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By Fareed Zakaria, CNN
The next time you pay $3.50 dollars for a gallon of gas, stop and think about a basic rule of economics. When demand is low and supply is strong, prices should fall. Right?
Now apply that to oil. People drive less in the winter. The American economy is slow. The Euro Zone has stalled. China and India are slowing down. So demand for oil worldwide is low. So why is oil trading high at $113 a barrel, more than twice the price it was trading at five years ago when the global economy was booming? What in the world is going on?
There's a school of thought that suggests the global economy is doing better than we think. China and the U.S. are proving resilient to Europe's problems and so traders are expecting renewed demand in the world's two top economies. But another school of thought argues we're in the midst of a bubble. Speculators have been driving up the price of oil and eventually it will crash.
Now I think that the economic fundamentals really can't justify oil prices at their current levels. The real driver of high oil is not the stuff you find in the business section of the newspaper - the demand for oil in India and China. It's on the front page: Global politics.
You see, traders worry about risk. And the biggest risk to oil supplies is the threat of war in the Persian Gulf. Meanwhile, in Nigeria mass protests are raising worries about the supply of fuel from there. Venezuela is in a slow-motion collapse because of Hugo Chavez's mismanagement. There have also been protests in Russia, the world's top oil producer. And remember the fallout of the Arab Spring - Libya's oil production in 2011 was severely curtailed. Iraq continues to disappoint with its oil output and its recent political tensions certainly haven't made things any better.
So a mix of war rhetoric and local troubles in key oil states are factors driving up the price of crude. And that translates to higher prices at the pump. Now that logic suggests that prices will fall when the news calms down.
But perhaps not. Perhaps oil producers want these sky high prices. Usually the major oil producers understand that keeping prices too high in the short term means people start finding alternatives to oil. They start driving more efficiently; they start looking for alternate energies. But this time, oil states face crucial challenges. Look closer at the Arab Spring. The only oil rich country that has been forced into regime change is Libya. Why? The Gulf states lavish subsidies and salary increases on their citizens. They've upped spending to record levels to suppress any popular discontent.
I saw some striking numbers this week: Look at the "break-even" costs for the world's top oil producers. That is the minimum price at which these countries need to sell oil so that they can balance their budgets.
Russia now needs oil at $110 a barrel to manage its finances. For Iraq, the number is $100. Even Saudi Arabia now needs oil to trade around $80 a barrel just to balance its budgets. The numbers are also high for Algeria, Qatar, and Oman. Only a decade ago Saudi Arabia was able to balance its budget with oil prices averaging around $25 a barrel.
So now it is in these countries' interest to keep oil prices high, which they do by curtailing supply in one way or the other. This is perhaps the most lasting impact of the year of global protest: High oil prices.
So, the bottom line is an oil crash seems unlikely. Even though the engines of global growth are sputtering, be prepared for a period of expensive commutes. Maybe it's time to trade in your Escalade for a Prius.
For more of my thoughts throughout the week, I invite you to follow me on Facebook and Twitter and to visit the Global Public Square every day. Also, for more What in the World? pieces, click here.
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How come I never seem to read anything about Canadian oil in these articles? I thought Canada has the second most oil reserves in the world and we are always left out of the discussion.
I think the process to extract oil from Canada is much more expensive and complicated than other countries mentioned because of the method that needs to be used. I don't mean to say Canada isn't a key player but rather that they are not key players yet.
True, Canada has huge oil reserves, second to Saudi Arabia. They make up of oil sands – also known as tar sands. Now with existing technology they are considered recoverable.
It's an unfair game these oil-producing countries play on us. We are subsidising their nefarious politics – bribing its people so they can rule the country, control its oil-wealth and indulge themselves in luxurious decadence.
Lol. Canada not a key player. Spoken like an american who does not know what goes on past his own house.
Not a player, get a clue! Canada is the largest importer into the United States. About 50 % more than Saudi Arabia.
Canadians ay, they are nothing more than Generic Americans Ay!! They are the off brand Americans Ay, The wanna be Americans Ay. No more over the border shopping for you Ay!! Now be a good little Canadian er Generic American and run along boy....Ay
Jim - spoken like a true canadian who thinks he knows everything.
If you check the numbers as to America's biggest oil supplier now, you will find Canada is the biggest. Here is this real issue, world economics are focused on the Mid East and its supply of world oil. if America was smart we would tap into our own supplies of natural gas which is huge, and oil from Alaska and Montana, geo-thermal in the mid west in which deep drilling is not as bad to get to. Also get more proactive in fusion, and electro-magnetic. Build the pipeline now and get a goal to be energy independent within the next decade, just like we did to get a man to the moon and return to earth safe.
Take off. A true Canadian would never write "Ay". It's "EH" as in CanEHdian, you Hoser.
The break-even point for Oil-sands, depending on who you believe is around $70/barrel. Stands to reason as Oil has been averaging $90 the past 18 months with conservative projections at $100 and the multi-nationals are investing heavily into leases and new extraction technology in Alberta. Fuel is not subsidized here nor are rebate cheques given to citizens as per OPEC style. The challenge here is to moderate devlopment to a sustainable level.
Generic, you are an idiot. 'Ay' ? Seriously? It's 'Eh' you moron. This made my day. Haha.
CandyAss, they don't follow America's political-Doctrines at this time. Whereas, if we the U.S, boosted Canada's economy and build their Financial Muscles, they will come after US and they will burn our White House as they did in the Mid 1800's. As the saying goes, bad neighbor can be used as access of destructions, America has too many proofs to remain vigilant from whatever comes from Canada.
However, we will use Canada's oil when there is no other options left for US.
Emboa! I might just kidding.
Well, I'm usually not into conspiracy theories but it seems that they're trying to keep the public in the dark on where the majority of US oil comes from, for what reasons I do not know. It is odd though, since Canada exports mainly to the US and we actually get very little from the Middle East.
Actually, the prices of US West Texas Intermediate crude oil is significantly less than North Sea Brent, which does result in gas prices in the US being a little less that in other parts of the world. This is due in part to increasing production in the US and Canada. If the Obama Administration will approve the Keystone XL pipeline it will help the situation even more.
Hi Tom. For me to say there is no connection between politics, wall street and the news industry would be naive in the extreme however I think mostly the news just goes where the easiest money is to be made. They know as well as politicians that rhetoric beats facts with a kind of "the house always wins" odds. The fact that Canada produces most of the US oil and is its biggest trading partner in general just doesn't fit the popular view.
It seems the American public, not just those whose hands control the instruments of power, prefers to believe that their oil comes from the middle east and that China is their biggest trading partner. Tell them different and they will dismiss it with a condescending, "Yeah, whatever". The facts are for wonks like you and me, not the masses.
GREED! It's purely economics for the major stock holders of the Oil producing industires. $$$$$ for me! The hell with the cunsomers! They'll pay for that same gallon of gas, regardless of price. They got us over "the barrell". You're all idiots to think your response to this crap will make any difference.
And everything you have pointed out is true which works just fine for the speculators. There may be no other commodity as valuable as oil. Gold, silver, diamonds etc are valued because of their scarcity but the world would continue to function without them. No oil and the world literally would stop functioning.
Seat 2A:
While I don't oppose the Keystone XL pipeline after a thorough review of the plan by regulators, it's a ruse to believe that it will lower prices in the US. Why? Because we already have several pipe lines extending from the oil sands to the Midwest in North Dakota, and other Midwestern states (as south as Missouri) where we have refineries. Unfortunately you've been tricked with propaganda by the Koch brothers. Big oil, mainly the Koch brothers want a pipeline to extend to the gulf not to lower US oil prices, but to enable them to sell Canadian and US oil to the world where they can fetch a higher profit per barrel as when compared to the US. Just google "US oil piplines map", and you'll see our country has many pipelines running oil from the North. The means to get that oil to the gulf coast and shipped elsewhere in the world is our Mississippi river (and train tracks), so the amount they can export isn't as much as if with a pipeline; hence why the Koch brothers are fighting so hard to get it passed so quickly. Rushed ideas are asking for mistakes, so best to be cautious with such a large project. And don't get me started about the lost jobs. The review of the pipeline will create jobs in of itself, and few of the jobs building the pipeline will be permanent, where as the clean up of our Chesapeake bay will produce more permanent jobs and is a positive action for our nation.
When you make your judgement on environmental issues from information provided by a company looking to profit from that issue, don't be fooled to wholly trust the results as there's always other motives than what they will publicly say.
The 'conspiracy' of all the oil conspiracies is that perhaps the easy to get oil is virtually gone, 'peak oil' has been reached & this is why govt's around the world will NEVER have the economic boom we all once knew UNTIL an alternative source is found. There are many books that have been wrote in the past 2years that say this. RT news had a great story about it also.
Canada is not mentioned because for all intents and purposes canada and america are one oil source. And a huge one at that. Mister obama needs to get the pipeline done or it goes to china. It has nothing to do with the ridiculous statement that the tar sands is a dirty oil. Canada has actually more reserves than saudi arabia. More is being found every day. But everyone knows america imports most of its oil from canada. Maybe not CNN. This article is looking at the rest of the world...except North America.
You are a little mistaken about the pipeline. The purpose of the pipeline is to move the Canadian oil to the gulf coast to be refined then exported. The pipeline will be moving oil past several refineries in the central US. This pipe line is all about exporting oil to other countries. Not intended to help us at all.
Well Larry it is neither needed or wanted by the majority because it runs needlessly down to the gulf when it could stop near New York and be refined there and then exported with cost of a new refinary being cheaper than the pipeline and creating more jobs in an area that desperatley needs those jobs, rather than in an area where workers will be harder to find.
The pipeline goes to the Gulf Coast because that's where the large sophisticated refineries are that are needed to convert the Canadian syncrude into gasoline, diesel and chemical feedstocks. The large product pipelines are also on the GC, such as Colonial which goes up the East Coast. The export story is a figment of the enviro-nuts such as Daryl Hannah, Leonardo Dicaprio and other folks who play oil experts on TV. The dirty oil label is also an enviro-marketing gimmick, since the refineries operate under the exact same environmental limits whether they're running high sulfur crude oil from the Middle East, or low sulfur syncrude from Canadian tar sands!
Judith,
I agree, this pipeline will do nothing to benifit America. It is intended to reduce the cost of transporting oil to forign markets. The irony of this pipeline is there are refiners in the Pjilly, NJ area that are closing because of a lack of buyers for their refined produce.
The purpose of Keystone XL is two fold. Expand the capacity of the pipeline running from Alberta to Cushing Oklahoma. Oilsands production will be increasing significantly in the next decade this additional capacity is needed to keep pace with development. The next purpose is to move that massive amounts of oil stored in Cushing to the Gulf Coast refineries. These refiners pay higher prices for oil since the majority of the feedstock is shipped from overseas. Currently producers from ND and Alberta are forced to sell their oil at a lower price since it's locked in at Cushing. Some are using rail cars to move their oil from Cushing to the Gulf Coast just to realize the extra income per barrel.
The XL pipeline has little to do with exporting the oil overseas. It's about getting the oil to the refineries in the Gulf Coast and for realizing the maximum price per barrel for oilsands crude.
It's called oil speculators. When the dollar is devalued, investors look for returns on cheap money. One place is commodities. Why do you think the price of EVERYTHING, not just oil, has gone up? Blame the FED and blame both political parties. Are devalued dollars means those countries now need a higher price for oil to also balance their budgets. If the FED raised interest rates oil would come back to the 50's and those countries would learn to balance their budgets. At these prices alternatives are not far away. The world will run out of oil customers before it runs out of oil.
Speculators have nothing to do with oil prices. If you think they do anybody can play the futures market but be prepared to take a trip to the poor house. Ijut.
canada is the #1 supplier of gasoline to the US.....
Price of oil is high due to pure greed. Nothing more,nothing less.
Well put. Nothing but greed.
Bull, that's bull. Political instability and a decline in cheaply extracted, cheaply refined oil are driving prices, too.
But with oil, to which America is addicted like an desperate crack-head, don't look for easy answers. Instead we get feel-good slogans and Jiminy Cricket thinking on the way to a "crude awakening" that the planet is a place of finite resources and ever fewer Plans B.
Bull... you must be at one of the fancier Occupy Whatever protests that has WIFI... since when did Captialism and a free market economy become pure greed? The arguement is tired and overused... time to either turn the page or find a newer version of your liberal playbook.
If you don't like free enterprise please leave and go to a country where it is not allowed and where there is no gas or it costs 8$ a gallon.
THEN STOP BUYING IT. Ride the bus, buy a bicycle or segway and use them.
Until we as a people stop WHINING and take charge of our situation, we CANNOT b!tch about a cartel manipulating prices.
