Hundreds of you have submitted very thoughtful questions for me through Facebook, Twitter and my blog. Over the next few days, I am going to post my text and video responses to some of the most common questions and a few others that caught my eye.
The rising price of oil is the single most serious threat to the global economic recovery, the U.S. economy and President Obama's reelection prospects. Right now, we are beginning to move into a pretty broad-based recovery. Manufacturing is rising for the first time in 25 years. Technology firms are doing very well. Retail is picking up. The green shoots of the housing recovery are emerging and that's very important because housing has led almost every recovery since World War II. .
But all the while that you have this economic good news, you are beginning to see oil prices rise quite substantially. They're up about 15 percent over the last few months. And that could put a damper on all this good news. Why is the price of oil rising?
Zakaria: Iran is a "rational actor"
It's happening for one reason, principally and that is geopolitical risk. There are fears of a war with Iran and fears that crippling sanctions on Iran would cut down Iranian oil exports almost entirely.
If you look at demand for oil, it's just not that strong. Much of the world is in slower economic times than before. In January 2007, oil was $50 a barrel. It's now $110 a barrel. This doesn't make any economic sense unless you factor in geopolitical risk. So for oil prices to decline, there must be some resolution to the tensions with Iran.
But there is a broader problem, which is that there just isn't that much oil on the market and demand is going to begin to rise again as many countries come out of their recessions and into recoveries.
Zakaria: Another war in the Middle East?
There isn't that much of what's called "spare capacity" - the ability to increase production quickly. The only ones who have it are Saudi Arabia and they are operating at their limits in some ways.
So there are economic fundamentals that explain why oil prices are high - but not why they are so high. The reason they are so high is really Iran, Iran and Iran.
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Wall Street has made oil it's new bubble, now that the last thing they destroyed (Housing) is in the dumps. I can buy oil that has not been pumpt out of the ground yet. WALL STREET – WALL STREET IS GOING TO DESTROY THIS COUNTRY.
Oil is not traded in the Wall Street, but in London and Geneva. Yes, the nuclear crisis and Iran's sabre rattling are mainly responsible for the surge in oil prices lately. But Israel and the GOP hopefuls have also helped beat the drums of war. Iran might be facing tighter sanctions soon, momentarily it benefits from the high prices. All these oil exporters stuff their coffers as much as they can, before the prices fall again. They need the revenus to finance the welfare transfers to keep their people quiet. .
Those who have all the wealth using that wealth to speculate on oil and gain more wealth is responsible for as much as 1/3 of the current price of oil.
But oil IS traded on the ICE down in Atlanta. I suggest you learn about the ICE. Before the introduction of ICE in 2000, Americans spent 7% if their incomes on food and fuel. After the introduction of ICE and all of the deregulation forced through by extremely corrupt politicians in Washington in 1999 and 2000 and also due to the extremely lax oversight by the CFTC, Americans now spend over 20% of their disposable incomes on food and fuel.
It was a mistake taking out Saddam Hussein, he was Iran's worst nightmare. He kept them in a box, just like Donald Rumsfeld taught him to in the '80's. "W" did Iran a huge favor.
@Phil Hansen: good insight. GE Bush was a flop in more than one way. He was an amateur riding his daddy's coattails and had little clue who to make a good president. He is one of the worst in the last two centuries.
Jesus Christ declared speculation as judgement over man, therfore any man who speculates goes against God's will. Therefore Holy and Unholy men, are at constant war for control over middle earth.
Gandalf where are you! O well at least we have arogan... Grab your swords if you worship God, or you worship Satan fight. Be ye luke warm and ye will be spit out.
Put down the weed.
loco weed
Good grief...get a life
That's not weed... Were talking heavy stuff here... Get help.
Man, you're high.Or just one of those creationist, Evangelist who listen to Rush Limbaugh.
I think that he is just being sarcastic - at least I hope so.
greed. Not Iran. Iran is simply another in a long line of excuses. Greed ,pure and simple. I predict that desperate people will resort to violence against big oil companies and politicians as it may be the only way to make this b.s. stop. Sad but true. When the mega greed rich reach into peoples pockets for their last bit of change some one some where is going to snap....
Stop being upset and do something. There is an alternative is called the chevy Volt, why do you think the right is trying to tarnish its reputation. Its an OIL liberator. You pay a little extra but no more worries about OIL prices.
A hotdog at a gas stations 1 dollar
A fillup at the gas station 60 dollar
Driving your Volt passed a Gas Station saying 4.59 a gallon PRICELESS
Btw the volt is not expensive, you can lease the Volt for 349. You save 100 on gas a month so for a small fee of 249 a month you can stick it to Wallstreet and OIL Barrons
Too many people (and politicians), say the answer is new fuel efficient cars. I’d love one, but people like myself, or anyone else in my family could never afford one. We’re forced to keep are old cars running as long as we can, so we can keep driving to our jobs, and spend all our money on rising gas prices.
You sound like sound like a young liberal OWS punk who has no idea what it is like to pay an electric bill... You think electricity is free from daddy. Think again kid. And do you have 60,000 dollars lying around to pay for a Volt piece of crap? Most people who work to feed your lazy Azz don't either.
I think you are on drugs. The volt cost 40k and can go @35miles on electric, the rest of the trip is on gas. The avg car cost 25k with 25-35mpg, so how much gas it that cheaper car buying on the price differential. As the cars switch to electric (obama mandate), doesn't it occur to you that electricity prices will skyrocket, second electric is very inefficent per input/output btu compared to gas. Lastly population increases are going to wipe out any gains from renewables. So there are still big problems brewing for the future. How much energy is going to be required to make and install all the wiring in parking lots, street parking stalls, etc for the electric world. Problem is liberals only look at a small data set to determine their agenda.
Chevy Volt won't be around much longer, GM just terminated a very large contract with Hitachi where several of the control systems for the battery on it are built. That was a good 300 people that just lost their jobs at a single factory because the Volt is failing.
