81regiment

I'm not disputing that they have a ton of money invested. http://www.cbsnews.com/stories/2006/05/16/...in1620802.shtml Yikes.

Go look it up yourself - you won't hear it on the mainstream media. I've done enough work for you.

Do you really believe that? Our roads should be the best in the world if that is true. You're right - they're BUYING oil at $70 a barrel!

David, Go to the DOE website and look it up yourself. OPEC is a cartel, but even they are subject to the whims of the market. They could not stop prices from crashing in 2002. They cannot keep them from rising now. They are 40% of global production now, down from 55% in 1973. Their influence is waning.

David...let me repeat this again: I didn't bring Bush and Cheney into this. You did. You made the $85 million claim. Where did you get that information? Another poster quoted $100 million. I left them out because they are inconsequential to the analysis. If you wish to hold me to the standard of providing a source, I think I have demonstrated the ability to do just that. Where's yours? If network news is your source...good Lord...

Here's the production history - from OPEC's 2004 Statistical Bulletin. http://www.opec.org/library/Annual%20Stati...tin/asb2004.htm 1980 26.5 MMBD (million barrels per day) 1981 22.2 1982 18.7 1983 16.6 1984 15.9 1985 14.9 1986 17.6 1987 16.7 1988 18.8 1989 20.4 1990 22.0 1991 22.2 1992 23.8 1993 24.2 1994 24.6 1995 24.6 1996 24.8 1997 25.4 1998 27.7 1999 26.2 2000 27.7 2001 26.9 2002 24.3 2003 26.8 2004 29.6 So from 1993 to 2000, during Clinton's superb display of geopolitical chest thumping, OPEC production went from 24.2 MMBD to 27.7 MMBD, a difference of 3.5 MMBD. Over 8 years, this is .4375 MMBD. During Bush, OPEC production has gone from 26.9 MMBD to 29.6 MMBD, a difference of 2.7 MMBD. Over 5 1/2 years, this is .4909 MMBD. So....if you want to play this inane game of who wields influence...it ain't Clinton. FYI, under Bush I, OPEC production went up 5 MMBD in the 4 year period from 1988 to 1992. Facts are stubborn things.

Oh God, go to this link and tell me what OPEC output is. No, what, I'll do it for you since you refuse to engage in analysis. http://www.eia.doe.gov/emeu/ipsr/t21.xls OPEC output is increasing. 2001 30.87 million barrels per day 2002 28.99 2003 30.72 2004 32.92 2005 33.95 Is production increasing? Yes, and it has been since the oil price trough in 2002, when oil bottomed at $15.

Here's your claim. Post #74 in this thread. Prove it. The market is opening in 15 minutes...time to fry some real fish.

David, I never made an initial claim on how much Cheney and Bush own in oil stocks. YOU did. Sooooo.....where's your source?

Because he doesn't have to. We're not the only ones who want oil. Here's what is going on in Saudi Arabia. You won't hear this from the maninstream media because it doesn't fit the anti-Bush, anti-oil message they have been spewing. SOURCE: Mike Rothman, Oil Analyst International Strategy and Investment Group May 24, 2006 Morning Oil Update The start up of the Haradh field in Saudi Arabia – 300,000 barrels/day of Arab Light crude – is the first of three main projects designed to raise the Kingdom’s production capacity. As a follow-up to our report a month ago about Saudi Arabia’s capacity expansion (detailed on the following page), indications are that ARAMCO will bring on the 2nd stage of Shaybah (250,000 b/d of extra light oil) in 2008. This would raise capacity to 12.75 million b/d by 2009. Manifa is a 40-50 billion barrel field. If developed, initial output will be 1.0-1.5 million b/d of Saudi Heavy crude. Zuluf is a field lying in about 80 feet of water with approximately 10 billion barrels. It currently produces 400,000-450,000 b/d of Arab Medium. Plans are being considered to add another 200,000-300,000 b/d. Nuayim in central Arabia may be developed at an initial flow rate of 100,000 b/d as early as 1999 with another 50,000 to 100,000 coming on soon after that. Shaybah began producing 500,000 b/d of Arab Extra Light crude in 1998. There are now indications that production will be raised by another 250,000 b/d in 2008 and then possibly another 250,000 b/d after that. These three fields constitute the Khursaniyah project due to bring on 500,000 b/d initially in 2008. Haradh came on stream last month at 300,000 b/d of Saudi Light crude oil. Khurais comes on stream in 2009 at an initial rate of 1.2 million b/d of Saudi Light crude oil.

oops, I forgot these... http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp http://www.bakerhughes.com/investor/rig/rig_int.htm http://www.eia.doe.gov/pub/oil_gas/petrole...tml/petbro.html and some just for grins... http://www.businessandmedia.org/news/2006/news20060523.asp http://www.mrc.org/cyberalerts/2006/cyb20060428.asp#1 Cutie Katie's interview Shell CEO http://video.msn.com/v/us/msnbc.htm?g=c198...a8&f=00&fg=copy I have some Wall Street research as well, bu I can't publish it here.