The underlying concern that I got out of this article is that Russia and other big oil exporters are SCREWED if the price goes back down.
IIt's because you don't know for sure about that. Somebody told you it. We need to verify this information.
verify what?
That we don't need money to keep doing the same thing. http://icasualties.org/Iraq/index.aspx except war obviously
That would be hard to coordinate, though. So we need Farheed
or the State department
Sorry, umm.. distance traveled to carry the gas. private companies and varied systems of government and ancient laws of economics and the like (etc).
.........
Pete – it is very simple. Oil is traded on the world market and thus is not priced locally. Canada will benefit from the high oil prices just like every other oil producer does. The turmoil in the Middle East cause the price of all oil produced in the world to be higher. Many people in the US fail to understand that simple economic fact. No matter how much oil is produced in the US, the price of the oil is set by the world market. Only if the US could totally produce all of its oil needs and become a major oil exporter will this change. By the way until the 1950s, the US was a major oil exporter.
The best energy policy for the US is to try cut its consumption every year. In 2007 or 2008 when oil consumption fell by 5% in the US, the world price of oil fell by about 50%. Of course the Republicans do not want the US to have an energy policy that attempts to cut consumption. The best way to fight to Islamic terrorist is to reduce the amount of money going to the Middle East.
If Iran and Saudi Arabia had less money, they would be much less likely to finance Islamic terrorists.
eople here are pointing to Canadian oil, especially the tar sands, but that opportunity is rapidly closing. The Canadian hearings on building a pipeline from the tar sands to Canada's West coast ports are almost complete, despite the attendance of Robert Redford, Leonardo deCaprio and Kevin Bacon. You see our President is incompetent, but Stephen Harper, their leader is a go-getter, makes decisions, and moves on them. Just because our leader is completely absorbed with winning the next election to the point of being dysfunctional, it doesn't mean that others countries are going to wait around for us. Canada is going to sell the oil elsewhere to people who really want it. And hey, we'll see if Obama will go to war to protect our mideast oil....and the day he will have to face that decision will come.
Oil is a world commodity and the price is set in the world market. Whether Canadian oil is shipped to the US or sold to Asia makes no difference to the PRICE of oil. The only thing that really matters to the US is the PRICE of oil. If the price is too high, it will cripple the US economy. When the price of oil reached about $140/barrel, the US economy started to go into the recession. Once the recession started, the US housing market collapsed. I realize that Canada is a friend of the US but that friendship does mean that US will have sold oil discounted to the world price. Money is money and all of the companies mining oil in Canada want the world price for their oil. The only way to get the price of oil down is to cut the demand.
Because when it comes to oil your a relatively new player and not a first thought yet. Although I wish you were because your a friendly stable government and that would pressure other nations to act in kind.
canadian oil needs to trade at 100.00 to make money or the tar sands will lose money !it's in thier interest to keep the prices high too!let's face it what we experiencing is really economic terrorism with oil being the main vehicle for the attack!
Environmental Protection Agency...Regulations...
RON PAUL RON PAUL RON PAUL
good point Pete
With the world's conventional oil supplies near or at peak, we have no choice but to turn to heavy, dirtier petroleum that is more expensive to extract and refine. Canada's tar–let's call it what it is–is not the "light sweet crude" of decades past.
Those who claim greed and political instability drive high prices are only partly correct. The cheapest oil to extract–"light" (under high pressure, therefore easy to extract) "sweet" (low sulfur)–is not being discovered at anything like the rates of discovery of the 1940s, 50s, and 60s.
And it won't, ever again, unless there's a giant lake of it under the melting polar ice our emissions accelerate.
But we Americans have no plan B beyond "drill here, drill now, pay less." That makes a good bumper sticker as we cruise along the highway of disaster-to-come.
It's because of the Obama Politics, to get back on his job.
We have no balls to turn the taps off here in Alberta, the bitumen is sent via pipeline to the Americans so they can say it was an American Made Product" we really just keep getting shafted by the Americans whether it be Oil, Electricity, Lumber, Paper, etc. They don't seem to care about wanting to dam up valleys that may push people to relocate, but soon as Canadians want to open another open pit coal mine they whine as much as the politicians in both countries suck ass.
I think we would be better off too if we refined it here and then sold it to our neighbor to the south. We could make them pay more and we could pay less.. than the $1.02 a liter.
Fareed you must have been fingering your azz like the Indians do again while you were writing this article. The demand of oil is defintely not less than before. Do you realize China sold close to 20 million vehicles last year, much more than the vehicles sold the in U.S.? What do you think those vehicles run on, air alone? Besides, a lot of countries have been paying for much more than $3.50 a gallon of gas for many many many years. Now you may go back to finger your azz again.
Please correct me if I am wrong....but, I thought ago that the US gets the majority of its crude oil from Canada. are our gas companies are taking financial advantage of the American consumers??
really no one cares about Canada if you want to see them on the map then do something that will leave a lasting economic impact on the entire world.
Canada – Ha
220 Billion Barrels is in North Dakota – the largest oil discovery since 1938 (Sadi Arabia 256 Billion)
Facts... don't forget to mention that you're essentially mining and extracting that oil in North Dakota.. It isn't light sweet crude from Saudi Arabia so try not to compare the barrels of oil in North Dakota vs. Saudi Arabian crude. There is no comparison in quality or net energy produced. USA is still in decline with regards to oil production rates and it will continue to decline in the years ahead. The little plateau or bump in production rates from the Arctic, shale or tar sands will not allow us to continue to grow our economy long term.
Pete.. Canadian tar sands is essentially a mining operation. It's a very slow, energy intesive process and the net energy we get back from tar sands is MUCH lower than just sticking a pipe in the ground and watching it come to the surface. It's not light sweet crude oil. Much of this oil is lower quality higher weight oil. Higher weight means less gasoline per barrel. The gasoline that comes from it is also higher in sulfur. Don't look to tar sands or shale rock as a way to escape the decline in oil production rates worldwide. It's a fantasy...
Gr8 punch line....Fareed do you get commissioned by toyota?
This is what caught your attention in the whole article! Are you one of those anti efficiency hawks?
who the hell can afford a Prius???
might as well get a bike..or a freaking Moped..gee i remember back in 96 i could fill my F150 with Dual tanks for $40..now Im glad that its in the scrap yd..I now drive an Escape Hybrid which averages around 35mpg.and thats not bad for an SUV.
Let me guess. 'cuz the sellers want a high price?
That's my guess, between taxes and gas prices, and it won't stop until the Country is really in the ditch....................
The key to the solution to this problem was mentioned in this article when the author said, "Usually the major oil producers understand that keeping prices too high in the short term means people start finding alternatives to oil. "
That they need oil prices so high to balance their budgets ignores the law of supply and demand and I don't care what their "issues" are that make them NEED oil prices so high, they can't just ignore the law of supply and demand. By keeping oil prices high, they are pushing us into the alternative fuels we need to be using, anyway. And, now, with their populations in a state of unrest, they can't afford to let prices fall so much that we abandon our search for alternative energy sources. So, their days are numbered in terms of their ability to yank the world around on oil prices.
This crap stops when the price of oil is tied more closely to the price of wheat...... They can't eat oil.....
Bingo. Why don't we keep the price of wheat high to finance our own budget?
Also, the gas companies are exporting gasoline from the US to keep prices high. They are manipulating supply and demand, exploiting Americans for the sake of profits. That is un-American and just goes to show you just how far we have declined as a country.
un-American....what are you talking about? that is exactly American.
This is why I cant understand why we need the pipeline, so the oil companies can sell it over seas. Why not just build a refinery in ND and distribute gas from there?
Oil producers have been able to bend the law of supply and demand through OPEC. By keeping the OPEC producers in line with production limits, they have succeeded in keeping the price higher than it would be without those limits. There are limits as to how far out of line of supply and demand they can push the price (otherwise oil would be at $200/barrel) but most everyone agrees that part of the $100/barrel is due to OPEC's influence on both its members and non-member producers.
Didn't oil trade at over $140 a barrel when things were "booming",
D umb A zz...
How come "oil traders" get to steal 40% of every oil dollar 'we' have to spend heating our homes and driving our cars? Do you really want to call this "supply and demand"? It's legalized robbery! Can I stop "Joe" on the street and take 40% of his cash? Joe has a good "supply" of money and I "demand" that he gimme some!
Well you can thank our government for all of these oil problems. If they would not have started all this trade crap this would not have happened. Our Government is letting China kill us little by little along with all the others bringing their crap into the United States. Oil is not the only problem. But they will keep oil up so high that one day we will not be able to afford it . \
Becca! either we are FOR free trade or we are against free trade. We can't just demand other countries to open their markets for us and then turn around and close ours to their products. While China is an exception that has to be felt with, we have to find ways to manufacture and produce things that can be sold to the rest of the world despite the fact that manufacturing in the states will cost more than say, China!
We can't just imagine that the solution is simply stop "crap" as you put it from coming to our country! we also sell "crap" to others depending on how you look at it, or at least, used to sell crap to others until recently when it was much cheaper to produce that crap in other countries.
Mina, the problem is with import vs export. We're charged a boatload by other countries when we import into their countries. We charge very little when we let them import into ours. What needs to happen is our govt needs to grow some concern for this country and it's people. Raise import fees, or demand other countries lower thiers. It's really sad that people in other countries pay less for goods than we do when those goods are produced here.
What the heck do you thing Obama administration is doing? Stop drinking the kool-aid and open your eyes!
last i checked they tried to get rid of oil subsidies only to have it filibusterd by the republicans..... try opening YOUR eyes
you are so right, it is the speculators, these dark markets with little or no oversight, or regulation. On paper they buy up the oil, never take physical control of the oil, only put a small percentage of money down, and sell when the price goes up. Change the rules, regulate this market. This all started back around 2000, when the laws controlling the commodies markets were changed, this is one of the reasons why Enron emerged. When they say free market economy, this is it, a few will do really well, but at the expense of eveyone else. Good luck
What about the continued devaluation of the global reserve currency, the US Dollar, which is used to purchase various critical commodities around the globe?
Exactly! Obozo is printing money and driving the value of the US dollar down and the price of oil, which is based on the dollar, up.
Because the eco nazis in the libtard party want everyone driving government subsidized electric roller skates.
The continuous devaluation of the US$ is of strategic and deliberate interest to the US govts. Inflationary effects reduce the effective indebtedness of our govts.
I'm not buying it, this article is just another reason fuel is priced where it is. And if the facts are true, well just another reason to tap national resources to keep others (Russia, etc) in check. No more US $ getting others fat while back home our own are still suffering!!!!
You seriously have no clue.. Were getting oil for worthless peices of paper which is our currency. Were printing money like theres no tomorrow. I'm still very surprised our currency hasn't collapsed yet.. I say keep buying oil for these worthless peices of paper. once oil runs out in the middle east the whole world will be in poverty and WW III will begin. Once were too broke to meddle in other countries businesses there will be peace on earth.
The reason oil is so expensive is liberals like it that way. They somehow think that by artificially inflating the price that the consumer will use less. They seem to forget that people work and need to commute to get to work. they forget that half of our society lives in rural areas and needs personal transportation to get food and supplies. They forget that raising the price of gas hurts the low and middle class the most.
How does any liberal have any influence on fuel prices? If anything major capitalists have that influence and I would have to assume that they would be more conservative than liberal. I make this leap because the oil industry harps against regulation so much.
Because Obozo is printing money to finance his record deficit. When the government prints money, the US dollar tanks. The price of oil is based on the dollar so it takes more of them to buy a barrel of oil.
That's how liberals drive the price of gasoline UP.
Get it now, Syd?
So you are saying that liberals are risking the world economy in order to push their green agenda? That sounds an impossible. However the Bush administration did the same when pursing their agenda by invading Iraq. So you might be onto something. Although the former is a joke and the latter is a reality.
Exactly, Charlie! Good post.
Take away the rednecks and trailer trash that are easily controlled by the media, the Dems have always been criticized for catering to the poor or middle class guy that needs a leg up during financial tragedy. You must have your parties confused. And as for the Federal Reserve, fearless leader Ben Bernanke was originally appointed by Bush Jr. So again, another root of evil traced back to that motley true of an administration. And you probably voted for that imbecile as well.
You also fail to realize that the GDP in this country has historically ALWAYS been higher and employment always been lower on average since the 1950's under a Democratic Regime. Put that in your tail pipe and smoke it.
Ohhh Liberals want oil prices high.....what are you, a Moron! Jesus Christ. Are you deaf or blind! wasn't oil trading at $140 while Bush was a president for 8 years. Isn't Obama trying to push for alternative energy sources but your GOP idiots are trying to stop every move he makes.
I am an architect who worked for a major firm and I can tell you how excited everybody was when Obama became president and how the firm's leadership was expecting a big push for construction work and more efficient buildings and building products when Obama announced regulations for energy efficiency.
