Oil Prices at $66 per barrel, your opinions?

[RD]

Oil hits $66 a barrel, not hammering economy
By Sue Kirchhoff and Adam Shell, USA TODAY
Oil prices touched $66 a barrel Thursday as gasoline supply fears continued.
U.S. light sweet crude was up $1 at $65.90 at midday after hitting a record-high of $66. London Brent was up $1.55 at $65.54 after touching $65.66.

Adding to worries Thursday, Iran's nuclear work put it at odds with the United Nation's atomic watchdog and more U.S. refinery snags threatened gasoline supplies to the world's biggest consumer.

Earlier the International Energy Agency said non-OPEC output was falling short of expectations, compounding supply concerns.

When will it start to slam the economy?

On Wednesday, oil price turmoil spilled into the stock market. The Dow Jones industrial average, up more than 100 points earlier in the day, finished down 21 points at 10,594 amid growing concern oil could reach $70 a barrel.

The market trimmed its gains Thursday as oil surged but was still modestly higher.

"At some point, high oil prices have to matter," says David Briggs, head of global equity trading at Federated Investors. "When Joe Six Pack has to start paying $50 to fill up his tank, you have to think they will stop buying Frappuccinos and bottled water."

Even though oil prices are up more than 40% from a year ago, a number of economists say they are not yet at a level that will derail U.S. growth. The economy expanded at a healthy 3.4% annual rate April through June. Ben Bernanke, chairman of the White House Council of Economic Advisers, Tuesday said oil prices hadn't slowed the economy.

There are a number of reasons oil hasn't had a bigger impact, ranging from the fact it is a less important component of the economy than it was a decade ago to businesses' reluctance to pass higher costs on to consumers to maintain market share. Contained inflation means the Federal Reserve has been able to raise rates at a gradual, less disruptive, pace.

"Saying that higher oil prices have not increased the risk of recession or serious economic slowdown is clearly not the same thing as saying that they have not had an impact," says Anthony Chan, senior economist at JPMorgan Asset Management.

Chan points out that economic growth will be weaker this year than in 2004 and is likely to be slower in 2006, partly because of rising oil and interest rates.

Studies from organizations such as the International Energy Agency suggest a sustained $10-a-barrel increase in oil prices reduces world economic growth by half a percentage point.

Mark Zandi, chief economist of Economy.com, lists several reasons U.S. growth is above average, even with the oil pressure. The price surge is due to strong global demand, rather than supply disruptions, as in the past. Inflation expectations are low, and consumers have tapped home equity to keep spending.

While some economic models show $75-a-barrel oil could have a big impact, Zandi says the price would probably have to go higher to really hurt. But if housing and other sources of growth fade, the oil pinch will get more acute.

High as they are, oil prices have not reached the levels of the late 1970s and early 1980s, adjusted for inflation.

"We're likely to see prices continue to trend upward," says Jason Schenker, economist at Wachovia. "The biggest potential to push prices down is going to be an increase in supply, but right now supplies look pretty fixed."

Contributing: Reuters

[Charger_Fan]

Oil Prices at $66 per barrel, your opinions?

My opinion is that it's gonna get much worse before it get's better.
I noticed this morning that my little "cheap" gas place just upped the prices $.08 from yesterday's price.

[BB1]

  Time to get a smart car...   

http://www.zapworld.com/cars/smartCar.asp

[Brock Samson]

  Well, it's a concern of course, if your on a budget.
  It would keep me from driving my Skunk as a daily (which I've concidered) cause in it i use permium (or race gas) and that costs... Big Time.  These days i'm going through two tanks of gas a week in my 300 M and it gets four times the mpg as the R/T.
And, IF I was gonna sell both my vehicles and get something else, as I'm concidering... gas milage would be a factor.
So a SRT-8 is out...
So for now the Charger is a great sunday Car, and the M is a great daily...
So i'm holding...

[my73charger]

Man does this suck rocks!  it just jumped 13 cents to $2.50/gal in Grand Rapids, MN   

[gadabra]

At 91 pence/litre here in the UK this equates to approximately $5.90/gallon.
So at 10 mpg the Charger is a tad extravagant  
Still not going to sell it though...

[SirNik73]

maybe its not time to sell the Benz Diesel and it's time to make it run on french frier oil. "i'll take a bigmac and 5 gallons of oil" you think it will work? ... maybe

[4402tuff4u]

In my opinion, it's absurd how it just keep's climbing. Would be nice for "someone" to do something about it. But then again, I'm not sure anyone can do anything about it. Maybe flood the market with oil reserves  to lower the prices. 

