Nickname: big al

Review: Econoguy: I believe the switch to hybrid vehicles, if it happens at all, will take place incrementally over a period of decades rather than in one dramatic breakthrough as you suggest. Also, any energy saved by hybrid use will likely be offset by increased global demand. Please see the article "Fill 'Er Up--But With What," May 22, on this Web site for a more detailed examination of this issue. In any event, if the current pull back in gasoline prices continues, the short-sighted American consumer will likely forget all about hybrids and return to their gas-guzzling SUVs--until the next price spike pushes prices to $4 a gallon.

Date reviewed: Sep 4, 2006 11:33 PM

Nickname: econguy

Review: In response to Big Al, I will point out the main differences of the energy spikes. In the 70s/80s there was a long adjustment process and some timely new old fields coming online (North Sea and Prudhoe Bay). Consumers helped only temporarily with a switch to mostly imported small cars and utilities stopped using oil in steam boilers. This time, we effectively have the same incoherent energy policy, but the big difference is systematic improvement in hybrid vehicles. No, they are not the deciding factor at present, but the investment and technology path is set for third and fourth generation hybrids to lead consumer response (globally). It is this systematic response on the consumer side that is different this time around. It will prevail. The only question is whether investment strategists will follow a gradual Toyota-style improvement path to the opportunity or whether breakthrough steps will occur that create a rush.

Date reviewed: Aug 29, 2006 3:00 AM

Nickname: big al

Review: To "econoguy," who states in his post of Aug 22, "persistently high energy costs are directly correlated with innovation and adaptation on the demand side": I remember similar sentiments expressed during the 1973 oil embargo when prices increased fivefold in a matter of months and thirty-three years later, we're more dependant on oil than ever. A modicum of progress has been made; we've managed to patch together a crazy-quilt of alternative energy sources, but there's nothing to replace the versatility and scale of petroleum, nor will there be in our lifetime.

Date reviewed: Aug 24, 2006 2:26 AM

Nickname: The Plunger

Review: Geez, everybody and everyone is absolutely positively convinced that oil is going up. Presumably, if they are betting men they are long. So who is left to buy? Stay short till everyone turns bearish. The Bulls are toast. Just an insight from someone who has spec traded oil futures professionally for 20 years...

Date reviewed: Aug 23, 2006 5:24 PM

Nickname: You just have to be right

Review: China's crude imports were up 17.9% in the first 5 months of 2006, and India's were up 12%. In late 2002, China imported 4.8 million tons of crude per month. In June 2006, they imported 12.3 million tons. The USA imports over 10 million barrels of crude everyday. We also import over 1.2 million barrels of gasoline. With the USA economy slowing, a small reduction in the import numbers will not have a big reduction in the price. We're short refining capacity and will stay that way. If demand goes down, we will just import less gasoline, but the price of crude or gasoline will not fall.

Date reviewed: Aug 22, 2006 3:56 PM

Nickname: econguy

Review: The clock is ticking on OPEC and big oil. It may not be a problem this year or next, but persistently high energy costs are directly correlated with innovation and adaptation on the demand side and also among nonOPEC producers. Tick Tick Tick

Date reviewed: Aug 22, 2006 2:39 PM

Nickname: worryoil

Review: Clearly part of the cost of oil is the declining USD. Look at the value of the dollar compared to the CHF over the last five years. The rotten financial conditions of the US are contributing directly to the demand for more USD's to buy oil. That only further worsens the economy of the US and the value of the USD. We are caught in a huge bind thanks to the profligate spending of our pols in DC.

Date reviewed: Aug 22, 2006 9:59 AM

Nickname: David S. Maquera, Esq.

Review: Oil was cheap during the '90s when the U.S. was the sole superpower with relatively easy access to plentiful oil. Now, the U.S. may yet be a superpower but after losing a full division in Iraq (2,500 dead and 18,000 disabled) and inability to confront Iran, Russia, and China in Asia, the days of plentiful and secure oil are over.

Date reviewed: Aug 22, 2006 1:13 AM

Nickname: Dale

Review: The commentator assumes that the value of the dollar itself will remain stable. Yet the inflation adjusted price of oil is only two-thirds what it was at the 1980 peak, and that is with the US dollar index still relatively strong at around 85. If the dollar index drops into the mid 70s, it doesn't matter if we have a recession, the dollar price of oil is going to stay in the 70s. Maybe the US is the top user of oil now, but China will not slow down even if the U.S. does. The leadership will just change hands. The days of everything being U.S. centric are coming to an end, much like they did with England in the 1910s. By 2010, oil will account for between 51.4% and 52.6% of China's energy needs, up from 29.1% in 2000. In 2010, the country's oil demand will probably be between 350 million tons and 380 million tons.

Date reviewed: Aug 21, 2006 9:52 PM

Nickname: solomonrex

Review: 1) Middle East crises will come again. 2) India and China are ramping up their demand. 3) Russia is the only new substantial source for oil in the last decade or so, and they've got a very political energy policy. 4) Oil would be even higher without the E85 and hybrid talk from the auto companies. However, these are mostly not economical to implement. So supply and demand mean that oil is going to go up. Liberals have to face facts and say that the U.S. does a good job at reducing consumption and emissions (when we want to), and it's India and China that will be the big consumers going forward. And I honestly think, once Iran goes nuclear, they or Hezbollah fire a missile at Israel, Israel fires back, and then there's a lot less accessible oil in the world. So there's that.

Date reviewed: Aug 21, 2006 8:57 PM