by frog
Today’s audioblog (mp3, 0.3MB, 2.43mins) is Jeanette talking about National’s proposal to temporarily cut petrol tax.
Published in Audioblog | Campaign | Environment & Resource Management by frog on Mon, September 12th, 2005
Tags: environment
on the trolls and those who are unable to keep on topic
Frog,
I have two questions.
Jeanette says this… ““However, what we are experiencing is actually a signal that petrol prices are on a one-way, long-term trend upwards as we reach the end of cheap and accessible oil”
So why it that 2010 and 2020 oil futures are no different from the prices in 2005. These guys know the most about oil out of anyone in the world. The study it for a profession and put their money where their mouths (and minds) are. Why don’t these guys see the long term upward trend.
Secondly. If the Greens can see the one-way long term upward trend of oil prices, why don’t the Greens advocate tipping the Cullen fund into oil futures? We could become the worlds richest nation.
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Because what the Greens claim is just not true, Archon. Simple as that. It’s blatant scaremongering, and thankfully the good people of NZ are not willing to buy into such crap.
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Chris, Archon
Would T.Boone Pickens qualify as an expert? Or the good folks at XOM? They both see the imminent end of free and easy oil.
Jeanette may have it wrong in that a global recession could put a damper on prices, but that is the ONLY thing that will do it…
Now the idea that speculating, even on a sure thing, is a good idea for governments has also been tried and found wanting, because the market has a way of punishing people who “know” and the manipulations of those markets are made in offices far removed from Wellington. Moreover, the recession risk is real enough.
The best way to deal with it is not to depend on it, and that is what Greens espouse.
One other question… where in the hell can you get 2020 oil futures? 5 year contracts are available, and 8 year contracts, but 14 years. Honest question, I really don’t know of any that go that far. I am however, aware that there’s damned little predictive capability in them. Perhaps you need to be aware of that too.
http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_baum &sid=aB3IqgTnYSUc
Informationally Challenged
Six years ago, the December 2004 oil futures contract was trading at about $19. The only information about the current $55 price per barrel of crude oil was dead wrong.
Why should the contract maturing in 2010 do any better predicting oil prices six years out?
Once you go out more than a few years, oil futures contracts “are sparsely traded, with little, if any, open interest,” said Rick Mueller, senior oil analyst at Energy Security Analysis Inc. in Wakefield, Massachusetts. “I can’t imagine there’s much information there.”
Are we clear now?
Thanks
BJ
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Hey ChrisBishop, are Chevron scaremongering when they say we face an energy crisis?
http://www.willyoujoinus.com/
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Archon raises a very good point though – given what we know from recent history, and what evidence is on the table, why do people who one would think know what they are talking about continue to predict the return of $20 oil?
The only reasonable answer is that they simply haven’t noticed whats happened over the past decade, and think that we are living in a rerun of that 80s decade, the one where oil prices went up and then went down.
Maybe they’re right, but the evidence suggests they are not.
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dbuckley
People who “know” are aware of the demand side of the equation being vulnerable, and the supply side being filled for the moment. In other words, there’s actually more crude available to the refineries than the refineries can process, and enough in the pipe to handle consumption for a while, and the US is releasing reserves and the Japanese ditto. The likelihood of sustaining the $60 price is thus small in the near near term. In point of fact, the likelihood of an engineered drop in prices leading into the US election next year is extremely high. That market gets gamed unmercifully.
Greens are still looking at longer term prospects and those are exactly as dismal as we understand them to be. Any question about the next 6 months however, is best answered by looking at the industry rather than the world.
The $60k question is how far it may drop. THAT comes in at varying estimates and guestimates from $20 to $45 with myself settling in around $38 before it bounces back, but there’s more questions surrounding the value of the $ then as well.
The point is that it is speculation. MOST of the people who watch this expect a short term drop to some degree, and it would probably be happening far faster except for the loss of production in the Gulf of Mexico. That sort of action is pretty well factored into the SHORT term futures markets, but even those don’t suffer from any surfeit of accuracy. Even those are simply speculation.
I don’t gamble with my mortgage money or my retirement funds. New Zealand should not do so either.
respectfully
BJ
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Thanks for that clarification, BJ
We in NZ have known for some time that US internal oil prices bear no relationship to the prices the rest of the world (nb:us, making America them) pay.
Oil futures is a market played by Bush, and his cronies in Texas and Saudi Arabia.
No idea why anyone would play guessing games with funds with those good ol’ boys, only gonna make’em richer.
Hence our internal estimates of what life could be like in 2020 are markedly different from any cognitive dissonance propounded in the USA.
katie
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I have published a PowerLess NZ press release on this issue.
Also available (in much harsher terms – ie, including the swearwords) on my blog.
titled – A Leader Must Have a Vision… I argue Brash’s vision was that of the virgin mary promising oil to drop back to $35 a barrel.
http://ontic.blogspot.com/
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