SCCL.. You do realize that a gallon of gasoline contains 115,000BTU's, and that 1kwh of electricity is equivelent to 3420BTU's. In your worst case scenario of "only" getting 35 miles out of that charge you are doing it on approximately 36,000BTU's of energy vs 115,000 in a gas car. That means for equivelant energy in a Volt you can go over 100 miles on the same amount of energy. Not to mention when "idling" in traffic even for hours at a time I only use 0.25kwh per hour. Personally I could care less what other people drive. I don't have to pay for it, and they do. Perfectly happy spending $27 a month to go 1000 miles.
scci: Did finally manage to squeeze in 'liberals', well done. Do you suppose it's 'liberals' that are doing the speculating, that which is driving up the price of oil worldwide. These 'fears' – what fears? What percentage of the worlds oil demand does Iran really meet – 5%? The rantings of, and the reaction to a 5% player raises the price 100%? The price was doubled by speculators that provide 0% of the oil production on the planet.
@Steve: Your analysis is missing an additional step. How many BTUs of feedstock are consumed at the plant to produce the 3420 BTUs you cite in 1 kWh of electricity? Electricity is not mined from the ground, it must be created from natural resources, and there are inefficiencies in production. In the US, coal is the largest feedstock used in creating electricity, and coal plants are about 33% efficient – implying it really requires 109,000 (36,000 / .33) BTUs of coal to move a Chevy Volt 35 miles, as opposed to 115,000 BTUs of gasoline for a car that gets 35 mpg. Electric cars hold promise for the future but wild-eyed euphoria based in false analysis helps noone.
Sdn – you never really answered my liberal rant but as usual deflected the discussion to something else. As a moderate Republican, I think anyone buying in the commodities markets; need to take possession of their purchases. This will mostly eliminate speculators that are wreaking havoc on our capitalism system. I am not a big fan of the current WS and commodities trading regulations. But then again dodd & frank just passed new rules that have done nothing to date. Both parties currently blow and both are only there to help their friends & campaign donors. We are more like Greece then people realize
sccl: 'as usual'? I don't recall ever replying to any of your posts. And I've never accused anyone I've never met of 'being on drugs'. Untruths and insulting accusations may be convenient in promoting an agenda, but, in fact, put paid to serious consideration of any subsequent commentary. I don't use the terms 'liberal' or 'conservative' in my posts for the simple reason they are irrelevant and clearly, if unintentionally, illustrate a lack of fundamental objectivity. I'm a mechanical engineer by profession, and am perfectly aware of the laws of conservation of energy, hysteresis, and system losses.
The point Matt is making is that if we use our collective intelligence, we can rid ourselves of a dependence on fossil fuel. Yes it might be expensive at first but within 50 years, one of our rewardswould be saying asta la vista baby to the blackmailing oil dealers.
SDN – If you are politically neutral, then why did you respond with a defense of the term “liberal”? You certainly leave the impression that your viewpoints or opinions fall into the classification of aligning with liberal ideology. There is a word to classify or describe every action & everything living & nonliving thing on this planet. It is a shame you did not use your engineering degree to politely inform matt about energy input vs outputs which I have know doubt that you fully understand
Factor in that instead of using an existing empty GM building, they made one from scratch. I call that a huge waste of energy that has to be calculated into matt’s calculations. I am for all other forms of energy but unlike gas, non of them are a one size fits all with the possible exception of hydro since it is powered by gravity. But our politicians have put all their eggs in one basket – the car and yet the housing consumes more energy. There are so many things that can be done to save energy here it is crazy. The problem is all the zoning codes that no one at present seems to want to tackle. So back to the car we go.
I ask GM how is it that a 1992 Geo Metro that I owned, got 48mph on a carburetor 1 litter engine and today it takes a sophisticated, complicated, expensive piece of machinery to get the same results of 20yrs ago. I really do that car had very low emissions. I am old enough to have been jerked around the last 30yrs and that is why I get a little derogatory with my posts.
sscl: I agree wholeheartedly with all the energy and conservation related comments you've made. I believe them to be well founded and defensible in a rational discussion. Your insistence in attributing comments, impressions, degrees, defenses etc that I simply have not included, suggested or implied in my comments is something I won't tolerate. You don't have the option of restating, translating, making assumptions, drawing conclusions about my statements or attributing your 'impressions' to something I haven't even peripherally suggested. This simply becomes a farce – you interpret what I've said – to your imagined advantage – and then your response to what you've decided I've said. Like I said – a farce.
the leaf is way better
@ Matt, Then what we need are cars that run on hot dogs. But of course then people will invest in hot dog futures, drive the price up, yada, yada, yada.
@grvol
1. The Volt is not crap.
2. The Volt is not $60,000.
3. The cost of automotive energy via electricity is far less than via gasoline.
4. grvol's greatest skill is being pointlessly obnoxious. To society at large he is, well, a drag.
$40k for the Volt. I'm constantly amazed at the lengths to which Americans will go to own automobiles.
Andrew
Bicycle Commuter
Yeah, biking to work really would only work for about 6 months a year here.
We need to do more than just have electric cars. If half the people in the U.S. had electric cars, it would overload the national power grid. We need to update it. Also, we need to fix our infrastructure. Most of it is complex and old. We need to use more public transportation (like buses, railroads, trams, etc). Public transportation is more efficient than individual cars. and just because we switch to electric cars means cheaper fuel prices. We also need to think about how we produce our electricity.
@Bikers
Yeah... I cant feed and provide for my family with a bike. Next.
@ Tom: I believe the smart car is only 10,000 bucks =)
And with a range of 25 to 50 miles per charge how long will it take me to get from Georgia to Oregon?
