Oil at $200/Barrel

[suburban george3]

Toyota's problem is that they have a lot more larger vehicles in the market than Honda has, and obviously the sales of those aren't doing so well these days. My boss just got rid of his Toyota Tundra and purchased a Camry instead for example. Honda has one model of truck (which is fairly small and streamlined anyway) and the larger SUV (Pilot) which is also well under Toyota's largest SUV.

Toyota has tried way too hard to be toe to toe with Ford and GM, and unfortunately for them the market is heading away from those large, gas guzzling vehicles. While Honda has made some changes in that direction (such as the up-size of their Civic and Accord), it hasn't been anywhere near as much as Toyota.

This morning oil went well above $145 (as I type this it is at $145.64) and continues to climb at record pace. We broke a record yesterday and have already broken another record today. We may see $150/barrel by mid-July instead of the end of the month as I had previously guessed. The $200 mark is well within reach by the end of the year IMO and unless something profound changes between now and then, I don't see anything stopping it from reaching that price.

Toyota indeed try to go head to head with Ford and GM with trucks and XL SUV's. However, the buyer of the Toyota brand is more likely to have replaced a car while Ford and GM's trucks have a loyal following from contractors, farmers, etc. Nissan has the same issue (of course they are discontinuing production of the Titan and Armada. It has been announced that Chrysler will build a full size p/u for Nissan.)

In London, Brent crude futures rose to a trading record of $146.69 a barrel on the ICE Futures exchange before retreating to $146.07, up $1.81. - AP

$150 will happen, heck maybe even today with the nervousness over sabre rattling concerning Iran. There are concerns today that Iran might try to restrict or block oil shipments from the Gulf region. Any type of conflict there will send oil skyrocketing.

Cruising the net at lunch, I found this article I thought some of you might want to read. Apparently contracts are increasing rapidly for $200 a barrel oil by December. There is also increased interest in $300 a barrel, especially if Washington and Tel Aviv go to war with Tehran.

Nauman Barakat, of Macquarie in New York, said that investors were again buying call options at $300. "I assume on the presumption that some sort of a confrontation will take place between Iran," he said

There were 29,775 outstanding contracts for Nymex December 2008 call options at $200 a barrel on Thursday, up 87.5 per cent since June. Since the beginning of the year, the so-called "open interest" in these contracts has jumped 600 per cent.

very very discouraging..

[Neo]

The Center for Neighborhood Technology has heat maps up for major US metro areas showing the effects of gas price increases. This is a great way to visually see how much better off those closer in to the cores of cities (or even better yet, those living in the core) have it in regards to transportation costs:

http://htaindex.cnt.org/

FYI, the site is either down or extremely slow at the moment so perhaps it is best to come back to the site later once the initial wow factor has died down a bit.

[Raintree21]

Senate Republicans have dropped the Arctic National Wildlife Refuge from their energy policy debates in order to get more support for offshore drilling proposals.

[Captain Worley]

Not a bad move, politically. I think there's a lot more potential in the offshore drilling.

[suburban george3]

After a couple days of severe declines and or being fairly flat, oil is rocketing upwards again. It is near record territory at $146 a barrel. Due mainly to dropping crude inventories, the Iranian missle tests, and oil-related violence in Nigeria.

[Charlotte_native]

Due mainly to dropping crude inventories, the Iranian missle tests, and oil-related violence in Nigeria.

Or from greed and price fixing by those that are in control of this commodity.

[suburban george3]

After a couple days of severe declines and or being fairly flat, oil is rocketing upwards again. It is near record territory at $146 a barrel. Due mainly to dropping crude inventories, the Iranian missle tests, and oil-related violence in Nigeria.

Strike that, oil is now above $147 as the DOW is now under 11,000 for the first time in 2 years. Also, now evidently Brazilian oil workers are threatening to strike, adding to tensions over supply.

[Lowerdeck]

I wonder if some commodity traders have a dart board with excuses on one of the 20 spaces, and wherever it lands we hear that excuse for the day oil goes up another 4 dollars a barrel. (Lame joke, yes I know.) It's seemingly the same excuses over and over and over and nothing ever really happens to justify the increase in the long term.

This all boils down to the reckless consumer economy, the weak dollar, and incredible greed

[Gusterfell]

^The reason such figures are so hard to find is that they would show that there is currently no shortage of supply, that if anything there is an excess of oil due to most refineries running at roughly half capacity. The hard data would show that, as the Saudis recently said, there is absolutely no economic reason for prices to be anywhere near their present levels.

[Gard]

The two largest things killing us in oil prices right now is the sinking dollar (Fed is starting to bring up the interest rate a little finally to slow its march upwards) and speculators. The speculators are believed to be adding around $30-$50 a barrel. The airlines are getting in on pushing back now and fighting as well and the CEOs of 12 airlines (inlcluding all the major ones) sent out letters to customers urging to them contact their representative in Congress and demand a solution to this. The airline lobby groups are pretty strong and Congress has a handful of bills being worked on now that would regulate the oil industry and even a proposed ban on using speculative targets for pricing oil. I'm interested in seeing what Congress gets done on this (I'm keeping an open mind and will not sway one way or another until I see something come out of this all) and how much the airlines will be able to influence it.