It is people like you who keep this country behind. You are just worried about driving your pick up truck to Wallmart everyday.
mina don't waste your time with the Foxbots... you can't combat idiocy on their level with rational thought.
Charlie..the liberals have nothing to do with the price of oil. The high oil prices are the result of greed..pure greed. Look at the historic profits the oil companies have reaped in recent years..that tells the whole story.
As far as I can see, oil is a fossil fuel being used for a long time. Is there any way, in which to determine how long the oil reserves in the world will last? Has the world tried to determine the answer to this question? Let us ask another question. Do we want to depend upon oil for our energy needs? Are we going to want to depend upon oil for eternity, or as long as humans survive on Earth? Should we try other avenues for our energy requirements?
..... Have you been in a reallllllllly deep sleep?
Dear Fareed,
1 – Saudi Arabia is the worlds largest supplier of oil, not Russia!
2- You forgot to point out that Americans use up more fossil fuels than any other country in the world.
3- An oil crisis is not only likely, it's inevitable. Why? Not because of international relations with the Middle East, but because we're running out of oil!
You know all this Fareed, stop beating around the bush. You're a liar and a fraud!
Part of what you say is indeed true. But, America is sitting on more oil supply than the middle east has by far. We arent even pumping out 5% of what we could domestically produce. Last figure I knew of for a fact was only 1 in every 10 wells in Texas alone were pulling any oil. That doesnt count any other domestic fields. So oil supply isnt running out, Just main stream media hype and scare tactics. Now lets also not forget that the quality of our crude is also a higher grade than the crap from middle east.. I say that could mean cleaner burning more effiecent engines, yet we don't try to do that??? Once again it all points to political greed and back room deals with major oil companies.
you should read into the oil peak crisis. we no longer have the fossil fuels to support our population growth. raising prices is only to sustain the drop for a while until they find new oil fields.
Dear "Not So Gullible"
1. Russia produces more oil than Saudi Arabia since 2009. Please check your facts before you try to correct facts to others who are experts on the subject!
Ditto... Fareed you useless Indian, why don't you go back under the rock you crawled from in Bombay! GO BACK TO BOMBAY YOU FILTHY INDIAN!
Do u wanna be even more of a racist bigot than u currently are? The high price of oil is from greedy speculators, shareholder oil magnates, and desperate countries like Saudi Arabia and Russia who need the high price of oil to fund suppressing their people. And as for the Keystone pipeline, studies done by research groups say that the pipeline will actually kill jobs, hurt our environment, and raise oil prices. But "studies" done by the company itself say all the opposite, with the GOP backing it to hurt Obama and Fox hosts saying it'll create hundreds of thousands of jobs. Open your eyes and look at all this with some skepticism, because blindly listening to the corporations and the speculators will land us flat on our face.
Y'know the price of oil is about more than economic fear and China. You just can't (and never will be able to) squeeze oil out of tar sands, oil shale and deep ocean deposits as cheaply as you can pump light sweet crude out of Texas or the Saudi fold. Some of the resources we rely on today cost more than $30 a barrel just to get out of the ground and ready to send to a refinery. Compare that to about $1 a barrel for the high grade Saudi fields. While some of the current price of oil is due to speculation the floor is much higher than it used to be. If we ever see the oil prices of the '90s again it will be because the world has found an alternative and is moving away from petroleum as a fuel.
It would be cheaper to drill in Alaska in the area that is nothing but flat wasteland, and it's a lot easier to clean up spills there than in the ocean...
True, but also speculative. There isn't enough exploratory data from Alaska to make a solid estimate of how large the deposit is but it's very unlikely to be enough to move the global price of oil. The floor of oil prices in the future will be set by the cost of producing from Canadian tar sands, the Bakken oil shales in the US, Venezuelan heavy oils and other large low grade resources. The good news is that there is plenty of it, the bad news is that it will never be cheap.
Geologist – you forgot to mention the difficulty of producing from these alternative sources IN VOLUME.
It is much more difficult, for example, to open-pit mine tar sand in Canada that it once was to drop a new well in Texas. I've seen estimatesw for Canadian tar sand production maxing out (optimistically) at 4 million barrels per day by 2030. Compare that to Saudi Arabia which is producing 10 million barrels per day currently.
How bout this.. We start charging all these countries we ship food to on the same level as they charge us for oil. Can't eat the damn oil!!!!!. Next we use the oil we have and Put AMERICANS to work and stop pumping everyone elses
's economy. Hell most of those "oil states" hate the U.S. anyway. I say screw them.. This isnt supply and demand. Its greed pure and simple. I think that its time for the little guy to get the big stick and smack some heads over this crap
A raise in oil prices should say a rise in greed,profits.We produce 50 % of the oil we use and our major supplier comes from Canada.Remember the huge profits reported by the oil companies this past year when everyone else was struggling to get by.Folks we need to remember all this this coming elections.
There is no "supply and demand" when it comes to oil. The price is what it is based on the past. GOD FORBID anyone in this world take a pay cut. Saudi balanced budgets on $25 a barrel then and saw higher profits at the price rose. Why should they drop the price?! They are used to making billions if not trillions. "Speculators" look at their checking balances, thats their tool for pricing.
All I know is this black gold problem is really scary for me..
Google the term "peak oil" for a real wake-up call.
I had a wise teacher once, and one of her favorite sayings was necessity is the mother of invention.....
So what you're saying, the biggest way we could hurt the oil producers and speculators financially is to use less gas? I don't want to drive a Prius, but it wouldn't be hard for me to cut back a few gallons a week. It's to bad Americans can't rally around something as simple as this.
Yeah, but what of those of us who've already cut back as far as we can? I only drive outside my neighborhood for work (which is 18 miles away – the office was moved 2 years after I got the job, used to be 4 miles) and once a month to the warehouse store. I tried carpooling, but my work schedule is kinda oddball and it was not possible to find new partners after the last time my work schedule changed. I drive a Chevy Aveo hatchback that gets 28 mpg, and I'm still paying nearly $110 a month for gas.
Just bought a MC = 50 mpg. Work from home 3 days. Drive car only in the months when it's too cold for the MC. Work is less than 15 miles. House is gas heat. Still have the yard tractor, electric just doesn't work for gardening yet. Still driving the car too much but trying to figure out how to cut that back. Good bye gasoline
Amigos! I know the way! you might say no way Jose! but I do. Start pumping oil here in America and we (mexicans) will work for very cheap..oil barrels will flow all over the states!
Why is oil prices going to stay high they ask....because the government wants it to, plain and simple. We have more oil in this country to sustain our needs for 1000's of years but our government would rather sell it to other countries instead of helping its own country get back on it feet. Oh well, let the chips fall, and send this country into a deeper depression than it's ever seen before.
Fareed forgot to mention that the Obozo administration has printed so much money that the dollar on which the price of oil is based has lost its value. That's why we're paying $3.50 a gallon, which is exactly what Obozo and the liberal eco-nazis who run his administration want so people would be forced to either drive less, buy little electric cars, or move from the country to the inner city urban bubbles.
Are you paying attention, Amerika?
Zakaria I completely agree with your points and I like what you have written here. One aspect of this issue I feel should have been included is the fact that everything we consume relies on oil for transport. The price of gasoline only addresses the cost of transporting ourselves while everything else is transported by ship, truck or train, all of which, including the trains that deliver coal to power plants, run on diesel. The price of diesel has roughly doubled since 2009. That is going to drive up the cost of living much more than pump prices i.e. it takes oil to grow, process, package and transport food.
I am fascinated by your comment, "Venezuela is in a slow-motion collapse because of Hugo Chavez's mismanagement." I am pretty well read regarding oil production issues and geopolitics to the point of being some kind of armchair "wonk" and I feel embarrassed that its' the first time I have heard this. I always thought Venezuela must be doing great with all its oil. But then there's Nigeria now that I think about it. The curse of oil and all that. If you can justify it I would love it if you could write a post giving a bit of a broad strokes breakdown of your view of Venezuela's "slow-motion collapse".
Thanks
Rick
Victoria BC Canada
P.S. I must agree with the comment re Canada above.
I doubt that Mr. Zakaria will expand on his comment, because it has no basis in reality. Venezuelan Oil Indusry recovered very quickly from the disastrous drop in production caused by the oil strike in 2003, and has maintained its production around 3 million barrels per day ever since. Not only has Venezuelan economy been growing steadily, but initiatives like Petrocaribe and increased trade with our neighbors have also helped to bolster Latin America's economic growth. With the largest crude oil reserves in the world, Venezuela is negotiating with OPEC the increase of our quota, in order to be able to increase our production to 4 million by 2014. 5 trillion US$ were awarded to PDVSA last month in order to start the construction of new production, storage and refining facilities.
And what about the EPA getting their finger in the pot and we could end up paying 25 cents per gallon fee or is that investment?
This is why I started biking to work last year. Saved over $2000, and lost 50 pounds as well. There's no downside. Give up oil, it's only making the world worse, your wallet lighter, and your stomach bigger.
Nice thought for some. But as someone who works in the electronics service industry, it would be tough to lug around 500 pounds of tools, test equipment and parts on a bicycle.
It's not as hard as you would think. Look into the Xtracycle, or the Surly Big Dummy, or maybe a Bakfiets cargo bike. If those don't work for your load, you can still make positive steps by doing your grocery shopping and other errands on bike. Every bit helps.
Obviously bikes aren't going to completely replace cars, but for every person who switches most of their driving, that's less demand and oil prices should fall.
The key here is to diversify the available fuel or energy sources available and develop them as much as possible to drive down their initial high costs. We can't forever rely on oil, even if the Earth has enough oil reserves that can last for thousands of years. Lots of nations with very high populations which were very poor in the past are rapidly industrializing. In the meantime, extracting oil is getting more expensive, due to diminishing returns. Currently oil is still very important as it is easily transportable, has the highest energy density per unit of volume and can be stocked for an almost indefinite period of time.
Diversifying alternate energy sources (biofuels, hydrogen, battery, natural gas) and adapting a more "conservative" or "responsible" stance on energy usage is a key factor. You can't fight obesity by loosening your belt.
The oil prices must come down some day because what goes up must come down,a very popular saying in Nigeria. The political tensions observed in countries that are major players in global oil prices cannot continue forever.
As we anticipate a
better outcome, let no one develop high blood pressures yet. Be hopeful for a better future.
It's called peak oil. Get use to it.
Exactly!
Peak rip off better anology.
Charlie's got it... Peak oil is the problem. It's also the main cause of the world's current economic problems and our main reason for intervening Iraq, Libya and soon Iran. Crazy times ahead...
The Year: 1996 The Location: Cleveland, Ohio The Price of Gasoline: $0.94/gal If you don't think inflation and or manipulation of prices you live in a fantasy world. WAKE UP! You are living the in controlled destruction of the global economy. And as we finally make the final transitions into the technology age we will see a world much like the transition to the industrial age. Every fundamental global paradigm shift is marked with revolution and violence. This is the new 1848.
The destruction of the global economy by quasi socialists, unions, and public sector pensions sucking the life out of what would be healthy capitalist economies.
Socialism is a parasite that kills health economies and liberalism is a mental disorder.
Another GOP supporter caught in the head lights of the FOX gravy train. Get a brain, get your head out, and realize this goes beyond that of your tiny brain politics. You are doing exactly what the elites want you to do. Good job.
You should try to not be such an idiot
If you think Obama is any less corporate owned than Bush was you're crazy. The only difference between R's and D's is the lies they have to tell to get elected. The idea that socialism or environmentalism is responsible for high oil prices is laughable. Prices are based on supply and demand with a bit of exaggeration from market speculators. The price is going up because demand has increased steadily and since 2005 supply is flat. And supply is not going to go up. The oil production curve roughly traces the oil discovery (with a time delay to build the production facilities) and the discovery curve already peaked... we can't go back in time and change that. The oil we need to maintain global economic growth simply isn't there. Hence, we will have a world wide depression until we either invent replacement technologies (alt energy and increase efficiency) or else kill a lot of people... which seems to be the preferred choice of our corporate and banking masters.
As to why the U.S. or Canada aren't producing more? Why sell it at $80...$90....$100, and it'll be gone forever? We're holding our reserves in 'reserve' for the day oil gets to $200 a barrel, then we MAY put it on the market to make a killing!! Insofar as the normal, typical every day driver—who REALLY gives a hairy rat's patoooty???
We really should look at Canadian oil. After all Iran wants to manipulate us with the oil. Go to a nearby neighbor who is a friend. Maybe we should look at the pipeline. Obama keeps saying we should be prepared for the future with Green products, why not be prepared with the oil. Or is the Mideast his friend and he does not want to have a thing to do with Canada.
