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Oil Gives Economy Both Barrels
Wall Street Journal ^ | 3/3/2012 | Liam Denning

Posted on 03/04/2012 8:57:27 PM PST by U-238

Most drivers are familiar with the nagging refrain of "Are we there yet?" But with gasoline heading back to $4 a gallon on average, it takes on more urgency: Oil can't go much higher without derailing the economy.

Brent crude oil is back above $120 a barrel. Looked at on a 12-month rolling average, it is now 6% above its prior 2008 peak. U.S. gasoline demand is down almost 7% year-on-year. This year, Europe is forecast to consume 10% less oil than it did in 2008. Global demand is still forecast to rise, but only in emerging markets.

Oil's high price greases this transfer of demand from the West to the rest. While mature economies are forced to brainstorm efficiencies, emerging markets offset the pain with faster economic growth and, often, consumer subsidies.

At some point, though, oil prices overwhelm everyone. Efficiencies take time to develop: The faster way to lower consumption is recession. In emerging markets, high oil prices stoke inflation and make subsidies unmanageable.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Foreign Affairs; News/Current Events
KEYWORDS: oil; oilprices; useconomy

1 posted on 03/04/2012 8:57:31 PM PST by U-238
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To: U-238

Today, oil trades 35% above the cost of producing the world’s most expensive barrel, according to Sanford C. Bernstein


2 posted on 03/04/2012 9:09:27 PM PST by U-238
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To: U-238

Obama and the media can attempt to deflect the blame for high gas prices all they want.

In the end though, even if he doesn’t get blamed for gas prices, the economy will tank and he owns it. Period.


3 posted on 03/04/2012 9:20:37 PM PST by nhwingut (Sarah Palin 12... No One Else (Maybe Tim Thomas))
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To: U-238

wow, the average deep horizontal well costs 9.2 million, so they are not getting as rich as you think


4 posted on 03/04/2012 9:47:04 PM PST by richardtavor
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To: U-238

INFLATION

The dollar is worth less and the speculators are out in droves.


5 posted on 03/04/2012 9:57:49 PM PST by Sequoyah101 (Half the people are below average.)
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To: Sequoyah101

You are also forgetting the hedge funds


6 posted on 03/04/2012 10:01:54 PM PST by U-238
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Comment #7 Removed by Moderator

To: allmost

You may want to hold your horses. There are other people waiting for an answers in other threads. Since you called me the “a” word you will not get a response.


8 posted on 03/04/2012 10:43:55 PM PST by U-238
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To: allmost
Flight deep Orange. kick your ass.
9 posted on 03/04/2012 10:45:43 PM PST by allmost
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To: U-238

I think you consider freeper mentalitiy as done. Try it.


10 posted on 03/04/2012 10:48:27 PM PST by allmost
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To: allmost

Take it to the hand...


11 posted on 03/04/2012 10:49:55 PM PST by U-238
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To: U-238
These are just a few of the reasons gas prices are quite suddenly burning up your income.

----------------------------------------------------

Iran is going to take over the world.

The refineries need maintenance

The speculators are doing it

We're running out of oil

We have plenty

Americans are driving less, so we need to raise prices

The Chinese have millions of mopeds to fuel

There is a leak in a pipe in Moose Jaw Alaska

A rodent chewed through a line at the main pump station in Texas.

Demand is down but we are producing more however, our refineries have been and are being shut down

Prices will go to 6.75, but 3 days before the election, Obama will lower prices to 1.40 to ensure reelection

A school of endangered blowfish have been sucked into a pipe, and it takes time to get them out.

Iran has nukes

Unstable markets worldwide.

A big refinery fire

A small refinery fire

A refinery fire could possibly happen

New gas additives are being developed to make Americans even more stupid

They forgot to build a pipe

They don’t like pipes

Rich liberals want the price even higher.

Obama hates the oil industry

The oil industry hates Obama and are hoping this kills his reelection

Liberals want everyone ridding donkeys and bicycles to work as a sacrifice for the planet

We moved more armaments to the gulf because Iran is taking over the world

Wild money printing and massive deficits

Americans love high gas prices

Refinery margins are tight…They hardly make any money at all.

The masses have no idea how free market works.

It is being exported because we are making more than we use.

