The Future of Oil Prices | Newsweek Environment

Oil: More Demand, Higher Prices

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Considering the falling dollar, could there be a push to value oil on a different currency, like the yen or the euro?
No. That would be very difficult. It's not so simple just to switch. But what's happening is that oil-producing countries are shifting out of dollars as soon as they receive them. They're not holding a lot of dollars.

What does that mean for the average U.S. consumer?
That there's downward pressure on the dollar, and it's becoming more expensive for us.

Responding to a reporter asking about the possibility of gas prices reaching four dollars a gallon, President Bush said last month he had no indication it would reach that level. In the short run, is that realistic?
The only question is when. If the economy softens, there's a good chance that oil prices will soften as well, and hence gasoline prices. But in our business we take a longer view. We believe there are a lot of people in the industry that think we're headed for a production and supply crunch. It's not that the world is running out of oil, but that the world is running out of oil production capacity.

So even if the OPEC cartel wanted to increase production, you're saying their capacity to do so would be limited?
Yes. Basically, OPEC is along for the ride. Demand is driving it. Demand and the "financialization" of oil have more to do with it. Now, if OPEC opened up every stop, then they might be able to soften the market somewhat, but then you eliminate all spare capacity, which isn't a good idea either.

How would oil prices react if the U.S. invaded Iran?
It would jump through the roof. Don't ask me for a number. It would destabilize the region from where a great deal of oil flows. I think the price of oil would rocket upward.

Do you foresee a similar effect from an escalation of the conflict along the Venezuelan-Columbian border?
I don't think it's had that much of an impact so far. Frankly, what's had a bigger effect on the global market is mismanagement of the petroleum sector by [President Hugo] Chávez. Although they have huge oil reserves, production is declining due to just sheer incompetence. Venezuelan mismanagement is more significant to the oil market than a possible border skirmish between Venezuela, Columbia and Ecuador.

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A blogger named Edson writes "Did the word Democrat really come from democracy?"

Here is a derivation of the words "Democrat" and "Republican."

The United States of America is a republic, that is to say, a Federal government in which the people are represented by elected officials from the various states. Before we were a republic, we were a democracy made up of 13 individual states that were not united. A democracy is a form of government where the individual citizens have the right to speak their minds and influence the political discourse. Democracy was named after Demosthenes, a citizen of ancient Greece with a speech impediment who practiced talking with his mouth full of pebbles to overcome his disability. Demosthenes later became a great political orator. This is where the Democrats derive their name.

The original Republicans were in favor of the states joining to form a republic (which is how that party got it's name). The original Democrats were opposed to this idea, they represented the individual states and were worried that the republic could gain too much power over the states, and through the exercise of tyranny, deny individuals their freedom. Trust me, people were pretty passionate about their liberty in those days, having just fought for independence from England. The Declaration of Independence, the Federalist Papers, the Constitution and the Bill of Rights were all hammered out by serious-minded men who sought to balance the need for individual freedom with our shared common cause, the needs for united strength and social order. Balancing the rights of the individual against the rights of the whole society is what America is all about. This is not only a great achievement for our nation, it is one of the greatest achievements of mankind. And we have, by and large, been true to our ideals over the past 227 years. The system of government we initially established, although needing occasional revisions, has stood the test of time.

Let's not forget where we started from, that impulse towards equality and freedom.

America is, with all it's faults, a meritocracy. Most of our founding fathers would never have had a voice in the 18th century English government they rebelled against, a monarchy where you had to be born into power. In America it was different. If you had intelligence, passion, ambition, drive, talent and a little luck, you could change the world.

This is the real secret to Obama's popularity, his ability to touch this archetype in our souls. This is why a white, conservative middle-aged female Republican like me wants to vote for him. He's got that blend of intelligence, passion, ambition, drive and talent. I'm giving him my vote to proffer him the last ingredient, a little luck, so I can watch our Republican Democracy in action, and once again change the world.

IN GOD WE TRUST

Member Comments

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Posted By: sirhc @ 04/05/2008 7:43:48 PM

THE TRUTH OF THE MATTER IS THAT CLIMATE CHANGE IS VERY REAL. I TRIED TO DENY IT BUT WHEN YOU HAVE AL SHARPTON MAKING COMMERCIALS WITH PAT ROBERTSON AND NEWT GINGRINCH DOING COMMERCIALS WITH ANNCY PELOSI ALL FOR THIS-THEN THAT'S A LOUD AND CLEAR SIGNAL. Go to www.dakshidin.com for the environment uptick on other energy source(mainly air and wind-I saw on Glen Beck about the air powered car-HOPE SO!)and www.greenglobeint.com for the companies that specialize in tourism and traveling in the most green way because traveling is very, very much a pollutant as people discard and tarvel more frivilous than when they are home.
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Posted By: david-fahey @ 03/19/2008 12:25:40 PM

question. with the present falling dollar, what would be the cost of a bbl. of oil today in, let's say, 1999 dollars? the ones bush found in the bank when he became prez. bush says he was an effective manager of the economy what do you say?
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Posted By: Nins @ 03/13/2008 9:26:23 PM

A blogger named Edson writes "Did the word Democrat really come from democracy?"

Here is a derivation of the words "Democrat" and "Republican."

The United States of America is a republic, that is to say, a Federal government in which the people are represented by elected officials from the various states. Before we were a republic, we were a democracy made up of 13 individual states that were not united. A democracy is a form of government where the individual citizens have the right to speak their minds and influence the political discourse. Democracy was named after Demosthenes, a citizen of ancient Greece with a speech impediment who practiced talking with his mouth full of pebbles to overcome his disability. Demosthenes later became a great political orator. This is where the Democrats derive their name.

The original Republicans were in favor of the states joining to form a republic (which is how that party got it's name). The original Democrats were opposed to this idea, they represented the individual states and were worried that the republic could gain too much power over the states, and through the exercise of tyranny, deny individuals their freedom. Trust me, people were pretty passionate about their liberty in those days, having just fought for independence from England. The Declaration of Independence, the Federalist Papers, the Constitution and the Bill of Rights were all hammered out by serious-minded men who sought to balance the need for individual freedom with our shared common cause, the needs for united strength and social order. Balancing the rights of the individual against the rights of the whole society is what America is all about. This is not only a great achievement for our nation, it is one of the greatest achievements of mankind. And we have, by and large, been true to our ideals over the past 227 years. The system of government we initially established, although needing occasional revisions, has stood the test of time.

Let's not forget where we started from, that impulse towards equality and freedom.

America is, with all it's faults, a meritocracy. Most of our founding fathers would never have had a voice in the 18th century English government they rebelled against, a monarchy where you had to be born into power. In America it was different. If you had intelligence, passion, ambition, drive, talent and a little luck, you could change the world.

This is the real secret to Obama's popularity, his ability to touch this archetype in our souls. This is why a white, conservative middle-aged female Republican like me wants to vote for him. He's got that blend of intelligence, passion, ambition, drive and talent. I'm giving him my vote to proffer him the last ingredient, a little luck, so I can watch our Republican Democracy in action, and once again change the world.

IN GOD WE TRUST