https://www.theguardian.com/business/2023/sep/17/global-inflation-fears-as-oil-price-rises-towards-100-a-barrel
Rise of 30% since June follows increasing demand in China and production cuts by Russia and Saudi Arabia
Haven't we had oil at $100 a barrel before, and not that many years ago? And yet fuel and energy prices were lower.
It's almost as if the price the consumer pays has absolutely nothing to do with cost.
It’s actually pretty well correlated once you remove state taxes, which have increased significantly in some states like California. Mississippi gas, for example, is cheaper now than 2010, with respect to crude prices and discounted for inflation.
Gas was $100 a barrel under Bush. It was like $2 a gallon.
Dad said "Jesus criminey were not going anywhere for a week!"
V.V I paid 3.75 a gallon 3 days ago.
I remember seeing $5/gal under Bush. His last year had an average of $3.30 and peaked over $4... https://www.yahoo.com/lifestyle/gasoline-prices-fared-under-last-190000869.html
In the small rural town I was in it was literally a dollar a gallon. People went to buy gas just to get out of the house since everything else was being closed down.
But gas tax isn't tied to inflation and it's a fixed dollar amount per gallon (not a percentage), so $100/barrel should be relatively close to the same as it was in in the mid-2000s, yet it's doubled.
Why do you think gas isn’t affected by inflation? Costs go up with inflation. This increases the price. Remember that the cost of the commodity itself is effectively zero. The cost is all in exploration, extraction, refinement, transport, and sale. All of that goes up with inflation.
The price per barrel includes almost all those expenses, so inflation should be reflected there.
The rest is offset by a gas tax that's deflationary. The federal tax of 18.4 cents per gallon hasn't changed since 1993.
The price at the pump should be correlated much more strongly with the price of a barrel than with inflation, and the price per barrel was similar or higher during the Bush administration.
The price per barrel includes almost all those expenses, so inflation should be reflected there.
Right, which means that the inflation adjusted price of oil today is significantly lower than it was in 2008.
labor
Wages haven't been going up that much though. Not as much as inflation, not as much as prices. Shipping and processing costs, too, haven't actually gone up significantly - there's no particular reason for it to cost more to do the things we've already been doing.
Good! Make it $1000 a fucking barrel! Any developed nation who genuinely cares about the health of their economy will be highly motivated to get all the way off of oil.
It's been fluctuating in and out of triple digits for many years now. The price is manupulated by those who profit the most. Never so high that we panic away from oil, but always high enough for record profits. Fuck oil.
I want it $1000 a barrel just because of all the train lines it would build. The first time I saw gas get over $5 I was in LA and they very quickly approved the new extensions people are enjoying today.
Meanwhile in the UK we have to suffer with privatised Railways. Scum cunts, and that is because the older generation decided they didn't want to pay tax towards it. Imagine having to pay £100 to go 300 miles on a train. Should be 20% of that.
As much as I would absolutely love us shifting from fossil fuels, it also needs to be practical. Suddenly increasing the price of gas doesn't work for rural areas like the one I live in where your car is immensely important to you being able to get to the store or your job and we're not in areas that public transport would be considered due to how small and spread out the towns are. And a lot of us don't have the option to move closer to the cities and the transit opportunities either due to our jobs or just the cost of living required for the city versus our rural homes. We NEED to start working on infrastructure that doesn't only have large cities in mind, but also us on the outskirts of the city or the rural communities will become even poorer than they are now when they have to pay a small fortune just to travel to the store or their jobs.
Oh no! If only we had some other means of creating or storing energy, if only there was a way to rid us of the dependency of oil!
Nuclear?
Everything else has a huge dependency on environmental factors (wind, sunlight, water) or storage resources which are harmful to scale up without safety consideration.
The actual data on renewables is impressive, but not nearly impressive enough to stop climate change..as.anyone can see who is paying attention to the emissions data.
Renewables still greatly depend on fossil fuels as a backup power and thermal power source, which is why fossil fuel companies are promoting renewables-only to the masses.
It ensures society remains dependent on fossil fuels for the next decades, albeit at a lower intensity. Which works out very well for them, since they already passed peak production and just want to sell the remaining stock as long as possible for the highest price.
Once we crank up a few hundred nuclear reactors to serve as the backup for renewables and as a thermal energy source for producing synthetic hydrocarbons, then fossil fuels will become obsolete.
Until then, we're going to be partly dependent on fossil fuels and pay a hefty price for them.
