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#1
03-30-2005, 02:41 PM
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Bloomberg agrees with Botnst's...
Theory that nothing drastic has to be done to change consumer habits regarding petroleum consumption.
Market forces will di ot for us. Demand may rise until oil hits $80 By Bruce Blythe Bloomberg News E-mail article Print view Search Most e-mailed Most read RSS Crude-oil prices may have to rise to $80 a barrel or higher before U.S. demand for gasoline, diesel and other fuels begins to slow, said Arjun Murti, an analyst with Goldman Sachs. U.S. motorists show few signs of curtailing their driving habits even with retail gasoline above $2 a gallon across much of the country, Murti said in an address yesterday at the National Petrochemical and Refiners Association annual meeting in San Francisco. "Our view is that oil prices have to keep rising until the economy is impacted," said Murti, 35, a New York-based managing director at Goldman Sachs and co-leader of the company's energy group. "At $80 oil, we might expect some negative reaction on the demand side." Oil prices soared above $50 a barrel the past year as economic growth stoked demand in the U.S., China and India. Prices also rallied on concern over supply disruptions in the Middle East, which pumps more than a third of the world's crude. Crude-oil futures traded on the New York Mercantile Exchange reached a record $55.67 a barrel Oct. 25 and came within 2 cents of surpassing the mark last week. The price for oil yesterday settled up 52 cents at $54.95 a barrel, up 47 percent over the past year. Growth in oil production worldwide isn't keeping pace with demand, Murti said. "We expect continued steady supply growth, but not a surge" in oil production, Murti said. "We are not in any way suggesting that the world is running out of oil. We don't expect $50 to $85 oil to be likely" over the long term. Oil at $80 probably would send U.S. pump prices for gasoline to about $2.75 a gallon on average, almost 70 cents higher than current prices, based on calculations from the Energy Information Administration, the statistical arm of the Energy Department. The cost of crude makes up about half of the retail price of gasoline and diesel in the U.S., according to department data. Every $1 move in oil prices typically results in a 2.5-cent move in retail gasoline. The average U.S. retail price for regular-grade gasoline jumped 5.7 cents to $2.056 a gallon last week, 0.8 cent below the all-time record reached in May, the Energy Department said. A growing U.S. economy is spurring shipping and travel, and stricter environmental rules are limiting increases in refining capacity. The nation's gasoline consumption has risen every year since 1991 and is expected to average a record 9.22 million barrels a day this year, according to the Energy Department. Oil is still cheaper than it was in the early 1980s after adjusting for inflation, Murti said. Gasoline makes up about 50 percent of U.S. refined-product consumption, he said. "While supply will continue to grow, oil prices will have to go higher, gasoline prices will need to go higher, to really knock off demand," Murti said. "We think we're going to need changes in consumer behavior, and it's going to take higher prices to do that. It's going to take a lot to change consumer behavior."
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Enough about me, how are you doing? 
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#2
03-31-2005, 08:00 AM
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Quote:
Murti then shrugged his shoulders, spit on the sidewalk and said, "what the hell do I look like a gdamn fortune teller?" This.....is not news. Paul X.
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Pxland 2001 Honda Accord 1995 Jeep Cherokee 1973 MB 280SEL 4.5
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#3
03-31-2005, 08:23 AM
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Quote:
FYI, I was pointing out that Botnst had said just about the same thing on an earlier thread. However, feel free to comment on every thread if you wish, that's what it's here for. Quote: Originally Posted by BusyBenz I do agree, but you have to start making it happen, or it aint gonna happen at all! No you don't have to do a darned thing. When the price gets competitive it will happen on its own. Now is the time for bright boys and girls to put on their thinking caps and figure-out how to make money as the price differential approaches parity. It is NOT the time to get the damn-fool government involved. __________________ Res ipse loquitur
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Enough about me, how are you doing? Last edited by Plantman; 03-31-2005 at 08:46 AM.
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#4
03-31-2005, 10:42 AM
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Quote:
Thank you for your permission. Paul X.
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Pxland 2001 Honda Accord 1995 Jeep Cherokee 1973 MB 280SEL 4.5
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#7
03-31-2005, 06:00 PM
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$80/bbl? Bring it on!
My overrides are lookin' good, the distributions from the pipeline partnerships are fantastic and I'm burning free WVO in my cars. The future's so bright I gotta wear
 !
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Never a dull moment at Berry Hill Farm.
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#8
03-31-2005, 09:15 PM
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Quote:
Hey Jim, how have you been? Haven't seen you post in awhile. How's your shop coming along?
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Enough about me, how are you doing?
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