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GameStop Corp. Message Board

  • unseennc unseennc May 22, 2008 3:19 PM Flag

    oil not in a bubble you say?

    The world's finely balanced market for crude has been creeping into surplus for several weeks. Opec's monthly report says that demand this quarter will average 85.75m bpd. Supply was 86.8m bpd (ed. Looks like Boone Pickens needs to get updated figures) in April. The fresh output from Nigeria, Iraq and Saudi Arabia may push it significantly further into surplus.

    The signs are already surfacing in global inventories. Opec says that stocks held by the OECD club of rich countries are above their five-year average, with "comfortable" cover for 53 days' use. US stocks have edged up for the last four months, though they fell last week

    While it is widely reported that output from the non-Opec trio of Norway, Britain, and Mexico has relentlessly fallen, it is less well known that a clutch of other countries are gradually filling the breach.

    The US Energy Information Agency says non-Opec supply will edge up by 600,000 bpd over coming months as Brazil, Azerbaijan and the Sudan raise production. By next year, the US itself will be producing enough extra oil to shave its import needs.

    None of this has been enough to curb the buying frenzy this spring. Goldman Sachs has warned that prices could reach $200 in a final spike, and even the bears at Lehman Brothers say there may be enough momentum to keep the boom going until Christmas.

    It is unclear whether hedge funds and investors piling into futures contracts have now become the driving force in a speculative bubble. The Bank of England said yesterday that they were not a factor.

    Lehman's latest report - Is it a Bubble? - says commodity index funds have exploded from $70bn (£36bn) to $235bn since early 2006. This includes $90bn of fresh money. Energy takes the lion's share. Every $100m flow of investment money into oil lifts crude prices by 1.6pc, it said.

    "We see many of the ingredients for a classic asset bubble," said Edward Morse, Lehman's oil expert.

    you think? And you know what that isn't even taken into account the demand destruction going on or the new technologies, greater MPG standards etc. In 5 years oil may like gold in the 1980's and the stocks of the 90's be trading at historic lows for decades. Hmm increases in supply decrease in demand and the price of oil goes up. Yeap makes perfect sense. The truth is starting to get out there. Memorial day has been in recent years the high mark for gasoline prices. I think GME will do very well in a decreasing oil price environment. Good luck longs

    Now where's that idiot saying it wasn't a bubble?

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    • I'm not sure what the point of all that was except to say that we agree on some things. Yes, coal and oil are a form of stored solar power. You omitted to say however that that power has been collected for millions and millions of years and conviently compressed into a very energy intensive state for our use. Nothing else will be nearly so easy.

      Certainly no real-time conversion of solar power will be as cheap (except maybe hydro electricity where the energy is again concentrated for us. The problem there is that there is nowhere near the quantity required to satisfy our needs.)

      Anyway, I also agree that society can overcome most challenges when there is sufficient motivation. However, the size of the challenge in front of us is monumental. It dwarfs things like the war on terror or even WW2. I repeat again, the only viable long term solution is nuclear power. It's the source of solar energy ... although we haven't figured out fusion yet ... and we won't in the next 10 years either no matter what resources are thrown at it.) For now, energy efficiency and conservation is the only other strategy.

    • here's some physics/geology/chem 101 for you. OIL and coal are solar power. the only difference is the time rate. If you factor in the time required to produce oil and coal in their natural state it becomes one of the least efficient uses of solar power.

      and some chem 101: As far as Hydrogen not being a source of energy. It depends on what state you find it in. water is simply hydrogen and oxegen after the release of energy. There is enegry released when the two combine. This is what produces the heat (energy) in fuel cells when hydrogen combines with O2 to form its waste product water.

      as far as ethanol the technoligical discoverers in the realm of biotech can and will make plants produce more energy compounds (sugar) from the Sun.

      So solar panels take 5 years to break even. They last for about 20years. That's 15 years of pure profit (savings) with no input costs.

      as far as eletricity. the higher the voltage the higher the potential for work to be done (i.e the more energy available) You might want to study the first and second laws of thermodynamics. IRT to the oil bubble that is occurring. All things seek a stable level and given time everything will become equal. So if oil becomes unequal to a large degree. nature (laws of thermodynamics and laws of economics) state that that unequal level will be filled in some way. It will either require the process to slow as each unit of energy costs more or a new cheaper input to become available.