Fossil fuel companies are not promoting renewables only. I've only seen objective reports from within the electricity industry promoting this - eg the UK's Nation Grid recently did a Future Energy Scenarios study that determined renewables was the fastest way for the country to reach net zero.
Building a few hundred nuclear reactors takes a long time. Meanwhile, fossil fuels will continue to dominate our use. This is what fossil fuel companies want, to delay our transition away from them. Renewables give us the opportunity to wean off fossil fuels much more quickly. We'll use a lot more fuel waiting for nuclear than we will backing up renewables.
We need nuclear, as part of a complete energy portfolio. However, renewables are available now, they're quick, cheap, proven and profitable. If we build an excess of renewables, we can account for nearly all of the times where the wind isn't blowing or the sun isn't shining. Then, once we've weaned off fossil fuels, we can fill out our portfolio with nuclear. By the time the nuclear plants are built, our demand will have grown and that excess in renewables probably won't be an excess anymore.
Renewables are highly volatile and storage technology isn’t there yet for most large grids. Right now that stability must come from coal, LNG, or nuclear, with some exceptions like geothermal. Pick your poison. China is building 5-10 giant new coal plants per year to satisfy this demand, despite being one of the cheapest places in the world to manufacture solar panels and turbines. If we care about the environment, we’ll choose nuclear. Germany’s “green” party has successfully lobbied to effectively end nuclear support in the country, and now they have to significantly increase coal and lignite consumption following the Russian LNG embargo.
I don’t understand why nuclear has to be a dirty word. Modern reactors are clean and safe. Far better for the environment than coal and LNG.
This stupid renewables vs nuclear debate is engineered by the fossil fuel bastards. We need both. It's not a choice. Both.
It's not either/or, it's in conjunction with, and it just so happens that renewable-only isn't sufficient and has failed to scale enough to combat climate change.
While here in Australia we already have a state running on 100% renewables, any plan for nuclear takes too long and costs too much. Read up. The barriers for compact reactors are large and expensive before nuclear is feasible and they still haven't worked out that pesky waste issue. Investing in nuclear once renewables are established is fine. Expecting nuclear to bear the load while they are yet to be built is just fantasy. Renewables are here and are cheaper. They are literally the answer already here.
Tasmania has some great geography for hydro power, generating 90% of their power. Most places in the world don’t have such geography. Pointing to goldilocks locations as though they’re replicable everywhere isn’t well informed. Further, while hydro is less volatile than wind and solar, it still requires a reliable grid fallback during droughts. Tasmania has this with the Basslink. Without it, they would also require quick-fire coal and LNG plants on standby. Or, more likely, running permanently as the spool-up cost is very high.
No one is claiming nuclear is cheap and instant. We’re arguing that neglecting nuclear keeps coal and LNG consumption unnecessarily high.
Appreciate you did research, however Tasmania isn't SA. And Bass link runs both ways. It's a grid link, not a power generator.
But if you th8nknthats goldilocks, let's look at France. It's the most successful and pervasive nuclear power. And they are currently moving away from nuclear. Ouch.
But if you th8nknthats goldilocks, let’s look at France. It’s the most successful and pervasive nuclear power. And they are currently moving away from nuclear. Ouch.
Nuclear is a dirty word because we have 80 years of demonstrating its disastrously destructive tendencies, including in North America. Trinity tests irradiated and killed entire towns. Three Mile Island is like the 3rd largest nuclear disaster of all time. Fukushima/Chernobyl haven't quelled anyone's fears of meltdowns.
Now, is a meltdown ever likely to happen? No, of course not. But that doesn't mean it can't. The mining and processing of uranium/thorium is insanely bad for the environement, and I wouldn't be surprised if it was close to coal carbon emissions.
We have thousands of miles of coastline, thousands of miles of rivers, and many large lakes in Canada. Why couldn't we have a robust hydro network?
Nuclear should absolutely be part of the picture. That being said, nuclear does a bad job scaling up for peak demands over base load. Better than solar or wind for sure but not good enough. For a fossil fuel free world we do need energy storage. Luckily pumped water energy storage is pretty viable.
We need to get off fossil fuels ASAP, we also should probably wean away from car centricity, it's making us dependent on these oil cartels. They have an oligopoly and they can just yank the prices up if they want and screw over everybody else.
In the US, it's pretty much only Republicans who insist that we stay on the fossil fuel rollercoaster these days.
