LoL merchant....with the summer we've had it's not just my brain melting.  My old economics prof would be thrilled that I remember more than just "supply & demand".  

I was living in NJ when the oil embargo hit, with everyone talking about the 'Energy Crisis'.  In elementary school I remember thinking we were gonna run out of gas...'How will we get to the cottage this summer'?

Here it is almost 30+ years later and the most popular vehicles on the street are gas sucking SUVs.  If you want to read a good book, try Red Strom Rising by Tom Clancy....it's about WWIII being started over the old Soviet Union's need for oil.  Of course the Russian people aren't told that.

           Yeah, back in the late 80's there was somewhat of an oil crisis i believe (I was like 2, but from what I've read) because people where using oil wastefully. Machines used oil like it was going out of style, people where driving massive gas guzzeling cars and trucks, and goverments wheren't doing anything about it. When the price started to go up, thats when we had the introduction of more efficant machinery and cars of the early 90's. Back then this (along with a slow steady increase in production) was enough to drop the price of oil back down to a reasonable level which we enjoyed until a few years ago when oil hovered just above $20/barrel.
           That was all 15-20 years ago. Things have changed. We now are nearing capicity of oil production, and the point where oil production starts to decline (predicted by many to be around 2012) grows ever closer. We also have China try to completly moderenize it's self by going though somewhat of a mini super speed industreal age. Other goverments, namely the USA, have realize that a oil crisis is inevitable and have started to stockpile oil. Anouther thing that wasn;t nearly as big a factor then was tghe predicted 10$ fear premium on the price of oil, caused by terrorism (and argueablely goverment fear tatics, no saying the're real, not saying they arent lol).
          Some things are the same, as krill said, people are driving less. With every cent gas goes up anouther 10 thousand people probally buy a hybrid. The more lucritive the alternative fuel industry becaomes the mroe likley that it will be that we soon find a good alternative to crude.
          Anouther thing to keep in mind is that oil is used for a lot more than gas, which is the primary thing people assoicate it with. its used in everything from rubber to paint. So the automotive industry aside, we are still quite dependant on oil.

Hugely dependent merchant....

Trudeau got back in power around 80/81 and jacked gas taxes to around 15 or 20 cents a litre.  The Clark government was defeated largely because their budget included a 10 or 12 cent hike all at once.  Trudeau, ever the cagey politician....basically he did the same thing only more so, but over a period of a few years, 5 cents here, 3 cents there.  

In North American we're hugely dependent on our cars because of distance...in Europe things are much more crowded and public transport is far more efficient and cost effective.  

I wonder how many people think the war in Iraq was motivated by a desire/need to dominate the oil market?  All other considerations aside...if it wasn't for the oil in the region I doubt anyone would have cared how horrible Husseien is/was.

I agree krill.... did bush send troops beacuse sadam was oppresive... yes... but would ha have bothered if they where in antartica... i doubt it

Uzbekistan (sp) is reportedly as bad if not possibly worse than Iraq ever was....but they're an ally so I guess it's okay.

More "good" news for oil investors/players:

Power Cut Shuts Down Iraq Oil Exports

Iraq's oil exports were shut down Monday by a power cut that darkened parts of central and southern Iraq, including the country's only functioning oil export terminals, Iraqi and foreign oil officials said.

http://news.yahoo.com/s/ap/20050822/ap_on_re_mi_ea/iraq_oil

Oil hit $68/ barrell yesterday. So just to note thats a 45% ROI since this site opened 4 months ago. Very good for a safe investment.

Oil went above 70$ because of Huricane Katrina threatening the US. There goes anouther mental hurdle... It might drop down now that the huricane has passed, but I wouldn't be surprised if it creeped up just below $75 over the next month.

Well now that we know the huricane did more than just interupt oil production, it essestialy shut it down by 25% of the US capicity I'm thinking the price will climb until everything is back online, then we should see a balance or even possibly a lul if Bush releases some of the US oil reserves like they say they might. With the price climbing so rapidly I would suggest that Oil is a good investment. But anouther industry we all need to start talking a lot about is the Althernative Fuel industry, I'm talking bio-desil and the like. If anyone has any good companies in that area feel free to talk about them to a small extent (To at least make us aware that they exist).
DeMerchant

Ok, the price of oil fell today after several of the oil facilities that where shut down by the huricane started back up. But I dont really think this will continue after the long weekend (is it a long weekend in the states too?). Until all facilites are back online it will only speed up the rise of prices... what we saw the last few days is the price of oil greatly increase, and then recede a little. But it certainly hasn't gone back to where it would have been if the huricane hadn't hit.
DeMerchant

I was reading some articles and I guess a few more of the factors that are easing the market is that the EU has agreed to realease some of its oil holdings. This dramatic increase in price is being felt all over the world. And countries are all coming together to fight the battle. I don't know the future now. I'm usually quite positive but the news that is released every minute seems to say that Katrina may have been the even the world needed to start batteling the price of oil back down. Although I'm normally very bulish on the oil market, keep a close eye on any developments over the next few days or you could pay out of the pocket for it. I thik we will have a better understanding of where the price will go after the weekend.

It's inflation that has me concerned....so much of the economy's strength right now is built on low interest rates.  But if inflation starts rearing it's ugly head...then interest rates may be hiked to combat it.  

So much of our economy relies on relatively cheap energy....

Sure there will be inflation, but it will be inflation of goods caused by high oil prices, not the cost of oil it's self as oil isn't factored in when determining inflation.

So I'll finally admit it, oil is going to go down. OPEC is now realizing that the high prices are spuring on their worst fear of increased efforts to find alternate sources for energy. This, just like the energy crisis back in the early 80's should force them to lower prices. Also I wouldn't be surprised at all if goverments use this and anviromental accords (suck as Kyoto) to raise fuel consumption requirements on vehicles. What will really happen no one can no. But for the time being I'm skeptical that there will be much growth in the price baring any natural or caused disasters.