Matt, how many of us have$40,000 to buy a Volt? Why can't Obama open up some drilling? That would create the expectation that prices would go down, and they would. Yes, we need alternative, but in the meantime, we need relief. We cannot destroy the economy while waiting for alternatives fuels to be developed at prices the majority of the country can afford
Sorry Matt, it was the Free Market and free enterprise that made this country great, not the government mandating what people have to buy or drive. The Volt IS a massive failure, has lost billions of taxpayer money and people who travel any distance at all have soundly rejected it. Just because the Feds are pushing it doesn't make it viable.....heck look at Amtrak, USPS and a whole host of other government failures.
@Dave If you are going to add the BTUs required to make electricity then to be fair you also need to add the BTUs to refine gasoline.
When speculators have to front oil futures purchases 100% instead of buying on margin, the cost of oil will recede accordingly. There's much more, read this for starters: http://finance.fortune.cnn.com/2012/03/08/oil-prices/
Whatever the pretext for high oil, war with Iran for example, the issue is we don't have a realistic energy policy and our own energy supply. Step 1 should be the construction of pipelines for Canadian oil, step 2 should be drilling for more of our own, step 3 should be aggressive development of nuclear energy, and step 4 should be robust long term development of energy supplementation using solar and wind. We tried suppressing steps 1-3 and focusing on step 4 which didn't work.
You can also buy corn that has not been grown yet. Is 1/3 of the price of corn necessarily due to wall street speculation?
Let them eat grass. Squeeze teats. Milk. About $4/gallon
Let them pay royalties to governments, do seismic surveys, analyze seismic surveys, drill in 2 miles of rock under 2 miles of water, produce with world-scale expensive equipment, refine at very little margin, distribute at little margin, finance the whole lot, take on all the risk, and make < 10% returns. Those damn integrated oil companies. Gasoline.
Of course dairy farmers have to do more than the above. but I hope you get the point.
Does anyone want to count up the government loopholes and subsidies to the dairy industry and compare them to oil?
We've heard all the excuses, but there is only one reason the price of oil keeps going up: The greed of the oild industry, including speculators, is boundless. They continue to use any excuse to jack up prices, as they have for years. No profit margin is big enough for them, and they don't care what they do to the world economy. Until we decide it's worth another "Manhatten Project" to get serious about making America energy-independent, we are at the mercy of the oil barons. A major problem is that a gutless, money-hungry Congress loves the oil lobby and its money at least as much as they love the "Big Pharma" lobbyists.
It is funny how people here come to complain about high rising prices nobody complains for example about high pricing Ipads.
In terms of oil I don't know how many times Americans are going to be caught in this endless game of oil going up and down. If you don't want to be caught or minimize the effects of the oil pendule just try to buy a more efficient car. The good thing about this is the higher and more painful the prices get more people will start to make a concience effort to save, downsise the huge cars they already had and disminish their addiction to oil.
Costs is not an excuse there are plenty of cheap options around there non hybrids cars that gives you 40 MPG and actually are priced very well, those new efficient cars are a safe as any and if you ditch your old big car get somehting in rerturn and give that has a down payment you will be better off in the immediate future.
Keeping you gas guzzler is not an option in a always increasing oil prices scenario.
We can't wait for a definitive solution we can start doing something right now like asking your congressman or lobby for a mass transportation system but I guess it is easier just to seat and complain.
I got my toyota Prius in 2004 and it has already saved me more than the premium I already paid then in 2004 to get an Hybrid. I have to say that it gives me some kind of pleassure to see how I paid $35 for a tank of gas that last me around 2 weeks and I see people paying $120 to fill those huge trucks and it will last a week if they are lucky.
Didn't you see this picture before?, didn't you learn the lesson? Well I guess no.
Well said
But men love to prove how masculine they are by driving a Ford F350 or Dodge Ram. They would rather pay $100 at the pump then drive some sissy-boy Prius. What would that say about their "manhood"?
you sir are an idiot, many of this people are construction professionals, delivery people, movers, transporters, people that has big families,etc.
do you think everyone chooses to drive big trucks, the root of all our current problems is derived from dishonest people that controls the energy supplies.just like the "Enron" CEO's.
besides not everyone can afford to drive hybrids, there is people that can only afford to drive the two thousand dollar old car.
your utopia exists only in your head.
Your idea is good on paper but in reality it doesn't work. There are too many people who work in jobs making under $10 per hour to make it feasible for them to afford a new car and the only choices they have are those inefficient vehicles. Now I suppose you would tell them they need to get a new job that pays more so where do they look?
you should have seen the size of the skid marks in her pantys
I agree the Buyers and Wall Street it's all the same game.
Welcome to the scam world.
Very true indeed. it is already happening.
I personally do not believe all that crap about Iran as the U.S. only bought about 3% of it's usage from Iran and with the current sanctions I do not believe we are even buying from them right now...And to top that off 2yrs ago I was working on Western Refinery's communication system and struck up a conversation with some of the administrative people there concerning GAS PRICES,they came back at me and stated that the reason that the OIL from our own soil is not sold to the American people AT A LOWER COST is BECAUSE THE U.S.CONGRESS SIGNED A TRADE AGREEMENT WITH OPEC THAT WE WOULD NOT UNDER-CUT THEIR PRICE PER BARREL LET ALONE PRICE COMPETE...IF THIS IS TRUE ,THEN OUR OWN GOVERNMENT IS INTENTIONALLY LYING TO US AND THIS IS WHY OUR COMPLAINTS TO THEM GO NOWHERE...!
I can fix the price a global law if you bid on oil you must take delivery.
up to one year out.
But you must take delivery or you lose your money.
imagine if I could buy the supply and future supply of the drug "Plavix". Without it many would die, But I bought every pill Merick makes for the next year. It's my way or the highway so I tipple the price. You pay what I tell you or you die.
I price it like a bag of ice after a hurricane.