David, I never said you could not express your opinion. I was presenting an analysis of the issue - you can take it or leave it, but I'd like the same level of respect, without the name calling, implied ("here's a lesson for you") or otherwise. I was simply trying to explain to the community at large way things happen the way they do, and for that I was called an oil lover, insular, ignorant of China's environmental issues, sitting on the seat of empire....and in need of an economics lesson...among other things... Sometimes I can get lengthy - diatribe has a negative connotation - do you call that walking your talk? There is a reason that economics is called the dismal science...it is difficult to grasp, it is mundane, it is a cure for insomnia. When I suggest reading Thomas Sowell, I am serious. He is excellent - his book should be required reading for every high school student. When Ryan started this thread, he struck a chord with me - everyone has an opinion about the economy, even though they do not understand it. A little financial literacy would go a long way in this world. When I said... "I'm not in much need for economics instruction from unhinged liberals on DCP. In other words, there's no demand, but a lot of supply. What is that worth?" ...I was speaking of your insistence to "teach me a lesson", not referring to oil. What is the value of your "lesson" if you are willing to keep supplying it, but there is no demand for it. I know what the value is to me. Unhinged is a reference to the fact that my analysis flies in the face of your world view, and you choose to ignore a discussion of the analysis and continue to spout the liberal talking points. It is human nature to defend your opinion, and you are entititled to it. It is crazy to keep blaming Bush for high oil prices, but so long as the media keeps spouting this invective, people who won't engage in analysis are the same as a door that is off the hinges. Some stock market traders are always buying or selling at the wrong time. Having that information can be EXTREMELY valuable. So when certain guys are in the market, I almost always want to do the opposite of what they are doing. Taking the other side of their trades is a way of saying that it's easy to take their money. It has nothing to do with drum corps, but it has everything to do with being an informed participant in a global marketplace.

Correct - supply and demand do NOT impact each other directly. When we go to buy a gallon of gasoline, we have NO clue about the supply side of the equation...the only thing we know...is PRICE. That price will determine how much we will buy, AT THAT PRICE, and we are TOTALLY oblivous to how much is being supplied. TOTALLY. If prices are falling, we are likely to buy more. If they are rising, we are likely to buy less. When Exxon decides to make a gallon gasoline, they only know the market PRICE for a gallon of gas. That price will determine how much gasoline they make, AT THAT price. They do not know if that gallon will be incrementally profitable versus the last gallon they refined. If it is, they will supply more. If it is not, they will supply less. One of the beauties of an economy coordinated by price movements is that nobody has to understand it in order for it to work. Surely, this is better than prices being set by law or by committee. Thank you for reading my diatribe. I hope that this helps in understanding the topic at hand, as opposed to inflaming a point of view that is seemingly hypersensitive to any sort of analysis that flies in the face of said perspective. Chicago was great today. I was born there - always nice to go back.

My issue is not a lack of a source. My issue is believing everything the media says verbatim, without an rational analysis to support a claim. Which is the VERY FIRST THING I POSTED on the subject. http://www.eia.doe.gov/emeu/ipsr/t21.xls http://finance.yahoo.com/q/sec?s=XOM http://finance.yahoo.com/q/sec?s=CVX http://finance.yahoo.com/q/sec?s=RDS-A http://finance.yahoo.com/q/sec?s=MSFT http://finance.yahoo.com/q/sec?s=BMY Let me know if you need anything else.

Thanks for nailing that one, ChicagoFan. It can't be said it any better. Lovely weather in Chi-town this morning. Too bad I'll be in a meeting all day talking drum corps and money. Bring on the summer.

Here's a lesson for you. I'm not in much need for economics instruction from unhinged liberals on DCP. In other words, there's no demand, but a lot of supply. What is that worth? I trade stocks for a living, so I live and breathe this stuff. I want the other side of your trades.

Well, #### I gotta start watching the network news so I can quote them as a reliable and unbiased source. I just saw Katie Couric interviewing the CEO of Shell - when Katie says something, take it to the bank. You speak of "the share holders (Bush and Cheney)" as if they are the only guys who have benefited. When, oil was $15 a barrel in 2000, and the oil companies had much lower profit margins, did you find any "other solutions?" Why wait until oil profits go down? I'm sure there is someone out willing to capitalize you.

