Petrol to go over & stay over a dollar
- Thread starter Aceyducey
- Start date
Hi Guys
Interesting article on Saudi Arabia's oil reserves is to be found at this site:
http://www.petroleumnews.com/pnads/238338932.shtml
Again an article saying that Arabia may not have the oil everyone thinks they may have.
Regards
Interesting article on Saudi Arabia's oil reserves is to be found at this site:
http://www.petroleumnews.com/pnads/238338932.shtml
Again an article saying that Arabia may not have the oil everyone thinks they may have.
Regards
Here's a snapshot of the US futures market's prices for crude oil for the next two years.
Suffice to say that the price of oil is expected to drop slightly, but remain over that magic US$35 mark...in fact over US$37 for the entire period.
http://cdfa.aghost.net/index.cfm?show=62&subtype=crude%20oil
Oh and Matthew Simmons has had some interesting things to say about Saudi's claims they can maintain their level of oil production over the next 50 years: http://www.simmonsco-intl.com/files/Hudson%20Institute.pdf
(And he's not ramping oil prices as a certain person has claimed - he's calling for transparency in the market so that industries can begin preparations for moves to alternative energy sources should the Saudis be stretching the truth).
Cheers,
Aceyducey
Suffice to say that the price of oil is expected to drop slightly, but remain over that magic US$35 mark...in fact over US$37 for the entire period.
http://cdfa.aghost.net/index.cfm?show=62&subtype=crude%20oil
Oh and Matthew Simmons has had some interesting things to say about Saudi's claims they can maintain their level of oil production over the next 50 years: http://www.simmonsco-intl.com/files/Hudson%20Institute.pdf
(And he's not ramping oil prices as a certain person has claimed - he's calling for transparency in the market so that industries can begin preparations for moves to alternative energy sources should the Saudis be stretching the truth).
Cheers,
Aceyducey
Hydrogen cell efficiency up to 8%...needs to reach 10% to be commercially viable
The latest from the alternate energy area:
More at: http://news.bbc.co.uk/2/hi/science/nature/3536156.stm
Cheers,
Aceyducey
The latest from the alternate energy area:
More at: http://news.bbc.co.uk/2/hi/science/nature/3536156.stm
Cheers,
Aceyducey
The perception with doomsayers that the Human race is about to hit the wall is founded from fear and self-interest. So it is great to see positive posts about the future here.
When and how this technology will be viable we don’t know yet but we get through each Crisis because like the infamous statement that “only six computers will ever be built and they will be too expensive for all but mega rich countries”, only the truly insightful can even glimpse the future.
Congrats to Acey to helping the forum to be part of this glimpse. Time to buy desert plots with lots of sunshine? Rockhamption again!
Regards Peter 147
When and how this technology will be viable we don’t know yet but we get through each Crisis because like the infamous statement that “only six computers will ever be built and they will be too expensive for all but mega rich countries”, only the truly insightful can even glimpse the future.
Congrats to Acey to helping the forum to be part of this glimpse. Time to buy desert plots with lots of sunshine? Rockhamption again!
Regards Peter 147
Here's the other side of the discussion....
Source: SMH (http://www.smh.com.au/articles/2004/08/15/1092508262703.html)
Bear in mind:
OPEC has set a target for oil to be priced at $US28-35 / barrel. The organisation has an active interest in talking down oil prices from current levels. If oil prices go too high many countries and companies will invest more in alternate energy sources thus jeapardising oil producer revenues in the medium term. Already we've seen a reported 8-fold increase in queries for LPG conversions for family cars in Australia at grassroots level.
Currently global oil reserves are historically on the low side. The US reserves are very low after their war & they are actively rebuilding them for security reasons. China is rapidly mechanising it's armed forces after a bit of a surprise at the US's easy victory in Iraq & in order to fulfil their own superpower ambitions...at the same time China is rapidly shifting to a more mechanised society, more automobiles, air conditioners, industry & computers - thus is experiencing both a huge leap in oil usage & requirements for an oil reserve (plus their main oil field is declining at 5% per year).
Many countries are on the downside of oil production. Their production is decreasing while demand is increasing - Australia is one example...we used to export oil, now we import 90% of our needs. A strong oil reserve is important for security in every country, let alone to meet demand!
Finally consider this - OPEC claims that the world is oversupplied by oil by 2 million barrels a day - that equates to 730 million barrels a year.....or 10 days global usage at current levels - that's not much of a safety margin for an industrialised world!
With the current oil demand curve, at current production levels we'll be back to a deficit level in only a few years....and no new massive oil fields like been located in the last 25 years (though Kazakhstan holds promise of one more and we can always pillage Antarctica - and I believe this WILL happen even if a war has to be fought over it).
