Happy New Year, $100 Barrel

From Bloomberg today:

Crude oil rose to $100 a barrel for the first time in New York as record global fuel consumption threatens to outpace production.

Oil's gain, extending last year's 57 percent rally, was boosted by forecasts that U.S. stockpiles dropped to a three-year low last week. Unrest in Nigeria, Africa's largest oil producer, also spurred prices.

Three-figure prices may bring energy costs near the tipping point that will cause global economic growth to falter. China has more than doubled oil use since New York crude dropped to this century's low of $16.70 a barrel on Nov. 19, 2001. That's soaked up most of the world's spare production capacity amid supply cuts in Nigeria, Iraq and Venezuela.

``These prices are here to stay,'' said Emil Pena, member of the advisory board at Calgary-based Genoil Inc. and the executive director of the Energy and Environmental Systems Institute at Rice University in Houston. ``We have to come to grips with these high prices. I hope this will lead to us becoming more efficient and increase our energy education.''

Read the rest here. Discuss.

  • Urban Planning Overlord (unverified)

    $100 a barrel? Good news. Eventually U.S. motorists will get it into their thick heads that they can take lifestyle actions to reduce their consumption of gasoline. Producers will figure out more fuel-efficient ways of getting their goods to market. And alternative energy sources become fiscally feasible.

  • Garlynn -- undergroundscience.blogspot.com (unverified)

    I see this as good news. Up to a point (which I don't think we're even close to yet), higher crude oil prices will cause alternatives to crude oil to become more attractive. For instance, biodiesel in Oregon is now selling for prices comparable to super unleaded, or even regular diesel. So, as alternatives come into the market, they will be more competitive, and this fact should also spur more research and development of new alternatives.

    The main downside to these high prices is that most of the money is going to the oil industry. If we're going to be paying close to $4 a gallon (or more) for gas, I'd like to see more of this go to taxes, which could help produce more alternatives to driving (such as high speed rail and other mass transit options).

    BTW, did anybody see "I Am Legend" over the holidays? I noticed that gasoline prices in the NY City of the extremely-near-future were around $10 a gallon. :-)

  • Brian (unverified)

    Record high oil/gasoline prices, recent utility hikes, significant rises in food prices- it's enough to make a budget minded individual like myself cringe in dismay. Thankfully I recently received an 11% wage increase along with a generous bonus or I'd really be sweating it. Tighten the purse strings, folks. Were in for a bumpy ride.

  • (Show?)

    It's the one's whose purse strings are already pulled to shreds that concern me. They don't have anymore room to tighten.

  • Tom Civiletti (unverified)

    Crude oil prices will likely drop some, but the bounces will keep getting higher. As energy costs pinch the working class, the economy will make decent wages harder to secure. While oil companies make more money, much of the mark-up will go to OPEC nations, draining more and more from the US economy.

    Waiting for market forces to drive conversion [and don't forget all the fat subsides oil companies enjoy] means more pain for more people. The US has inefficient industry, inefficient transportation, inefficient housing, and is the driving force of the increasingly inefficient globalized economy.

    <h2>Put off buying a new garden shed. In a while you might be able to score an Excursion or Expedition for a few bucks, either of which should serve well as storage for rakes and hedge clippers.</h2>
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