Israeli attacks on neighbouring countries = major increase to crude oil prices

[Falcon Freak]

You think the current price of $US75 per barrel is expensive? We will consider that cheap in a few months time. Hold on for the ride!

FF

[merlin]

shh don't give them ideas...

[Jeeepers]

A doomsayer on Sunrise said the other morning that fuel prices will hit $6 per litre inside of 15 years. I realise that is a vague timeline, but it doesn't make it less scary. I payed $1.59 a litre yesterday (Deer Park, Vic.) For BP Ultimate.

[HSE2]

Originally Posted by redfin

A doomsayer on Sunrise said the other morning that fuel prices will hit $6 per litre inside of 15 years. I realise that is a vague timeline, but it doesn't make it less scary. I payed $1.59 a litre yesterday (Deer Park, Vic.) For BP Ultimate.

No it won't hit $6 dollars in 15 inside years unless wages are going to go through the roof. These people making those claims should be hung and quartered. There is no capacity to pay that sort of money and if there isn't by that time the world would have come to a stand still. Super funds would have disappeared, factories shut down and wide spread civil war will be common. You won't be worrying about the price of fuel. Despite the cries to the contrary oil will have to be regulated and removed from trading largely because the people trading in it aren’t acting responsibly.

The penalty being paid at the pump now is largely due to what, might happen or what could happen. That’s the justification hedge funds are using. It doesn't matter that the event hasn't happened and most likely won't it’s a public event that gives justification. Currently its unfounded trading in fear more than economic reality that sees us paying what we are. The issue is that the economy and not just ours has stood up better then anyone imagined and that’s the bottom line. While ever this situation remains the market will push. To really understand what is going on you need to understand the way markets work more so then any understanding directly relating to oil.

[falcon91]

Crude Oil prices seem to fluctuate for any reason lately:

Problems in the Middle east. (Been happening for 4000 yrs)
Storms in the Gulf of Mexico (Been happening since the dawn of time)
Unrest in Venezuela
New General in Sierra Leone
Iran rattles sabre
North Korea rattles sabre
Indonesia rattles pocket knife
Butterfly farts in the Congo

Jeez, all this stuff has been happening for years, these are all excuses, due to greedy suppliers of a commodity that everyone wants.

[OzJavelin]

Originally Posted by HSE2

Despite the cries to the contrary oil will have to be regulated and removed from trading largely because the people trading in it aren’t acting responsibly.

That's a bloody good idea. You should run for Prime Minister .. I don't think Peter Costello *really* wants the job ;)

[4.9 EF Futura]

Originally Posted by HSE2

The penalty being paid at the pump now is largely due to what, might happen or what could happen. That’s the justification hedge funds are using. It doesn't matter that the event hasn't happened and most likely won't it’s a public event that gives justification. Currently its unfounded trading in fear more than economic reality that sees us paying what we are. The issue is that the economy and not just ours has stood up better then anyone imagined and that’s the bottom line. While ever this situation remains the market will push. To really understand what is going on you need to understand the way markets work more so then any understanding directly relating to oil.

However, the activities of the market are based on the factors of the underlying commodity

The market is simply searching for an equilibrium price. Everyone throws their hat in the ring about what the think the "fair" value for a barrel of oil is i.e. what they think that a barrel of oil will be worth in "x" months (futures contracts currently traded in a 3 month delivery contract IIRC). And somewhere in that middle gound, you find the equilibrium price.

If Israel continues agression towards Syria, Lebabon, Gaza etc. then it's fair to assume a disruption to oil supplies in this region. Lower supply obviously leads to an increased price (ceteris parubis)... the traders attempt to quantify this impact - not suprisingly, they wind up at a price which is higher than it was 24 hours age.

Exactly the same when there's a big hurricane looming off the coast of florida. It's going to hit, it's going to disrupt oil rigs and processing facilities - take a position now. It's not irresponsible.