Where we really screwed up is our dependence on oil. We should have foreseen this and taken oil off the commodities market. With other commodities you have options. If coffee goes to $100 a lb. a consumer can buy tea. As consumers, we can't do a dang thing about oil. We can't have our cars run on water until the price of oil comes down.
Yea, yea, yea, I know you can modify a car to run on ethanol or make a diesel car run on used cooking oil. But you can't really to that on a nationwide scale to force oil speculators to sit on their investment and lost money.
For the most part oil speculation did not ramp up until the passing of the Commodity Futures Modernization Act of 2000. This bill also gave us the Enron Scandal and the Great Recession. Look it up, you will be shocked...
Fears? Fears are what speculators thrive on. Anything to use as an excuse to up their bets and the oil prices.
Oil has become a commodity in the stock market.
Being a Canadian I don't typically comment, but saying the reason is the Iranian problem misses another rather significant reason???? Oil is sold in U.S. dollars. You folks are printing them by the trillions??? You keep changing the basket so it appears inflation is under control. BUT the oil prices aren't lying. Your money is simply getting worth less and less, and all commodities traded in U.S.D. (almost everything) are feeling the pinch. PS A leade that calls Israel a cancer that must be cut, can hardly be considered a rational actor. While M.A.D. might have worked on the godless commies, (who would fear death more than a godless commie)? I suspect it will not have the same effect on paradise seeking Ayatollah's
I'm not sure that makes sense Brian. True, the dollar is weaker than it used to be, but then currencies that are independent of the dollar would not be seeing price gains in oil since their currency would become more valuable relative to the US dollar and rise at comparable rates to the commodity. So I guess the question is: is Canada not seeing oil price rises? Since I know the answer to that question, I'm going to perhaps suggest a different theory is in order. Geopolitical stress is certainly one part of the equation.
Of course Canadians are seeing oil prices go up, the U.S is our biggest market, so we're printing money as fast as you are. Rather than comparing currencies compare oil to other key commodities, and what you see is???? yes they are going up as fast (or faster) than oil.
You're not sure it makes sense 'cause you have no idea that oil is traded for gold, then converted to dollars. Brian is absolutely correct... monetary policy is the culprit driving gas prices.
Brian, you are CORRECT. The majority of the problem (not all) is that oil is valued in U.S. greenbacks. You can thank Bernake and the FED for QE1and QE2, a policy that purchased/bought back bonds by printing several TRILLION Dollars to pay for it. Printing and borrowing has reduced the value of the dollar to some of the lowest values in years. Inflation is also a result of the reduction in the value of the Dollar. All global currencies' values are down because they aren't based on the gold standard, unless the country manipulates it's currency value. Watch the ticker, when the value of the Dollar increases, the value of gold and oil goes down. However, there are geo-political situations (like Iran/Israel, Iraq War, Libya, etc.) which causes temporary spikes due to speculation.
@Sabrina
I don't agree. What is Uncle Sam suppose to do? He can't raise taxes without hurting the economy and he can't cut spending without hurting the recovery. The problem is who controls the money... and hint it's not the government. Whether its debt or gold, if the government doesn't directly control its own currency... we are always going to be at the mercy of those few who are.
You are not Canadian.
Talks like a sandpit scorpion.
Sings like a sandpit scorpion.
Must be a sandpit scorpion.
Iran is just the most convenient excuse for speculators to do what they'd have done anyway.
Commodity trading for oil must be banned.
It can't be done. The oil companies are more powerful than the U.S. government, in fact they are capable of buying it. Congressmen aren't that expensive. The oil companies will continue to do whatever they want
Why, because it says so in the Kuran?
1. wall street killed the housing market
2. wall street killed the "Americans and their cars on super highways" dream with high oil prices
3. wall street is killing the gold market
How much has the price of gold gone down in the last 6 months? What was the price 6 months ago? What's the price now?
Wall Street didn't kill the housing market- Terrible lending practices (meaning lending money to people who had no business borrowing in the first place- as indicated by credit score) did that. Oh, and you can thank Clinton for that. The theory that every American should own a home won't work. Home ownership never works for those who can't/won't pay their bills.
Wall Street didn't kill the gold market- You haven't paid attention to the history of that commodity. It's one of the safest items to invest in. I personally own gold. It's the one tangible thing that backs MY money.
Wall Street didn't kill oil prices- Most of our pricing is controlled by OPEC and passed on to the consumer. Most countries are seeing gains in fuel prices. Using your fanciful theory, the US Stock Market controls other economies directly, rather than indirectly. The remainder of the fuel price has to do with much higher and ever increasing anti-pollution standards... forcing fuel to be even further refined.
And for the record- we only get about 12% of our oil from the M.E. Of that 12%, 8 of it comes from Saudi.
Dan, you must work for Wall Street. Saudi could ramp up production. Obama wants oil to be high....I travel to 2-30 countries each year. Your evidence is flimsy at best. cheers. Americans we need to unite. Let's not let political parties destroy us.
A house divided can not stand
I agree with you. But common sense and dignity no longer exist in our country.
be a patriot .....shoot a speculator today
Tone it down... that's uncalled for. Don't you think there's enough violence in the world already. How about locally in your neighborhood. Kids shooting kids as carelessly as your flippant statement.
Introduce them to your friends, Glock, Smith and Wesson, and Magnum and ask them if they want to gamble and speculate if your friends rule.
Why doesn't anyone talk about the oil cartel? it's called OPEC (Organization of Oil Producing Countries). The HQ is in Vienna. It's a consortium with representatives from middle-eastern countries, Venezuela , other producers, and no doubt Canada, from whom the USA gets 50% of its oil. The cartel operates independently, and can set prices world-wide at any level it chooses. I question whether Iran has a greater impact than OPEC.
They go together. In the past OPEC has decreased the production of oil to force an increase in the cost of crude. I'm sure they would be doing it now if they had to, but they don't need to.
