China's influence and oil no longer priced in Dollars

If oil is no longer priced and traded exclusively in $US then this would have a big impact on the dollar. The daily global consumption of oil is about 80 million barrels; at about $70 a barrel that is about $6 billion per day. If you reduce demand for $US by that much every day, then you very quickly run into massive over-supply.
I believe this will be a process that gradually increases in speed, but I belive at this stage it is inevitable. The most powerful raw commodity consumers and producers are all paving the way for a new reserve currency, and all the US is doing is giving them more reason to get on with it.
 
Potentially yes, but it will also have the effect of making US goods a lot cheaper to foreigners, causing an increase in demand for them. The problem is, that the US is no longer a producer nation and a lot of what they do produce is not really in demand abroad, e.g. cars.
The big question is how high will inflation go?
 
The Saudis and Russians are denying that any such talks have taken place. Obviously, we all believe what the Russians and Saudis tell us. :rolleyes:

The last 2 paragraphs of that article sum up for me what is wrong in this world.
 
i would believe it has been taking place. china have openely commented that they will slow down their purchases of us govt bonds. they are also tired of oil being so volatile cos its priced in USD
 
it depends on what currency that the oil would be priced in after the dollar.

obviously the dollar's value would decline and the new currency i.e euros would gain dramatically.
 
It would be disastrous for the U.S. if oil wasn`t priced in dollars ,or they weren`t the ones doing the selling. I`m talking about middle east oil and african oil.THAT IS WHY the U.S. has such a military presence in these areas trying to ensure that U.S. companies will be the major beneficaries of ever more expensive oil, whether its sold in dollars or euros or yen.Most manufacturing and jobs have gone to asia and asia in turn rely on western markets to sell their produce.Of course the rich companies and individuals benefit more than poorer people who have lost their jobs.This arrangement may seem a bit unethical....wherby the west tries to control the resoucres and gets asia to buy them for their exports and also gives a poor deal to people in the resource rich countries.Ireland is involved in this....with many irish people working for multinational companies and also we have military in CHAD and its well known that Sudan and CHAD are rich in oil.My point is..that it is naive to expect the euro to become superstrong ,even if oil is traded in euros....uncle sam won`t be left short....not when it has to use its military and oil companies to secure the oil for the west.
 
This arrangement may seem a bit unethical....wherby the west tries to control the resoucres and gets asia to buy them for their exports and also gives a poor deal to people in the resource rich countries.

This is not entirely correct. Asian countries buy most of their oil directly from the oil producing/mining companies, which in the Middle East are Middle Eastern (often state owned) companies; it is large Asian oil refining companies that take delivery of oil just like western oil companies. However, China for example has such a large demand for oil that it often cannot secure enough directly from oil producing countries and then resorts to buying on the open market, where of course western oil companies come into play.
What the large western oil companies do is secure access to certain amounts or percentages of the pumped oil. And the presence of western military in the region is there to 'protect' those oil pumping operations and 'encourage' certain deals between the countries and oil refining companies.
 
This is not entirely correct. Asian countries buy most of their oil directly from the oil producing/mining companies, which in the Middle East are Middle Eastern (often state owned) companies; it is large Asian oil refining companies that take delivery of oil just like western oil companies. However, China for example has such a large demand for oil that it often cannot secure enough directly from oil producing countries and then resorts to buying on the open market, where of course western oil companies come into play.
What the large western oil companies do is secure access to certain amounts or percentages of the pumped oil. And the presence of western military in the region is there to 'protect' those oil pumping operations and 'encourage' certain deals between the countries and oil refining companies.

Yep, and long may it continue. If China becomes the dominant player in the world there's no way they will behave as well as the Americans. That can be seen clearly in how they are acting in African states that have opened their door to Chinese oil companies.
 
leak from the IEA yesterday saying that peak oil is basically upon us and they didnt want to annouce it cos it would crash the stock markets. i dont think it would to be honest as the value of oil companies would jump my many many multiples over night and this would prop the indices up
 
leak from the IEA yesterday saying that peak oil is basically upon us

Isnt "peak oil" just a media invention. If you are saying that we've reached peak oil, then you are essentially saying that there is no oil left in the world that isnt currently being tapped. What a load of rubbish - there's loads of oil in the Atlantic, just at present the technology isnt there to fully exploit it. As technology improves, this will be tapped.