[cityboi]

This is starting to get scary

[dxartist]

This is starting to get scary

what state is this? I'm guessing California.

[suburban george3]

This is starting to get scary

It's already scary, the scariest thing now is the economy in general. We are in completely uncharted waters with the possible potential of bank failures. Even one of the biggies, Wachovia, is being rumored to potentially run out of cash.

Let's hope we can right this ship our we'll be writing history over the next decade.

[sean]

scarier still is the price of diesel fuel. you and i can cut back on discretionary driving, but what about the big rig freight trucks that stock our grocery stores?

[suburban george3]

Let's also not forget home heating oil... this upcoming winter could be the most expensive on record to heat a home with oil; barring a collapse in the price. Everyone who uses much oil/gas needs to be saving and cutting corners!

[Neo]

If anyone hasn't noticed, the price of oil fell below $133 this morning. At this point I'm used to the high prices and I honestly don't mind paying it if it fuels (pun intended) the industry to innovate. I'm hoping that if oil does continue to drop (I don't believe there is room for it to drop much more) that America won't go back to their big SUV's.

[suburban george3]

If anyone hasn't noticed, the price of oil fell below $133 this morning. At this point I'm used to the high prices and I honestly don't mind paying it if it fuels (pun intended) the industry to innovate. I'm hoping that if oil does continue to drop (I don't believe there is room for it to drop much more) that America won't go back to their big SUV's.

The consensus is that oil is still heading to $150+. However, unless it completely collapsed, I think the high prices have lasted long enough to put an effective end to the SUV craze.

[suburban george3]

Oil may be droping, but is that being reflected in the price of gasoline? While certainly we are seeing some effects, particularly in the airline industry, I still see pleanty of people at the gas pumps. I am afraid it is going ot take more than just a little dip in oil prices to bring gas prices down.

There are still plenty of cars at the pump, but overall Americans drove 1.4 billion miles LESS last month. I drive quite a bit and have noticed a reduction in traffic.

As far as oil prices, most 'experts' think this is just 'standard' fluctuation. Most agree we are still headed up to $150.

[Gard]

If anyone hasn't noticed, the price of oil fell below $133 this morning. At this point I'm used to the high prices and I honestly don't mind paying it if it fuels (pun intended) the industry to innovate. I'm hoping that if oil does continue to drop (I don't believe there is room for it to drop much more) that America won't go back to their big SUV's.

Personally, I think that if oil does drop some more and bring prices down that most people at this point will be scared to buy a gas guzzler, fearing that the price will go up again.

[dxartist]

Personally, I think that if oil does drop some more and bring prices down that most people at this point will be scared to buy a gas guzzler, fearing that the price will go up again.

Good point. If if gas drops to $3.00 a gallon, you are still talking about a $75+ fillup. Not only that, the SUV makers such as Ford would be hesitant to produce more of these gas guzzlers, fearing a glut of inventory (not like they don't have a glut now). Heck, if you like SUVs, you can pretty much pick and choose which ones you want.

With prices the way they are now, you see more motorcycles and scooters on the road. I should know, I commute on a scooter every day. I laugh at those gas guzzlers all the way to the bank, even in the winter. Me and my less than $5.00 fillup. I aso own a high gas mileage car that hardly gets driven! The odometer moves maybe 10 miles a week if that.

[Raintree21]

The Senate passed a test vote on legislation today 94-0 in an attempt to regulate oil speculation. Perhaps Congress is finally going to act.

[Gard]

^^^

I really think at this point, especially in election year, that neither party wants to be seen as the problem or standing in the way of fixing the oil problem, hence no "nay" votes on the bill. The instant there would be one, the other party would be trying to use it as leverage in the presidential elections.

[swh1972]

Oil has dropped below the $120/gal. level, and is down from it's recent high of around $147.

I still agree that long term prices are only going to rise, but this gives some support to the notion that for the short term, the run up in oil prices was somewhat overstated.

[suburban george3]

Oil has dropped to around $118 a barrel. Supposedly, there is an electonic floor of $117 that will trigger a mass sell off if that level is reached. We'll have to wait and see...

[Gard]

Thats what I heard too...

I also find it rather interesting that the main reason cited for oil prices dropping is because of falling demand in the US. If demand continues to fall, there is a good chance that oil prices will keep falling with it. Even with the tropical storms moving through the gulf, which historically has caused price to rise, prices have still continued to fall. For that matter, there was an attack on an oil line in Nigeria and Iran continues to threaten to the straight of Hormuz and oil is still falling, which in the past almost never happened.