Let's put $100 million in perspective. 375,000,000 gallons per day (that's 375 million gallons consumed daily, in the US only) times $3.00 per gallon times 365 days equals $410 billion+ in retail gas purchases annually. If they have a $100 million equity ownership in oil and gas, that investment may be - MAY BE - yielding 5%. For simplicity's sake, give them $5 million a year in dividends on a $100 million investment. 5,000,000 as a percentage of 410,000,000,000 is 0.012% Is that what you are so bent out of shape for? 0.012% of the action? Even if it is up front, legal, and fully disclosed? What makes you think that 0.012% of ANYTHING wields influence over the other 99.988% of ANY KIND? YIKES. If they are doing something illegal, let's bring the charges and put them in jail. After all, 40% tax rate on $5,000,000 is $2,000,000 a year to the IRS. GW paid $187,768 in taxes in 2005. http://usgovinfo.about.com/gi/dynamic/offs...060414%2D1.html Cheney paid $529,636 in taxes in 2005. http://usgovinfo.about.com/gi/dynamic/offs...060414%2D2.html Looks like the IRS is over $1.3 million short. Put 'em in jail, even though he gave away his stock option proceeds. Bring the proof that there is something wrong, and put them in jail. Put these bastiges in jail. When we do that, we could have an honest, politically untainted discussion about economics. On another thread. Maybe. Someday. FYI Oil stocks in general are up 4X since 1999. Those bastiges - they made 4 times their money in 7 years...jail 'em. Oughta be against the law.

Yes, I got it all along, David. So which is it? Lower demand, or lower prices? You make the call, but they are NOT the same thing - which has been my point all along!! People use certain terminology interchangeably, which is just plain wrong. You said two different things in two different posts. Prices provide the incentive for producers and consumers to produce or demand more or less of something. When prices change, production and consumption behavior changes. Changes in prices are a market response to or a symptom of changes in a supply - demand condition. I would never make the assertion that one needed a McDonalds hamburger TO SURVIVE. NONE of the discussion is framed in such extreme parameters, so it's pointless to have a meaningful discussion under such absurd assumptions. If you want to go there, I need more information. Does each person have the same appetite? Come on, we're talking about junk food!!! Does every person have the same amount of purchasing power? If not, some will starve...right? Higher bids get the goods? Are burgers really the only food available? Really? In a real economy, there are substitute products. KFC, anyone? Who gets paid for making the raw materials for burgers available to McDonalds's? Is the supplier of beef jacking his prices? Or is it the pickle guy? Or the guy who drives the delivery truck? Doesn't McDonald's costs go up because now the populace is worried about surviving instead of flipping burgers and they have to raise their hourly wage? Since there are now record prices for burgers, McD's has record profits? How can they make 500 burgers if this is all true? Since it is a matter of survival, is there a goverment involved to make sure everyone starves by controlling prices and rationing? More Kool Aid...

That's the point - the formula doesn't change. And it won't. Ever. EVER. If production falls relative to demand, prices go up. If production rises relative to demand, prices should fall. Ask any corps souvie manager who still has 2002 t-shirts in stock. It's not difficult - really, it's not.

Could someone explain this to me? Do you mean that if McDonald's makes more hamburgers, I will desire to eat less of them? Or if there are more drum corps, we will watch them less frequently? I don't get it. I was going to say that you don't get it, but I'm sorry - I don't get it.

Can anyone say "water fuel?" http://domesticfuel.com/?cat=22 Click on the water fuel link. Wait til the Saud family sees this...

Now there's some "analysis" I can use. Like I said in my preface - accusatory without proof: I'm am oil lover, I'm rationalizing, I sit on the seat of empire, I don't understand economics, I have no understanding of China's air quality, I am insular. Nice to meet you too, rookie. Wishing your view on the world doesn't make it so either. We've been living with laundry list of risks since the beginning of time. I think I'll make it through the next 85 millions barrels without batting an eye. Has anyone seen my empire?

