Why are fuel prices so high?

[undeterred]

[cosmik debris]

1. Demand from China, India, and Japan.

Competition for resources raises prices.

[Leo 9]

35. They didn't just now toss their bicycles.

Their roads have been packed with autos for a long time.

Demand has not gone up nearly as much as the price has in these past few years.

[El Pinko]

2. Other - 50% Speculation, 50% supply tightness caused by the beginning of peak oil.

Supply will be adequate for several more years, maybe even a decade or more if and only if all the advanced nations conserve as much as possible starting NOW.

But the prices are getting ahead of themselves due to speculation. There have been zilch bona fide shortages thus far.

[DadOf2LittleAngels]

29. Im with you on the Speculation

but the tightness is not from peak (thats not to say peak has not happened), rather, its from the growing economies of China and India

[El Pinko]

38. That's what peak oil is, though.

It means that supply will no longer grow at a rate sufficient to accommodate demand. Supply has nearly been flat for 4 years now while demand has continued to soar.

I'm sure that the supply will probably continue to increase for a few years, and this speculative price spike might be enough to drive the worldwide economy into enough of a tailspin to tamp down demand for a few years, lowering prices. But as oil becomes increasingly harder to produce, the annual production will eventually plateau (which it may be doing now) and drop, despite rising prices, and once the worldwide economy starts to recover, there will be no way of meeting the increased demand.

[nichomachus]

3. The oil company executive are working hard to lower prices

or so they tell us -- just like the rest of us are working hard to see if we can make less money.

:rofl:

[undeterred]

4. I think we should let them sit in prison until they figure it out.

[Kali]

5. good place for thought

dick, w, sleza, and the rest of them should all go

[judy]

6. Certainly not peak oil or high demand...

If that was really the case, oil companies that sell on the US market such as Exxon, Shell, etc. would not make "the highest profits in the history of mankind".
And, I don't think it is OPEC either. This is because the US only gets a percentage of its oil from OPEC.
I think the prices are the result of failed, or purposely failed policies if you ask me.
Bush/Cheney and Co. I am sure speculate every day on oil futures, and so do their friends, and they are piling away the profits.

[Andy823]

14. I agree.

Speculators are jacking up the prices and making a fortune on oil. Bush and Cheney will do anything to help out he "good old boys" who put them in office, and to line their off shore bank accounts with millions of dollars. The drop in the dollar, the terrible economy, are all the results of the Bush agenda to make the rich richer, and the poor, well even poorer. When oil goes up the dollar drops. When interest rates go down, the dollar drops. The FED has been lowering interest rates which lowers the value of the dollar making it a good deal to buy up oil. Seems to me that if the FED was really trying to help the people of this country, they would have stopped lowering the interest rates as many economists have suggested. Instead they lower them helping to raise the price oil. Bush and Cheney know what they are doing, helping out corporate America just like they always do!

[Cosmocat]

22. we have a winner ...

purposely failed ...

This admin is a whose/who of the oil industry ...

IF their interest was in controling oil prices, they would have ... For oil prices to have the drastic increase over this presidency with the MANY oil people in the admin, it is a simple 1 + 1 ... No other reasonable conclusion can be drawn ...

I saw a bit in the last couple of weeks on the history channel, about how this admin and Bush himself has strained relations with most of the major oil producing countries ... His trip to Saudi Arabia recently, they just punked him over there and they said it was because of things they have done the last six, seven years ... They have contempt for him ...

IMO, Cheney et all purposefully have strained relations to put oil producers at odds with the US, just basically let Bush let his inner self - a jerk, out on them ... They turned Iran away post 9-11 when they reached out, they have demonized Hugo Chavez ...

My position is this ... We will know for sure if there is a REAL problem here when the next president takes over, hopefully BO ... IF gas prices stay where they are or go higher, there is a real problem ...

I am betting within two years or so they dip back under 3 dollars ... They are NEVER going to be 1.50 again, but I think once this crew leaves they will drop - in the end, this is a final push with Bushco providing cover ...

[aint_no_life_nowhere]

32. Isn't the cost of petroleum set by international markets?

I think that demand from China, India, the U.S. or Europe affects the price of oil everywhere it is sold. Whether the U.S. imports 1% or 100% of its petroleum from OPEC, isn't the cost of a barrel of oil whether from Saudi Arabia, Venezuela, or Texas determined by international demand? Maybe I'm wrong about that, and if so, I'd enjoy learning something new.

