ZACK U asked:


Oil is increasing because as you get closer to supply overload, perhaps the oil price starts becoming asymptotic.

The economist said speculators couldn’t drive up the price of oil because they are simply trading ‘paper barrels’. However, all this demand for contracts has to increase demand somewhere; They buy oil, then they sell it before ‘delivery,’ but in the process they are increasing demand.

It would seem that oil price could come down fairly easily. There is 1 million barrel discrepancy between supply and demand. With people’s lifestyle changing a little bit, you could easily take out 4 million barrels of demand and then the price could really plummet to 30’s or 20’s.

Nevertheless, this would mean a constant constraint on world growth, as every time the global belly would swell a price shock would ensue; demand growth is faster than supply growth.

It will be interesting to see where it goes. Please leave your insightful comments below.
Eventually high prices make alternatives attractive.

Did you know that hydrogen is cost efficient at 150 a barrel? you can use coal or nuclear to turn water into hydrogen, at an energy loss, but cost is what matters in the end.

Oil will not stay at thsi price but the constraints on growth will… This will mean people will notice another oil shock after it goes down again fairly quickly. This is why alternatives become viable.

The best outcome will be a combination of all the alternatives. And….nuclear power.
Mrs. bugsme…

I think your right about that…it will take a few years before this starts happening though, perhaps two decades…In the transition period, oil nations will have a ball.
in other words..its going to crash and oil nations will not like the outcome (its not their fault or anything that oil has gone up though)…but then perhaps it will go up again a year later, so, its up for grabs.

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BizAnswers asked:


In the short term, I think it is clear that speculation affects oil prices, but over the long term, I am less than convinced. Specifically, with all derivatives, there is someone on the other side of the deal; it is a zero-sum game unless someone takes delivery. If speculation drove the long-term price of oil, it seems to me that the speculators would be required to take delivery of the oil at some point in hopes of selling it at a higher price. If the speculators are not taking delivery, supply and demand must dictate the price of oil as the long-derivative speculator simply offsets the position of the short-derivative speculator until the contracts settle or expire. Since speculators who do not take delivery are not affecting supply and demand, how could speculation cause a long term increase in the price? News commentators continue to bang the drum of speculation causing the price rises, but I remain unconvinced. Now is your chance to convince me where my analysis falls short.

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tsloan71 asked:


Is it possible that by selling major oil companies stock and re-fusing to purchase in vestments with those companies would that force these companies to drop the market value for there product? If this resource is being traded as a commodity instead of using the don’t buy gas from that company to force price change. Would it not be more effective if everyone sold stock in those companies and re-fursed to purchase stock or investments with those compnies and sub-companies to bring the price of oil down???

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Josh3 asked:


What are your feelings about gas prices ever returning to $2.99 a gallon or even $3.50 a gallon. Or will oil prices ever return to below $100.00 a barrell again anytime in the near future?

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McGoo asked:


In early May, the average price $ per gallon in the U.S. was under $3 per gallon. Right now, with oil back at that previous level, gasoline is still hovering around $4 per gallon. Tell me that Exxon Mobile is not gouging us.
Go Broncos…Theoretically, yes that is the way it is SUPPOSED to happen but if that were the case, then why does the price at the pump go up seemingly immediately when the price of oil goes up at the end of the trading day in Saudi Arabia?
Rocker & nj2pa…national average still lists 3.89/gal. Diesel fuel has declined 60 cents a gallon here in Michigan over the past 2 weeks yet unleaded actually went up 2 cents per gallon within the past two weeks. We are at 3.88 along the West coast of Michigan. Traverse City South to Muskegon.

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lita asked:


when will its cost come back to normal?why is that the price of oil has increased?

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ma b asked:


Now a days world oil price gone up due to high price of oil. Poor people economic is very low and not surviving their life.

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sanctus.angel asked:


President Bush said during an interview that the reason food prices are sky-rocketing is due to the fact that a barrell of oil is $126. How do food prices appertain to oil prices and why does the economy revolve around oil?

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Overt Operative asked:


Iran is suffering severe budget shortfalls because of low oil prices on the international market. Hamas is funded by the state of Iran. Could Hamas be acting under the direction of Iran to push oil prices higher? It interesting to note that no rocket attacks on Israel were happening when oil was over $100 a barrel.

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Billy R asked:


I’ve heard that oil prices are higher than they would be in a natural supply/demand economy, and that part of this is due to speculation. What is speculation? How is it raising the price of oil? Also, if people or companies are using oil speculation to make money, why don’t more people do it?

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