acl65pilot

yep. It really is worth that much of a rise in one day.

aerospacepilot

I remember about 2 years ago when oil was at $60 a barrel and most everyone was singing the same old tune (oil is too expensive, this is simple supply and demand, the oil bubble will burst, blah blah blah…..). Here we are just 2 years later and oil is at $140/barrel. Yet most people still can’t see that oil is a very different monster. It is the life blood of the western economy. It is able to defy the laws of supply and demand. The ultimate law is something is only worth what you pay for it. If you bought gas today, you bought oil for $140/barrel. Therefore, you believe oil is definitely worth $140/barrel. Otherwise you would not purchase it. I think oil is worth much more (maybe $200/barrel, that is gas at $6.50-$7/gallon) I think at $200/barrel oil, you will start to see people changing their ways. Over the long term, the price of oil is only going to go up and up and up. Rather than arguing about it, I think everyone should think about how they are going to adapt to this environment of super high energy prices.

152SIC

Oil is not immune to the laws of supply and demand. The elasticity of demand for oil is relatively inelastic, but demand will change.

fosters

Just because I bought gas today doesn't mean I think gas is worth $4/gal. I bought it because had I not, I wouldn't be going to work. I bought it because I currently have no other option not to, short of walking the 13 miles to the airport and back.

And you're wrong about another thing - the US is already starting to change its ways. Perhaps you've missed the headlines about small car sales, resurgence in mass transit, reduction in miles driven etc. while watching oil. This time last year I had driven almost 3,000 miles. Now I'm down to less than 1,000. I myself am cutting back.

The Duke

Looks like the big investigation everyone was talking about did a lot a good for oil prices!

Twin Wasp

My head hurts.

WhizWheel

I've been arguing that speculation is a major cause yet I'm not saying the weak dollar is the underlying force. The weak dollar is one, ONE facet of why oil is at all time highs. Speculation will do what it does to oil whether or not the dollar is weak or not. And on that note the dollar has already begun a slow rebound (as evidenced by a previous poster referencing the Yen and looking at the Euro) because based on traditional indicators, this isn't a full blown recession. Yes I agree that it is darn close to one but we are already seeing corrections and surprising numbers in some industries that many analysts predicted would drop. The lagging indicator to a weak economy is jobs and today the rise to a 5.5% jobless rate should be the last of the major incicators to show weakness. The economy, the dollar, oil.......it will all correct and it won't be long

FliFast

On April 2nd, 2008, the government reported that overall oil demand was down and the news sent oil up $3 bbl from $100-and-change to $104.

Immune, maybe not...unpredicatable to principles as old as the hills, I'd say yes.

FF

reevesofskyking

did anyone else notice the other commodities were setting records today too. It just goes to show that people are throwing money at all commidities. You will see that corn is up to a new record of 6.52/bushel.

http://money.cnn.com/news/newsfeeds/...5b41647391.htm

Beans are also near record highs, and this link describes how the price movement of beans and grain are more closely following the price of crude.

http://www.theprairiestar.com/articl...s/market11.txt

It might be easier to see and understand grain prices coming down "crashing" Seen it before here in the midwest, and there is not many farmers that I talk to that say the price of corn can stay this high for ever. I can remember just three years ago we thought it was great when corn did 1.79 a bushel. That was just a great price. In the near to medium term there is no reason in my mind to beleive that oil can reverse its direction as well. I am not talking about any longer because I am not a full peak theory believer yet.

I also belive there is a coming glut in gasoline stocks in the next year for this reason..

Oil will climb, and well as gasoline and continue to rake in record profits, thats fine by me to make moeny.

Then oil starts will some sort of retreat "bubble pop" and gasoline futures lag oil futures so much these days that they will continue to refine until their purchase price of refining crude becomes cheap enough to lower the price of gas and still maintian status quo profit margins. Then as the snowball gets rolling down the hill, and price still continues to slump, they will produce more (understanding there is not much spare refining capacity) to sell by volume to make the same revenue and pleasing share holders at the same time. Then it will catch up with them at the bottom, we have plenty of gas and oil, and the cycle starts over again of "cheap oil" for a while until energy demand lags energy productions, and settles at the "bottom" and starts the climb all over again.

Tech Maven

All you need to know about peak oil and what our economy faces going forward 2, 3 decades is this book. First thing you'll learn is that these high prices today will look low compared to what they will be in the next few years. It's simply a supply and demand problem, as demand skyrockets because of the needs of China and India and the rest of the world while output will slowly be coming to a crawl in about 20-30 years. Get edumacated about oil......because you're not going to get the big, depressing picture from the media or talking heads.