OPEC controls production, they don't control speculators. There is already more supply than demand but speculation ignores immediate supply and demand. Removing oil from the commodities market is the only way to stabilize prices.
Canada is not a member of OPEC or any other cartel!
You are right Tom! The US was the one sovereign nation until year two of George W.s first term. We are now laughed at. The oil industry is now the one sovereign power and will be into the future. The steep rise in oil and gas is the industry warning us to stay out of Iran. Don't do anything that interferes with profits!
Canada is not part of OPEC.
Yet our number one export is now refined gasoline.
Apparently we have so much excess of this, that we're selling it off to the rest of the world rather than trim our prices at the pump.
That is true. This is why drilling more in the US or building the Keystone pipeline is not going to drastically reduce gasoline prices. The US petroleum companies will always sell to the highest bidder. If that bidder happens to be a foreign company then so be it.
I was skeptical, so I looked it up. It is actually true
Energy export is our #1 export
http://www.usatoday.com/money/industries/energy/story/2011-12-31/united-states-export/52298812/1
You say that as if you're surprised. It's a global commodity, we sell it to the world, nobody can step in and say "stop that, only sell it to America, we want our prices to be cheaper right now".
Free market.
One word: GREED
Finally, an honest and wise response!
Guys 1.2 million barrels is not a small things...even though Saudi may say that they can compensate but they can't...also there could be element of the market playing into this...oil companies earn from high prices and they want the governments to keep speculating wars to justify high prices giving the excuse of tension in the market...these are the same people who do insider trading and leach middle class of their hard earned money...lets push for reforms in the way prices are fixed to have a cap on the prices.
Uncontrolled oil prices are the direct result of politics and speculation. Our own government US production roadblocks and decisions, as well as, Irans agenda to disrupt the Middle East, both contribute heavily to the price of Oil. And do not forget the higher price of Shale and Sand Oil production, higher barrel costs are needed to support them.
In the 70's gas prices went up because oil production could not keep up with demand. Currently, the petroleum industry can keep up with demand. It is the speculators that are keeping the prices high. Drilling more or building the Keystone pipeline is not going to drastically lower gasoline prices in the US because petroleum is a global commodity. Let's say we have more wells and the Keystone pileline is built. That would allow US petroleum companies to produce raw crude more cheaply. But they will not sell to US refineries for less if they can sell to global markets for more. They will continue to sell to the highest bidder and just take a higher profit.
Please, explain to me why we are being held hostage to Iran's politics or Saudia Arabia and how much oil they can pump? America has more oil than Saudia Arabia but we won't pump it because the environmentalist have us convinced we can't do it safely.That just isn't true and yet we are sending our money to people who don't like us. Drill on our own soil and then the price will come down for us and we will be getting the foreign countries to buy from us! Please lets use some common sense!
jc, you are wrong. The aggregate output for US crude peaked in the 1970's and has largely declined since, with a few upticks here and there. It did not peak because of the environmentalist. It peaked because all the major, large, easy to access oil fields were pumped past their natural peaks. If you knew anything about the resource, you would understand that as a field matures, the oil in it becomes harder and more expensive to obtain. Even with the extra effort to obtain the "bottom of the barrel" oil, it is of a lower quality and more expensive to refine. Anyway, the main problem is that the resource is finite and the US just doesn't have the enough recoverable oil in the ground to be produced in a manner to quench America's thirst for it. Even the CEOs of all the major oil companies acknowledge this fact. So, whether you like it or not, the US is stuck in the position of being dependent on foreign oil for the foreseeable future. This presents us and our way of life with a huge problem. As demand keeps increasing across the planet, the price will continue to rise as it is the lifeblood of ALL economies across the globe. The answer is not to "drill baby drill" as the dimwit Sarah Palin and her kind like to espouse. The answer is to invest huge sums of money in renewable sources of energy. If we don't, we will look back at the days of the past recession as a minor bump in the road.
Excellent commentary.
Invest in renewable......Solyndra!!!!!
jc: You may hear some people make comments about the US having huge oil reserves. A lot of that oil is imbedded in rock which requires fracking to extract. That is an expensive procedure. It is not really profitable until you are charging $3.50 a gallon for gas. That's why companies are doing it now. But since it is such an expensive process, it will not lower the gasoline prices substantially.
Typical manager-type comment. Never worked a day on the floor (or in the oil fields or exploration teams) but thinks he's more qualified than the people with 4, 6, and 8 year degrees and years of experience in petroleum geology to make decisions about policy.
We have oil yes. As others have pointed out – it's also far more expensive to extract and refine than what is available elsewhere. It's the same reason the Canadian's didn't t bother with their oil sands deposits until the price went sky high – when all it said and done it ends up being a net negative value in terms of energy production. In idiots terms, that means we would need to burn more oil to get that "American" oil into a useable form that we would get out of the process. Besides, using up the oil somewhere else before tapping out our own reserves makes for sound policy. If we use our domestic reserves as the "drill baby drill" mouth pieces want to, then what are going to do when that runs out and we find ourselves in the middle of a conflict? We've already seen how jittery the market is at the possibility of war – imagine what it would be like in a real war when tankers regardless of national flag would be a huge target.
Conversely if we reduce our dependence on fossil fuels in general and sit on our own reserves, we have the ultimate trump card; when the big exporters are dry and the hostile importers like China are watching their economy and military go down the drain, we would be chugging along. That was one of the reasons for putting the oil on the Arctic Shelf off limits to drilling and filling those salt domes under Louisiana with oil; if war broke out with the USSR they were our reserves in case the Middle East got closed off.
I agree Mijohn. Fracking is not going to help our cause nor is the supposed job creating pipeline through Nebraska and that is why the Governor and his whole state blocked it. Look it up half wits! That pipeline is to pump all that to Texas for export. Now that it is blocked they have to try to route it through Canada through the Indian land and they are saying hell no. Look it up. For anybody who thinks that we are going to get that oil you are a fool. It will all be exported just like we are exporting gas now for the first time in most of our lifetimes. 40 yto 50 years at least!