Obama is trying to run america like dalton mcguinty the liberal leader has ran and ruined the province of ontario canada. McGuinty believes in the green scheme, investing billions in solar and windmill scams and car batteries that blow up. He is burning the ontarion into massive debt and hijacks them with soaring hydro and insurance rates while catering to refugees and canadians of convenience. Just like california. Obama, Mcguinty, california. All one in the same. Massively in debt and going nowhere but down.
You nailed it. There is `ideology money' ; green-washed publicly subsidized heavy borrowed investments like Ontario/Obama camps, and there is `hard-earned money'; savy investors who read the spec sheets.
Petemg- Canada IS the #1 source of foriegn oil to continental US. The Keystone XL pipeline to Texas from Alberta is for crude supply to refineries located there. Once refined to gasoline it is intended for EXPORT. What is the #1 export commodity of the USA ? Gasoline.
The true cost of an oil & gas based economy need be factored in . If that was done gas would be $15. / gallon.
I believe Obama wishes to move away from oil & gas based economy for the sake of humanity and the planet.
Problem being the strong lobby with all the $$$$ , and of course- human greed.
And the Republicans want to continue drilling. And for what? Adding more oil to the world's global supply so that prices can go up even further? As anyone should know by now, oiil is based upon what the suppliers and speculators want the price to be, not what demand dictates.
The only way out of this mess lies in two options. One, we become oil independent, which is a finite solution and probably not feasible in the first place. The second, is to seriously look at alternative fuel options. penalize any companies that look to hinder the process (i.e. buying up alternative patents, land grabs, etc.), and get the show on the road. Henry Ford had an electric car for this wife in the 20's. When you compare what he had then, and what we have now, there hasn't been much progress. That is by design and unacceptable. We can put a man into space, but can't develop an alternative fuel source for a land vehicle in 90 years. I'm calling a big BS on that. Let's get it together and get this done.
How are you going to power the electric cars...hampsters on treadmills? Most electricity in the US comes from coal. Can't have that...it's not "green". Besides, even IF more were built (coal, nuclear, hydro or otherwise), the NIMBYS (Not In My Back Yard) and BANANAS (Build Absolutely Nothing Anywhere Near Anything) won't allow any more transmission lines to be built without getting their panties in a wadd.
Earl Weaver- Think solar arrays placed in different time zones. Think storing the heat in sodium at 1000 degrees for latent heat recovery. Consider wind turbines to augment electrical generation. And of course Geo-Thermal as we all know the deeper one goes the hotter it gets until you hit molten rock! These are called 'renewables'. Problem is they are free and perpetuate forever and oil barons can't steal from you while destroying the Earth at the same time. But keep defending them and the political hacks that are on the GOP payroll.
That's why the "Big O" has got to GO!
Big Oil is now too big, too powerful, and has too many politicians on it's payroll. It ain't gonna happen until there is a popular uprising amongst the people. That isn't going to happen either so settle back and get used to taking it in the shorts.
What do you think "THE BIG O" has to do with oil prices it's the big rich oil investors who are to blame because of their GREED.
If you mean big OIL then you are correct sir!
Be careful what you wish for. You can always adjust your Petroleum consumption at your own pace and budget. The `Big Green' will gladly accept billions of tax dollars (yours and mine) to create a `psuedo-industry' like Ethanol etc. `Alternative' energy sounds great as talk is cheap. When you have to lay down a hard earned dollar, the free-market has the final say.
Auto-makers like Ford, (no I dont work for them) have had record years by introducing technology driven increases in fuel-eficiency and performance. The Leaf and the Volt are collecting dust in showrooms. Few people can rationalize paying 35% more for a vehicle that runs down if you get too far from home.
Like it or not, Oil rules as it is still the most practical choice for the near-future.
Volt doesn't run down Dave. Merely switched over to hybrid mode. Range is somewhere close to 500 miles electric / hybrid combined . Not bad. The few models that made it to a showroom close to me were gone before any dust collected! But hey, keep up with the good factoids!
FAREED, you spew more non-sense and pass it on for fact than any other foreign-born 'spinster' out there. Why don't you go back to Bombay where you PONTIFICATION makes sense to the UNEDUCATED masses. STOP SPINNING!
Watch the markets: as soon as gas hits $4/gallon, the economy will tank (sorry for the pun) again. This cycle is never going to end, as long as average income stays so flat/declining in the USA – Especially in the face of inflation eating away what little people have in savings now.
The average American income was $26,000/yr in 2008. It's no better now, while prices for almost everything are higher. You might want to think about how far that money goes with expenses being what they are today.
Sorry, posted in the wrong spot
Darius, if there is some kind of point in that rambling series of political one-liners, you certainly haven't made it. Provide actual arguments for what you are talking about, not just empty statements with no substance behind them.
The basic rule of economics is this: G R E E D. Plain and simple.
Greed works. Do you not like having the best standard of comfort ever in the history of man?
GREED IS THE NUMBER ONE FACTOR IN ALL OF THIS!!! EVIL
Rich greedy oil stock investors will keep oil prices artifically high even if oil spewed out of the ground without drilling for it.
Nonsense. Learn some basic economics. Ijut.
Create your own oil company, sell your oil at cost, and quit whining, please.
Mr Zakaria – DID YOU EVER HEAR ABOUT PEAK OIL and EROEI (Energy Return On Energy Invested) .....you should look inot it and you will see there is another level even behind politics on the first page.
Unfortunately those issues are NOT almost t all in media. Maybe you can try – your articles are read by people. It would be great help for all to understand where the REAL problem is.
Thanks
Martin
Oil goes to the highest bidder. Why is that so hard to understand. You can want to sell at the highest price but that has never influenced price.
Why oil prices will stay high? This won't a lot of BS like the mega liberal Zakaria rattled of in the article. Just one word....Obama. November 6, 2012 can not come soon enough.
Alternative energy projects continue to come on line daily.
And slowly but surely they will displace fossil fuels.
Every year a higher percentage of energy is generated by alternative energy and that continually lowers the risk of energy disruption from the crazy Middle East.
Right now oil prices are in the stratosphere for no sane reason. Oil traders feed on their own paranoia.
.
"Maybe it's time to trade in your Escalade for a Prius"
Ahh yes.....the true agenda reveals itself. This is what the leftists of the world (including Zakaria) are truly hoping for. LOL!
We are now exporting gasoline, since if we allowed it to stay on the domestic market, prices would fall. That would cut into the oil companies' profits, so we export gasoline. The Keystone XL pipeline likewise would not be used to lower prices in the US; instead, the oil is destined for foreign markets.
The idea of supply and demand dictating the price of oil is "quaint".
ever cross your mind that maybe our dollar is not worth what it was 10 years ago? END THE FED
Fareed: There is another factor that you are not looking at:
Riddle me this, Batman: Why is it when we had the record setting oil price of $147/brl and the national average price of gasoline was $4.11/gallon. Right now, average price for oil is between $100 and $110/brl and national average price of gasoline is between $3.30 and $3.50/gallon. The disparity between oil prices and gasoline prices is amazing.
Also, you have gas station owners, like the main one here in the city I live in, that will raise the price of gas by 15 to 19 cents a gallon for reasons like it is going to snow, oil goes up a dollar a barrel, or a holiday. For example, gas was $2.94 a gallon for Christmas. The day after, the said gas station company, which owns about 90% of the stations in my city of 125,000 people, raised the price to $3.19 a gallon. The rest of the stations stayed low, and the big company dropped their prices back to $3.02. and then everyone else went up to that.
Having worked for oil companies on offshore oil rigs, I cannot understand why the gasoline prices are doing what they are doing. At one point not too long ago, oil was at $110/brl and the national average price for gasoline was $4.00. How is it that $37/brl makes up $0.11/gallon prices. The traders on Wall Street are controlling the oil price and gasoline prices separately. They are just trying to make a buck off of all of us!
Please explain how the traders on wall street are causing prices to go up. You can't can you. Please get educated.
Gager,
Gasoline is also traded on wall street, just like oil. They set the prices, and the station owners tack on their cost, taxes, and any other government fees, then add on their profit margins. Look up gasoline on the stock market, and you will see that I am correct on this.
As I said in my post, I have worked for a lot of years in the oil and gas industry. I am guessing that you are the one that needs to be educated.
The US has the worst basic education in economics ever. It is absolutely scary. An amazing amount of wealth is created from economic freedom and yet most people want the freedom to stop.
The editor must be a liberal because he said it may be time to trade the Escalade for a Prius. Why not support the American economy and trade the Escalade for a Ford Fusion Hybrid???? At least this way we create American jobs and get great fuel economy. I have a Ford Fusion Hybrid and have had no problems do don't start saying that it is all about quality. BS!!
Another Day....Another Excuse........
Investors with money are using oil to hedge against inflation of the dollar. It's as simple as that. We are all paying the price to keep their investments up. We need to eliminate oil speculation or require people to take position of the commodity they are buying.
If that were true which it is not then why are half the speculators losing their shirts? Speculation is zero sum gambling and has nothing to do with the price of oil. The price of oil has everything to do with speculators winning or losing.
People scream and squawk about speculators and oil companies being the cause of our high gas prices. Compared to most other countries, our gas is cheap. What's their reasoning for why gas is so expensive everywhere else. It will be a decade or more before fossil fuel alternatives are the norm. Get used to paying $5 a gallon of more from now on.
The other countries pay 3$ – 5$ a gallon in taxes. This is so well known only the very young and very foolish dont know it. The fact that you dont know this suggests you need to educate yourself a lot more before posting.
Between oil producers, speculators, and gas companies, it will never be low. Oil was $10-$20 a barrel for decades. They will raise it a lot if the economy turns around. They know they can..
This article is a lie, propigated by Wall Street. The real reason oil and gas are so high is the massive speculation in the markets by large banks and hedge funds. The large banks are taking massive free loans from the Fed and either speculating themselves, or loaning that money to hedge funds. They have artificially inflated the Dow and all of the commodity markets with their free to gamble with money. The US consumer is forced to pick up the price tag for there obscene profits. The current administration is powerless to stop it, as they have been bought an paid for by Wall Street. Only Ron Paul has the guts to stand up to them and the Fed.
Total nonsense. Absolute BS. Please explain the mechanics behind your belief.
Seriously, please get all of your Hollywood left wing liberals and socialists together, create your own oil company, and sell your oil at cost.
Hey Frank, I think I hear the stealth helicopters coming to take you away.....
The easy to find, cheap to produce oil is no more. Why would oil producers choose to drill for oil miles under sea waters in the Gulf of Mexico or in Brazil? Why is Saudi Arabia, spending billions to inject steam into the Wafra oil field to coax oil out of the sand? For the same reason that the Saudis, whom the world turns to for spare capacity, have not increased oil exports since 2005 despite rising prices; the giant land oil fields have not been found to replace the aged Ghawar. Canadian oil sands, deep sea drilling, oil shale, all can produce oil but at much higher cost. But don't be concerned America, fire up that SUV and stop whining about expensive gasoline because we put ourselves in this position. Nigeria, Iraq, Saudi Arabia, Iran, Libya – we need their oil, like it or not.
The oil price will fall when our government (and other governments) gets serious about fuel efficiency standards in private passenger vehicles. Instead they let people drive around like the spoiled brats they are in big trucks and SUVs for no other reason than they want to have a big truck.
As for Canada, they are so worried about being taken seriously, they are willing to turn their country into a reprise of Soviet-era Siberia, deforested, polluted, and destroyed. What a crock of absolute bull this all is.
To the free enterprise haters, how does wall street control the price of gas. Explain the mechanics. You can't because wall street does not control the price of gas.
Again Gager,
Look up gasoline on the stock market. It is traded just like oil.
It is not oil that is traded on wall street, it is the oil company stocks. I own some oil company stocks and so far so good.
Gager,
You REALLY need to look up what you are talking about.
Oil in the US is traded under WTI (West Texas Intermediate). That is the benchmark oil price set in the US.
Gas is traded as gasoline. I am glad that you have oil company stocks. But get a clue!
Oil prices will continue to rise in the US because Obama is destroying the US Energy Infrastructure! Obama is doing more damage to the poor and the middle class than Osama could have hoped for. The corrupt and incompetent Chicago Democrat is just doing what his Chicago Dems have done to Chicago and Illinois: moral and fiscal bankruptcy!
Ken – the simple facts are that oil and natural gas production in the US have GROWN under Obama.
This is very basic knowledge. Look at some of the EIA data for the last few years for more detail.
israel needs to learn how to SIT DOWN!
Here's a thought... The reason gas prices are so damn high is to maintain "Big Oil's" MULTI-BILLION dollar profits! Duh!
ST,
The oil companies do not set any of the prices. The traders on Wall Street do. They just profit from what the traders do.
