What is driving up oil prices?

What is driving up oil prices? Topic: Media research organisations in india
June 17, 2019 / By Bobbi
Question: I have a seemingly obvious but obvious about oil prices. What is the main cause of the high oil prices today? Some say it's increased demand from countries like China and India, but that claim is refuted by data showing that current demand is actually lower than supply. The 2nd opinion is that speculation is driving up the prices? So the question is, exactly what is the mechanism of speculation that drives up the price? I'm not familiar with options/future, etc, so if I can get a very simple and brief and layman's answer, that'll be great. And believe me, I've tried reading about it on my own, I read wikipedia, read all kinds of news/research reports. But all of them seem very convoluted, and hard to follow. It's like, you'd think it'll be easy to explain the current rise in oil prices, yet no one seems to be able to explain it clearly to an average Joe.
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Best Answers: What is driving up oil prices?

Acklie Acklie | 3 days ago
US top trade groups already demand an end to oil speculation, but Congress do not act and Media do not report "Leading energy experts across the country agree that recent, unprecedented jumps in crude oil prices are due, in large measure, to rampant speculation in the energy commodities markets.” “19 of the nation’s top trade associations, consumer groups and labor organizations, the coalition urges “immediate reform in the widely-speculative energy commodity futures markets.” http://www.travelagentcentral.com/air-travel/air-transport-association-america-urges-congress-act-oil-costs
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Acklie Originally Answered: What are some advantages and disadvantages for texting while driving? Cell phone use while driving?
Well i don't know many advantages to it but I will list a few for each: Advantages: You can communicate with your friends still while driving. Disadvantages: Both eyes aren't on the road at all times, your twice as likely to get in a car accident, could lead to death and not as focused. Yeah I know, I see a lot more disadvantage. I never text while driving because I'm always scared I will get in a accident. I knew you weren't playing stupid though lol

