Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Oil demand soon to decrease?
Old 08-18-2005, 07:30 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
Oil demand soon to decrease?

http://biz.yahoo.com/usat/050817/13050759.html

In response to an earlier thread on how high oil prices will skyrocket:


Looks like the high oil/gas prices are slowly starting to affect people's commuting habits. Transit ridership is up. People moving closer to their workplaces, or getting jobs closer to their houses. Those poor SUV owners who are paying $100+/wk for gas are finally feeling the crunch.

In my local area, the regional public transit agency said for every $0.10 increase in gas prices, they see a ridership increase of 1400 per day.

Only time will tell how much change will come about from these high oil and gas prices.
justin is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Oil demand soon to decrease?
Old 08-18-2005, 08:30 AM   #2
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
Re: Oil demand soon to decrease?

Quote:
Originally Posted by justin
Only time will tell how much change will come about from these high oil and gas prices.*
I'd say that the only certainty is that there will be changes in oil & gas prices. Another certainty is that journalists on deadline will find ways to write plenty of articles making both scenarios seem equally plausible.

I'm clueless enough about the petroleum industry to have another question. Does anyone know how much of a barrel of oil is burned for transportation and how much is used by various chemical, textile, pharmaceutical, and other industries?
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 09:03 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 2,375
Re: Oil demand soon to decrease?

Goldman Sachs take on oil futures - but with their history of oil price analysis, should be taken with a grain of salt gallon of gas..

http://www.bloomberg.com/apps/news?p...qFwEo&refer=us
Danny is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 09:09 AM   #4
Recycles dryer sheets
 
Join Date: Apr 2005
Location: Seattle
Posts: 188
Re: Oil demand soon to decrease?

Quote:
I'm clueless enough about the petroleum industry to have another question. Does anyone know how much of a barrel of oil is burned for transportation and how much is used by various chemical, textile, pharmaceutical, and other industries?
I brought this up with some friends I have who know about that kind of thing. Apparently there are alternative ways of making plastic that use plants as their base instead of oil. The gist seemed to be that you have to do so much processing to get it already that a little extra in the beginning if you can't have oil doesn't make a huge difference, while gasoline comes out of oil pretty easily.

Tim
nuisance is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 10:06 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
Re: Oil demand soon to decrease?

Quote:
Originally Posted by Nords
I'm clueless enough about the petroleum industry to have another question. Does anyone know how much of a barrel of oil is burned for transportation and how much is used by various chemical, textile, pharmaceutical, and other industries?
Nords,

I believe out of all world oil consumption, US autos consume 10-14%. This is coming from another thread here on oil where someone cited "official" numbers from somewhere. Maybe 10 million barrels/day? So a 10% drop in US gas consumption would result in a ~1% drop in total world oil consumption. Which means the current surplus in oil production would increase by 50-100%.

justin is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 11:19 AM   #6
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Oil demand soon to decrease?

Quote:
Originally Posted by Nords
Does anyone know how much of a barrel of oil is burned for transportation and how much is used by various chemical, textile, pharmaceutical, and other industries?
In the US, the transportation sector consumes 2/3 of our oil demand.



The DOE projects that world oil demand will increase by about 2/3 from 2002 to 2025. The price of oil has almost trippled from 2002 to 2005. So while demand is increasing, it's obviously nowhere near in proportion to recent price increases.
wabmester is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 11:24 AM   #7
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
Re: Oil demand soon to decrease?

Quote:
Originally Posted by wabmester
In the US, the transportation sector consumes 2/3 of our oil demand.
I think that would include shipping, by truck, ship, train, and air, as well as passengers by bus, air, train, ship, and private cars of course.

The private automobile would be consume a portion of the 2/3 of total US oil demand.
justin is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 11:33 AM   #8
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Oil demand soon to decrease?

Quote:
Originally Posted by justin
The private automobile would be consume a portion of the 2/3 of total US oil demand.*
Right. As I posted in the other thread, the transportation sector is 2/3 of our demand, and *personal* transportation is 2/3 of the transportation sector.
wabmester is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 01:36 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Re: Oil demand soon to decrease?

Quote:
Originally Posted by wabmester
The DOE projects that world oil demand will increase by about 2/3 from 2002 to 2025.* *The price of oil has almost trippled from 2002 to 2005.* *So while demand is increasing, it's obviously nowhere near in proportion to recent price increases.
That is what is meant by "inelasticity". To increase crude supplied to world markets a relatively small amount from 2002 to 2005 required a large increase in price.

Haha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 03:34 PM   #10
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Oil demand soon to decrease?

Quote:
Originally Posted by HaHa
That is what is meant by "inelasticity". To increase crude supplied to world markets a relatively small amount from 2002 to 2005 required a large increase in price.
But obviously the recent price growth of oil is unsustainable.* * I don't recall it growing this quickly during the last oil crisis, yet the graph clearly shows that our demand fell off considerably as a result.* * It's interesting to see that the transportation sector demand does appear to be pretty inelastic with almost monotonically increasing growth.* *Oh well, time for my bike ride.*
wabmester is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 06:03 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Re: Oil demand soon to decrease?

Quote:
Originally Posted by wabmester
But obviously the recent price growth of oil is unsustainable.*
It may be unsustainable. I know that is your opinion. Still, if it were obvious, then the out months in crude futures would be considerably lower than they now are. The people who deal in oil for a living apparently don't find it obvious that prices are unsustainable.

Haha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 06:07 PM   #12
Thinks s/he gets paid by the post
 
Join Date: May 2005
Location: Texas
Posts: 1,038
Re: Oil demand soon to decrease?

Get used to it. Oil is still cheaper than the other options. When the price gets high enough other energy sources will become competive. This doesn't mean that it will be cheaper than oil though.
__________________
In theory, theory and practice are the same. In practice, they are not.
Lazarus is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 06:13 PM   #13
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Oil demand soon to decrease?

Quote:
Originally Posted by HaHa
It may be unsustainable. I know that is your opinion. Still, if it were obvious, then the out months in crude futures would be considerably lower than they now are. The people who deal in oil for a living apparently don't find it obvious that prices are unsustainable.
Well, I said the price *growth* was unsustainable, and investments are all about growth, right? My impression was that crude futures are selling at about the current price, which implies zero growth (which I still think is optimistic).
wabmester is offline   Reply With Quote
Re: Oil demand soon to decrease?
Old 08-18-2005, 06:35 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Re: Oil demand soon to decrease?

Quote:
Originally Posted by wabmester
Well, I said the price *growth* was unsustainable, and investments are all about growth, right?* *My impression was that crude futures are selling at about the current price, which implies zero growth (which I still think is optimistic).
I missed that. You are of course correct. This would apply to investments in crude futures. But all most service companies, producers, oil sands miners, etc. need is prices that continue in this vicinity and they will do very well in their business. Over time, that will be reflected in dividends, or appreciation, or both.

haha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
It is NOT about the OIL after all doushioukanaa FIRE and Money 20 05-19-2006 12:07 PM
Oil, Oil, Everywhere . . . marty Other topics 1 05-17-2006 02:05 PM
Oil Change (A Little Long) Wife Sent to me, she thought it was cute poboy Other topics 21 03-30-2006 07:15 PM
Katrina Targeting U.S. Oil Operations Craig Other topics 1 08-28-2005 10:57 PM
I need to get a new car! laurence Other topics 124 06-10-2005 08:35 PM

» Quick Links

 
All times are GMT -6. The time now is 08:48 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.