This will actually remove some of the volatility surrounding oil prices - as a particualr event moves closer (outright war between Israel and its neighbours) the traded price will converge on the "real" value of oil... as opposed to waking up one morning and seeing the price of oil up $20/bbl, you might see it climb $1/day for 20 days (poor example, but you get my drift).

It's not the outright price that's a concern - it's volatility. Volatility = risk. Lock in a price as soon as you can, risk is reduced.

If you really think that there is no global capacity to pay $100, $200 per barrel of oil then think again. Yes - that would absolutely cripple an economy like ours... recession followed by depression. Your predictions of civil war would surely come to fruition. But do you think China would mind paying $100/bbl? It might cut their economic growth from double digit figures to low single digits. There is untold capacity in a market like that. It wouldnt stop them in their tracks like it would for us.

[FordFan86]

LOL @ Butterfly farting in Congo.

In short: Don't **** with Israel.

[HSE2]

[QUOTE=4.9 EF Futura]However, the activities of the market are based on the factors of the underlying commodity[/QUOTE=4.9 EF Futura]

Yes but the factors aren't being represented like they should be.

Justification for cause differ from analyst to analyst

[4.9 EF Futura]

Originally Posted by HSE2

Justification for cause differ from analyst to analyst

Lol.. and that's where the furphy begins!

"Oil prices were up slightly on NYMEX today with the start of the Winter heating season"

"Oil prices are expected to rise shortly with the start of the summer driving season"

An amusing world that we live in :

[Work Horse]

If we could buy peace in the Middle East I could care less what it costs to fill my car.

[HSE2]

Originally Posted by Work Horse

If we could buy peace in the Middle East I could care less what it costs to fill my car.

I second that.

[Jeeepers]

Originally Posted by Work Horse

If we could buy peace in the Middle East I could care less what it costs to fill my car.

Peace in the Middle East? A true oxymoron that one. :

[Falcon Freak]

Originally Posted by redfin

Peace in the Middle East?

It will never happen.

FF

[Kryton]

how about we dump the oil parity?
dont say it cant be done because it could if the pollies really wanted to.
we own-supply-make 80% of our oil/fuel that we use in this country. why we need to pay what some other country wants us to pay is beyond me.....no its not, its called feeding the government.
what hope do we really have?

[4.9 EF Futura]

Originally Posted by Falcon Freak

It will never happen.

FF

It will one day. I just hate to think of the circumstances in which this will occur.

The leaders of these countries are on record as saying that one day they will wipe their opposing countries off the face of the earth.

Eye for an eye... until we're all blind.

[xe351]

it wont happen. Just wondering, has anyone done tests and the like to see if australia has more oil? its a huge place, there must be some more oil hiding under some desert right? (thinking wishfully)

[4.9 EF Futura]

Originally Posted by xe351

it wont happen. Just wondering, has anyone done tests and the like to see if australia has more oil? its a huge place, there must be some more oil hiding under some desert right? (thinking wishfully)

I think we're ranked 3rd most attractive country in the world for further investment by oil companies. I think mostly offshore.

[Yum-Yum]

Originally Posted by redfin

I payed $1.59 a litre yesterday (Deer Park, Vic.) For BP Ultimate.

Mate, over here in NZ we're at $1.71 for 91 Unleaded, more for Premium:s

[Jeeepers]

Originally Posted by Yum-Yum

Mate, over here in NZ we're at $1.71 for 91 Unleaded, more for Premium:s

Scary stuff... But on a lighter note, a good excuse to get another bike. :

[4.9 EF Futura]

Originally Posted by davway

how about we dump the oil parity?
dont say it cant be done because it could if the pollies really wanted to.
we own-supply-make 80% of our oil/fuel that we use in this country. why we need to pay what some other country wants us to pay is beyond me.....no its not, its called feeding the government..
what hope do we really have?

Dude the parity pricing of oil was thrown out under the hawke/keating government (i.e. a LONG time ago).

We pay the market rate for oil and refined petroleum. You cant legislate a foreign company to sell oil to us at "mates rates" - they'll pack up shop and go set up in a country that's willing to pay the market rate.

