2008, the Year of $100/Barrel Oil

As freep pointed out, the price of oil has officially topped $100/barrel.

Surging economies in China and India fed by oil and gasoline have sent prices soaring over the past year, while tensions in oil producing nations like Nigeria and Iran have increasingly made investors nervous and invited speculators to drive prices even higher.

Violence in Nigeria helped give crude the final push over $100. Bands of armed men invaded Port Harcourt, the center of Nigeria’s oil industry Tuesday, attacking two police stations and raiding the lobby of a major hotel. Word that several Mexican oil export ports were closed due to rough weather added to the gains, as did a report that OPEC may not be able to meet its share of global oil demand by 2024.

Light, sweet crude for January delivery rose $4.02 to $100 a barrel on the New York Mercantile Exchange, according to Brenda Guzman, a Nymex spokeswoman, before slipping back to $99.15.

I’m not surprised in the least that this symbolic limit has been passed (however briefly–this was just a single transaction). It’s just kind of creepy that it happened on the first business day of the New Year (along with a 200 point decline in the Dow).

We started last year with the hope that somehow we could scale back Bush’s disastrous imperialism. A year later, Bush’s policies and the developed world’s addiction to oil continue to destabilize the world. Only now, the economic impacts of those policies are taking center stage.

54 replies
  1. freepatriot says:

    Hooverville, here we come

    gonna be kinda hard to blame the Clintons for this disaster

    what WILL the repuglitards do ???

  2. bmaz says:

    Aaaarrrrgggghhhh says Captain Renault. It must be beer thirty somewhere in the world, I am going to start looking for that place…..

    • freepatriot says:

      don’t you have a football game to go to ???

      you can’t be getting drunk before a football game …

      oh, wait …

      scratch that, or please forgive and ignore that advice (hey, it worked for mushi, didn’t it ???)


      think I can’t see you in the “West Virginia” jersey, dude ???

      I’m Omni-impotent, or something like that …

      • bmaz says:

        Freep – not going tonight; I am still recovering from the Hoosier Hooligans from Indiana episode. So, I will be watching on the TeeVee with you. There are a lot more Nooners running around town than Mountaineers though; so you will be well represented.

        • freepatriot says:

          I might be suffering from “Football Overdose” by now, but I ain’t gonna quit

          this just in:

          chicken noodle network has a breaking story:

          Woman Sexually Harrassed on a plane

          man strokes woman’s hair while she sleeps

          major story developing

          in case you’re wondering, YES, it was a white woman

          only chicken noodle network could serve up shit like that then turn to the musharaf story for 5 seconds …

    • phred says:

      In college we had a tradition called Case Day. Suffice it to say beer thirty started at breakfast. Not a recommendation (particularly given your recent brush with the Oh God of Hangovers), I’m just sayin’…

        • phred says:

          Try, there is no try… Only do. Or do not.

          I did. Once. ; )

          Clearly, Yoda never played rugby. Oh, and there was a reason I was the anchor on our post game line outs. Amazing I have lived this long…

        • Neil says:

          It may have been a bit more common when the greek system was in place. The DKEs had a keg on from August to May and a beer pong table. Funny that the trustees decided to shut it all down. On rush day, a Saturday in February, beer thirty tended to start after a breakfast. I remember after a rush day lacrosse practice, a few freshman were approached by the coach who said, “I heard a few of the freshmen were drinking before practice.” to which one answered “Yea, we heard that too.” Lesson learned, ’nuff said.

          • phred says:

            Indeed, and I should point out that my exercises in stupidity in college occurred at a time and in a place where the drinking age was 18. So, while excessively brainless (albeit fun as hell ; ) it was at least legal.

            • Neil says:

              Ditto, if nothing else it was legal. If I had thought about it, my motto could have been: Anything worth doing is worth overdoing. I remember some graffiti on a bathroom stall in the science building, “Amherst made me an alchoholic” right next to
              God is dead” Nietzsche
              Nietzsche is dead” God

              That’s good to know… well, I don’t know if its good but its of interest to me. So with unexpected free time due to a forfited rugby game, and made thirsty with the anticipation of a post-game kegger, it sounds like you embraced the opportunity to make a dent in the 50 kegs. Ouch. Bet you didn’t get much work done Sunday either. I imagine it was that lesson that turned you away from that particular excess.

          • emptywheel says:

            Oh, trust me, it was still common, and I was often invited. I just didn’t partake in that particular excess.

            Also note that I was at Amherst for 1) the period when the school was winking at money laundering into beer (in the post-frat days they wanted to make sure we had a social life, and I turned 21 before they really started carding people for the seemingly unlimited free beer), and 2) the beginning of the yearly party, “hedonism.” My last year–in which I was one of the first people to show up at the party after MoHo blew us off at 7 AM for our rugby game–we went through 50 kegs, which takes some doing with 1400 students.

