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Old 06-12-2008, 07:21 AM   #22 (permalink)
Baraka_Guru
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Quote:
Originally Posted by william
The only real driver of the price of oil is the speculators. It's not demand vs. supply - the demand has dropped. Ask GM or Ford how much of an increase they have for pick-ups/suv's. Oh wait, they're suspending those operations.
The speculators need to be controlled as they were for power following Callifornia's brown outs.
You make it sound like speculation is the only problem.

As I hinted at in a previous post, as the price of oil rises, exports begin to falter as oil-producing countries hang onto more of it for local use while their economies expand on oil profits. This invariably causes a further rise of oil prices.

Oil inventories are another concern. It seems we aren't completely sure if some nations (yes, even in the U.S.) can meet demand during certain periods. (This fuels speculation.) Also, some oil-producers (Mexico, for example) are seeing dropping output. (This fuels speculation.)

You cannot isolate this issue to one cause. There are several. It is complex. Our economies are deeply dependent on this resource, and it isn't just for personal transportation. There very well might be a bubble, but if it pops (yes, "if"), don't expect things to return to "normal." Cheap oil as you know it is a thing of the past. I doubt we'll ever see oil drop much below $100/barrel, if ever. And I'd consider us fortunate if we don't see it hit $200 in the near future. An oil bubble isn't like a housing bubble or other bubbles. It's a different story here.
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Last edited by Baraka_Guru; 06-12-2008 at 07:23 AM..
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