Demand has fallen

We need refinery upgrades and expansion

We are making more than we use so we have to sell it to the Chinese, (They have 1 billion mopeds to fuel , and need to go to work so they can send us more Communist products .

We have plenty of oil, so much so, we need to sell it abroad to keep prices low.

We have plenty of oil, so much so, we need to sell it abroad to keep prices high.

Barry intentionally pissed off the oil companies and seriously limited their profit and boy are they PO’d.

12 posted on 03/04/2012 10:59:35 PM PST by dragnet2 (Diversion and evasion are tools of deceit)
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Comment #13 Removed by Moderator

To: dragnet2

That seems to be a complete list of excuses. Pretty soon, aliens will attack from outer space.


14 posted on 03/04/2012 11:01:23 PM PST by U-238
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To: U-238

Would you care to be honest?


15 posted on 03/04/2012 11:02:42 PM PST by allmost
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To: allmost

This discussion has ended. Please stop stalking me


16 posted on 03/04/2012 11:03:48 PM PST by U-238
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To: U-238

Oh, no... #12 is just a few of the excuses I’ve heard in just the past week.

There are more.


17 posted on 03/04/2012 11:05:15 PM PST by dragnet2 (Diversion and evasion are tools of deceit)
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To: dragnet2

List them. I think its interesting.


18 posted on 03/04/2012 11:06:08 PM PST by U-238
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To: allmost

snort


19 posted on 03/04/2012 11:11:54 PM PST by allmost
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To: U-238

He is really made. Try it from him..Whineing pathetic, too close to reality. must be nice. I qaulifiy one.


20 posted on 03/04/2012 11:27:05 PM PST by allmost
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To: U-238

Done deal.


21 posted on 03/04/2012 11:36:44 PM PST by allmost
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To: U-238
U-238 07666666666666666666666666666666666666666yt60.
22 posted on 03/04/2012 11:47:56 PM PST by allmost
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To: U-238
How long before President Obama calls for price controls?
23 posted on 03/05/2012 5:57:55 AM PST by 2001convSVT (Going Galt as fast as I can.)
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To: U-238

Aren’t they like, speculators?


24 posted on 03/05/2012 8:49:27 AM PST by Sequoyah101 (Half the people are below average.)
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To: Sequoyah101

They are both involved in speculation but hedging involves taking an offsetting position in a derivative in order to balance any gains and losses to the underlying asset. Speculators make bets or guesses on where they believe the market is headed.


25 posted on 03/05/2012 4:04:57 PM PST by U-238
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To: Sequoyah101

http://wiki.answers.com/Q/Difference_between_speculation_and_hedging_strategies


26 posted on 03/05/2012 4:09:15 PM PST by U-238
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To: allmost; U-238
He is really made. Try it from him..Whineing pathetic, too close to reality. must be nice. I qaulifiy one.

I've read through this thread 3 times trying to figure out what your problem is to no avail. Care to spell it out in simple, understandable terms?

27 posted on 03/05/2012 4:36:20 PM PST by houeto (Mitt Romney - A Whiter Shade of FAIL)
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To: U-238
Oil isn't the cause. It's the symptom. The Democratic party along with the RINOs have derailed the economy with insane levels of spending.
28 posted on 03/05/2012 5:36:25 PM PST by VRWC For Truth (Throw the bums out who vote yes on the bailout)
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To: U-238

I’m no oil analyst but it’s pretty clear that this oil bubble, assuming no Mid-East war, will be over long before October\November and gas will be at $3 or less, certainly well under $3.50.

If the Mid-East does go up in flames, I’ll probably buy a Volt and a 200 foot extension cord to charge it from my condo.

........just kidding


29 posted on 03/05/2012 5:57:10 PM PST by citizen (The Dims will all unite for Zero. We must soon unite behind our challenger and back him to victory!)
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To: VRWC For Truth

I agree.


30 posted on 03/05/2012 6:03:26 PM PST by U-238
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To: citizen
I’m no oil analyst but it’s pretty clear that this oil bubble, assuming no Mid-East war, will be over long before October\November and gas will be at $3 or less, certainly well under $3.50.

I agree.I would say that speculation is driving up the prices.

http://money.howstuffworks.com/oil-speculation-raise-gas-price.htm
31 posted on 03/05/2012 6:09:55 PM PST by U-238
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