              • phred says:

                7050 beers / 1400 students = 5 beers per student. That’s positively moderate ; )

                Neil, or as Oscar Wilde once said, “nothing succeeds like excess”. That’s what youth is for though, eh? Then we get to be all stodgy later… I’m well into stodgy, now I’m working on curmudgeon. Oh to be like bmaz ; )

  3. merkwurdiglieber says:

    Clinton implemented most of the economic changes the Republicans wanted,
    he was not as militarily adventuresome as PNAC wanted but bought in to the
    NAFTA, CAFTA globalist consumer meme as any Republican ever did. The Bush
    WOT has destroyed the value of petrodollar that underpins the Ponzi scheme.
    The entire American Establishment and it’s academic brood houses for the
    likes of Zelikow, Rice, Boucher, Addington, et al, bears responsibility
    for the collapse oncoming.

    • emptywheel says:

      I think Clinton deserves some of the blame. Basically Clinton took over as the previous short-term fix to the Ponzi scheme (globalization that devastated non-oil commodity producers and exposed a lot of poor people to teh world labor market) began to fail (Once you let Asian tigers with more engineers per capita in, the US is going to get increasingly less competitive over time). He propped it up again by turning our economic system into a house of shaky finance vehicle cards. While he doesn’t deserve credit for the mortgage crash, he does deserve credit putting people’s retirement into the stocks (basically creating new consumers for stocks in an oterwise increasingly less competitive market).

      That said, short of a leader who is going to call a Ponzi scheme a Ponzi scheme, we’re not going to get out of this problem anytime soon. Oh, if Gore had run….

      • merkwurdiglieber says:

        Right. We won’t get out of this problem, we will go through it, just as
        my parents went through the depression and discovered the rightness of the
        New Deal. Most people pre 1929 were happily Republican. It took the brutal
        schooling of the depression to make for a more Democratic electorate that,
        fortunately for us, found a leader in FDR. We are in a real bind here.

        • emptywheel says:

          That would be a reasonably good outcome for a terrible course. Of course, there’s a worse outcome–the country could turn to some worse form of govt.

          One of my biggest concerns with Huckabee surging is it plays to the worst instincts of American populism.

          • bigbrother says:

            I have no fears just reality and dealing with the hand dealt. There is great opportunity to adjust the economy and the energy crunch. Tools are available fir those with political will. I would expect Al Gore is appointed to an energy coucil formed by the next administration.
            The trade issues will need to be dealt with. John Edwards has the tools, the will and the support of both sides of the aisle. American consumer economy cannot function without well heeled consumers almost all side agree. The malls and outlet will shut without consumers.
            Things can be fixed we are an energetic nation that has been focused on enriching the rich while they fritter away the “essential capital” they demand.

            • Mr.Cbl says:

              7 years of decline of the manufacturing base is far more than political will can fix over night. Our manufacturing might was built on GENERATIONS of federally funded research, affordable education, industry with the will to pay decent wages and keep the keepers of the institutional knowledge until the knowledge was passed on to the next generation, build and maintain ifrastucture, not to mention spend the time and money to build an orginization that could compete and dominate on a global scale. That and so much more is GONE. Alternative energy is great as a talking point but please don’t believe that we can crank it up like we used to.

              • freepatriot says:

                whaaaaaa ???

                7 years of decline in the manufacturing base ???

                try 40 years of decline (when did the auto industry in America die, 1972 or so ???)

                and “generations of government subsidized research” ??? what “generations” did that happen in ??? (if you’re referring to the space program, you might note that the research happened right before the decline started)

                even after 7 years of bush, we’ve got the best developed infrastructure on the planet, and from what I’m reading at DKOS, solar energy is on the way to overwhelming the petro energy industry (something about making solar cells with an inkjet printer)

                so things don’t look so bleak

                at least not as bad as you think …

              • BayStateLibrul says:

                Look at the bright side, besides $100/barrel oil, we’ve got plenty of Collateral Default Swaps (CDS) or Collaterized Loan Obligations
                (CLO’s) to fiddle during the credit cruncher.
                Make sure your Structured Investment Vehicles (SIV’s) are in tow.
                Any reproduction, manipulation, or other use of these terms, without the expressed consent of the Wall Street Journal is prohibited…. not valid in Texas.

              • readerOfTeaLeaves says:

                Institutional knowledge = irreplacable.
                People have to know what the machinery ’sounds like’ when it’s functioning properly; that whole ’sixth sense’ level of real knowledge has been eaten away the last years.