Actually it started right after Katrina.... Gas hit $5 a gallon, and big oil made record setting profits. You didn't really think the prices would come back down after a taste of those profits did you?
There's ALWAYS an excuse to raise oil prices, but NOTHING is ever a legitimate reason to do so. Until Iran is sinking oil tankers in the Middle East, it's all BS to raise prices over TALK!!! Is that all it takes to raise prices? – THREATS!!?? It's oil companies making excuses!
I agree. The oil companies are always raising prices and blaming anyone but themselves. Remember they raised prices during Carter's administration because they said they were running out of oil. Than Bush's because of Katrina. Every time it is just price gouging. Not it is blame Iran. When it is really Blame Big Oil.
The reason for high oil prices is because of oil speculation from trading.
I personally know several energy traders and they tell me that speculation accounts for 30-40% of the price of oil right now.
Right now speculators are only required to put up $6,885 for every 1,000 barrel contract to meet margin requirements. That is ONLY 5-6% of the value of the contract, which means that speculators have can buy lots of oil contracts with very little money. In fact CME (the clearing house that set commodity rates) lowered its margin requirement on Feb 9th of this year and prices of oil instantly went up from $99/barrel to today's rates.
Speculators work under what is referred to as “margin-equity ratios” which represents the amount of their trading capital that is being held as margin at any particular time. The low margin requirements of futures results in substantial leverage of the investment. The more leverage employed, the more likely a substantial change will occur typically driving the value of the investment (prices) up. Futures trading normally require low margin deposits in order to PERMIT an extremely high degree of leverage. being highly leveraged is what got us into the currently economy problems that we are in now.
I would increase the margin requirements to 30-40%, if that was done then all of the speculators would immediately jump out of the oil market since they would lose their ability to highly leverage the contracts by having to place more of their capital into the actual contracts. Additionally they would be forced to SELL there contracts to cover the increased margins, which would force down the price of oil.
Here is proof this would work, in May 2011 CME raised margin requirements on silver and the following day prices of silver crashed. Commodity prices actually fell across the board as speculators feared that the margin requirements would increase for other commodities as well. After 2 weeks silver prices fell by 33%.
Raise the margins on oil contracts and watch the prices drop like a stone!!!!
Fareed, you should be contacting CME on a daily basis and ask them why they LOWERED the margin requirements and why they keep them so low. This is the REAL problem, its just that no one wants to admit whats happening because wall street is making a killing on speculation.
Doug, thank you for making that clear, because you've hit the nail on the head here.
The thing for our government (Obama) to do is to release oil from the Strategic Petroleum Reserve before the delivery for those contracts come due and make those political vulture speculators lose their shirts.
Remember, those guys are betting heavy on war and they are praying for it. Dump some of our citizen owned oil on their heads like that a few times and they won't have the 5-6% of the value of the contract in their pockets anymore. It will be back in ours, like it should be.
Excellent info. Idon't know if your info is right or wrong, but it sounds right.
If your figures are right, how do we get the 5% margin increased to a reasonable figure like 30% or 40%? Meaning, who has the power to force CME to increase the margin? The SEC?
Now why can't this sort of thinking be the norm when it comes to policy? Oh right, it doesn't fit onto a bumper sticker so most American's aren't able to remember what came one paragraph before, much less understand it. I keep forgetting that for the last 30 years there has been a deliberate effort to create mindless drones who can perfectly answering meaningless questions on standardized tests but are incapable of using what is termed "critical thinking".
Doug
Great information. I wonder if our representative understand what is happening because they take their ques from the oil company doners. We need to write to our congressment and demand that they raise the margin requirement. Low margin speculaiton is also responsible for the increased prices of other commodities.
I hate to tell you this but your mother lied to you.–you are not very smart. You are not very smart because you underestimate your foes. We know you are not American and that you and your small brained friends are hiding in a sandpit somewhere. Honesty leads to successful dialogue not this very silly game you are trying to play.
Fareed Zakaria s a F tard!! Write about something you may know a little about next time.
Right you are. This guy is full of it. He needs a basic economics class. CNN should can him.
Please explain to me how he is wrong about the world oil supply being in a position where it will not be able to meet the demand once the world's economies come out of recession. Tell me. I want to hear you explanation seeing as the supply crude oil has remained relatively flat for the past 6 years and is in no position to climb for the foreseeable future. If anything, it appears as if world supply has peaked. Even the Saudis have started to explore deep water drilling in the Persian Gulf. Tell me, why would a country which claims to have "inexhaustible" sums of oil start drilling deep water wells, the most expensive and inefficient type of oil drilling if their field are inexhaustible? Tell me. I want to understand.
Hey Fatmah, do you and your little friends call each other to decide what names you are going to use. I can just hear it, I want to be Elizabeth, no no Georgia hehehe......
Canada and Mexico are our largest supplier of imported oil and, because of Obama devalueing our currency by adding another $5 trillion to our national debt inless than 3 years is the real reason why oil is going up at the pump here in the U.S.! We get almost none of our oil from the middle-east! U.S. dolars are currently, worth less than Canadian dollars for the first time in approx. 70 years thanks to our "spend thrift and chief" in the white house!
So if I were to tell you that $1CAD was worth $0.63US in 2003 and $1.09US in 2007, would you admit that you're INCREDIBLY misinformed and reevalute your position? That was under Bush. (Since the executive branch is responsible for everything...) Today it's about $1CAD to $1.01US. You're right though. Stupid Obama. http://www.bankofcanada.ca/rates/exchange/10-year-converter/
Oil wells are being exhausted, oil is gradually running out, hence the high and sustained prices. Eventually, it won't be available at any price.
Not true. The petroleum industry is keeping up with global demand at this time.