[Nacho-RT74]

I think I'll drill under my building searching for oil... since I'm in Venezuela I think that I can find some...

WHO CARES... I don need to drill under my building.... I FILL MY TANK WITH US$2,5

MUAAHAHAHAHAHAHAHAAHAHAHAHAHAHAHAHAHAHA

j/k

[my73charger]

I think the only thing that would change the market at this point would be if the demand dropped off significantly.  That is not likely to happen as of yet.  I know its not like I am doing any joy riding on $2.50+ per gallon.  I wouldn't doubt if the price continues to go up until we plain cannot afford to drive...just my pessimistic 2 cents....

[RD]

maybe its not time to sell the Benz Diesel and it's time to make it run on french frier oil. "i'll take a bigmac and 5 gallons of oil" you think it will work? ... maybe

only costs $3,000 for the conversion kit, unless you can figure out how to do it yourself.

[RD]

I think I'll drill under my building searching for oil... since I'm in Venezuela I think that I can find some...

WHO CARES... I don need to drill under my building.... I FILL MY TANK WITH US$2,5

MUAAHAHAHAHAHAHAHAAHAHAHAHAHAHAHAHAHAHA

j/k

hey, mail us some 55 gal drums of gas, we will pay you top dollar for it!

[PocketThunder]

I think that my '89 Ram 3/4 ton "Whitey" isnt going to last to much longer as my daily driver.   14 mpg @ 200 miles per weeks is costing me almost $40 a week to comute to work.   Time to find a TDI Golf.

[my73charger]

Sad but true Pocket....

[ChgrSteve67]

It sucks to have to keep paying more and more.
In Sacramento California I payed $2.67 for Regular Unleaded today.
I really feel sorry for our boys up North.

[I removed the rest of my statements, I forgot the rules]

Sorry

[RD]

ummm.... wow     that was keeping it real.   I would love to comment, but i believe the same rules apply here as they did at the last board, i.e. no political or religious rhetoric allowed, so i will not state that I agree with you. 

[Charger_Fan]

I still want to convert my daily driver over to run on methane. It might not be the most pleasant experience to follow me down the highway, but I could sure go far!

[70charginglizard]

Opinion......IT SUCKS!

[ChgrSteve67]

I still want to convert my daily driver over to run on methane.

Where do you mount the filler hose?

If it where I think I'll stick to gasoline.

[Crazy440]

Last year the U. S. exported 268 million barrels of oil. Shockingly, according to Dept. of Energy figures, that's about equal to the amount of oil we imported from Iraq in 2001, the year before our latest war with that country began. It's also about equal to the most optimistic guesses about production volume from ANWR, if drilling is allowed there.

In other words, if we simply held onto our own oil, the United States would have no oil interest in Iraq at all.

[253862656971]

I get a kick out of the politicians who are "appalled" by the gas prices yet you never ever hear them mention removing the gas tax.  I think if there were no federal or state gas taxes then gas would be less than $1.50 a gallon.  The gov't really needs to do what Alaska did with it's oil income.  I guess they only allow a certain percentage of oil income to be spent.  The rest is invested or saved.  Alaska is supposedly the richest state in the entire US.  Maybe an Alaska resident can chime in hear and correct or confirm what I said.

[TruckDriver]

Personally, I believe our goverment is all for this. I mean, you dont see them doing anything about it. and I am sure they see this as a great way to get people to stop driving old gas hogs as well as a good way to promote hybred cars.

[Silver R/T]

didnt Bush sign some kind of deal to 'lower costs of oil' ?  most likely was some kind of bs again...

[chrisII]

ive ben driving my 94 dakota as a "commuter car" about a 45 mile round trip to work daily. it gets "good?" mileage at around 19 to 20..but when a former salesmans car, a 98 breeze came avalible at a good price through work i snatched it quick i dont really feel the pain of the gas price yet its more of sticker shock. but i realise it isnt getting better. i dont expect the breeze to get much over 28mpg but winter is coming soon and for whatever reason my dakotas mileage drops like a rock in the cold, and so does over time at my job ..the real problem in this is i will have to take inshurance off of my charger...      

[BigBlackDodge]

You know, the gas stations used to get robbed around here alot!

Now they're robbin' us!

BBD