http://www.belfasttelegraph.co.uk/business/business-news/opec-warns-oil-prices-could-rocket-to-500-a-barrel-13922597.html

The nightmare scenario of oil reaching $500 a barrel within a few years was raised at the weekend by a member of OPEC's governing council.

It would mean a fourfold increase from current prices and ends any hope the ECB has of getting inflation under control.

Such a rise would also pose a serious threat to economic growth in oil importing countries.

Iran's OPEC governor Mohammad Ali Khatibi has warned oil prices could reach as high as $500 per barrel in a few years' time if the US dollar falls further and political tension worsens.

"If the dollar's value continues to decrease and if the political crisis becomes worse, the oil price would reach up to $500," Mohammad Ali Khatibi said in an interview published on Saturday.

"If there is another war in the region, it will not only be Iran's oil not reaching the market, but rather the oil of the whole region would be cut from the market," Khatibi said.

"In that case, we will not have a price rise. We will have a price explosion."

Mr Khatibi made the comments in response to a query about the possibility of oil reaching just $200 per barrel in the next two or three years.

Iran gets daily revenue of about $300m from exports of crude oil, exporting some 2.5 million barrels of oil a day at an average price of $120, according to the Iranian oil ministry

Attempts by some producing countries, like Russia, to trade oil in euros rather than dollars have found little support, with middle eastern countries that dominate OPEC more than happy to continue using the US currency.

Exactly why I'm thinking of ditching my beloved Avalanche ;(

Of course this could be Iran trying to flex it's oilpeen and threaten the world, but still it's a valid concern.

Time to get off the black junk and let the ME turn back to the 14th century battleground that no one will care to intervene in.

It's their very own greed that will destroy their economic empire. Yes we love our gas guzzling enviroment destroying SUVs of Death (TM) but when Jim Bob's weekly gas bill gets to be more than his monthly trailer payment even he will back off on the driving. Hell already we have driven how many fewer BILLION miles this summer as a nation?

I think they don't realize that the economies of the oil importing countries can only support so high of a price before it crashes. You can't sell a product if people can't buy it. Let's just hope ours doesn't fail before theirs.

It's their very own greed that will destroy their economic empire. Yes we love our gas guzzling enviroment destroying SUVs of Death (TM) but when Jim Bob's weekly gas bill gets to be more than his monthly trailer payment even he will back off on the driving. Hell already we have driven how many fewer BILLION miles this summer as a nation?

I think they don't realize that the economies of the oil importing countries can only support so high of a price before it crashes. You can't sell a product if people can't buy it. Let's just hope ours doesn't fail before theirs.

/nods

I think they make the assumption that we'll continue to support their price hikes.

I hope they find out the hard way they have nothing else to offer the world and to push us off the oil nipple will only decimate them.

How do you see it as OPEC's fault that our devaluing dollar and "liberating" the region has caused oil price instability?

I think we're arguing that Iran, not OPEC mind you, predicting 500 bucks a barrel when demand has dropped flies in the face of traditional supply vs demand.

OPEC has long been a player in keeping the dollar where they wanted it. Oil might be pegged to the dollar but doesn't it work both ways?

This is a great thing for alternative forms of energy. Selling oil at $500.00 a barrel simply means there will be a glut of oil because no one in their right mind will continue to use oil. Go go go H20 fuel power, Wind power, Solar power, hydrogen power, biodiesel and in addition the millions of acres of sunflowers will be quite beautiful.

I think we're arguing that Iran, not OPEC mind you, predicting 500 bucks a barrel when demand has dropped flies in the face of traditional supply vs demand.

OPEC has long been a player in keeping the dollar where they wanted it. Oil might be pegged to the dollar but doesn't it work both ways?

I think the problem is that our dollar is still massively devaluing, completely out of OPEC's control.

Helicopter Ben seems dead set on taking our currency to Zimbabwe levels of inflation. If he's not lowering rates, he's giving billions in loans to prop up failing securities. These things have a tremendous inflationary effect.

So, even if demand drops a few percent, the price in dollars can continue to rise sharply.

Cut off monies to all countries and definately put a stop to lowering rates/propping up securities without forcing them to revamp.

/nods

Aye Rover, I think the insane energy costs directly led to change such as:

http://www.lcsun-news.com/ci_10277640

Which I think wouldn't have happened otherwise.

Re: Alternatives as a consequence, absolutely.