Now I'm just talking about the basic barrel of oil from the ground which has quadrupled throughout the world in the last few years. I'm not talking about the obscene profits of U.S. oil companies after they get the oil and refine it.

[Jakes Progress]

36. Not peak or demand.

That is what the oil tycoons and bushies and industry paid "experts" are saying are the reasons.

The source of these is the main reason not to believe them. Why would we suddenly believe that cheney and exxon are going to tell us the truth? If they say it is peak oil or Asian deman, it simply can't be, because these guys are sociopathis liars. It they say it, it's a lie.

Their motives are pure greed: obscene profit and unfettered drilling.

But nearly every place you read about it, the source trots out the lies from cheneyco.

[dmosh42]

7. Bush, Cheney and congress leaders invested...

heavily into futures market on commodities. Along with hedge funds, knowing nothing would be done to find out, they bid it up as much as possible. All crooks!

[MercutioATC]

8. A combination of speculation, the decline of the dollar, and increased demand from the Far East.

[The2ndWheel]

9. Yes

An increasingly complex world results in increasingly complex problems. Increasingly complex problems result in increasingly complex solutions. Increasingly complex solutions require more energy to keep our increasingly complex structures up and running.

[AndyA]

10. OTHER - overseas demand.

I saw on the news this morning that even though Americans have sharply cut back on driving, it will do nothing to lower gas prices because of overseas demand increasing.

Remember that next time you get ready to shop at Wal-Mart.

Wal-Mart is one of China's biggest consumers.

Money spent at Wal-Mart gets plugged right back into China's economy.

With a booming economy, China has no incentive to reduce fuel consumption, and fuel prices are regulated by the Chinese government.

So, what little money you save at Wal-Mart is being spent to fill up your gas tank. In fact, it's actually costing you more, so shop local businesses whenever possible, buy American made products, and if you must buy foreign goods, complain to management about it so the word gets out that we're sick of cheap foreign crap that falls apart, poisons us, and ends up costing us more money in the long run!

[wtmusic]

13. Overseas demand has doubled in the last six months?

No doubt there is more demand, but it has little to do with the outrageous price fix that is happening in the US.

[AndyA]

15. It's not just demand, but that does play a role.

Speculators are driving the price up.

And the oil companies also have a little to do with it, they wouldn't be making the kinds of profits they've been making if they weren't involved.

And if you want to go back to square one, I'd say the Bush Administration's super secret Energy Policy of 2001 that is not available to public scrutiny is likely ground zero.

[magellan]

11. All the above excluding 3 and 6, plus speculation

Just to add a little: the refineries have been merging. That along with pressure from the severely devalued dollar has also contributed to runaway gas prices.

Welcome to the GOP economy. They've been working hard to get it to this state of perfection for a long time and in many different ways.

[hyphenate]

12. feh

Many reasons, the most prominent (to me) being that the GOP party (Gas, Oil, Petroleum) wants to drill in ANWAR and other such places, and are therefore trying to make citizens fed up with the protection of same and demand drilling to alleviate the cost of gas and oil.

But we can't stop there--the longer people have to deal with high prices, the sooner any treaties with OPEC will be broken, and we can then invade some of those countries and take the oil forcibly. Except for Dubai and Saudi Arabia, who will play host to Cheney, Bush and all the other assholes, and keep them from being prosecuted for high crimes and misdemeanors.

It boils down to being nothing more than a big scam on the part of the current administration to make themselves richer than god, continue to hold some major power mojo, and fuck us (U.S.) in the ass even more.

[liberal N proud]

16. Speculation in the commodities markets

Germany in call for ban on oil speculation
By Ambrose Evans-Pritchard
Last Updated: 10:49pm BST 26/05/2008



German leaders are to propose a worldwide ban on oil trading by speculators, blaming the latest spike in crude prices on manipulation by hedge funds.

It is the most drastic proposal to date amid escalating calls from Europe, the US and Asia for controls on market forces, underscoring the profound shift in the political climate since the credit crunch began. India has already suspended futures trading of five commodities.

<snip>
Mr Beckmeyer said the last 25pc rise in the price of oil to $135 a barrel had nothing to do with underlying supply and demand. “It’s pure speculation,” he said.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/...

George Soros as well:
http://www.democraticunderground.com/discuss/duboard.ph...

