.

Indeed, although the high world price for oil has helped propel the Canadian dollar, which is in part now a petrodollar.

caltrane74
Jan 3, 2008, 2:23 PM
Rise Dark Lord. Rise Dark Lord!!!

RISE!!!!

Doug
Jan 3, 2008, 3:40 PM
word. and this is why i wonder why Metro Vancouver is building a gazillion highways south of the river but no commuter rail or even express busses

Because trucks don't take transit.

vid
Jan 3, 2008, 5:26 PM
So when we go onto those highways, all we're going to see are transport trucks?

PhilippeMtl
Jan 3, 2008, 6:20 PM
:tomato: :tomato: :tomato: :tomato: :tomato:

http://i162.photobucket.com/albums/t279/scottr49/champagne.jpg

I know that the energy industry is actually on a downturn in Alberta, but I'm still going to briefly celebrate this event.

You are a selfish asshole. It is only good for your own pocket and for other Albertans but it is a nightmare for the rest of the world.

psych1
Jan 3, 2008, 6:23 PM
You are a selfish asshole. It is porbably good for your own pocket but it is a nightmare for the rest of the world.

Easssy there. I think "nightmare" is a little strong, no? Low fuel prices, in as much as they contribute to global warming, might be seen as more of a nightmare.

caltrane74
Jan 3, 2008, 6:40 PM
You are a selfish asshole. It is only good for your own pocket and for other Albertans but it is a nightmare for the rest of the world.


I'm with Scott on this.


This is good not only for Alberta, but for Canada as a hole. Isn't it better to take advantage of the demand supply imbalance in regards to the world oil market, rather than be a victim or a spectator to it?

Riise
Jan 3, 2008, 6:51 PM
Easssy there. I think "nightmare" is a little strong, no? Low fuel prices, in as much as they contribute to global warming, might be seen as more of a nightmare.

I'm with Psych on this one, the gas guzzlers' loss is the entire world's gain. Although I'm not in the O&G or Economics industry, I believe we are at or very near to Peak Oil. For those of you who have watched End of Suburbia it could be the beginning of an era where the world is forced into sustainability.

WhipperSnapper
Jan 3, 2008, 6:59 PM
Are you that naive?

Sure my government is struggling to control debt however the energy boom has been very good to me and many other Canadians who aren't living the inflationary overheated economy. And, I love to see European pump prices for non-commercial use here in order to manipulate the American dream to something more sustainable.

psych1
Jan 3, 2008, 7:20 PM
I'm with Scott on this.


This is good not only for Alberta, but for Canada as a hole.

Freudian slip?

caltrane74
Jan 3, 2008, 7:24 PM
Freudian slip?

I was wonderin' if anyone would notice that.

Good eye psych.

tokie1
Jan 3, 2008, 7:27 PM
You are a selfish asshole. It is only good for your own pocket and for other Albertans but it is a nightmare for the rest of the world.

How is it a nightmare? If anything, transit supporters should be cheering the price of oil going up. The more gas costs, the more people will choose to drive less and take alternatives. It also makes the cost of transit cheaper relative to investing in roads, so governments will invest more relatively in public transportation.

vanman
Jan 3, 2008, 7:38 PM
If oil prices reach a level too high it could spark a catastrophic domino effect that could collapse the world economy.

caltrane74
Jan 3, 2008, 7:49 PM
If oil prices reach a level too high it could spark a catastrophic domino effect that could collapse the world economy.

It won't happen.

Oil prices will rise gradually over the next 15 years to about 200 dollars a barrel. At which point the supply & demand equation will come into balance and conservation and new alternative energy streams will come online.

All the while, we as Canadians will be living much "greener", at least financially.....

Kevin_foster
Jan 3, 2008, 8:16 PM
At higher prices, you could say that the demand for oil transforms into an elastic one.

If Oil hit $200 a barrel, the major consumers would seriously start turning to other alternatives.

Seeing that Solar is now cheaper than coal now.... hmm....

vid
Jan 4, 2008, 3:53 AM
Seeing that Solar is now cheaper than coal now.... hmm....

It isn't, just a certain kind of solar is cheaper than coal. It's still ineffecient. You'd have to wipe out New Jersey to power New York. As a source for home energy, though, we should definitely take advantage of it. I think that by 2012, there should be a law requiring all new homes to have some sort of solar power on their roofs, at least in sunnier cities.

ScottFromCalgary
Jan 4, 2008, 4:32 AM
You are a selfish asshole. It is only good for your own pocket and for other Albertans but it is a nightmare for the rest of the world.

You are at least right about the selfish asshole part. However, you're argument would be even better if you said "greedy, selfish asshole", since that more closely reflects my avatar and signature.

In reality, high oil prices are good for the Alberta and Canadian economy, and help to decrease demand for fossil fuels which are harmful to our environment. And it lines my pockets. Douchebag.

vid
Jan 4, 2008, 4:37 AM
I agree with Scott here. :) I am, of course, assuming you have many shares in companies that are researching oil alternatives? According to Time magazine, one company, called First Solar, saw an increase in value of more than 700% in 2007!! Wish I bought into that!