I will admit, that it is totally possible that the oil companies pay the traders to inflate the prices.
You are all free to go start your own oil company and sell your oil at cost, please.
The price of oil company stocks is not the price of oil. Wall street has nothing to do with the price of oil. You just don't get it.
Gager,
See my last post to you. You really don't get it!!!!
Why will oil prices stay high?
Because unless the globalist elite give the illusion of scarcity to our precious resources, they will have no way to overcharge us for resources that are in abundance and destroying the middle class would be a little bit harder.
Why would you cocnlude that oil is abundant?
Google these phrases:
"North Sea oil past peak"
"North Slope oil past peak"
"IEA peak oil 2006"
Two things: WHY does everyone fail to talk about the BILLIONS in pure profit (after all is paid) OUR oil companies make? It the prices are fair why these profits that are absurb. Also, no one mentions that OUR oil companies have been charging 30 to 80 cents more for diesel that cost one to two cents less to refine? They used to use the excuse of winter demand but now it is year round. Why are the oil companies spending millions upon millions in TV ads trying to convince us they are nice guys and not crooks. Me I beleive the later.
IIt is a global market. You can't dictate what profits a big oil company is aloud to make. Anyone that complains should create a business that does not make money, then there would be no innovation and reason to work hard, socialism.
aloud? Really? If you can't spell at 5th grade level then don't post at all.
So the rule of supply and demand is all a myth...plain and simple. .....nice.
Thank you speculaters....I hope you rot in hell.
May you rot in hell for destroying freedom.
Jimmer – Google the phrase
"IEA peak oil 2006", and then decide if supply is a factor.
Oil prices are high because Opec says so and Obama wants them to be high so he won't increase supply. Gas was 1.80 when he came into office. When he leaves, it will go down again.
M0R0N
Mr. Zakaria, Your article failed to address production cost as one of the main drivers. "Easy oil" is becoming less and less available. Older oil field reservoir output is dwindling, and replacements are more expensive. Many producers are required to drill deeper and in harsher and more risky environments (deep water) for example, to replace those reserves. Shale gas and oil extraction is another example that requires a break even point at which if the cost of extraction does not justify the value received. Oil companies don't want sky high profits, oil companies work in a global economy like everyone else. Everyone wants a profit. OPEC's somewhat controlled quota system is indeed built to keep prices at some level, but that does not mean that the large international oil companies are purposefully not drilling. It is all a bit more complicated.
Greg – you nailed it.
Most new oil discoveries are costly – deep offshore, tar sands, shale oil – the "easy oil" is gone.
Most conventional oil fields are past peak as well, while demand for oil continues to grow robustly, leading to higher prices.
Spin it anyway they want, it's greed.
It all makes one wonder as to who is REALLY pulling the strings on events like Iran's threat to impact the gulf oil traffic. Is there some person or persons functioning as the "Godfather of Oil" (larger and apart from the Middle East Oil Cartel) that is orchestrating all off this mayhem, indirectly supporting their own economy(s)?
It's time the US (perhaps the US and Canada) become one large oil-independent grand "island" by encouraging renewable energy and conservation while still cultivating their own oil resources for use, if anything, in being at the table in such a volatile global influence.
Seriously, did you think all the lawsuits BP has was going to come from the stockholders or execs? Duh. No one was punished or even lost a bonus, but they were forced to give a lot of money to people (who, like most dumb Americans are bred for, probably spent it on a new TV rather than the environment getting any better). Where do you think this money was going to come from? This is why we need more PUNISHMENT and less lawsuits. No more giving money to people who don't deserve it (they shoudl purely be compensated for actual losses, no other damages) and people severely punished when stuff like this happens. BP only had to wait for the dumb American public to forget before raising their prices (and yes, it is a collusion of all the oil companies).
It is a free market. If you want to create an oil company and sell your oil at cost, please do. Get all of your liberal buddies together and go for it. And if you make a mistake, no one is perfect, than we can sue you and put you in jail.
Be prepared for expensive commutes to come? Are you kidding, Fareed. Just yesterday, I spent $75 filling my tank. Our household is paying nearly $500 for gasoline. Isn't that expensive enough?
These high prices are driven by the Wall Street speculators, whom this administration has been unable to rein in because they have been protected by Republicans in Congress.
John – Google the phrase:
"IEA peak oil 2006"
Oil's price is more about the constraints of supply than speculation.
High Oil price trend – follows recent / continuing unrest in the Arab world.
There, that was easy.
If only the Irish had stuck oil and Arabs had potatoes – life would be so much less hassle for the West.
We could probably cut demand dramatically if Corporate America would embrace telecommuting. My 3-hour commute is often unnecessary since I can usually do everything from home.
With Sarah Palin being our self-proclaimed "energy expert", I'm surprised she hasn't weighed in on this yet. I'm sure that thousands of teabaggers are wandering around their trailer parks like lost zombies, waiting for instructions from their queen.
A week ago I read in USA Today that the United States in 2011, for the first time in a decade, was an oil, natural gas and jet fuel exporter. An exporter. I am not an economist but if the US is selling oil/natural gas/jet fuel (to whom?) would that not mean we have more of that product than demand? And if we have more of that product than demand, why are we paying for oil coming INTO the country? And if we have more of that produce than demand, why is gas $3.50 a gallon? Want to fix the econonmy and create jobs, drop the per gallon price of gasoline/jet fuel to $2. Prius? What Prius?
David, perhaps we are exporting gasoline, but not oil. We are still a huge importer of oil. We all love our cars and conveniences. Natural gas though is a different issue, recently we have become or will soon become an exporter thanks to shale gas and fracking. If you want to ban all fracking than be prepared to pay more for natural gas and become a net importer. And we have turned around years of oil decline by fracking for shale oil as well.
The US exports some gasoline, and even some oil, but we are a NET IMPORTER of oil.
The US also exports large amounts of natural gas, and it is expected that 2012 will be a record year for natural gas exports from the US.
NET Importer but most of it comes from our ALLIES. Saudi Arabia and Canada. Countries that invest back into American businesses. Still the person point is not to muted with semantics over words. The truth is we are EXPORTING GASOLINE because we aren't using. We have the refiniries and the refining capacity for the oil but we can't use all of it because our demand has gone down. So if the US demand has gone down and its down worldwide. That is for OIL AS WELL AS GASOLINE. Then why is the price so high.
STOP BUYING GAS AND THIS WONT MATTER...LEARN TO TAKE A BUS DUMMIES
yeah that's a great idea... I'll just take a bus for my 60 mile round trip to work every day.
why dont you go live in a teepee and let me know how that goes, dummie
must be george bush's fault
Read "The Prize" by Daniel Yergin to learn how the oil industry really works, though asking you to read a book is probably too much. Most you are frighteningly ignorant about the world around you.
While the GROWTH in global oil demand has slowed, demand continues to grow robustly. The world will require an extra 1 million barrels per day over each of the next 5 years to meet anticipated global demand growth (Reference: IEA).
Also, supply is very constrained, with most conventional fields past peak. The IEA has stated that conventional oil production peaked in 2006, and the world will never exceed those 2006 conventional oil production levels -ever. Thank god for non-conventional oil sources, like tar sands, shale oil, and biofuels.
Ignoring this simple fact of severly constrained supply ensures that we are headed for another major economic "event".
Google: IEA 2006 Peak Oil
Stop BSing the public with these lame articles. Oil changes price on the whims on the oil companies and the governments that are in their pockets. It does not follow the basic rule of economics at all.
Watch the markets: as soon as gas hits $4/gallon, the economy will tank (sorry for the pun) again. This cycle is never going to end, as long as average income stays so flat/declining in the USA – Especially in the face of inflation eating away what little people have in savings now.
The average American income was $26,000/yr in 2008. It's no better now, while prices for almost everything are higher. You might want to do the math regarding how far that money goes with expenses being what they are today.
The Oil industry is run by crooks, and crooks will always find a way to drive up prices.
The price is high because they know they can charge what ever price to get to work....we are being ripped off by the 1% yet again.
OH FAREED. Lending is what drove the price of oil back up. Some will say that it was lending that created economic demand that led to more demand for oil. That would be wrong as well because the price still exceeds even that demand. THE TRUE driver is speculators have more access to capitol and are doing what they do best and that is flipping oil. The cost did rise when they were talking about blockading the strait of hormuz that still doesn't justify the cost. The only way to get the cost up that high is someone has to pay for it. Someone is through borrowing money. When lending was tighter you saw prices plummet. Yet the demand for oil globally hasn't changed significantly in 5 or 6 years. If anything US demand has gone down. Way down so much so OIL is becoming our number 1 export and is helping to decrease our trade imbalance.
What a waste of webspace this article is. You can sum up the reason for high gas prices with one word. GREED. The next time I pay $3.50 dollars for a gallon of gas, I'll be thankful the price has gone down. Where I live in Northern California gas prices are all at least 20¢ a gallon higher than that, with most gas stations charging upwards of 30¢ to 40¢ more per gallon.
Reader's Note: Someone should tell Fareed Zakaria to go back to school and learn how to write proper English. If you use the $ symbol, there's no need to spell out Dollars.
I'll say this much, that it isn't our fault nor the rest of the world's that these oil rich supplying countries chose to increase their spending because they were receiving an undeserved glut of oil income. When it all comes crashing down... and it will very soon, I hope they all fall under for the irresponsibility they are guilty of and the economic woes they have placed on everyone else. If you can manage your budget with oil at $25, there's no reason you can't continue doing it.
Obama Democrates can't complain of high oil prices when they don't want Canada oil via Keystone Pipeline, no plan for energy independence, and no policy in the Middle-East!
This article misses the mark on several counts. First, while it is winter in the northern hemisphere, it is not in the south, and some countries are close enough to the equator as not not have the seasonal swings. But his biggest mistake is saying that demand is down. Europe's economy may be in recession, but the economies of china and India are growing at slower paces, not declining. Their oil consumption is growing, as is global oil demand. All he had to do to find that out is to google it.
Why haven't we converted our country over to CNG? Natural gas is at an all time low, we have more supply than demand AND we're sitting on 300 years worth? Obama get off your lazy campaigning butt and let the U.S. use it' natural resources.
Econ 101: If we were all driving electric cars or cars based on compressed natural gas (or anything other than oil) the price of oil would PLUMMET!!! Market price (speculation) is still driven by DEMAND. Period. Doesn't really matter where the oil is. WE THE PEOPLE are responsible, we literally DRIVE the price of oil up and up. There are lots of ways to maintain your current driving "life style" and use less oil at the same time. We just don't want too because we are spoiled. Eventually we will be forced to make a change. Econ 101: The buyer ultimately sets the price. iPhones cost $600 to $1,000 dollars because demand exceeds production. Eventually iPhones will cost $99.00. Same holds true for oil.
Corporate greed.....which is where most of our problems stem from in the U.S. Vote Romney to help complete the Corporate Aristocracy.
Exactly. A vote for anyone other than Ron Paul is a vote to seal our fate.
Ultimately, the phrase is "what the market will bear". Meaning, it doesn't matter how much these countries need sell a barrel for to "break even". The global economy cannot support oil at a higher cost than it is right now for any real length of time. Bottom line, just like so many other bubbles that have popped, this ohe will to – because it has to. The result of being greedy and keeping oil too high or artificially driving up the price is a global economic crash. The world's "financial architects" have painted themselves in a corner with unbridled economic growth based on NOTHING over the past decade – in particular, the past 40 years. Consider that 80% of the value of the "markets" since 1973 is INFLATION.There is not "real" value". If you don't have a plan for the collapse, you should probably start making one soon. The events they have set in motion are out of their control at this point.
Fareed, the corrupted son of corrupted politician will always justify benefits to their corrupted corporate and politician friends. Recently he said India will lose its BRIC status because it is not allowing walmart to do business in India. According to Fareed, India is corrupted if they do not allow certain corporates to do monopoly business. He is fine if some whistle blowers got murdered by his friends in India. Shame on you Fareed.
Obama gets a free pass... when bush was in office the libs pounded him on gas prices... obama takes vacation , gets pass.... its bush's fault..... silly libs
GREED! The fact of the matter is, when oil prices first went up in 2002 to 2.89+ the oil companies began making record profits. then they slowly gauged the prices higher and higher and higher and they continue to make record profits. This is 90% greed and 10% supply. perhaps this is the true reason Bush went into the iraq war.
so bush went to war for oil? so we must have pillaged and looted Iraqs oil reserves right? where are they sir? please think with your head not your mouth... otherewise you end up looking stupid
My opinion: 9 -11 (and ultimately Iraq) was to facilitate huge growth of the military industrial complex and massive Liberty stripping under the guise of attack and strengthened through fear mongering. I think 9-11 was the same as Peal Harbor – the government knew about the plans and could have stopped them yet decided to allow the events to happen to further their own power/gain. Bottom line; our government is corrupt and evil and has no regard for "we the people".