So we should expect more interest raises to efficiently transfer money from the poor to the wealthy... ehm... keep inflation at bay...
High interest rates and inflation hurt people with money and help people with debt. As interest rates rise, the value of assets decreases. The inverse relationship is strong and well tested. Debt, on the other hand, loses value with inflation. Inflation paid off 20% of my mortgage over the last few years.
No one likes high inflation. It’s definitely not a scheme to transfer wealth. That’s the status quo with 2% inflation and cheap debt for the wealthy to use.
It's crazy how brainwashed people are. High interest rates are excellent for regular people except those carrying credit card debt. But people think the fed is somehow harming them.
High interest rates and inflation hurt people with money and help people with debt.
Lol, wut?
Inflation allows borrowers to pay lenders back with money worth less than when it was originally borrowed.
Inflation is in fact a massive transfer wealth from the lenders to the borrowers, measure in trillions.
Econ 101
https://www.investopedia.com/ask/answers/111414/does-inflation-favor-lenders-or-borrowers.asp
I’m not saying runaway inflation is generally good. It’s not, especially if ongoing for long. I’m just talking about lenders and borrower.
The impact of interest rates is a lot less cut and dry.
Yeah the combination of the two is what made me have the reaction I did.
I don't think interest rates being high are a net negative for all people with money. It's great to be able to plop your money in a bank account and earn generally more than inflation in interest right now risk free.
Generally, high interest rates are going to be bad for borrowers. I think high inflation coinciding with high interest rates isn't particularly geat for most, but it's harder if you have no money because you need the ability to take on debt, and that debt is going to come at high interest rates.
Some credit cards are at 30% interest rates, in no way is that good for those who need to borrow.
Inflation is also a-ok for asset holders. It's cash you don't want to be holding in times of high inflation.
Ya I feel pretty lucky tbh. Bought a house 2.6%. And the value of my home has gone up tremendously, meanwhile the value of my principal has been slashed. Timing feels criminal. Unfortunately most people aren’t so lucky, and I am very aware that benefiting from a crisis.
This is the best summary I could come up with:
Oil prices are on track to reach $100 a barrel this month for the first time in 2023 after surging by almost 30% since June, after Russian and Saudi Arabian production cuts and rising demand from China.
Earlier this month, Saudi Arabia extended 1.3m barrels per day (bpd) of combined cuts to the end of the year, accelerating a drawdown in global inventories.
The report was released just a day after Opec announced that the market was facing a deficit of more than 3m bpd in the upcoming quarter, potentially resulting in the most substantial supply shortage in more than a decade.
Saudia Arabia and its partners in Opec are also concerned that the IEA has predicted that demand for oil will peak before 2030, which some analysts believe could be brought forward to 2026 by the rapid switch to renewables already under way.
The rising cost of fuel and demand from the Chinese economy, which ranks as the world’s biggest oil importer, are expected to cloud the outlook for central banks and their mission to bring down inflation rates that are still well above the 2% target level.
US central bank interest rates were widely expected to have hit a peak after a drop last month in core inflation, which strips out volatile elements such as fuel and food.
The original article contains 630 words, the summary contains 220 words. Saved 65%. I'm a bot and I'm open source!
Wish I knew what the oil cartels hope to achieve with this. It's not as if we're ever going to soften on support for Ukraine. Maybe just lashing out?
They're cashing out. They know the jig is up and they're not investing in new wells like they used to and are justenjoying the higher profit margin on the existing wells.
As well as the EV transition is going, we’re still decades away from them becoming the dominant consumer vehicle worldwide. Even further away for commercial vehicles, and further away still for shipping and planes. These countries are making hay while the sun is shining. If the West had any balls it would sanction the shit out of cartels like OPEC. Problem is, voters punish politicians who allow gas prices to rise, and OPEC knows this. We’re not willing to trigger a price war by enacting sanctions.
Super agree that they strongly prefer a certain stripe of US politician, understand our electorate, and pull their levers accordingly. It would be immense if we could short circuit that weakness in our democracy somehow. A green new deal would have done that, but the Dem party oldsters seem to hate that idea.
Honesty this is a good thing. Higher prices make transition away from oil mote profitable and it seems we're only allowed to do things if they're profitable. Maybe a good old fashioned oil.crisis is what.the world needs. We put up with 1973 style shit for a little while and then investments away from oil happen and then we never go back. We have tools we didn't back then, like good wind and solar, ebikes, more developed transit networks in cities, etc. So it won't even be as sucky