[undeterred]

17. thanks for the good info

Its so many steps removed from what most of us can see that its just bewildering. We can't fix it, and our elected officials don't agree on the reason (GOP calls for more refineries).

Meanwhile, more and more truckers are unable to keep driving because they can't afford the fuel and the price of food keeps going up.

I hate to think what this will do to tourism in the US this year.

[Warpy]

19. That covers spot market futures

and the spot market is what gets used when there's a screwup someplace: a grounded tanker, somebody underestimated demand, an oil field fire.

Most oil is under long term contract and is considerably cheaper than the spot market price.

[Warpy]

18. OTHER: long term contracts have been renegotiated

and the dollar is buying only half as much as it did 5 years ago, thanks to the GOP fiscal insanity that has driven the value of the dollar down.

Don't expect a break on gas prices over the next five years, even if the next administration manages to shore up the dollar.

Do expect all prices of all goods in this country to rise on production and transportation costs.

We went through this in the 70s due to OPEC. Now we're going through it thanks to the GOP and its total bungling of this economy.

[harun]

20. Other: Barrowing money to fund the Iraq war has driven the dollar

down, thus making us spend more dollars to buy the same amount of oil.

[aint_no_life_nowhere]

31. Yup, Bush has destroyed the U.S. dollar to fund his wars

He's pushed a policy of low interest rates through the Federal Reserve so that he can borrow more for war, at the cost of the U.S. motoring public. Lower interest rates means fewer investors want dollars and the value plummets. Bush doesn't care about the cost of gas because he uses Air Force One like his own SUV.

[harun]

37. High oil prices are a success for B*sh, his core supporters and funders

are big oil.

You don't see B*sh giving any speeches on a new energy policy to help address the problem do you? This isn't a problem for him, it is a business success.

[slackmaster]

21. Pretty much all of the above

It's all happened before.

[lutefisk]

23. Momentum investing in oil- with plenty of manipulation to help it keep moving up

It's almost like penny stock manipulation, but with one of the world's most important commodities.

Of course there are other factors, but this is a money-making machine for the privileged few. And Junior pResident made it all possible.

[ToeBot]

24. Because Capitalists control the oil supply, and..

the US allows two oilmen to occupy the most powerful positions in the county (arguably the world).

[librechik]

25. Iraq War is a huge success

mission accomplished--oh, and btw, the dollar is worth shit, and ignorant e-traders are using fuel and heating oil to pump up their portfolios. They weren't allowed to trade those commodities before 2005. Since then, prices have gone crazy.

[RedCappedBandit]

26. Combination of factors

Economy, increased demand, peak oil (maybe) WAR, etc

[Leo 9]

27. War makes gas cost more.

War and threat of war makes gas cost more, especially when the war is in the countries with the world's largest petroleum reserves.

Supply gets cut back accidentally or on purpose, or accidentally on purpose.

Iraq is number 2, and Iran is number 4 in world petroleum reserves.

War waged there makes oil prices climb sky high.

USA is not even in the top 10 of world petroleum reserves.

Production issues here can't move the price of oil as much as issues with the world's largest petroleum reserves.

Our rising debt and the resulting falling dollar has made oil especially expensive for us.

The oil companies and the oil states conspire to restrict production.

Alaska sues the oil companies for blocking production.

They threaten to take away their leases on land next to ANWR, because the oil companies say it's not worth developing.

Federal land with regulations waived is offered to build refineries.

No takers yet.

A search on the words "refinery memos" shows how they shut them down.

[undeterred]

28. I thought Iraqi oil was going to cover the cost of the war

:sarcasm: I do believe that turd was floated pre-war.

[Leo 9]

34. No, it's Iran oil now that will cover the cost.

http://www.thenation.com/doc/20080331/navasky_cerf

[aint_no_life_nowhere]

30. Other - I think there are several causes

The falling buying power of the U.S. dollar, OPEC strangling the world and charging whatever the market will allow, high demand including demand from emerging economies, continuing high demand in the U.S. and absolutely wasteful U.S. consumption, oil company greed and the failure to run refineries at top capacity whether intentional or not, and perhaps the wars in Afghanistan and Iraq which are not only money pits but oil pits, too.

I think there's blame enough to go around.

[camero]

33. Market manipulation and a weak dollar

Too many greedy players buying contracts without taking any deliveries and Helicopter Bernanke printing money out the ying yang.