As for the GST... well... death and taxes mate. Cant avoid either of them.

[EL_futuraistic]

Couldnt believe i heard price was over $US75 a barrel. As if things couldnt get any worse.....

That was this mornings news

Yesterday arvo's news was that unemployment is at an All Time Low, so there is a strong likely hood of a rise in interest rates.


And then on this arvo's news, aparently there has been a dramatic increase in people stealing petrol...... WELL BIG SUPRISE THERE.

Im only 23 and never really understood fully why the elder generations HATE the government, and banks........ well now I do.

[4.9 EF Futura]

Originally Posted by EL_futuraistic

Couldnt believe i heard price was over $US75 a barrel. As if things couldnt get any worse.....

That was this mornings news

Yesterday arvo's news was that unemployment is at an All Time Low, so there is a strong likely hood of a rise in interest rates.


And then on this arvo's news, aparently there has been a dramatic increase in people stealing petrol...... WELL BIG SUPRISE THERE.

Im only 23 and never really understood fully why the elder generations HATE the government, and banks........ well now I do.

Are you confident that you do truly understand?

How is more people having jobs a bad thing?

If you're demanding an economy where everyone has a job, interest rates are low and oil is cheap then your're living in an economic fairly tale where the streets are lined with gold and children play in rivers full of chocolate.

Low unemployment = inflationary pressure = interest rate rises. If more people truly understood how difficult it is to maintain a sound balance in this relationship there'd be a damn site less criticism of the government. Look at the inflation, employment and interest rate environment over the past 10 years.

Now things are getting slightly worse (still a damn site better than it ever has been) and the people revolt.

What have banks got to do with anything? They dont "control" interest rates. Nor does the government. The Reserve Bank of Australia is responsible for independently setting the target cash rate. They set the "price" of money... not the commercial banks.

[EL_futuraistic]

Well from what i understand if you work 3hrs a day or more your considered employed....... rediculious if true.

Most people are only just scraping through with their morgages, living from pay to pay and an interest rate increase on top of high petrol price could put people over the edge. (hence the increase of petrol theft)

I understand the Reserve Bank of Australia sets the interest rates, that last comment was a touch "tounge in cheek" attempt at humour. All i was getting at is that everything seems to be increasing in price, yet minimum wage seems to stay the same.

The Rich people get richers, The Poor people get Centerlink benefits and the Middle Australians pay for the Upper and Lower Class and get nothing.

That maybe a blind, naieve view but thats the way I see it.

I personally dont have a morgage, Petrol prices are a fact of live so im not winging about it........... I just think that whilst wages are supposed to increase with inflation or whatever over the last 12 months the cost of everything has sky rocketed, yet wages stay the same.

[Pieoter]

Simple fact is petrol prices won't go down and we need to look for alternates. Brazil runs its cars on I think either 100% or 85% ethanol so they arn't effected by oil price rises. Australia should do the same, once cars are tuned for the fuel they create more power than petrol but im not sure how it compares environmentaly.

[Kryton]

Originally Posted by Pieoter

Simple fact is petrol prices won't go down and we need to look for alternates. Brazil runs its cars on I think either 100% or 85% ethanol so they arn't effected by oil price rises. Australia should do the same, once cars are tuned for the fuel they create more power than petrol but im not sure how it compares environmentaly.

as soon as another source of fuel becomes popular, the government will tax the crap out of it as well. whether it be in the way of higher rego since your not buying normal fuel or just charging an arm and a leg for the alternative.

[4.9 EF Futura]

Originally Posted by Pieoter

Simple fact is petrol prices won't go down and we need to look for alternates. Brazil runs its cars on I think either 100% or 85% ethanol so they arn't effected by oil price rises. Australia should do the same, once cars are tuned for the fuel they create more power than petrol but im not sure how it compares environmentaly.