              • behindthefall says:

                Mr.Cbl January 2nd, 2008 at 11:01 am
                In response to bigbrother @ 12

                7 years of decline of the manufacturing base is far more than political will can fix over night. Our manufacturing might was built on GENERATIONS of federally funded research, affordable education, industry with the will to pay decent wages and keep the keepers of the institutional knowledge until the knowledge was passed on to the next generation, build and maintain ifrastucture, not to mention spend the time and money to build an orginization that could compete and dominate on a global scale. That and so much more is GONE. Alternative energy is great as a talking point but please don’t believe that we can crank it up like we used to.

                Oh dear. You see it that way, too?

                Re who’s responsible: probably every Chief Executive since Carter. Remember the scoffing when he said something along the lines of “freeing ourselves from our dependence on oil is a moral obligation equivalent to a war”? Now that I try to remember what he said, I don’t see where ‘war’ entered into it, but the effect at the time was to evoke derision, which probably scared off anyone else from broaching the question. Not that Ronny ever would have, or Bush 41. And Clinton liked the middle-ground too much.

          • merkwurdiglieber says:

            Huckabee has too much of the A Face In The Crowd about him for comfort.
            I remember a line from Didion about the 2004 election that she felt that
            the people had lost the democratic instincts for democracy to function.
            A “strong leader”, I, Rudy type is also a threat, but you have it, Huck
            is the “I’m a cracker, you one too, gonna take good care of you” type that
            is more likely to emerge.

        • sona says:

          Keynes, in reference to capitalism in his General Theory of Employment, Interst and Money, described capitalism as a system founded on the belief that that the worst people with the worst of intentions can somehow generate the best outcomes for the greatest number of people. Not the exact words, but a recall from a long time ago. May have to dig into that tome to find the quote.

      • klynn says:

        Agreed…I’m almost to the point of considering a national write-in for Gore…

        In many public places in Columbus,Ohio I’ve begun “election” conversations in groups of 50 or more people with mixed backgrounds politically. Everyone still comes up “Gore”, especially Republicans and Independents… H. Clinton just tanks in these conversations…Edwards seems a “possibility” and NONE of the repugs even registered in these conversations. These conversations have happened in very public places and were totally spontaneous.

        $100 – no surprise there. It’s just beginning…

        BTW, thought you might like to here this O/T. I was with my family at OSU rec center yesterday. Hundreds of students were gathered around all the plama screens in the Rec Center watching the Rose Bowl. Loud cheers rang out at the end for Mich. Yes, Buckeyes were cheering LOUDLY for that team up north. It was pretty cool. All agreed, Carr deserved to go out in such a great way…

        • emptywheel says:

          Yup, and we’ll be rooting for the Buckeyes on Monday.

          Carr looked like a superb coach so long as you guys had Cooper around. But Tressel, he’s a great coach.

          • klynn says:

            I did a great deal of lurking yesterday and bit my lip as I read… “Did bmaz forget his promise?” I wondered…

            So, I stepped away from the key board and chalked the comments up to arm chair quarterback talk, pretzels and beer — just hoping you would keep your promise once a new day dawned!

            See what a day can do?

            Thanks bmaz. Now those fingers weren’t crossed when you typed that promise?

      • RockPaperScizzors says:

        Clinton was a good republican as were his architects; Greenspan, Rubin, Rahm Emmanuel.
        1.NAFTA; goodbye american jobs
        2.China WTO Agreement; your welcome Walmart, goodbye american industry/jobs
        3.Repeal of Glass-Steagall Act 1933; hello subprime mortgage crisis
        4.Telecom Reform Act; eliminated major ownership restrictions for radio and television groups.
        5.Death penalty expansion
        6.Extraordinary Rendition

        • merkwurdiglieber says:

          Clinton empowered Murdoch by your #4. Murdoch operates as a shadow
          government if you don’t cooperate with his business/political agenda, acts
          as a Ministry of Information if you do. Bad business all around.

      • readerOfTeaLeaves says:

        Agree, but with this point to somewhat neutralize: the neocons baited, entrapped, and hounded Clinton so that he was dreadfully constrained.

        Just read the chapter in Unger’s book “Fall of the House of Bush’ last night that details how the US ‘land for peace’ swap in Israeli-Palestinian conflict was derailed by Lewinsky. Literally, Ken Starr brought charges just as Netanyahu was in DC to be berated and cajoled by Clinton. Enough to make a person put on a tinfoil hat 8(

        Yes, Clinton didn’t do enough.
        But powerful interests kept him tied down, plus he lacked some good staff in key areas.

    • emptywheel says:

      Well, it is competitive right now, according to some. But it’s a lot harder to prove that when Bush’s friends are getting such a big helping hand from their former colleagues Bush and Dick.

    • readerOfTeaLeaves says:

      Someone I know who’s a farmer (triticale, lentils, wheat, corn) over the holidays commented that ‘ethanol is the best thing to happen to farming in memory’. I gather the energy price tipped in favor of biofuels at between $65 and $75 per gallon (in my part of the U.S.) The thing is, the farmers need the biofuels to work their farms; and biofuel payments are the first good news they’ve had in a long time.