Awwwww, I dunno nothin'. I jus' cut an' paste like Mr. Gates sez. :P :P

Ryan...thanks for shedding a little light on this. The media does NOT do a good job of covering all sides - just the ones that cause squawking for their own agendas. My advice when it comes to the media...turn it off and gear up for this summer. First, some cursory analysis is in order before we resort to political spouting and finger pointing. Carl306, sorry that I'm quoting you, but when someone says there is a 6-to-1 ratio imbalance and it is taken at face value to explain why the world is out of sorts, I gotta stand up and call BS. I'm not attacking you - your post raised my interest in how far apart perception and reality really are, but several subsequent posts here have raised my ire for they are either 1) plain wrong, or 2) accusatory with no substantive evidence to support the claims. Let us be clear on one thing: Free market economics have ZERO respect for political leanings. NONE. ZERO. ZIP. It is immutable that regardless of socio/geo/eco/political leanings, markets will thumb their nose at a biased view of the world and drag naysayers down the street until they "get it." Global commodities markets are just about as free as they come. Here's a news flash for everyone: No single individual or group of individuals sets market prices. WE ALL - MEANING BUYERS AND SELLERS COLLECTIVELY - SET MARKET PRICES FOR COMMODITIES!! Trying to control the economic motives of interested parties has been tried. Show me where it worked, flourished, and raised standards for all. Thought so. Second, FIND and PRODUCE are two very different things when it comes to petroleum economics, or any other economic enterprise. We have FOUND a lot more oil than we actually get out of the ground, both domestically and internationally. Global reserves of oil stand at 1.188 trillion barrels. We consume about 85 million barrels per day globally. If we had full and unfettered access to all of the proven reserves around the globe, there are over 38 years of supply at our disposal. If you want lower prices and/or more oil, stop consuming and/or get out of the way and let 'em drill. If you want to talk about supply versus demand, demand is indeed growing faster than supply can keep up, so prices rise. Demand is outstripping supply, but nowhere near a 6:1 ratio. The world is both producing and consuming oil at about 85 MM barrels per day, but demand is edging ahead at only a 3-5% pace. So at worst, the 6:1 ratio is more like 1.05:1. Exploration continues and new oil is found regularly. Reserves are up over 100 billion barrels since 2000. Long live Jed Clampett, but we have long since stopped shooting at the ground with rifles to bring oil to the surface. Visit www.veritasdgc.com and you will see that there is no mention of Jed Clampett, but lots of cool energy exploration technology that Jed would not understand. Have we found all of the oil that there is to find? Show me where the last drop is and I will buy it from you at the current market price. Deal??? :P In the US, we produce 8.3 million barrels per day, and consume 20.7 million barrels per day. Therefore, we must import over 12 million barrels per day. Oil production is bottlenecked, both absolutely and relatively. At the last energy cycle peak in 1981, there were over 6000 drilling rigs at work around the globe - there are now less than 3000. Why did drilling activity get cut in half? Because oil prices crashed and the economics weren't so great after all. Being in the oil business sucked for over 20 years. It sucked to be the CEO of Exxon. Cyclical businesses do not maintain their profit margins because high margins attract competition which leads to overcapacity which makes it a crappy business. To paraphrase Rodney Dangerfield, "That's right - it sucked!!" In the US, since 1981 the mix of rigs has gone from 60% oil and 40% natural gas to 15% oil and 85% natural gas. Gas economics have been much more favorable than that of oil, thus a huge relative investment in gas production. So while total drilling activity is down, most of the mix has shifted toward natural gas. Today, US refinery throughput is 20.5 million barrels per day. In 1981, we were cranking through 21.9 million barrels per day. So throughput is down over 6%, but demand is up by 25% in the same period. When demand is greater than supply, prices go....UP! It is true that the last refinery opened in the US was in 1979. It will take $3-5 billion to build a brand new refinery. If I was looking at peak margins, there's no way I would commit to undertaking such a capital investment, especially in the face of regulation and environmental insanity. Who has the capacity to build a new refinery? Mom and Pop? Or Exxon? Third, with oil at $70, Exxon just hit their highest net profit margin in the last 20 years at 10.1%. Chevron net profit margin is barely 8%. Royal Dutch Shell, which is domiciled in The Netherlands, posted under 7%. The software company that runs my computer made a net margin of 31%. The drug company that makes the aspirin I am going to take when I get done writing this response to rampantly absurd "analysis" has a net margin of 25%. ... If you lean so far to the left that all profits offend you, your ire is misdirected. Try looking here... How much is the government cut? The combined pre-tax income of just these three companies is almost $45 billion, and they pay a 40% combined tax rate, so you do the math and see how tiny the government take is. Oh yeah - I forgot federal excise taxes. Take 17% of your pump price for gasoline and 19% for diesel. At an average price of $3.00 a gallon, the government takes 51 cents a gallon. The US consumes 375 million gallons per day. So, government gets $191 million PER DAY at the pump. That's....oh....$70 billion a year, give or take. Mostly take. Two years ago last week, oil went thru $40 a barrel for the first time and has not looked back. At today's price of $66 a barrel, that's up 65% in two years. By contrast, the Dow Jones Industrials are up 11%, the S&P 500 is up 16%, NASDAQ is up 16%, the S&P 400 Mid-Cap Index is up 38% and the S&P 600 Small Cap index is up 43%. While the stock market does not like inflation, a 65% increase in oil hasn't kept the market from putting up some decent numbers. Oh...consumer prices are up a whopping 3% in the last 12 months, even with oil up much more than that. Hide the women and children, we're all going to ####. Before we do, read some Thomas Sowell. Maybe you'll have a better understanding of how the world works...you may not like it, but the market doesn't really care how you feel.