Canadian Mind
Jan 4, 2008, 5:16 AM
I'm in agreement with Scott, which seems to be happening alot lately.

Initially, all it did was screw over manufacturing in Canada as it forced the dollar to rise. Now that it is going to be going over 100 bucks a barrel, the Canadian and more notably Albertan, Saskatchewan, and New Found Land Economies are all going to get propped up more by this. Being that two of these provinces are have-not provinces, it benefits us alot. It will still hurt manufacturing as the dollar rises; however, as the demand for oil now starts to drop for oil as people search for alternatives, those companies that manufacture alternatives such as wind farms, solar panels, electric cars, devices for organic agriculture, etc. are all going to get a boost, while those that rely on oil, like the current auto markets, will tumble along with demand for those products.

So yes, it will hurt in the short run, but in the long run we stand to benifit in every way imaginable from rising oil costs. not only will there be demand for alternatives, there will be money to pay for them, and jobs created to make them.

ReginaGuy
Jan 4, 2008, 5:21 AM
Good news for Canada, and for me, as I just got a new apartment only 1 block from school :) I can walk every day!

Hardhatdan
Jan 4, 2008, 7:23 AM
The question for me becomes, is the "green" push really the "expensive oil" push...but manipulated by ones political leanings.

Either way, this high cost will be the real driver in energy alternatives in my mind, despite the pleas and rhetoric of David Suzuki, Al Gore and ilk.

Canadian Mind
Jan 4, 2008, 8:25 AM
hey yea, thats another benefits for us hi-rise nuts, demands for density around amenities driven by the lack of desire to use gas.

Aylmer
Jan 4, 2008, 1:07 PM
South Aylmer is extremely walkable!

The highest building is only 5 storeys but everything is close (Barber, grocery store, chinese food, pizza, ice cream, ect. ).

:)

Rico Rommheim
Jan 4, 2008, 1:35 PM
South Aylmer is extremely walkable!

The highest building is only 5 storeys but everything is close (Barber, grocery store, chinese food, pizza, ice cream, ect. ).

:)

You are a selfish asshole Aylmeroptimist, all you think about is your own convinience in your city but for the rest of the world it is hell!

caltrane74
Jan 4, 2008, 2:39 PM
High Oil is forcing a adaptation on the part of the entire Canadian economy. And it will be for the better. We see it in Ontario where the old industries like Auto Manufacturing are dying and new high tech industries are exploding and generating ungodly wealth.

RIM is destined to become the first 100 Billion Dollar Canadian company.

And there you go.

Doug
Jan 4, 2008, 2:57 PM
^How could you forget Nortel

Rico Rommheim
Jan 4, 2008, 3:12 PM
^How could you forget Nortel

What are they back over the 2.00? I sold all my shares and never looked back a while ago.

caltrane74
Jan 4, 2008, 3:16 PM
^How could you forget Nortel

Nortel could have only dreamed to have the management team RIM has.

And Nortel was always second fiddle to Cisco, never top dog. Being second doesn't count for shit in the high tech arena. We know that all too well now....

Thanks to Nortel

Aylmer
Jan 4, 2008, 3:55 PM
You are a selfish asshole Aylmeroptimist, all you think about is your own convinience in your city but for the rest of the world it is hell!

It's as hellful as you want me to think it is!

:)

Alberta Bound
Jan 4, 2008, 4:01 PM
Initially, all it did was screw over manufacturing in Canada as it forced the dollar to rise. Now that it is going to be going over 100 bucks a barrel, the Canadian and more notably Albertan, Saskatchewan, and New Found Land Economies are all going to get propped up more by this.

I think the medium-term benefits will extend beyond these three provinces. As the price rises, the economics for exploration and exploitation of harder to get at and harder to extract resources will start to make more sense. I am thinking more expansion in northern BC, the Arctic and the east coast off Nova Scotia.

At one time, extracting bitumen from oil sands wasn't economically feasible until technology developed and the price of oil/bitumen went through a certain threshold. The same thing will happen with oil shales. If there are burnable hydrocarbons in the ground, we will get them out eventually.

caltrane74
Jan 4, 2008, 4:19 PM
The extraction of heavy oil in Alberta is having a spin off benefit of creating a high tech industry focused totally on getting oil out of the ground.

Let's see what happens. Looks like it could be good.

vid
Jan 4, 2008, 4:35 PM
The coast of Nova Scotia is just natural gas. They could have unknown oil reserves off the coast, though. Ontario produces more oil than Nova Scotia!

http://www.cbc.ca/news/interactives/map-canada-oil/

Ontario has 1/7th the oil industry Manitoba has! Go us!

