Price of oil

[LibertiORDeth]

I have heard many ideas on what is causing the price of oil to be so high, and none of them make complete sense to me. You can't blame inflation, since everything else hasn't risen as much as oil, and what has is mostly BECAUSE of oil, not inflation, although that is part of the problem. Other people say the big middle eastern gurus and countries are making all the money, although would that not determine only the price of oil per barrel? If so, that can't be the problem, since to my knowledge oil hasn't gone up enough per unrefined barrel to cause a 300% increase over the last few years.

 

[ItsTime]

what the cost of everything made in the USA has gone through the roof. Inflation is being artificially controlled through HUGE imports from China and Mexico and cheap and sometimes illegal labor. All they have done is replace American goods with Chinese/Mexican and american workers with outsourcing and cheap imported labor. It is smoke and mirrors.

 

[RSLudlum]

You can't blame inflation, since everything else hasn't risen as much as oil, and what .

Oil is traded on the global market so the the value of the dollar comparable to other currencies has alot to do with the price of oil, but as you stated it isn't the only factor.

Watch this youtube of the hearing RP called on the value of the dollar and price of oil:

http://www.youtube.com/watch?v=hq4IagUK0p8

 

[ultimaonliner]

IMHO the major reason for the price of oil increasing is truly related to the fact that supply has not been increasing year after year while demand has been escalating.

This demand is not only related to China's increased consumption the the domestic US consumption. After the 70's, demand in the US decreased significantly because of "demand destruction" with the high prices of oil in the 70's.

Demand has now picked up domestically and significantly internationally.

This also coincides with the falling value of the US Dollar.

Speculators are not to blame for the price of oil IMHO. Nobody is stockpiling oil. It's being bought and used.

Oil is correcting now, but IMHO oil is still in a secular uptrend.

 

[Imperial]

Oil is the commodity most in demand, generally, on a global playing field. So, inflation affects it with a supply and demand of dollars similar to how supply and demand works for oil, if that makes since.

More dollars, same amount of oil equals higher price of oil.

Less oil, assume constant dollars, equals higher price of oil.

Every other factor is a subsidiary of these two basic facts, whether the economy starts losing confidence or war/geopolitics threaten oil supply.

 

[LibertiORDeth]

IMHO the major reason for the price of oil increasing is truly related to the fact that supply has not been increasing year after year while demand has been escalating.

This demand is not only related to China's increased consumption the the domestic US consumption. After the 70's, demand in the US decreased significantly because of "demand destruction" with the high prices of oil in the 70's.

Demand has now picked up domestically and significantly internationally.

This also coincides with the falling value of the US Dollar.

Speculators are not to blame for the price of oil IMHO. Nobody is stockpiling oil. It's being bought and used.

Oil is correcting now, but IMHO oil is still in a secular uptrend.

This makes sense. Is the oil cartel suppressing new refineries/drillers in order to keep the price up?

 

[pacelli]

If we want cheap gas, we need more drilling here in the US.

 

[Vaio]

Better question to ask should be: What happens to the Middle East when Saudi Arabia runs out of oil by 2050?

cuuuz we ain't gonna be off oil by then . Sure, we might have cars that run on carbon dioxide or tennis balls, but you ever stop to think about all those things that require petrochemicals like...PLASTIC :O Hell, without plastic, we wouldn't even have cars, computers, modern health care, TV's, satellite radio, and yes, even bottled water. I'm sure I'm missing a few hundred thousand other items not listed, but I think you get the point.

By the way, 2050 is a rather generous deadline. By the rate of consumption of India, China, Russia, and Latin America, combined with America consuming 11 times the rest of the world (not necessarily in energy though), and I'm sure that'll trim off a few decades from that estimate. Considering China really doesn't innovate ANYTHING and just steals technology and really doesn't give a hoot about its environment, oil consumption will drastically accelerate in the coming years. They won't switch to "alternative fuels" or energy that isn't petro or coal based. If we're invading countries based on their resources, what happens when China surpasses us in GDP and just launches a pre-emptive strike on our lower 48 states' ban on drilling that's been in place for decades?? All that extra petro under ground looks damn tasty to the communists.

Oil will never go down to what it was under Clinton. OPEC already said they won't let it go below $60/barrel, and judging by the information I listed above, there's no reason for oil to drop. Inflation is driving it up, along with lack of supply and massive explosions of consumption worldwide. Now go out and buy a $5 million windmill to power your torrent server and whip out your hybrid.

 

[surf]

Geopolitical risks. i'd bet these have added a good 20 - 30% to the price of a barrel of oil.

i have heard that the threat of a blockade on Iran and how (with OUR help) this threat has diminished slightly was one factor in the recent negligible drop in oil prices. that, combined with Iraq "standing up" and the implication or hope that the US will "stand down" (as the rhetoric goes) has also helped ease the pressure.

i'd say the rise in oil is 30% due to geopolitical risk, 35% due to dollar devaluation, and 15% due to increased demand (China, India, etc.) with the remaining 20% split among uncertainty, lack of supply, and other factors like the cost of alternatives (ethanol, etc.)

my .02

 

[eric_cartman]

it's mostly inflation. in combination with falling supply, increasing demand, speculators, and tensions in the middle east...

but it's basically all inflation. the prices of other commodities have also gone up a lot. gold went from 250 to 800 (over 1000 at one point). silver and platnium are also way up. natural gas went from $6 to over $13 at one point. corn, wheat, soy beans, all the base metals like copper, zinc, etc. they're all skyrocketing. granted, we've had huge pullbacks in most of these commodities (including oil)... but the inflation monster is alive and well ,and it will continue to drive up prices of all commodities including oil

 

[rvkpa]

I'm a firm believer that we will find a technological/sociological solution to peak oil. However, I have zero faith in our economy. Another poster above put it best: "Smoke and Mirrors."

 

[ThisCharmingAzn]

has anyone heard of the guy who found out how to burn salt water?

www.youtube.com/watch?v=Tf4gOS8aoFk

i hope thats the right link. im at work at youtube is blocked. talk about alternative energy? lol, theres plenty of and we won't be running out anytime soon. im not entirely sure how it works, but it has something to do with polarizing the water molecule with radio waves and releasing hydrogen gas, which is what really burns.