Oil is finite, but we are in no shortage of supply. Even if the easy to access supplies run out, the demand will be high enough that it is now profitable to extra the more difficult to access reserves – Such as Shale Oil.
The ultimate solution is still that we change our energy needs before the "end" comes. Renewable Energy is the only solution for the future. Even if we discover science fictional technology like fast than light travel, it is still in our best interest to change to renewable energy. Oil is formed from Biomass, so unless we find another planet that has life (which according to Christians that would be anathema), we are not going to find oil anywhere else.
Odd. While the geopolitical situation is clearly one factor, the known facts about the impact of speculators is much better understood and not subject to political winds. Stop Wall Street from buying oil futures and, according to the Oil industry, the price could some down nearly 40%. THAT's where the prices could easily be eased...although some of those Wall Street types wouldn't get the same fat bonuses.
Tough luck, greedy suckers!
"The reason they are so high is really Iran, Iran and Iran."
Retard – the reason the are so high is really speculators, speculators, speculators.
Just look at articles written about jumps in oil prices over the last 10 years. I'll bet 99% of the articles outline risks that speculators created. Then look at the next months worth of news – have any of the risks actually come to fruition? Again 99% – most of the so called risks never came to pass.
Earl: The reason why speculators are guessing that the oil prices will rise is because of the instability of Iran.
Thank you for correcting this unintelligible pile of mastodon dung. Earl, don't write anything unless you have something intelligent to say.
Hmmmm....And all this time I thought the reason oil prices kept rising was because Obama was a poor president. Maybe I should stop watching Fox News....
Let me make a few corrections to this story so it's more truthful.
Zakaria: Iran is a "speculators drug"
It's happening for one reason, principally and that is SPECULATION. There are SPECULATIONS of a war with Iran and SPECULATIONS that crippling sanctions on Iran would cut down Iranian oil exports almost entirely.
If you look at demand for oil, it's just not that strong. Much of the world is in slower economic times than before. In January 2007, oil was $50 a barrel. It's now $110 a barrel. This doesn't make any economic sense unless you factor in speculators. So for oil prices to decline, there must be an end to speculators and speculating of oil.
So there are speculators that explain why oil prices are high – but not why they are so high. The reason they are so high is really speculation, speculation and speculation.
No where was fiscal policy mentioned, which is no surprise! The Federal Reserve with the blessing of the Obama Administration, has created (printed) billions of dollars which were used to prop up Treasury bonds by using the newly created (printed) money to buy them. This has caused the value of the dollar to plummet and real inflation (numbers that include food, fuel and housing) to skyrocket. It's not just fuel. Have you seen how much a gallon of OJ is now? Last time I checked oranges have nothing to do with geopolitical forces!
Thank you. Somebody else finally gets it. I made the same point last night. Oil is a store of value like other commodities (gold, silver, platinum, palladium, copper, etc). The difference is, everyone needs oil (energy) unlike most of those other commodities. The Federal Reserve has increased the number of dollars (money supply) through QEI, QE2, QE3 (Twist), thereby causing the value of each dollar to decrease. Therefore, the number of dollars required to purchase a barrel of oil is higher. On top of that, even though US oil demand is down, demand from developing nations is increasing, as is the demand for refined products outside the US. Combine that with an increase in crude oil extraction costs (because the "easy" oil has already been produced) and you have higher oil prices as a result. The US must encourage development of domestic energy sources while creating a comprehensive domestic energy plan which defines the specific actions required to maximize energy independence and time line within which those actions will occur. During that time we must use our domestic sources of energy wisely so as to provide a "bridge" to the future. At the same time we must reduce spending and our national debt so as to increase the value of the US dollar and decrease the number of dollars needed to purchase the energy our country needs to survive and prosper.
The cost to drill has not increased, the cost to extract has not increased, the cost to refine has not increased – the only thing to have increased is the profits the oil companies will make at the expense of the world economy. Thank you big oil; huge profits today at the risk of financial disaster tomorrow
WANT TO UNDERSTAND HOW MAKES UP STORIES AS THEY COME ALONG……WITH NUMEROUS FLIP-FLOPS
Check these out:
In this article he says “The reason they (oil prices) are so high is really Iran, Iran and Iran.
AND, COMPARE WITH THESE:
Ref 1: “Could Middle East Tensions Boil Over” FZ, CNN-GPS 02/24/12
Zakaria -I'm struck at how in this one week you have seen – from Afghanistan to Yemen to Syria to Iran to Egypt – all these places at a boil. One reason for this, I suspect, is that oil is at over $105 a barrel.
And, check out my response under feedback:
I wrote “Anyone with rudimentary knowledge of MEn affairs and the dynamics of oil prices can understand that in reality Oil price is $105 b’coz of the turmoil in the ME, and NOT the other way around as our learned Mr. Zakaria seems to think!
Ref 2: Obama’s Oil Problem – CNN GPS Feb 26, 2012
Zakaria – "The one obvious factor (for rise in oil prices), of course, is the political instability in the Middle East. Worries about Iran are probably the principal driver of these prices and the speculations surrounding it. "
And, check out my response there too on Mr. Zakaria’s FLIP-FLOPS
Still believe Mr. Zakaria to be smart & learned?
Good job Zikria, truth is poison pill for a hindu, ignorant, no Medicine is better to cure sickness of hinduism, self center ism than truth absolute, hell with hindu, ignorant. Kepp on pumping the medicine.
Oil at this price is a gift, especially for the usa.
just want to congratulate oil companies they make us think that they have nothing to do with High Gas Prices
Are you kidding me people…
I agree. This story is bought and paid for by big oil. Blame anyone but the real culprit >Exxon, BP, Shell, etc.
hinduism, crookedness of hindu Jew's, criminal self centered, make an excuse to play with stock exchange, hell with public, hindu Jew, criminal self centered has his sight fixed on bone.