Iraq was about oil.
Libya was about oil.
Iran will be about oil.
one reason and one reason only: Greed.
Oil is kept high in collusion with the government, to generate the revenues to pay for running the government, people are allowed to think the greedy Oil companies are the only ones involved, which they are
Don't forget about the oil companies exporting gasoline to keep domestic demand (and gas prices) artificially high even during periods of low domestic consumption.
Total pure greed from (mostly) Islamic countries. a barrel of oil is worth LESS then 20$ PERIOD. there is no "REAL reason for it then pure greed.
How so you think those Islamic country fund terrorst and are able to get all those fanccy weapons to kill US and each other?
Of course there is also taxes(again greed) that most country apply to gas. how much those a gallon really whitout the goverment cut?
I like greed, it's people like you that scare me.
You'll like it until we become a socialistic state – and don't worry, you WON'T be one of the Aristocracy in the new order.
It would really help if you would dedicate a program to the economies of Venezuela, Ecuador, El salvador and Cuba. It is evident that theinformation disseminated regarding Venezuela is self serving in an election year and the likelihood of election fraud.
forgot to mention, Oil is probably kept high to keep from raising taxes on the wealthy, as well as the Oil companies greed
Gas / oil prices "wrench up" and ONLY up even above inflation. $3.00 gal gas goes up to $4.00 gal, then down to $3.25, then up to $4.25, then down to $3.40, and everyone says "Thank God the prices went down. This is great!".
Oil traded on the futures market does not control the price of oil. Futures traders try to guess the price of oil in the future. Oil is sold on the futures market to people who would like to make sure they get a fair price for the oil but to do that they must make sure the price is acceptable otherwise it will be sold on the free volitile market. The futures market is a zero sum guessing game.
Traumaemt,
Wall street does not control the price of oil.
Oil prices trade on oil futures contracts.
Canada is not mentioned because the supply is considered much more reliable.
Trading futures can make you some money or send you to the poor house. Best leave it to those who know how.
The reality is that as a nation we need to become less dependent on foreign oil, which is prone to disruptions, and that might mean developing the oil we have offshore and in the midwest and Canada, with its oil shale desposits. But, our government is keeping exploration limited due to environmental concerns. Mr. Obama is blocking a key pipeline from Canada which would bring high wage jobs and lower gas prices from greater domestic supply.
We have a choice as a nation, to go with GOP position, and develop our own sources, to keep prices affordable, or the Democratic one and block pipelines in Oklahoma, and no or limited drilling off our coasts.
But, Americans are choosing the Democratic one, and thus oil will become more expensive. Good liberals drive Priuses and Nissan Leafs. Good Republicans choose roomier and safer larger SUV's and pickups, which handle better in the snow.
Quite a contrast!
save your time reading the article. here's the short answer: because they can.
Prices stay high because; a) there's profit to be made, b) demand is relatively constant, c) supply is dwindling, d) oil companies use every excuse in the book, usually some ridiculous "fear," to keep prices higher than they should be, or e) all of the above.
Most small to large businesses are complaining about unnecessary government regulations which are limiting expansion. The new health care law is a big sore for members of the U.S. Chamber of Commerce, who must spend more time and money hiring accountants to figure out unnecessarily complex forms like 8814 and 3800 which allow deducting medical insurance for every employee they hire. Only 10% of small business owners are bothering to take the large tax credit, according to the IRS.
And, 6 Democratic and GOP senators wrote the EPA to loosen new regulations on gasoline, which would drive up the cost nearly 25 cents a gallon.
Folks, we have a choice as a naiton. To embrace the nanny, socialist state that Europe is trying to move away from, due to their finances collapsing, or to embrace free markets, limited government and lower taxes.
Sadly, we choose the former. So, expect high unemployment for a long time. Remember the 30's under FDR?
I have been a geologist for over 25 years.
No where in the article is it mentioned that oil is a finite resource. The world consumes about 30 billion barrels of oil a year. In 1999 oil went for about $10 a barrel. Now it's over $100. A primary reason for this is that nearly all the cheap, easy to find oil has been taken out of the ground. The oil we get today is getting harder and harder to find and extract. This is a major driver for the high prices we see.
Google the phrase "IEA peak oil 2006" to further understand the finite nature of oil.
Mark nailed it. This is the most censored news story out there. We have reached world peak oil production or will very soon. Once we hit this peak, oil production will begin to decline. The rate of decline isn't certain as it depends on many factors, but it will decline. As net exporters become importers, they will hoard their oil to maintain domestic stability. This means that those who already import most of their oil (ie: the USA) will feel the decline the most. It will not be a fun time.
Studmuffins-
Oil companies only make 10% profit on their product. Microsoft makes 29% profit on every windows upgrade. Let's stop beating up on the oil companies. Those jobs pay high school grads 90-120k a year, and in turn create 4 private sector jobs.
All the liberals posting here need to start their own companies, and find out the real world!!
Why do oil prices stay high? It's very simple: Price Fixing.
Don't expect anyone in the media to ever investigate it, though. Oil companies are major shareholders in the media.
There is collusion, of course, but subtle, no paper trail. It's easy to predict oil prices: Every 6 to 12 months, there is a manufactured "crisis." Retail gas jumps dramatically. When the media is saturated with outrage, prices fall, but remain about 10-15% above previous baseline. Then, the cycle starts again. It's a perfect system, with one flaw: If prices get too high, then the perpetrators bring the wrath of politicians (despite them being paid off), and it works against their interests.
Articles like this are irresponsible... who at CNN is getting paid off here? The media writes this garbage and somebody is paid off....do people realize the oil industry like the housing market is just greedy idiots trying to manipulate people for profit??
Wake up America this is garbage..the insider trading goes on, people are paid off and the government approves. Disgusting.
Mark-
You are right. Oil is a finite resource. We need to change our driving behavior, as prices will only rise. I read somewhere that oil might be $200 a barrel or more in a few years, and even Saudi Arabia and other mideast nations are running low on reserves. George Bush famously said that as a nation we are addicted to the black gold. And, that is from a former oil company executive!
But remember that oil is a key component in many products we use, such as plastic, asphalt to pave roads, and even tires from rubber. So, it is in our best interest to develop as much as we have in our nation and close by, until an alternative can be found.
Oil can be extracted from the ground without hurting the environment. Just look at Alaska and the pipeline there, which allows wildlife to walk underneath, and the tundra has not been harmed greatly.
High oil prices are a result of collusion between Wall Street and Washington. Legislation has been written over the last 10 years that allows speculators to conspire with investors to drive prices up on oil.
Oil prices will stay high because the oil companies are greedy mother effers.
Why will oil prices stay high? It's simple.
Contrary to the theme of this article oil demand is not declining – it is growing. The IEA estimates the wold will need over 1 million barrels per day of additional production for each of the next 5 years to meet global demand.
Where will this oil come from? Saudi Arabia is the ONLY major exporter who -claims- to have any capacity to increase production, and these claims are often disputed by the oil industry.
It's really very simple – supply is tight and demand is growing robustly, thus high prices. These prices will also not end anytime soon – Google the phrase "IEA peak oil 2006" to understand the implications of Peak Oil on price.
And buckle up – the next decade will be an exciting one when it comes to oil!
Ever heard of price elasticity? Oil doesn't play by the same rules as regular goods in economics. People are going to buy oil pretty much no matter what just like people are going to need food, water and electricity regardless of the price.
Actually, they aren't going to continue to buy oil, especially when they cannot afford it. It is going to get to the point to where people are going to drastically change their lifestyles to include as little oil as possible to make it through their day.
Puckles, here's one example:
I have an engineer friend who has a grid-tied solar PV array which powers his house. It provides ALL his family's electricity, and he sells the excess to the utility company. He has told me he is considering expanding this array to also provide sufficient electricity to drive 10,000 miles per year with a Volt. He has said it would be a $3000 addition to the current array, and would be paid for in 3 years (assuming a gas cost of $3.50/gallon at 35 mpg).
He's shown me the math, and it's correct.
The panels have a full replacement warranty for 25 years, so he could literally drive "for free" for a couple of decades.
I do not want a Prius or a hybrid. I want a completely independent car free from gasoline. Bio-fuel works, readily available, made from used vegetable oil. I want EVs on the road.
People here are pointing to Canadian oil, especially the tar sands, but that opportunity is rapidly closing. The Canadian hearings on building a pipeline from the tar sands to Canada's West coast ports are almost complete, despite the attendance of Robert Redford, Leonardo deCaprio and Kevin Bacon. You see our President is incompetent, but Stephen Harper, their leader is a go-getter, makes decisions, and moves on them. Just because our leader is completely absorbed with winning the next election to the point of being dysfunctional, it doesn't mean that others countries are going to wait around for us. Canada is going to sell the oil elsewhere to people who really want it. And hey, we'll see if Obama will go to war to protect our mideast oil....and the day he will have to face that decision will come.
Since oil is a global commodity, its price is not influenced by whether it is piped to the US or shipped to Asia.
So the point you are trying to make is false.
It is, however, in our strategic interest to keep that oil in N. America, because it helps to ensure the near term energy security for the US.
'cause the rich need to stay richer. somethings in life we just need to accept...like how cancer is an incurable disease. it's just a part of life...
speculation in commodities and corporate/cartel greed
"Speculators have been driving up the price of oil and eventually it will crash."
This was supposedly going to be addressed 2 years ago by the Obama Administration. When you allow the "what ifs" or the "it might happen" to play into the markets you are allowing gambling with EVERYONES economy. Why are speculators allowed? If I wanted to gamble with my money as often as the government allows speculation to take place I would live in Vegas.
There is no rhyme or reason to oil markets anymore. We do need to invest in "home grown" oil ventures and become less dependent on foreign oil. Yes, yes, we do need alternative energy sources but until they are mass marketable AND affordable we NEED fossil fuels to get us to that point.
You were foolish to expect any Administration from curtailing oil "price gouging". The government make a significant revenue on each gallon sold based on the price of that gallon.
This is just GREED!... Why do we let this happen? This is the reason the whole country is bankrupt. We need this madness to stop.. Mr. President Please stop this from happening. You with one swoop could fix the american economy by CAPing the price of gas and fuels at $1.50 per gal in the time of disaster and $1.00 at the time of no disaster. The people that drill wells and refine will still be making BILLIONS of dollars but the country will have had the choke hold of the oil done away with.. Think of it this way. It costs me to work $60 per tank full 2 times a week thats $120 a week in GAS and or DIESEL to get to work and back home.. Then my heating oil is $600 to $1000 every single time they drop at least once every 2 months. This madness needs to stop PLEASE PLEASE PLEASE CAP the price of gas and diesel...
Ask people who had to suffer through Nixons price freezes how well legislating prices works. There is no way out unless we stop using machines. Even if someone could invent a cheap alternative they would still market it at the highest possible price. That's how capitalism works. It benefits the capitalists at the expense of the people.
I've read stories like this my whole life. That's more than 4 decades worth of ever changing excuses for the high price of oil. It's civil unrest, it's peak oil, it's hurricanes in the gulf, it's embargoes, it's China, it's India, it's summer gas, it's winter gas, it's a lack of refineries, it's restrictions on drilling, it's the cost of oil sands, it's speculators, it's ... enough already. Here's the simple truth; oil companies and oil producers are fat as ticks and they like it that way. If demand starts to dip, they rig a reason to drive the price up to keep the margin the same. No free market would act that way... which means it's a racket and all the excuses are cover.
Your comment implies that oil supplies are "infinite", and price is only a function of corporate greed.
If oil were truly plentiful, it would be at $20/barrel.
God forbid that anyone imply that oil prices are a result of corporate greed.
I am now sticking out my tongue and going, "Bbbbbbbbbbbbb" while hitting my tongue with my finger.
oil may indeed be infinate, no one truly knows how much oil is under the skin of our earth. Of course they yell us it is in short supply, that's what keeps the price up. Even if America opened up all our wells they would still sell us the oil at market prices.
@rebiii
lol – well, we all hope that you're right that the world has "infinite supplies of oil".
Most experts say exactly the opposite.
Private or public companies produce or control only a very small part of the world oil supply. The vast majority of the global oil supply is controled by nation states, like Aramaco, PDVSA, Petrobras, CNOC, and others. (Exxon is <1%). No discussion of price can include the acknowledgement that needs of these states controls prices, and little else.
I know this will sound strange...... but consider the cost of one half gallon of milk.... at least here on Guam... is $4.69 and more...depending where it comes from....everything decent is imported....