You are also saying that oil usage will not change. I'd say that it's near certain that electric car technology will improve at a similar rate to the way mobile phone technology improved between the 80s and 90s. Where there's a demand, the technology will improve more rapidly than people imagine.

We could end up in a situation whereby in 20 years time, nobody is interested in oil and the middle east is bankrupt.
 
Isnt "peak oil" just a media invention. If you are saying that we've reached peak oil, then you are essentially saying that there is no oil left in the world that isnt currently being tapped. What a load of rubbish - there's loads of oil in the Atlantic, just at present the technology isnt there to fully exploit it. As technology improves, this will be tapped.
No, peak oil is based on geologic science. However, like global warming it is not an exact science and whether you believe in it is up to you.
What peak oil means is the following: at some stage the supply of oil will not be able to keep up with the demand, as no matter what you do, you cannot extract more than is practically possible restricted by costs.
The reason certain oil reserves are not currently tapped is not because the technology doesn't yet exist, but rather that using that technology is too expensive, i.e. retrieving one barrel of oil costs more than the market price of that barrel.
Peak-oil does not mean the end of oil, but the end of cheap oil.

You are also saying that oil usage will not change. I'd say that it's near certain that electric car technology will improve at a similar rate to the way mobile phone technology improved between the 80s and 90s. Where there's a demand, the technology will improve more rapidly than people imagine.

We could end up in a situation whereby in 20 years time, nobody is interested in oil and the middle east is bankrupt.

Of course oil usage is changing, the problem is that oil usage is going up. Of course electric car technology will improve, but the electricity still has to be generated. And if the amount of electric cars increases, so does the demand for electricity, resulting in higher electricity prices making oil more attractive.
The scientific world is split between those that believe we've passed peak-oil, those that think it is imminent, and those that think it is about 10 years out. The big question is whether electric motor and battery technology can improve fast enough AND whether roughly 800million motor vehicles can be replaced fast enough.
And even if this happens, electric motors and batteries require huge amounts of limited resources themselves.
 
Peak oil refers to the time when extraction of oil, and hence consumption is at its maximum.As oil is a finite resource,this has to occur or has already occured.A year ago oil was 150 $ a barrel before the global recession which brought the price down.It looks like we may have lots of future volatility in oil prices.Traders know that oil demand/supply is very tight and any upturn in the economy will see a surge in the price...which will make it too expensive for consumers and companies who will cut back and we will have another recession which will force the price down...leading to lower oil prices and the scenario starts all over again.
The truth is, that even as China and western countries compete for oil supply...at some time oil will become prohibitively expensive as the supply just isn`t there in anything like the amounts required.Then people will have to learn to live with a lot less fossil fuels to power their lifestyle.Personally I can`t see how everyone could have an electric car.How will all the electricity be created?.Most people will have to walk or get on their bike.
 
How will all the electricity be created?.

Hydo electric power and nuclear power plus some renewables such as wind, wave. None require oil.

Remember the 80s when mobile phone batteries were similar size and weight to car batteries? And they'd only power the phone for a short time. Within 10 years, the batteries were down to a few grams in weight and powering a phone for days. When there's a market, technology can react very quickly. I believe this will happen with cars - if oil were production were to stop today, within 10 years, we'd have electric cars that are much faster and cheaper than petrol cars.
 
peak oil has not happened and will not happen for some time yet.

we have been running out of oil for the past 50 yrs, its always exxagerated
 
Hydo electric power and nuclear power plus some renewables such as wind, wave. None require oil.

Remember the 80s when mobile phone batteries were similar size and weight to car batteries? And they'd only power the phone for a short time. Within 10 years, the batteries were down to a few grams in weight and powering a phone for days. When there's a market, technology can react very quickly. I believe this will happen with cars - if oil were production were to stop today, within 10 years, we'd have electric cars that are much faster and cheaper than petrol cars.

Nuclear power relies on uranium which is also running out.Even nuclear power and hydro and renewables will not be enough to power our homes and factories never mind providing power for electric cars for everyone ...maybe 1% of the amount of the cars on the road now.
I find this comparison between mobile phone batteries and car batteries a bit silly.We already have electric cars which are very expensive to buy and run.There is no guarantee that technology can solve our problems that will arise as oil runs out. I mean scientists have been working on possible solutions for at least 20 years and have very little progress made.
 
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