Also bear in mind my personal biases - I like oil prices at US$35 or higher
Cheers,
Aceyducey
Source: SMH (http://www.smh.com.au/articles/2004/08/15/1092508262703.html)
Bear in mind:
OPEC has set a target for oil to be priced at $US28-35 / barrel. The organisation has an active interest in talking down oil prices from current levels. If oil prices go too high many countries and companies will invest more in alternate energy sources thus jeapardising oil producer revenues in the medium term. Already we've seen a reported 8-fold increase in queries for LPG conversions for family cars in Australia at grassroots level.
Currently global oil reserves are historically on the low side. The US reserves are very low after their war & they are actively rebuilding them for security reasons. China is rapidly mechanising it's armed forces after a bit of a surprise at the US's easy victory in Iraq & in order to fulfil their own superpower ambitions...at the same time China is rapidly shifting to a more mechanised society, more automobiles, air conditioners, industry & computers - thus is experiencing both a huge leap in oil usage & requirements for an oil reserve (plus their main oil field is declining at 5% per year).
Many countries are on the downside of oil production. Their production is decreasing while demand is increasing - Australia is one example...we used to export oil, now we import 90% of our needs. A strong oil reserve is important for security in every country, let alone to meet demand!
Finally consider this - OPEC claims that the world is oversupplied by oil by 2 million barrels a day - that equates to 730 million barrels a year.....or 10 days global usage at current levels - that's not much of a safety margin for an industrialised world!
With the current oil demand curve, at current production levels we'll be back to a deficit level in only a few years....and no new massive oil fields like been located in the last 25 years (though Kazakhstan holds promise of one more and we can always pillage Antarctica - and I believe this WILL happen even if a war has to be fought over it).
Also bear in mind my personal biases - I like oil prices at US$35 or higher
Cheers,
Aceyducey
Here's an interesting piece in the SMH about how we're having a DEMAND lead oil shock, different from the last three which were SUPPLY led.
An interesting view on why there's not necessarily a recession in the future due to the shock.
Personally I won't be calling it a 'shock' (emotive term) unless oil is over $55 by the end of the year
Cheers,
Aceyducey
An interesting view on why there's not necessarily a recession in the future due to the shock.
Personally I won't be calling it a 'shock' (emotive term) unless oil is over $55 by the end of the year
Source: SMH - http://www.smh.com.au/articles/2004/08/20/1092972754647.html
Cheers,
Aceyducey
The inscrutable Chinese and nuclear generation.
Boy, you've gotta be flexible with your opinions today. Must be time to buy uranium miners.
http://www.wired.com/wired/archive/12.09/china.html?tw=wn_tophead_6
Thommo
Boy, you've gotta be flexible with your opinions today. Must be time to buy uranium miners.
http://www.wired.com/wired/archive/12.09/china.html?tw=wn_tophead_6
Thommo
Storm said:
Interesting point storm. I was in the UK 3 years back and thought 60p? humm thats x 3 so $1.80c a litre.
Here is Aus we can think about our world and say that $1.10 is bad but liveable.
We can forget the rest of the world is paying even more and that England, Europe, etc have a bigger influence on work economics than we do, so what is livable for us but be shattering for them.
Regards, Peter 147
Whine. Whine. Whine.
Whinge. Whinge. Whinge.
This may come as a shock to some of you, but there are people in this wide brown land of ours who have been paying well over $1 per litre of fuel for years.
Such as at Menindee where I am reliably informed that the going rate is currently $1.15 per litre.
Are we really a forum of city slickers who have never been west of the divide?
MB
Whinge. Whinge. Whinge.
This may come as a shock to some of you, but there are people in this wide brown land of ours who have been paying well over $1 per litre of fuel for years.
Such as at Menindee where I am reliably informed that the going rate is currently $1.15 per litre.
Are we really a forum of city slickers who have never been west of the divide?
MB
REAs have latched onto this and are suggesting that proximity to public transport (particularly rail) will be become increasingly important for long-term growth.
http://www.royweston.com.au/media/idx_showArticle.php3?oid=geraldton&newsID=87
Regards, Peter
http://www.royweston.com.au/media/idx_showArticle.php3?oid=geraldton&newsID=87
Regards, Peter
Pitt St said:
Who you calling city clicker you Pitt St Farmer
Having spent two years in Bourke I'm amazed it is only $1.15. I remember paying $1 in 1988.
True Story, Peter (the bushie) 147
Solution to Petrol Price
Hi,
Well, reading this thread . . . I can't solve the future deminishing oil reserve problem. However, coping with expensive fuel does have a solution.
Note: Current price $1.09 PL
As opposed to $0.89 PL a few months ago.
My current consumption is approx 60L per week. (Yes, yes work does involve a fair bit of travel.)
60L x $0.89 pl x 52 weeks = $2,776pa
Now: 60L x $1.09 pl x 52 weeks = $3,400 An extra $624pa
SOLUTION: BUY ENERGY STOCKS!!
Example:
01/07/04 WPL $16.78 per share
10/09/04 WPL $18.31 per share
This constitutes a 9% increase since 1 July.
