The Real Culprit For Rising Oil Prices.???..and theres plenty of oil......

by chrisjoel 79 Replies latest jw friends

• 

  SixofNine

  It's difficult to know (at least for most of us). There are many theories of course, but two of the people who should know have opposite opinions: George Soros and T. Boone Pickens.

  Soros says that speculation is a large part of the recently inflated cost of oil. He should know.

  T. Boone Pickens says that speculation is not a very large part of the cost (5%), but rather that the current global economy demands 87 million barrels of oil per day, while the oil producers can only deliver about 85 mbpd. He should know.

  They could both be correct, but in varying degrees. Or one may be wrong, and the other right.

  Btw, the USA uses approx 6 billion barrels of oil per year. If we reduced our consumption about 16%, we could lower our demand by one billion barrels. That's doable. We've done it before, and grown our economy at the same time.
• 

  shamus100

  Well, I know how it is in Canada, Chris. As for other countries, I cannot even speculate.

  Oil companies only have enough money set aside for new discoveries or drill new holes. When it's not feasible, they cut back. These high oil prices have only just come into effect in the oil world - to get going on these wells, geologists must put together proposals and haggle with land owners over leases. It usually takes a year or more to get everything approved, because they have to check if it is feasible using seismics. It's a long drawn out process, and, like I said, oil has only just blown sky high in the oil world. These oil companies are wishing they had a lot more wells on the go, let me assure you of that.

  The next thing that you all will be seeing is an increase in natural gas prices - $15.00 by the end of this year, and possibly $20.00 by the end of next year, if the forecasts are correct. Invest in gas producing companies, and well service companies. They're stocks are supposed to go through the roof.
• 

  chrisjoel

  Ok..but now CNN just said the price is rising because Israel just said a war with Iran is unavoidable .....and sets the markets speculators crazy...............

  sigh
• 

  zeroday

  ..but now CNN just said the price is rising because Israel just said a war with Iran is unavoidable .....

  WE can only hope...
• 

  shamus100

  Zerotoday,

  If you believe that I got that from the CBC, then fine - I got that from the CBC. It couldn't be because I am knowledgeable on the subject, and in the industry.

  Look - it's your country, believe what you want.
• 

  zeroday

  Look - it's your country, believe what you want.

  And as long as we buy your CRAP and keep you viable what do you care...
• 

  shamus100

  Zerotoday,

  I don't, actually. You just sound like a typical redneck American, who can't take any criticism and talk politely.
• 

  donkey

  It's called mass purchasing power. When we have commodity based ETFs and mutual funds the demand created by new investors in the funds causes the funds to have to purchase more and more contracts of the commodities - thus driving up the price further and further. Then as the net asset values of the funds increases it draws in further droves of new investors in the funds....and so it continues. When this occurs with stocks (instead of commodities) the price of the shares being invested in increases - but with little effect on anyone else. BUT when it happens to commodities the effects hit he prices of the physical commodities and thusly the ripple effect. Secondly, when funds buy stocks they have literally thousands to choose from. Not so with commodities. This in turn creates concentration (called focus) on the contracts of the commodities - further pushing up the price. This has created a dilemma for regulators - do they prohibit funds from purchasing commodities? That's a very slippery slope indeed. If you're still reading this...you're probably bored stiff so I'll call it quits here...Donkey
• 

  SixofNine

  Ok..but now CNN just said the price is rising because Israel just said a war with Iran is unavoidable .....and sets the markets speculators crazy............... sigh

  So that's score 1 for the "speculators" theory.
• 

  moshe

  If we reduced our consumption about 16%

  If the alternative is Walking, then a 55mph speed limit would help again and we could go back to small 4cyl engines like we had 20-30 years ago.