Ethanol and other biofuels consume MASSIVE amounts of fossil fuel during their production. Brazil's efforts have been targeted at reducing car pollutants from the cities - as opposed to reducing their reliance on oil and other fossil fuels.

EL Futuraistic, not sure what minimum wage figures ive been looking at but increases have been well above CPI. We must be vigilant in our remuneration unless we want further inflation rises and further interest rate increases. The days of 'guaranteed' wage rises in the absence of productivity increases are thankfully behind us.

I understand that your definition of employed is accurate. However, the economy is blind to the government's definition of employment. You can adjust the definition of employment for political reasons but it wont have an impact on the economy. Low unemployment - regardless of how its defined - will have inflationary impacts.

[xbgs351]

Originally Posted by EL_futuraistic

Well from what i understand if you work 3hrs a day or more your considered employed....... rediculious if true.

Most people are only just scraping through with their morgages, living from pay to pay and an interest rate increase on top of high petrol price could put people over the edge. (hence the increase of petrol theft)

I understand the Reserve Bank of Australia sets the interest rates, that last comment was a touch "tounge in cheek" attempt at humour. All i was getting at is that everything seems to be increasing in price, yet minimum wage seems to stay the same.

The Rich people get richers, The Poor people get Centerlink benefits and the Middle Australians pay for the Upper and Lower Class and get nothing.

That maybe a blind, naieve view but thats the way I see it.

I personally dont have a morgage, Petrol prices are a fact of live so im not winging about it........... I just think that whilst wages are supposed to increase with inflation or whatever over the last 12 months the cost of everything has sky rocketed, yet wages stay the same.

You don't have a good grasp of economics do you?

[Work Horse]

People are dying as we type folks!

IMHO it's a little crass worrying how much more fuel may cost us!

[4Vman]

Originally Posted by EL_futuraistic

Most people are only just scraping through with their morgages, living from pay to pay and an interest rate increase on top of high petrol price could put people over the edge. (hence the increase of petrol theft)

.

And you know this how??? some of my staff do live from "pay to pay" because they drink, smoke and gamble it all away, if i paid them more ,they'd just drink, smoke and gamble more...

Originally Posted by EL_futuraistic

Well from what i understand if you work 3hrs a day or more your considered employed....... rediculious if true.
.

Unemployment is probably at 6%, Its also rediculously true that at least 5% of the population are unemployable due to "incompatible skill set" to job relationship..
Ive had an advert for a Factory manager running for 3 weeks and only 10 applicants.... 9 of which were TOTALLY unqualified for the position.

Originally Posted by EL_futuraistic

I understand the Reserve Bank of Australia sets the interest rates, that last comment was a touch "tounge in cheek" attempt at humour. All i was getting at is that everything seems to be increasing in price, yet minimum wage seems to stay the same.

I lost my Factory manager last week who was on good money, company car etc etc to a company installing sound barriers on east link for $100K a year....
The average fork lift driver is on $60K a year... minimum wages mean squat when 95% are WELL over them, and over DISPROPORTIONATLY paid for their level education or skill set...

Originally Posted by EL_futuraistic

The Rich people get richers, The Poor people get Centerlink benefits and the Middle Australians pay for the Upper and Lower Class and get nothing.

How do you know this? from what ive seen and experienced the SMART people get richer... weather its from employment or centrelink...

Originally Posted by EL_futuraistic

That maybe a blind, naieve view

Yes i agree with you....

Originally Posted by EL_futuraistic

I just think that whilst wages are supposed to increase with inflation or whatever over the last 12 months the cost of everything has sky rocketed, yet wages stay the same.

Wages need to stabalise or equalise to get the economy under control, IMO the average wage is TOO high (look at some of the examples around) to make Australian business competitive globaly..
Small businesses with unproductive staff need to be able to shed them cheaply (see new IR laws), this will also make our workforce more competitive.
The Australian govt arent stupid or greedy, they see the writting on the wall, they're just reacting early to global forces and trying to position us to remain competitive, we also need to get the Australian Dollar under control, then things might improve.