Yes, energy shares do generally go up when the price of fuel increases.
The purchase of 100 WPL shares at the cost of $16.78 = $1,678 (Borrowing cost at 8%pa = $134) so total cost for the year (not counting dividends) = $1812.24
Profit to date: 100 shares x $1.53 = $153.00 More than enough to cover my extra petrol bill!
Annualised this translates to an extra $705 which is greater than the $624 pa petrol increase cost. (Includes cost of borrowing the funds.)
To be safe the purchase of 500 WPL shares on this basis would be more than sufficient to cover most any fuel price increase. (Leverage)
The logic is that as fuel prices increase, so does the profitibilty of energy companies. (And visa versa of course)
An interesting 'hedge' against costs eh??
Regards,
Steve
Hi,
Well, reading this thread . . . I can't solve the future deminishing oil reserve problem. However, coping with expensive fuel does have a solution.
Note: Current price $1.09 PL
As opposed to $0.89 PL a few months ago.
My current consumption is approx 60L per week. (Yes, yes work does involve a fair bit of travel.)
60L x $0.89 pl x 52 weeks = $2,776pa
Now: 60L x $1.09 pl x 52 weeks = $3,400 An extra $624pa
SOLUTION: BUY ENERGY STOCKS!!
Example:
01/07/04 WPL $16.78 per share
10/09/04 WPL $18.31 per share
This constitutes a 9% increase since 1 July.
Yes, energy shares do generally go up when the price of fuel increases.
The purchase of 100 WPL shares at the cost of $16.78 = $1,678 (Borrowing cost at 8%pa = $134) so total cost for the year (not counting dividends) = $1812.24
Profit to date: 100 shares x $1.53 = $153.00 More than enough to cover my extra petrol bill!
Annualised this translates to an extra $705 which is greater than the $624 pa petrol increase cost. (Includes cost of borrowing the funds.)
To be safe the purchase of 500 WPL shares on this basis would be more than sufficient to cover most any fuel price increase. (Leverage)
The logic is that as fuel prices increase, so does the profitibilty of energy companies. (And visa versa of course)
An interesting 'hedge' against costs eh??
Regards,
Steve
Hi Steve,
What about the buying and selling cost? You have to take off close to $50 for it, and also inflation then look at the ROI. WPL paid 46c (assume fully franked dividend) in the last 12 months and if they pay the at least the same
it is an extra $46 which would cover the buying and selling cost.
Also another bit that I am not sure you've taken into consideration. Assuming that the the price will go up, but at that same time the oil price will also go up, meaning that you might pay $1.20 per litre for the petrol, and at that time the profit has gone.
Also you have to buy WPL at the same entity as the car is kept and taxation should also help to reduce the profit.
After all of this I am still happy that you have WPL in the Navra Share Fund portfolio as whatever is the truth about natural shortage vs speculator driving up price, in the long term the price can go only in one way, up.
I personally strongly held this opinion as we 'develop' China and India (and maybe some other asian economies) into the manufacturing centres of the world (at our expense ) and their increasing need (together with their huge population who all would love to live having all western goddies, including cars) will underly the demand more than any half attempt by western countries to reduce their reliance on oil.
Obviously terrorism, local wars and shutting down Russian oil companies and having civil issues other oil producing economies makes some temporary difference, but the main trend will not be altered.
What about the buying and selling cost? You have to take off close to $50 for it, and also inflation then look at the ROI. WPL paid 46c (assume fully franked dividend) in the last 12 months and if they pay the at least the same
it is an extra $46 which would cover the buying and selling cost.
Also another bit that I am not sure you've taken into consideration. Assuming that the the price will go up, but at that same time the oil price will also go up, meaning that you might pay $1.20 per litre for the petrol, and at that time the profit has gone.
Also you have to buy WPL at the same entity as the car is kept and taxation should also help to reduce the profit.
After all of this I am still happy that you have WPL in the Navra Share Fund portfolio as whatever is the truth about natural shortage vs speculator driving up price, in the long term the price can go only in one way, up.
I personally strongly held this opinion as we 'develop' China and India (and maybe some other asian economies) into the manufacturing centres of the world (at our expense
) and their increasing need (together with their huge population who all would love to live having all western goddies, including cars) will underly the demand more than any half attempt by western countries to reduce their reliance on oil. Obviously terrorism, local wars and shutting down Russian oil companies and having civil issues other oil producing economies makes some temporary difference, but the main trend will not be altered.
Hi there,
I've just came across the following article. It is very interesting as well as some of the conclusions made. I am not sure how reliable their sources for the graphs, but definitely a point of view, which might even be very valid.
LinK: http://www.ammocity.com/artman/publish/article_196.shtml
I've just came across the following article. It is very interesting as well as some of the conclusions made. I am not sure how reliable their sources for the graphs, but definitely a point of view, which might even be very valid.
LinK: http://www.ammocity.com/artman/publish/article_196.shtml