      There is no alternative. either we except a slower/no economy as oil goes up in price or we find a cheaper form of energy. If it costs a 18 wheel truck 1,500 dollars to deliver 25 tons of steel every 1800 miles (at 5.00/gal) than that steel will at the final destination cost more that $1,500 with every dollar of increases in fuel that steel costs an addtional $300 dollar. Soon it becomes impossible to afford to do this.

      People think we need oil and we will always have OIL but if say desiel hits $10.00/gal will any company be able to ship the steel needed to build a building let alone pay for the steel itself because at EACH point from the mining, to the smelting, to the finishing to the delivery OIL will increase the cost. That is why gov loves the VAT tax. Soon the cost of oil makes it impossible to have any economic activity due to this multipling effect. So as oil continues to go up the choices are either an economic contraction or a new energy source. thus the stock selloff and thus why oil will not continue to go up indefentily no matter how short the inventory becomes. At some point the price will make oil unable to be the fuel of the economy. With the wages being held stable, with the decline in housing, with the decline in the stock market that point is very close infact it has IMO gone over that tipping point.

      You also must never have seen a socity that works together. Anything is possible if it is a matter of live and death. (see great wall, pyrimids, interstate highway system,WW2 buildout, etc.) the only thing we are missing at the present time is leadership and consensus. Once those two pieces fall into place which will happen shortly as the avg america can no longer go to work , have proper nutrition, has a lower standard of living, etc . OIL increases cause a negative feedback loop that can/will form into a perfect storm if the price does not go down.

    • well I'm out to enjoy the weekend. good talk have fun.

      Me too, take care and have fun yourself...


    • yes cool. Now if the equipment lasts 40yrs it still might be doable. New homebuilders could include it in the cost of the home. knowing you will not have an electric bill, heaating bill and just one monthly payment might be a good selling point. esp if you can lock it in at a fixed rate fro 30yrs and get tax breaks on the interest.

      would solve the housing problem too (tongue in cheek here) as we bulldoze all the old houses to build the new ones.....

      well I'm out to enjoy the weekend. good talk have fun.

    • congress is the biggest bunch of jackasses I have ever seen in one place. Should charge tickets for family outing to view congress. Could be the biggest sideshow attraction ever.

    • It was basically done sort of like a concept car in that it showed "it can be done". It cost 500K to do it but the homeowner "only" had to pay about 100K of it. If he saves $2500 a yr it'll take him 40yrs for him to recover his output. Higher elec/heating/cooling costs as well as inflation would mean a quicker payoff but it's still not really feasible yet.

      I think mass production/adoption and tax incentives could bring the cost down but it'll have to get down to around 50K (out of pocket) to make it work imo. Maybe in 10-15 yrs?... It's still really cool though don't you think?


    • Is it total cost or the short term cost. I would think the cost long term would be about the same but it would require a massive upfront outlay. You have the numbers on the cost say over 10years?

    • maybe but he sure sounds like him. as far as a good poster? I would have to disagree on that one.

    • P.S. Jester isn't Albeita. He's been around the VG boards for a long time but switched to another site that has far less spam so he spends less time around here. I looked that other site but it didn't have some of the features I've become used to on Yahoo so I didn't join. Even though I've been on opposite sides of debates with him before he's actually a good poster (IMO). He's just "opinionated" (like you and me..) lol.


    • Yes, I like H because it stores about 2.6X the energy per unit mass as gasoline

      The fuel cell technology that I think is cool involves home pwr. There's a guy in NJ who has sort of a test house that uses solar pwr in the summer to generate his pwr. The excess pwr is used to break up water into H and O. The H is stored in propane tanks. During winter, the H is run through a Hydrogen fuel cell to generate heat, electricity, & chemically pure drinking water. He has a big house too with a hot tub and misc other energy users that all run off the grid. The problem is "cost". It's not cost effective yet but it sure is cool...


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