Oil forecast to be 70.00 a barrel in 2009?

it might come down to convoying fleets of oil tankers through choke points like the straights of hormuz, the Northern Arabian Gulf, the suez, and anywhere else that they could be attacked. like in WW2 in the battle for the Atlantic, but instead of german U-boats it will be state backed terrorists, maybe even from other navys. they'll be guarded by the aussies, brits and us... it not a job it's an adventure

 

The bigest and most definate part of the 'they' I was refering to was gas station companies wether they have a hand in the earlier steps like shell and a few othes or JUST have the corner stop and robs with gas pumps but to the point that they influence the prices also the oil companies and OPEC. While the later group dosent 'set' the prices they definatly are able to influence it. While they have the least influence the wildcaters are a prime example, the folks who either drill slow produceing wells to get the dribble or have a farm with a well that say produces a barrel or 2 a day but collectivly the wildcaters can make a contribution to the supply. When oil prices are at 2000 rates these folks tend to turn off the juice to the wells pumps since theres no real profit in it to pump the oil but when it jumps up to $125/barrel they all fire up the pumps to get a piece of the pie. When supply goes down prices go up. The larger oil producers, particularly OPEC tend to do the similarly (and only make business sense) that if its not bringing enouph then the send less product to market and it then brings more. Just like the rancher who is not likely to sell heavily from his heard when prices bottom out but would rather hold onto them a bit longer to see if prices go back up and simply keep his females off the market when low so he can breed them later and when the lowered supply is felt the prices go up and as many as possible will have held out for these higher prices before selling and will now heavily sell. Its the basic modle to keep from going broke in business.

Like I say though the bigest place where I expect this will be the gas whole salers and gas stations (but would not expect it to be totaly bypassed by the other folks along the way). I dont see the gas stations selling the gas for less than the people will pay. If you think gas prices are set by the stock market, speculaters, etc, sorry but think again. Those factors do influence it since that determines the price they (gas stations) pay for the fuel but what determines the price you pay is what the owners think you will pay for it. Go to any large city and drive around the diferent areas of the metro. I have seen difrences regularly of 5% or more, even as much as 10% on the same day (with prices stable not jumping up and down) within 20 miles or so at stations with the same owners. All the stations in that area are generaly within 1% or less of each other because they know if you can go across the street and buy your gas for 10% less they wont sell much untill the competitors are sold out but you probably dont know the price across town and even if you do wont drive across town for that same 10%. When its the same day and both stations, 20 miles apart are owned by the same chain (not even franchises) and there is that much difference its not due to what they are paying for their fuel, delivery costs or any other costs (taxes also similar in both areas), its simply that they know the market will bare it so they charge it.

Now that said, if after a long time of paying $5 for a breakfast that cost the owner $1 to produce, their price goes to $2 so they raise theirs to $10. Now you walk in every day for a couple of years and pay the owner $10 for a breakfast and bitch about the price but come back every day and do it again and he now gets a price break on his stuff so it only cost him $1 to make it how many do you think are going to start selling you that breakfast they KNOW you WILL pay $10 for it for $5 rather than continueing to sell it to you for $10 and use the extra profit to go buy what they want or at best sell it to you for $8 so they still increase their profits greatly from when they paid $2 and sold for $10 but you bitch less or stop bitching all together because you were used to the $10.

I dont see to many stores, knowing you will pay $10, dropping it back to $5. Depending on their competitors they may go down to $7.50 but will keep it as close as they think benificial to the max folks will pay for it as they can to maximize profits.