That's why I desperately hope no more concessions are granted to the oil companies. Things like increased offshore drilling are a sham. 100% using the crisis to land grab wrapped in a flag.

If we let this play out, it's going to hurt, but the free market will sort it out. Private incentive to profit will always trump any bloated government initiative. Better to take our shots now and get them out of the way.

Just in Corn.........$500 a bushel. Starve the bastards.

Of course this could be Iran trying to flex it's oilpeen and threaten the world, but still it's a valid concern.

Time to get off the black junk and let the ME turn back to the 14th century battleground that no one will care to intervene in. Every time that bush/cheney threaten to attack Iran, or impose a blockade (which is itself an act of war), the price of oil ratchets up a few dollars every time. 25% of the world's oil travels within artillery range of Iran. Now that the "west" is dickwaving about Russia vs Georgia, the EU/NATO is going to have to rethink living on oil as 40% of their oil and natural gas comes from Russia.

About 1% of the world's oil passes through the BTC pipeline, and oil prices worldwide reacted due to the RvG dispute with an astonishing nothing. No changes at all. PKK blows up part of the same pipeline inside Turkey and oil goes up a couple dollars.

About half of the price of oil (when measured in dollars) is due to the decline in value of the US dollar. About $20-40/barrel (number depends on who you talk to, but I lean towards the $40) of the current price of oil is risk premium due to threats of war. If you remember that day a couple weeks ago when oil dropped $10/bbl in one day, that was also the day that the bush administration sent a negotiator to talk with the Iranians - with no preconditions. bush could have got oil under $100/barrel with just a couple of plane tickets. Instead he wants to act like some dickwaving gunslinger, and every one in the US pays for his counterfeit machismo.

Out of curiosity, what countries are the major exporters of refined gasoline products to the OPEC nations? I know Iran has to import all of it's gasoline. Would similar price hikes on the imports of these countries have some affect?

Instead he wants to act like some dickwaving gunslinger, and every one in the US pays for his counterfeit machismo.

Because he wants the price of crude to go up then his oilman friends can make a few more dollars in their game. The best thing that could happen is let Iraq, Iran, Venuzuela, Russia all take control of their reserves and throw the Exxon-Mobils, Shell's etc out. Why do you think T Boone Pickens is doing what he's doing...because the motherfuckers grabbed his wells and he's forced into investing in alternatives whether by need or just because he figures he's gonna fuck them back...but it is a great thing for our economy in the long run and in the short also.

The end of the world isn't near just yet!

Dollar hits 6-month high against euro (http://www.iht.com/articles/2008/08/11/business/11markets.php)

Unexpected natural gas boom may ease U.S. energy crunch (http://www.iht.com/articles/2008/08/25/business/gas.php)

:D

Thank god gas prices are going down. Saw a gas station here in LA that was down at $3.95

I use this frequently.

One of the very few chain mails someone sent me that I didn't delete immediately.

This is pretty nifty. Just enter your zip code in the site below, and it tells you which gas stations have the cheapest prices (and the highest) on gasoline in your zip code area.

It! 's updated every evening.

http://autos.msn.com/everyday/gasstations.aspx?zip=&src=Netx

Dropped to $3.39 here! Yay! Funny thing though...the brand new SUV I got last year which is a gas guzzler, still remains garaged. We have five kids, so any vehicle that fits all of us is a gas guzzler! I think I have put maybe 2000 miles on it in the last 10 months...lol.

With the ridiculous gas prices, I just re-arranged my schedule and did my errands when I could use my husband's car, which gets much better gas mileage. It's now a habit that I don't see any reason to change just because prices are going down. In a way, the high gas prices have been a good thing, because it's changed my way of thinking and behaving. I would venture to guess that I am not the only person thinking this way. Of course it's a little easier for me to make these changes because I don't work.

Same here, hell even 6 or 7 years ago I parked my truck and use my Honda for daily commutes. Probably put 2,000 miles on yearly at best pulling my boat and or gear to the north worlds year round.

People are definitely driving less (12.2 Billion less miles in June) and it seems to be a trend that has been happening for a little while now (last 12 months).

The US D.O.T compiles a monthly report. Just click on the June one, there is a lot of interesting information in the reports.

http://www.fhwa.dot.gov/ohim/tvtw/tvtpage.htm

June Report (http://www.fhwa.dot.gov/ohim/tvtw/08juntvt/08juntvt.pdf)