Rico Rommheim
Jan 4, 2008, 4:43 PM
There's oil everywhere, I'm sure if you dig deep enough you'll find plenty in Quebec. Especially in the river delata of the St-laurent, it's almost a giveaway that there's oil and/or gas there.

caltrane74
Jan 4, 2008, 4:49 PM
Hey guys.....

Ontario throws out a lot of Gold.

And last I checked Gold hit a new high yesterday.. 865 bux an ounce.....

Good ol'e Canadian Shield.

Barrick Gold (Toronto) stock is hitting all time highs as well.

vid
Jan 4, 2008, 5:07 PM
Yes, Geraldton and Marathon are going to be going pretty good in the future, and there has been tons of activity in the mining sector up here. It would be a pretty good thing to ease the economic transition from primary/secondary industries to tertiary/quaternary/quinary industries in the region. People can go from forestry to mining, while the rest of the population can get educations and go into trades, etc.

If we manage things properly, Northern Ontario would actually be very rich, and we'd all be better off for it. We just need economic policies to work with our situations. Ontario's economy is so broad that we need a double standard to manage it. It's simple too big for a one-size-fits-all solution.

Speak of the devil:

Hungry for gold
By Bryan Meadows | Thursday, January 3, 2008
http://www.chroniclejournal.com/stories_local.php?id=83776

A Toronto-based mineral exploration company is serious about finding a viable gold-mining deposit near Dryden.

Laramide Resources Ltd. is buying Thunder Lake-area gold properties from Corona Gold and Teck Cominco, and plans to raise more than $4 million in flow-through shares financing for exploration work on its mineral properties in Canada.

The plans include a diamond-drilling program on the company‘s 166-hectare Goliath Gold project immediately south of the Thunder Lake properties within the next three months.

The properties are 15 kilometres east of Dryden and one kilometre north of Highway 17 in Zealand Township.

The news is sweet music to the ears of Vicki Kurz, the city‘s economic development manager.

With the price of gold hitting historic levels of $864.50 an ounce Wednesday, and Dryden-area gold properties catching some renewed interest, “I think it is all positive,” Kurz said Thursday.

“Mining is a (largely) unexplored diversification we could benefit from,” she said.

...click link for rest of story

Very good news for Dryden. :) It's Ontario's smallest city, having been granted the status when its population was estimated to have passed the 10,000 person threshold only to realize that it had not actually reached that point when the census was finished. :P

Nicko999
Jan 4, 2008, 11:52 PM
oil hits a record high 100.09$ earlier today.!

Xelebes
Jan 5, 2008, 12:25 AM
oil hits a record high 100.09$ earlier today.!

When was that? It was trading at 97 bucks a barrel through most of the day.

Nicko999
Jan 5, 2008, 12:34 AM
When was that? It was trading at 97 bucks a barrel through most of the day.
It was the early part of the day probably in the morning

ScottFromCalgary
Jan 5, 2008, 4:03 AM
oil hits a record high 100.09$ earlier today.!

Actually that was yesterday. And it was a very small number of trades (ie. possibly only one or two contracts) on a day with very light trading volume in general. Oil will certainly be above $100 on a consistent basis one day, but don't expect it this week IMO. My firm pegs the fundamental value of WTI closer to $65 or $70 actually, so we'll see how things turn out over the next six months. Before you know it the US will be finished cutting rates and pull itself out of recession, the US dollar will rally and the price of a barrel in USD will decline relative to its value in other world currencies.

The problem with the current situation for Canadian companies is that oil in Canadian dollars isn't all that much higher than it was after Hurricane Katrina in August 2005. During this period they have had to face much higher capital and operating costs, as well as a greater tax burden due to the future loss of the income trust structure and higher royalties. That's why my celebration at the beginning of this thread was really only meant as a symbolic tomato dance.

vid
Jan 5, 2008, 2:11 PM
Oil at $100 a barrel? No way, says one defiant expert. Expect $60 crude--soon.
Forbes | November 12, 2007
http://members.forbes.com/global/2007/1112/028.html

War in Iraq, destabilization from Turkey, unquenchable thirst for energy in Asia, millions of fuel-slurping SUVs still cruising American highways. No wonder oil prices have jumped above $90 a barrel on the new York Mercantile Exchange, on their way to $100.

Not so fast. According to some longtime observers, we will soon see $60 oil. Their argument is that the main driver of price spikes is something hardly mentioned these days: a miscalculation by the world's most important supplier, Saudi Arabia. And within the next two months that miscalculation will be corrected and oil prices will drop. "It's sure getting set up for a hard fall," says George Littell, partner at Groppe, Long & Littell, a Houston firm that has advised oil drillers and investors on the outlook for crude prices since 1955.

Here's how Littell sees it. Last year Saudi petrocrats thought demand would slacken at the same time that oil production rose from sources outside the Organization of Petroleum Exporting Nations. They cut back Saudi production from 9.5 million barrels a day in March 2006 to 8.5 million a year later in order to keep supply and demand balanced and crude prices hovering around $60 per barrel.

...click link at top to continue reading

Mid January starts in three days. Good luck!