Stacie Stacie
Once the oil is in a tanker it begins the sell / resell life to reach the refiners. Oil is not selling at the well head for 140+ dollars. Every tanker filled should be sold for the price of the oil it was filled with. The crooks are there we are just having a hard time separating them from others involved. See the splash and dash that is soaking the US taxpayer and selling discount fuel in England (someone should see jail for this). Why are oil companies guaranteed 10 percent profit on a price increase for a raw material? I cannot believe it when everybody and the government let’s this slide. Are they investing more, working longer, building refineries (Valero is the largest refiner in US), attending more summits or maybe making more trips to the bank. Ten percent of millions is one thing ten percent of hundreds of billions is another. Cost of material, labor, storage and shipping are increasing on all companies but they are not guaranteed the ten percent. This is not a free market system there is no competition and manipulation of oil shipments are controlled by only a few companies. How can the world produce so much bio-fuel and affect the price of food and not the oil??
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Pru Pru
People try to explain the commodity bubble right now by a standard supply and demand model, but $150 per barrel cannot possibly reflect any possible feasible model of future supply and demand. The price is being driven up by speculators, largely the ones who fled the housing bubble, and the fact that the Federal Reserve is decreasing interest rates to the lowest they physically can only stimulates it (but they have to, to easen the recession). The thing you read about the futures market, in lay men's terms, goes something like this: companies want to secure oil at the price it is now, but they want to do it before the commodities bubble crashes. Southwest airlines secured oil at a price of 50 bucks a barrel (and they're paying that now), via the futures market. But earlier this year Northwest airlines tried the same thing, and ended up losing about 100 million dollars because the price of oil dropped just a smidgeon. Anyway, I hope that helps.
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Maybelline Maybelline
I don't know what you mean by current demand is actually lower than supply. You must of heard that from TV or some unreliable source. It is the quantity demanded that is higher than the quantity supplied, if anything. And, I say this with severe caution because it is the only reason price would tend to rise. When the QD is greater than the QS there is a shortage which causes the price to rise. For instance, if some event decreased supply, there would be a shortage at the old equilibrium. But, usually, markets are in equilibrium in which the QD is equal to the QS.
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Laurena Laurena
My friend is building this site that encourages intelligent discussions and presents different sides of issues. On this 'issue' the site explorers oil prices and links 6 videos of different political figures explaining (or trying to solve) the issue of rising oil prices. Hopefully that'll help. If not, at least more information. Reading about OPEC helps too. Frankly, however, I don't think anyone can give you a straight answer. The different 'theories' range from supply & demand, lobbyists, big oil companies.... Oil is a vital resource in securing power, I don't think its regulations are meant to be understood by the average civilian :(
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Laurena Originally Answered: Could raising the gas prices be the solution?
The best discussion I have seen on this subject -- A look at 'soaring' gas prices George Will April 5, 2007 WASHINGTON -They come with metronomic regularity, these media stories about "soaring" gasoline prices and the causes thereof, news stories that always identify the same two culprits, supply and demand. The stories always give various reasons why supplies are tight -more often, why prices include a risk premium based on fears that supplies might become tight -or why demand is higher than it is' "should" be, given supposedly high prices. Today, as the price of a gallon of regular ($2.70 nationally on Monday) "soars" almost to where it was (measured in constant dollars) in 1982, the "news" is: "Drivers Offer a Collective Ho-Hum as Gasoline Prices Soar"• (The New York Times, last Friday). People are not changing their behavior because the real, inflation-adjusted cost of that behavior has not changed significantly, and neither has the cost of the commodity in question, relative to disposable income. The next wave of stories about "soaring" gas prices will predictably trigger some politicians' indignation about oil companies' profits. The day after Exxon Mobil's announcement that it earned $39.5 billion in 2006, Hillary Clinton said: "I want to take those profits, and I want to put them into a strategic energy fund that will begin to fund alternative smart energy, alternatives and technologies that will begin to actually move us toward the direction of independence." Clinton's "take" reveals her confiscatory itch. Her clunky "toward the direction of' suggests that she actually knows that independence is as chimeric a goal as Soviet grain production goals were. President Bush proposes reducing gasoline usage 20 percent in 10 years. Perhaps: After the oil shocks of the late 1970s, gasoline consumption fell 12 percent and did not again reach 1978 levels until 1993. This decline was produced by an abrupt and substantial increase in the price of gasoline, which no politician, least of all the president, is proposing. And we actually could get lower prices because the president and various presidential candidates have become such enthusiasts for federal subsidies for ethanol and other alternative fuels. If these fuels threaten seriously to dampen demand for oil, the Saudis might increase production enough to drive down oil prices, in order to make investments in alternative fuels even more uneconomic than they already are. In the 20 years from 1987 to 2006, Exxon Mobil invested more ($279 billion) than it earned ($266 billion). Five weeks after the company announced its 2006 earnings, it said it .will invest $60 billion in oil and gas projects over the next three years. It will, unless a President Clinton and a Democratic-controlled Congress "take" Big Oil's profits, which are much smaller than Big Government's revenue from gasoline consumption. Oil companies make about 13 cents on a gallon gas. Government makes much more. The federal tax is 18.4 cents per gallon. Mrs. Clinton's New York collects 42.4 cents a gallon. Forty-nine states -all but Alaska make more than the oil companies do on every gallon. In 1979 President Jimmy Carter, an early practitioner of the Oh, Woe! School of Planetary Analysis (today Al Gore is the dean of that school), said that oil wells were "drying up all over theworld." Not exactly. In 1971, according to M. A. Adelman, an MIT economist, non-OPEC countries had remaining proven reserves of 200 billion barrels. After the next 33 years of global economic growth, Adelman says; those countries had produced 460 billion barrels and had 209 billion remaining. As for OPEC countries, in 1971 they had 412 billion in proven reserves; by 2004 they had produced 307 billion and had 819 billion remaining. Note the adjective "proven." In 1930, U.S. proven reserves were 13 billion barrels. Then we fought a global war, fueled the largest, most sustained economic expansion in human history, and achieved today's electricity-powered "information economy." Today, America's proven reserves are about 30 billion barrels -not counting the perhaps 15 billion in the field discovered last year in deep water 175 miles off Louisiana's coast. America produces about one-quarter of the 20.6 million barrels of oil it uses a day. Unfortunately, just as liberals love employees but not employers, they want energy independence but do not want to drill in the "pristine" (read: desolate) Arctic National Wildlife Refuge (potential yield: 10.4 billion barrels) and are reluctant to countenance drilling offshore. Well, then, what can be done immediately about the gasoline "crisis" du jour? Americans could save 1.2 billion of the 130 billion gallons of gasoline they use a year if they would properly inflate their tires. And they might do that if ever "soaring" prices actually make gasoline unusually expensive. George Will: [email protected] Washington Post Writers Group

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