....right now a gallon of regular is $4.62.... we have to get it from maylasia... what im saying is.... it costs a whole lot less to produce a gallon of milk than a gallon of gas.... but since we dont consume 4 to 7 gallons of milk at a pop.... the cost of gas effects us more....psychologically ..... though .....its still expensive when your income is low....
cnn got there facks from a cerial box
must be where you got your degree in spelling
Be prepared? It is already running over $350/month to commute to work in the little 4-cyl. That's another car payment!
Who the hell can afford a Prius?
I could written this article in two words, "Price Gouging".
It would have been a more accurate article if you had wrote it.
There were wars between 1950-1999 how come oil was cheap then ?
I mean there were Rusian wars, Yogoslavian war , Gulf war and oil was stable
How come now in 5 years the price has risen ?
What is WAR?
Is it Winning Against Resources?
Is it World Against ..Races?
Is it Win And Remain?
Is it White And Racism?
Is it World Against Remnants?
Is it .........................................?
»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»»
In my opinion, WAR is: it Was, it As and it Remains until the end of the World.
Either Religiously or/and Philosophically, WAR started by serpent in Adam and Eve time. Since then, it Remains in human blood. Sometimes we have more or less WAR. And also, Natural and Human WARs.
Oh, and you have to factor in the cost of the Iraq and Afghanistan wars, too. The troops are performing a service for the oil industry. So that huge chunk of your tax dollars that goes to the military is also a cost of our dependency on oil.
I agree with the fact oil producing countries have reasons to keep prices high but this only matters because we don't have a decent alternative. If we had something other than petroleum products to operate our machines oil would become dirt cheap.
Check out the movie Collapse which is an interview with Michael Ruppert. It's a wake up call unlike any other.
Yep, oil "insiders" and savvy investors are well aware of the looming challenges of peak oil. This helps to explain why:
Gold is up by about 6x over the last decade.
Oil is up about 4x over the last decade.
As sovereign debt grows to be unmanageable for most countries, and their currencies plummet, commodities are a desirable investment.
It's also probably a good idea to invest in energy before the every "Joe on the street" knows about Peak Oil...
I don't really believe in "Peak Oil". I think it is just another reason for oil companies to cut back in supplies and increase the price of oil. I have been hearing about oil reserves running out for decades. We were supposed to run out several times already. I think its just another scare tactic.
Bob – It's a bit like when you have cancer, and the doctors estimate you'll live 2 years.
Then you actually end up living 5.
That doesn't change the diagnosis, or the fact that you died from cancer.
We know who are responsible for the financial primary causes of engineers. It has been well designed by them...
However, despite what horrible stuff they do, they make America on top of the World! Which is Great!!! Although, they don't satisfied my financial need, I will never let them down to make American opponents happy.
Few Months ago, some...protested in American States. Did you noticed what those American opponents said?
Whomever, makes America Great is Greater. I fully respect them. They...know better than what we know.
I don't remember oil prices ever being cheap. Of course they are going gouge us. That's what they do.
Remember the Native American fable of the old woman and the rattlesnake?
The real reason is greed and avirice and a society that wastes oil to easily. If we could provide an alternative fuel such as alcohol to run our vehicles, you would see prices drop. If we flew less, stopped racing cars, transported goods by rail again instead of trucks, we might see prices drop. If we passed laws that acknowledged that the oil companies have a mnopoly on fuel and are engaged in profiterring, prices would drop.If we built more fuel efficient cars, prices might drop. But it is hard to defeat greed and the love of money.
The only reason the price of oil is so high is because the oil Industry is a monopoly. The industry keeps supply limited so the price stays artifically high. Instability in the Middle East is often used as an excuse to boost oil prices (by limiting supply). Hell I have been hearing about Iran being only six months from having nuclear weapons since the 70's. Its a scare tactic used to justify higher prices.
maybee if yall didnt spill the oil in the gulf .
yall isn't appropriate language considering the Oil company was responsible.
I am wondering if you will ever get an education to qualify for working at McDonalds or just stick with what ur doing now=living off of welfare.
I wish the article had some solid data indicating the demand for oil falls in the winter. I was under the impression that more oil was needed in most of the world for heating purposes. I may be wrong about this, but I wish this artlicle showed some actual information about this.
I did my duty for myself and removed my 10 yr old Oil Furnace that heated my house in the cold northest.I now have electric baseboard ,wood stove and pellet stove.I am also thinking about adding a propane heater just in case the Electric company decides to raise their already outrageous rates. I also went from two 6 cylinder cars to four cylinder cars.
I still can not figure out why commuting to work isnot an allowable IRS deduction??????????????????????????????? I would really like to know which members of our politicians voted on not allowing working people to deduct their expenses getting to and from WORK to survive and pay taxes????????
The author state he "saw some striking numbers this week: Look at the "break-even" costs for the world's top oil producers". I was wondering if he would share that info or at least provide a link of some sort.
Bob – Zakaria also implied that global demand for oil is declining – it's not.
From the IEA December OMR:
"Updated medium-term projections show global oil demand rising from 88.3 mb/d in 2010 to 95.0 mb/d in 2016, growth of 1.1 mb/d per year on average. "
That's a demand growth of over 7%.
The artilce states that countries now have what he calls a high "break even" point. Where they need oil prices high to balance their budgets. He then goes on to state that this is the reason they these contries want oil prices so high.
" So now it is in these countries' interest to keep oil prices high, which they do by curtailing supply in one way or the other".
Really, does he mean they never wanted oil prices high to begin with? They never wanted more profit?
They originally thought they wouldn't be able to get away with it. The economy turned out to be quite capable of absorbing the hike (yeah, it stung, but it didn't kill us).
"The next time you pay $3.50 dollars for a gallon of gas..." Ha, ha, Americans don't know what high gas prices are. So cheap gasoline! Using today's currency conversion rate, a gallon of gas cost $7.91 in Sweden today, and there are a whole bunch of countries with more expensive gasoline than that. Comparing with data from March of 2011 (http://www.dailyfinance.com/2011/03/29/gas-prices-world-high-low-country-pain-pump/), my guess is that a gallon of gas (converted from liters) cost around $9 dollars in Norway at the moment, and well above $9 in Turkey and Eritrea.
If this was a true global market for oil, would these price differentials really exist? I have a couple theories why there is such a difference in prices around the world. The first is that Norway and Sweeden pay the price difference in taxes. I have no idea if this is true. The second is that the oil industry has effectively segmented different makets so they can charge a different rate in different regions. In effect, guouging certain areas more than others.
It comes down to energy policy, and the associated application of taxes. Example: Canada is a net exporter (and the largest exporter to the US), and yet their gasoline prices are higher than the US.
Venezuela on the other hand heavily subsidizes their gasoline price (to maintain stability) and they have some one of the lowest prices on the planet.
Bob, yes, in Sweden, in 2010, more than 60% of the price of gasoline consisted of taxes (VAT, carbondioxide tax, and energy tax). Then while there is global oil market, I doubt there is a global gasoline market. (Have you ever heard of "gasoline tankers"?) In addition, as it is with all other goods and services, gasoline prices are probably affected by local supply and demand, which is affected by local income levels, distance to refineries, efficiency in distribution channels, etc. The price per gallon of gasoline in March 2010 was just $1.19 in Algiers, Algeria while it was $9.63 in Istanbul, Turkey – more than more than eight times more expensive! (http://www.dailyfinance.com/2011/03/29/gas-prices-world-high-low-country-pain-pump/)
The end of the article said that we might want to buy a Prius. How nice it would have been if it said a Chevy Volt, Ford Fusion, Chevy Cruze, Etc. Get the picture?
"So now it is in these countries' interest to keep oil prices high, which they do by curtailing supply in one way or the other."
But you said at the start of the article that supply was strong?
The author does appear to contradict himself here. The reality is that without significant barriers to entry, there would be many more suppliers in the world. There would be much more oil on the maket. Supply has been way below equilibrium (supply = demand) for decades.
Well, demand is infinite, so...
Why will oil prices never go down?? Greed plain and simple.
There are three reasons oil is expensive. 1) Instability mark up, the region where most of it comes from is politically unstable. 2) Demand increases every year, oil drives modern economies, the third world is moving more and more into a modern economic model every day. 3) Oil is priced in US dollars, which the current administration has been deflating with quantative easing (actually creating over a $1 trillion in new money, deflating the value of current dollars)
Scott, I would add that it is getting more expensive to extract. Much of the easy oil is gone. We are needing to drill in more technically challenging environments (deep water for example) and spend more and more to coax oil out of the ground.
I could agree on many things in the article but I just must say the main-reason must be that the production of cheap oil has stalled since 2006 (called peak oil) but it has not yet begun it's slipperyslope downhill. To see through the fog of smoke and mirrors, one must look what is going on in the world by just seeing what people do, and not listen to what they say.
* There have been a drive to secure "future prospects of oil" in the Arctic. Russia, Canada and other nation has started to "compete" and argue who have the most right to do this and that and where. The Arctic is an very unpleasant enviroment and it would be expensive – extremely expensive to take up oil there. Why would you do that if there were plenty of oil elsewhere?
* Canada tar sands – Why on Earth would start to dig up the most dirty, most expensive and most environmental unfriendly oil-source to date if it existed plenty of cheap oil elsewhere? And would you do it if the oilprice were let say $30/barrel? Of course not.
* The oilrigs are moving out to new frontiers – deepwell- drilling far out in the sea. If it existed plenty of oil in let say Texas, why on Earth would you drill "in the middle of the sea"? It is surely more expensive – I mean many more times expensive.
We must be honest in this matter, of course the price is related to risk but it's also due to the "short margin". There are simply not enough cheap oil-production to keep up with the demand (and further growth) anymore. When the economic engine of Europe and USA stutters, other takes their place to keep up the demand.
So, the oilexportering nations doesn't only need more money to calm down their population or fund their budget. They will really need it more to do more exploring and to find alternative sources (like the Arctic or a new Canada for an example).
I found these two points the main-reasons we still have a very high oilprice in a time of crisis in the major consumer-countries. Only a worldwide economic depression would force the demand down and the especially the price big time (and this might be one of the reasons the oil-exporting countries DOESN'T like high prices, because too high prices could very well trigger a depression and a price-collapse).
Bingo.
Sloppy English, BTW.
Sorry for my sloppy English in the previous post, but I also want to add this rhetorical question:
Since fossil fuels are a finite (non-renewable) resource, you know that from the beginning, and you build the entire modern society on that resource. In what direction do you think the prices (and for that matter the society) will go eventually?
It's not really that hard to understand, is it?...
I think you've pretty much summed up the nature of man.
In our defense, every other organism behaves the same – reproduce (yeah baby!) until resources are depleted and the "overshoot" settles down to a sustainable equilibrium.
It’s too bad we’re not any smarter than a rabbit in this regard.
I'm still not buying the "peak oil" theory. We have been sold this theory for years, well before 2006. Remember when we were sure to run out of oil before? In the 70's. And then again, in the 80's? They always seem to "find" additional sources of oil when alternatives become viable.
I'm willing to bet there is still plenty of cheap oil around.
Bob – It's a bit like when you have cancer, and the doctors estimate you'll live 2 years.
Then you actually end up living 5.
That doesn't make the original diagnosis wrong, or change the fact that you died from cancer.
I don't think its like that at all. I think its more like the little boy crying wolf. You believe him the first couple times, but then you realize he's lying. (I know, the wolf does eventually show up and sooner or later we should theoretically run out of oil).
But I have been hearing about peak oil since the 70's but they always seem to "find" another source. I can think of a couple major "finds" in the last year alone.
I think peak oil is just another scare tactic used to justify a higher than market rate price for oil.
Prayer is not an economic strategy.
Actually, a BIG issue in keeping oil prices high is that the Obama Administration's policies _is_ cutting down a lot of potential oil production. As such, this is one huge strike against President Obama, and could end up costing him the election.
The U.S. is drilling like crazy. Large "potential" reserves DO NOT MATTER. Flow rates matter. The amount of extraction per day per well is on a startling long-term downward trend. Keeping oil in the ground is a smart plan. (How rich would the U.K. be today if it had only started tapping the North Sea just now instead of decades ago?)
I think it's hilarious that neo-cons keep piping in with "drill now, baby!" You DO realize we'll start to run out of oil in the next 30-50 years right? And THEN you'll get to see some real dependance on foreign oil. All of the Republicans will cry "why o why did we use up our reserves back when gas was only $3.25. We could really use them now that it is $85.95 per gallon."
There's an important distinction to make. There are two reasons why producers need high oil prices.
* As mentioned, they need to fund state spending.
* Also, the MARGINAL cost of production is approaching $90/bl even for Saudi Arabia.
Forget greed, forget rhetoric, forget fear. If the price of crude went down to $60, say, Saudi Arabia would have no choice but to shut of the expensive wells and produce less.
