Crude oil: OPEC cartel? Speculation? Unlimited demand?
Summary: I am not sure there is a simple explanation for what's happening with crude oil prices. As with any unprecedented run-up in price on anything from Enron stock to tulip futures, there is always a mix of greed, speculation, widespread fear or eagerness, supply issues, etc.
I am not sure there is a simple explanation for what's happening with crude oil prices. As with any unprecedented run-up in price on anything from Enron stock to tulip futures, there is always a mix of greed, speculation, widespread fear or eagerness, supply issues, etc. Please note the price of air and water have not radically altered because generally we believe them to be in plentiful supply.
Finally, there's been some exploration of the financial rigging behind the full sails that carry the ship of oil-price into ever new waters. Low and behold, there's been massive de-regulation in the US, allowing ever more wealthy players to get into the crude oil futures speculation business.
Fantastic short-term gains to be had right now. Long-term the high oil price is driving more and more investment into alternative energy tech, thereby possibly hastening the decline of the oil industry's economic stranglehold on the planet. You have to savor the ironies where you find them.
Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.
Talkback
Why is Crude Oil Price so High?
"Why is Crude Oil Price so High?"
but you can't equal the brokers with greedy OPEC
All the money they make on NYMEX are in good hands here and making the America more powerfull. ;)
????
The Dollar, more than just inflation.
is the only way to keep US economy relevant
To do that, in the short run devaluating the currency works great: cheap labor in the states and foreign exporters and lenders getting the shaft on existing contracts.
In the long run the effects are devasting:
increase prices on commodities (like oil), and unwillingless to lend money and invest in US from abroad.
Since this administration is closing to the end soon, they use this last buble of air and pass the cost on the next government.
RE: Crude oil: OPEC cartel? Speculation? Unlimited demand?
You're just saying what quite a few people believe...
being labeled unpatriotic towards the war.
If one good thing can come out of this, it's that alternative
forms of energy are being looked at more seriously now.
Unfortunately, it takes situations like this to make it all
happen.
You're big on > symptoms < only
OPEC is made up of the same folks today as it was years ago. They =USED TO= treat us preferentially and with kid gloves, selling us the cheapest crude on the planet, to the envy of all. You do recall this, right? As time went on, we turned our M.E. client state we carved out (Israel) into a nuclear powerhouse right in their midst, with practically unlimited financial bankrolling, all courtesy of Uncle Sam (my tax dollars and yours). This goes on to this day.
A lot of the high-tech and expansion allowing "incendiaries" we've been providing Israel for decades end up getting lobbed on Middle Easterners' heads (the untold story, since you know the other "inbound!" side all too well). So as time went on, the OPEC boys got frustrated with the Americans they had for so long treated deferentially, and with remarkably golden gloves.
Then as we brought our invading armies to their part of the world, to remake their corner of it in our convenient image, they got further frustrated. The more zealous and reactionary of them lashed back directly, no longer aiming their anger at the tail (Israel) but at the head (USA) of what they saw as an insatiable dragon. And our reason for meddling in their affairs, and destroying those we deemed "unworthy"? Why, to protect the sacrosanct interests of Israel and Big Oil. Period. Only it backfires now and again, doesn't it? Yet plenty of Yanks keep waving the flag, while wrapping themselves in deluded righteousness.
This is your so-called "war against terror," synonymous in its mislabeling as were those mysteriously abstract "weapons of mass destruction" (talk about vaporware), which ironically, only WE and our pals in ISRAEL possess in reality. Funny, isn't it? The way we choose to see and then label things. And so we Americans wasted a ton of money and a lot of young men's lives to dispatch with Saddam and his regime. And what do we have to show for it? 4000+ dead G.I.'s, gas prices scaling the stratosphere, and a crater-ridden Iraq in far more unstable shape than when Hussein ruled it!
This is beyond industrializing the entire planet as quick as we can (c/o our friends, the international capitalists), so EVERYBODY overproduces and craves oil. We dare not forget the massive populations of the third world nations, to include China and India, thus making crude more scarce - and costly - to distribute to all in need. The junkie versus dealer principle in full and unholy bloom.
As for the capitalist speculators, they are a "legally" criminal class who serve no function but to leech off of legitimate enterprise, and the hard work of others. They fuel the price of crude even more than OPEC does. Speculation should be outlawed, just as unregulated usury was ages ago!