      But the fed gov’t still enables oil, gas, petrochemicals via tax structure.

  4. TheraP says:

    Apologies for going back to the “topic.” *g*

    Regarding oil and wealth, did anyone notice the formation of the Middle East common market yesterday? 6 wealthy oil states:

    The wealthy six Gulf states have taken a step closer together economically with the formation of a common market.

    The Gulf Co-operation Council states, whose wealth is largely based on oil, say the move will give them a stronger negotiating position internationally.


    The nationals of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates are now to be seen as equal, economically, whichever country they chose to live in.


    And another financial story (NY Times frontpage) shows how the wealthy here are the ones most hit by the financial problems of 2007.

    Worth a read: http://www.nytimes.com/2008/01…..ts.html?hp

  5. merkwurdiglieber says:

    Best developed infrastructure on the planet? What was that bridge collapse in minneapolis about? The thinking man is for Kefauver. Think
    some more and vote for Gore.

  6. klynn says:

    EW, bmaz,

    Allow me to correct myself, the students were watching the Capital One Bowl and awaiting the Rose Bowl broadcast.

    Great job by Carr.

  7. mainsailset says:

    Breaking: DoJ to launch criminal probe of CIA tape destruction…name a special prosecutor.

    TPM, Raw Story & Google Leads

  8. Neil says:

    I walked into Russell Liqours with my older brother and sister two nights ago. We went to buy marsala wine to make a delicious New Year’s Eve dinner, chicken marsala with porcini mushrooms and marsala wine sauce, etc. I held the door open as they entered and said in casual voice “I haven’t been in here since I was 16.”

    • BayStateLibrul says:

      Memories. We used to hang around the Townhouse in Belchertown on
      Thursday nights. Is it still around? Weekends, we were at 336 North Pleasant Street (Zeta Nu)

      • Neil says:

        Yea, the Townhouse is still there. I drove by it on my way back to happy valley from Boston last fall.

        We went to Alpha Delta Thursday – the frat behind the Harlan Fiske Stone stone, near Hastings.

        Is Zeta Nu still there or is it one of the three frats that were raised on the right side of N Pleasant heading toward UMass? What was the name of the frat made of white brick on the left side of N. Pleasant heading toward campus from town? I had some cutter friends (ARHS) who were members. I think it became the Hillel House eventually, doomed to closure resulting from chronic excess.

        • BayStateLibrul says:

          I’m not sure of ZN… last I knew it was being converted to other
          uses (could have been demolished) … The other frat could be QTV…
          Gee, I need to attend next year’s reunion…

      • Neil says:

        Yep Russells and Jerry sp? who owns and operates it. He looks young for his age.

        Is AM-CHI still there? I didn’t notice. There’s a good bookstore and Newberry comics, and a reasonably priced italian restaurant with nice seating on the second floor. Barsie’s is gone! Judies expanded in its space.

  9. Neil says:

    The price of a barrel was below $25 as recently as 2003 and, almost unimaginably, below $11 in 1998, a time when there was a glut in the world oil markets.

    Booming economies in recent years have led to more consumption of oil-derived products like gasoline, jet fuel and diesel. Political tensions in countries like Nigeria, Venezuela and Iran have threatened world supplies, while important fields in Mexico, the United States and other countries are aging and producing less.

    Big oil companies, though flush with cash from record profits, are having trouble finding promising new fields to increase supplies. Newly found fields in the deep waters of the Gulf of Mexico and off the coast of Brazil will take years to develop.

    The Bush administration has further tightened supplies by announcing that it would add to the nation’s Strategic Petroleum Reserve in the coming weeks, a move that some leading Democrats have urged President Bush to call off to ease the tight oil market.

    Investors and hedge funds have contributed to the run-up in prices. Oil, like other commodities, has become a perceived safe haven for traders who are skittish about the weakening dollar and fallout from the American credit crisis.

  10. Neil says:

    Krugman on the economy:

    While we dodged a bullet, however, there are between one and three more bullets headed our way.

    First, housing has further to fall. There’s been a further plunge in building permits and starts since the credit crunch began in August; these take a while to be reflected in construction spending, so there’s a fresh hit to GDP definitely in the pipeline. Even now, residential investment as a share of GDP is only down to its long-run average; you’d expect it to fall below that average for an extended period.

    Second, there are hints of a slump in business investment, especially commercial real estate, which seems to have had a bubble of its own and is feeling the effects of the credit crunch.

    Third, there are hints that consumers have finally started to cut back. On the other hand, exports still seem to be growing fast. So I’m actually uncertain about where things go this year.

Comments are closed.