Read theoildrum.com for excellent analysis.
Fareed,
Good assessment! But there is also one other ingredient. Price-fixing!
By the way, if you use half as much oil, it's twice as cheap. Problem solved! (I never worry about inflation, I save far more than that by not buying crap in the first place.)
Or could the price be manipulated bt th traders, not like they are honest people. I think their is a bit more to it than just the world economy is doing good or so they say.
Every time I experience a searing, hot burst of flatulence I am reminded of Sarah Palin.
Wrapped in a Doushe Limpjaw. Hahahahahahahahaha
the easiest fix for high oil prices is to start producing more oil here in the U.S which will make thousands of new jobs and help balance the our budget. We need to DRILL!
Come to Western ND and see that we ARE drilling. Are prices falling? No.
The answer: Towel Heads!!! (And of course our greedy oil companies too) Hahahahahahahahaha.
And not a word in this article about oil being harder to get to. What is it they say in AA, something about an elephant, or an eight hundred pound gorilla in the living room? Astounding, the power of the myth of progress.
http://www.offthegridmpls.blogspot.com
If gas prices are over $4 a gallon come election time, Obama is done! The keystone pipeline and gulf drilling has been shut down by this President and he will pay the price come election time.
Please do a bit of research instead of going by GOP and Fox rhetoric. Facts (by a non-partisan study): The Pipeline with create around 6,000 jobs for 2 years, then nothing. A far cry from the 100k number floated by Republicans. This oil is being piped to the coast with the intent to export it for profit. That means diverting it from the midwest, which will likely result in HIGHER gas prices for those people. The pipeline does not help our "foreign dependance" because it is being shipped off.
Fareed – the price if gas is what it is because the oil companies collude together to keep it that way. A gas price that is actually related to the cost of oil would be about 2-1/2 cents per gallon for every dollar a barrel of oil costs. So, $100 a barrel oil drives a gas price of $2.50. Add taxes to bring it up to about $3.00 a gallon. Everything above that is scamming by the oil companies.
Rise of planet apes, get rid of stupid and greedy Mankind....
not a mention of inflation, and the fact that OPEC only sells in the US dollar?
CNN needs someone that KNOWS something about economics, and not this loser.
And here is my explanation: gas prices are driven by GREED. If they can squeeze more money from you they will. Capitalism is based on greed. It's a vicious system. Welcome to reality, and good luck to you.
Today is Martin Lucifer King Day -- he had a dream that if he killed me he would succeed.
then when he couldn't live himself – - -= the others implemented the million tramp march everywhere. just in this city i work in there is a million tramp march
Everyone ridiculed Carter when he said we need to plan ahead to get off of oil. Who's laughing now? (nobody, this is DIRE!)
100% Obamas fault. (I decided to try the liberal way of debating)
I see your trailer park manager is letting you play with his computer again today, eh?
lol!
Classic.
I believe it's all a conspiracy. A simple threat is enough to jack prices up .20 in less than 2 weeks. Who profits? Oil companies. Demand did not increase. Real risk did not increase, but profits skyrocket.
At these prices, the current USA president and the worlds economy, our economy is DOOMED... Time to Vote Obama OUT OF OFFICE
No mention in the article of ongoing depletion of the world's largest oil fields. Production of easy cheap onshore crude is in decline, and we are attempting to replace it with much more expensive sources - more expensive in terms of dollars but also in terms of energy. This "tight oil" and oil sands and other unconventional sources require much more energy to extract, which means we need to produce an ever-increasing amount of "barrels" just to stay even on available energy.
This seems like a basic concept with which Mr. Zakaria should be familiar. Are we in denial about depletion?
Nice theory, do you have any sources to back this up?
If respected popular figures like Zakaria can't bring themselves to acknowledge the fact of depletion, ignorant folks on the internets will continue to blame their predicament on environmentalists, oil companies and other canards.
Wait for oil prices to hit $1000 a barrel, when Iran starts a nuclear war sometime within the next 2 years, courtesy of Obama's perverse Iran policies.
If you don't like the price of oil, then use a bicycle and/or public transit like the majority of the world does. Many of you argue about global climate change (I'm not saying that I believe), but how many of you actually make your actions reflect your beliefs?
My Grandson has more computer power in his game devises than NASA had the day it launched Apallo 12. Dont; tell me that we don't have the technology so I can get 50 miles a gallon in my pickup truck. Internal combustion engines seem to be 30 years retarded by design!!!!!!
They are high because we have a government that learned nothing from the 1970's oil embargo. Instead of refining our own supply we depend on some camel jockeys for our lives
Why the high price for oil? It's because they can get it. Period.
There's no regulation on price in the US and there's demand at the asking price. Oil companies are not into what is good for the country or the US economy, so they won't accept discounted prices to a lower level where they would still make money.
We don't need economists writing "down to us" as if it's more complicated than it really is.
High price on oil because they can. There is never an excuse and you can explain it out your ear because bottom line is that we all know the oil trading is a scam. When it's supposed to go down, we wait about a month or 2 to see any change in the gas pumps, but by then, something happens, like a worker hurts his finger and the price of gas skyrockets within a day, so don't waste your breath explaining the high prices of oil- because it's all BS and we all know it.
As long as we allow other countries to control our energy, we will pay for it. Everyone should be pushing for alternative energy.
The US economy is doing fine? You can't be serious! Maybe for the rich except I don't know any of them. Sorry.
Zakaria the s cu m bag doesn't know what he is talking about and is a legend in her own mind...or is it she thinks she is a man...I can't tell the differece.
Why will oil prices remain high? Because it's getting more expensive to get it out of the ground.
Fix the economy – give their own agenda.
Nobody mentioned a little thing called "Peak Oil".
learn your stuff people, oil is a bell curve we hit production capacity 6 years ago, whats gonna happen to our Hydrocarbon economy?
down the toiled it goes
Sorry, that's an old argument proven wrong with record oil discoveries and exports this year from the US.
Record discoveries? I guess you mean the deep offshore Brazil oil – very expensive to extract and the extraction rate will be low. So there's no help there.
And of course the exports you're talking about are for refined product (gasoline), not oil, since the folks in the US are driving more fuel efficient vehicles and the rest of the world is growing more and more hungry for refined oil.
oil is kept artificially high in price because the oil companies want it to be high . their speculators are doing this and have been for several years , that is the only reason .
ONE WORD, BIOFUEL!!!
Lots of research being done NO ONE EVER TALKS ABOUT... probably because greedy oil companies don't want you to know there's a genetically mutated algae that takes in sea water and puts out FRESH WATER and ETHANOL. This is real, folks. My boyfriend toured the plant for a college paper two months ago.
Excellent point. I have read a little about this as well and it seems very promising. If you have any links on this subject, please let us all know. It would be very appreciated.
Walter C. earned the trust of America over decades and people took his word as gospel on all topics. Fareed Z. is a nobody and CNN tries to foist him on us as the universal expert. This is why CNN is tanking.
Very true, not to mention is a hack for the Obama Administration.
Oil prices will stay high because the Obama administration has admitted they want high prices. For starters, cheaper prices mean people driving more and the need for improved roads which we can't afford. This writer is a nut.
Sadly America gets the media, the government and the crooked industries she deserves.The greed trough remains and only an Obama second term will set loose the Justice Department upon the pigs of industry. Where we are complacent and complicit is in not changing our behaviors further.Like in war or marital discord there is no robbery of rights without the consumers' surrender or acceptance of the oil companies thievery.
I hope they don't pay Fareed for writing the trash. It's hard to take him seriously.
But we don't need the keystone pipeline? When oil goes to $200 and Canada's oil is going to china we will have Obama to thank. I am outraged and I am a liberal!
Correct me if I'm wrong here, but isn't that why they want to build the Keystone pipeline. So they can get the oil into the Gulf so that it can be exported around the world and to China?
That wasn't a very good arguement especially since a majority of the points have only happened in the past two months. Oil prices have remained artificially high for almost four years now and is mostly due to speculation and a lack of regulations as to who can trade oil contracts. It doesn't matter what price that OPEC wants but rather what buyers will pay and that is currently being controlled by speculators and traders in the Oil market.
Keep in mind Iraq has 6 million Barrels coming online in next 2 years, which is about 5-8% of world production. That will take the steam out of any bubble, if there is one.
Mission Accomplished.
Eric – I don't know what your reference for that number is, but let's remember that Saudi Arabia is currently producing 10 million barrels a day from an extensively developed infrastructure that took decades to put in place.
For Iraq to achieve 6 mb/day in two years seems wildly optimistic.
What you would expect from this writer – nothing mentioned about drilling for our own oil – a foregone conclusion of "No" from the left.
We'll continue to let years pass – doing nothing but making our enemies rich – because of our own environmental whacko's. The left won't even approve a pipeline from Canada – Which would CREATE JOBS!
I'm not a Palin fan, but she was right – Drill Baby Drill!
Where should we drill Rob? Much of the free flowing oil has already been discovered in north america. The Arctic has enough oil for about 2-3 years worth of world consumption. Tar sands? Shale rock? Forget it.. It's slow, expensive, requires a lot of energy to process, etc. We are already drilling much deeper in the Gulf of Mexico just to keep up. We have to go deeper in order to get what we have left. It's more expensive and risky. We have to realize that the oil has or will peak very soon and we have to make adjustments now.
Because oil executives want more money. Please insert "Because..." below my blog.
Oil prices will stay high because of two words..... PEAK OIL
It's all a manipulation game people...Do you really think the major oil companies are going to flood the market with excess oil/gas ??? And what's the latest word that the US is exporting more gas than ever before ? Where does this figure into the equation ?
Maybe when gas hits $5 a gallon in the U.S., causing a THIRD Great Depression, maybe then the greedy bloodsucking speculators, who are becoming billionaires off the middle class, will back off a bit, hmm? When NO one can afford to drive to their job, if they have one. When commerce grinds to a halt because carriers can't afford the fuel costs. When industry, what little is left of it here, does the same. Maybe then speculators will have satiated themselves and back off.
Only rampant, unbridled speculation in the commodities markets can allow these bloodsuckers to kill America for the THIRD and final time.
Leigh... Speculators are really just gambling idiots who trade in the futures market. The vast majority of them lose money doing it. They also make money no matter what the prices is or where it goes. They can make just as much money if oil is at $30 or $100. The prices are rising because we can't keep production rates high enough to meet demand. Add in a little Iranian saber rattling and there you go..
Has there been any significant studies done of the effects of oil and gas drilling on the earth? If you really think about it, how much can we extract out of the earth before it starts collapsing (sink holes etc) and potentially causing other problems like earthquakes?
There was an interesting story about fracking for nat gas in PA possibly causing recent earthquakes there.
I've never heard of something similar for oil, and the volume of oil in the ground is so small it's hard to imagine that extraction would lead to earthquakes.
Well we wouldnt have this problem if are politicians werent bought by big oil and legeslation passed in there favor we have many other sources cleaner and cheaper then oil but why do have to slave for a fiat currency just to go from A to B think people please remove your head from the sand and challenge the accepted beliefe that we cant break our addiction from a oil that poision our earth and kills animal ad people everyday
The author had me agreeing with him right up to the end where he suggests you get a Prius. That is ridiculous for the following reasons; 1.) It is a car that is way too expensive for most people to buy, even with all of the taxpayer subsidied battery technology and material, 2.) most people would not realize a return on investment (for the extra expense of the hybrid) over the course of the car's life, 3.) the car is really a massive polluter thanks to all the lithium in it's batteries, 4.) only small or medium stature people can fit into it, and it's not much good to haul anything with. Not a practical suggestion for most Americans, Mr. Zakaria, not practical at all.
Romney, Gingrich and the likes plus their sycophant rank and file need to go. Vote all Republicans out, at every level.
As far as Canada goes their major customers are the USA, themselves, and other minor customers. Believe me North America is all good when it comes to oil requirements. Asia and Europe on the other hand... and they are some of our major customers for exports. Canada has lots of oil and sells lots of oil, but they don't sell oil to 'billions' of people like EMEA sources (and Russia) do. Ergo the focus on Middle East and African suppliers in the article. Just saying.
Yep, N. America is blessed with a range of fossil fuels – not enough to meet all our requirements now or in the future, but we are in much better shape than many other regions of the world.
Fareed. I normally enjoy your show and analysis, but this one was, let's just say poor. After listening to that loon Krugman promote inflation and USD printing, to suggest there is something nepharious in the pricing of oil is a bit odd. Oil is priced in USD and the USD is being systematically debased as a matter of Fed policy. Price oil in gold or Swiss Franks or Canadian dollars – let me suggest that the price is flat to declining. Again, as a matter of policy, food and energy are excluded from core inflation numbers. What's happening to the price of food?