As for us not being able to tap the largest oil reserve in the world in Alaska, wake up! This has little to do with Greenpeace, which at best is but a bitsy and insignificant flea in the government's ear. The main reason we resist tapping it - Republican and Democratic led administrations alike - is because these constitute STRATEGIC RESERVES. Meaning, our last assured draw, and the last go-to we have as a nation. Better to tap every other source and deplete the other guys' holdings before we hit our own last 'ace in the hole.'
But since we are all slaves to oil now and are not about to change our grease slickened ways, we soon will have no choice but to exploit these caches. If coal and nuclear energy alternatives could be more effectively tapped, we may not even need to pull from those life-sustaining reserves. This is more where Greenpeace (et al) raises their over-reactive ruckus far more detrimentally (and eventually will be ignored, as things get more bleak for all).
Ok, there's the other side to your original soapbox transmission, this time from the smog of SoCal. Don't get too rapped up in that red, white and blue robe. A lot of it amounts to bull these days, especially in the modern era where this country hardly resembles the America-first, debt-free promise it once was. You can thank the Feds, international financiers and corporate raiders by the score for a lot of that. Money grubbers owe no allegiance to anything except jack upon more jack. Capitalist heroes, ha! More of the joys and fallout from rampant and uncontrolled corporate globalization.
Oil price
Glad to see some aren't fooled
And let them lose their shirts (the speculators)
If all the US companies said we will sell all of OUR oil at $70/barrel, they would sell every drop and you can bet OPEC would come down dramatically. Of course they won't, they are powerless and have to go with the flow.
Long term, my company, in an effort to go green, it is no corporate policy to allow 3 days/week telecommute. It is working, even at 10AM, you can get parking close to the building. Large SUVs are simply not selling, and they are killing their own long term market. I have seen 5 smart cars (South Texas) in the last few months. I have never seen one before the start of this year.
Yes, the pinch is hurting all of us now, but long term, we will break free, and again, when there are no more greater fools, we will see the ultra wealthy take a beating.
TripleII
P.S. I am down to less than 1 tank per two weeks of gas, when the price drops again, I'll stay at that level.
...
Those smart cars
than what you got in small cars 30 years
ago. Back then a Rabbit, or Horizon, or
Corolla all got over 40 mpg on the
highway.
Today's cars, on average, weigh about
40 to 50 percent more than the same
sized cars of 30 years ago.
This ridiculous Smart For2 weighs 1800
lbs and has a 70 hp engine. A '75
Rabbit weighed 1900 lbs, had a 71 hp
engine, was fast as anything and had
FAR more space in the car. It was 50
inched longer than the For2.
The Smart is rated at 33/41 mpg. The
75 Rabbit was rated at exactly the same.
I had one. The mileage rating was
accurate.
Ah! Progress!
I figured higher.
With telecommuting, being more conscious about consolidating shopping, driving a little slower ( ;D ), I have probably cut my consumption in half, meaning overall, I have to thank them for jacking the prices up so I save money (back when it wasw $2.50/gallon).
TripleII
Smart Cars
The price speculation on oil is "managed" through NYMEX which is a thoroughly AMERICAN institution based in New York City. Of course, Saudis can not only only sell crude, they can then use the American dollars and European Euros they collect to speculate on the oil futures, and have plenty left over for Bin Laden or whomever they choose to have fight their battles for them.
RE: Crude oil: OPEC cartel? Speculation? Unlimited demand?
RE: Crude oil: OPEC cartel? Speculation? Unlimited demand?
Solution ? USA to reduce consumption drastically.
RE: Crude oil: OPEC cartel? Speculation? Unlimited demand?
People tend to justify the high oil consumption to high GDP. But then while GDP is important, the content of the same is more important in the case of oil consumption which is more related to manufacturing activity as compared to services. The share of manufacturing in GDP od USA is only to the extent of 10 - 12% as much of manufacturing shifted away to China and other developing countries.
In this situation, people as well as Govt. should accept very high oil prices with a view to drastically cut down consumption which will increase the gap between availability and demand.
When Saddam was in power, he made an offer to USA by which he offered oil at low prices to USA in return for help in getting rid of sanctions. But then the hawks in Bush administration like Cheney went ahead with their agenda of capturing Iraq in the hope of getting oil at zero price (they wanted to steal oil from Iraq) and hence the cooked up intelligence reports and the war. This war has increased the oil demand and also the uncertainity over supply. Further talk of Iran war is compounding the crisis as the total supply is now at 85 million barrels per day which is equal to the demand of 85 million barrels per day. Iran war is bound to reduce oil supply and increase oil demand which will take oil price to some 300 dollars a barrel as the traders and cartels are bound to make a killing.