Why do oil prices keep rising? GREED.
hindu, Judaism, criminal self center ism.
Exactly. its greed, greed and greed. It is so disgusting the way they keep coming up with this theory and that theory trying to justify it and they actually think we belive them!! ha ha... Its greed.
It doens't matter what a person drives, if we all drove small cars they'd drive the prices up to 13 dollars a gallon. they have us by the nose. but..... we can all protest in our own way. DRIVE SLOWER!!! I do, it works. they're not going to get ALL of my money for the oil companies.
There are two reasons why the price of oil is this high:
1) The global dependence on it. We do not have the technology (or the infrastructure) to enable our vehicles to run on a different fuel. Think about it. If coffee goes to $100 a lb. a consumer can choose to drink tea. (They may not like it as much, but they can get their caffene buzz elsewhere.) Those speculators who bought coffee at $100 a lb. will not be able to sell at that price. Since people stopped buying it, they will only be able to sell their investment if they lower the price. We can't do that with oil. We have no other fuel that can be produced as cheaply, nor do we have the infrastructure in place to (for example) produce 100 million gallons of ethanol a day.
2) The price of oil is this high because we put up with it. As much as we complain about it we are continuing to buy it. We have not reached the breaking point yet. As a nation (or globally) we could say "Enough!" and make oil a regulated resource, just as local utilities are regulated. No more would oil companies be allowed to sell overseas, nor would they be allowed to claim unreasonable profits. The problem is, this would cause a lot of ruckus in the marketplace and in our government.
outside my office, gas was at 3.89 this morning. It is at 4.09 now. 8 hours.
Abdul, you are such a big time liar. hehehe...
And the energy policies of this administration haven't helped any. Remember the gulf and the keystone pipeline?
BS. The price of oil is set by a world market that could not care less about the Keystone pipeline or the moratorium on deep water drilling. That is flat out psychobabble by Republican politicians and falls into the category of "Not intended to be a factual statement".
mr. obama failed to protect our national (economic) interests when he failed to rein in bellicose netanyahoo, our unwanted guest, the unwise man from the east. worse, leon panetta played into it. yahoo went home laughing, no doubt, costing us a few extra biliions in higher oil price because of his hot air in our country.
we oughta take out those extra billions from the aid we give to israel. this will force israel to elect a moderate govt for mideast peace.
anti American you!
no, do not stop the aid to Israel. stop the aid to Pakistan, Egypt and all those other countries that we can't trust
The reason Oil prices are so high is because we do not have a choice. We cant drive on air or water or hydrogen or electricity unless you have one of those cars and most people don’t. So you have no choice but to buy gas which is made with oil. Until we give ourselves that choice as a country we are going to get bent over the oil barrel every time. We have no alternative to oil and that is our number one issue. It is also the number one reason for all of our economic problems regardless of what others have to say high gas prices are what is killing middle class America.
American greed. From big business to the senate, they all have committed financial treason against their own country. They all should be hanged. There is no other solution.
I'm sorry, but I can't help saying this. You're an idiot.
There is not that much demand for oil. Have you ever studied economics? Of course there is a higher demand for oil. When demand goes up, the price goes up. When the demand goes down, the prices goes down. NOT THE OTHER WAY AROUND.
virtually all 1984 and newer cars can safely run on E85 ....no modification necessary, 70% less gasoline used now ... what is the problem?
If the price of oil is so important, then why the blaze did we go and provoke the Iranians who were minding their own business in their corner. We pay politicians and Diplomats to run policies. These last few years they have engaged us in two useless deadbeat wars and now try to bluff the Iranians clumsily and Oopse! instead they jacked up the price of oil.Shouldn't we have thought of this before threatening Iranians? I think a couple of these analysts don't know how to do their job and week after week they come on CNN and look very knowledgeable. As if we have forgotten that none of the predictions they made a week ago was right.
Just another excuse to raise our gas prices.
The US doesn't even buy oil from Iran.
We buy most from Canada, then mexico and then Saudi Arabia.
So, tell us again why Iran has anything to do with the rising cost of gas for the US.
What a bunch f crap.
I agree that we should find alternative fuels and reduce our dependence on foreign oil. But in the mean time can we please fire a few of these politicians, analysts and whatnots who clumsily make life difficult for you and me?Bunch of trouble makers!
This story is inaccurate. The price of oil has gone down in the last week. Iran is a small country which does not affect the US. at all. Not even oil prices. This story is simply not true. Iran is no threat to the US. If Israel is worried about Iran than they should take it to the UN. As an American citizen I do not agree with America getting involved militarily with Iran. Let the UN handle it.
Fatmah, habibji, the point is not that Iran has or does not have the power to unilaterally change the price of oil; but, that because of Iran's war mongering, along with their closeness to Oil Routes, they will cause so much chaos that oil will be difficult to deliver. Now, we know that Iran specifically wants to cause chaos and consequently must be stopped, sooner rather than later.
the problem is we alow the brokers to bid based on "futures". Since there is no psychic powers, there can be no way to know the future. Also, they can now prove that oil is not produced how we used to believe, and that there is no no oil peak, there will never be an oil peak, and that oil is continuouly being created in the ground (it does not take millions of years as once thought). we need to base the price of oil of the price of manufacture and distrobution, which would put a barel of oil at about 25 dollars to produce. The oil comapnies are stealing the money. It is odd that oil is a national resorce, but our government is not in control of it. It is also strange that companies that have proven themselves criminally negligent when it comes to safty (BP) are alowed to operate in the US.
funny you say that , the shale oil products coming out of north Dakota are considered a "precursor" to oil. Interestingly the same chemical components have also been found on asteroids
I think that if you give me 20 minutes alone with each of the oil executives and major players and you'll see $1.98 a gallon the next day.
Pure speculative B.S.... Iran has nothing to do with the price rising... or dropping, it's what the "party" (NWO) want you to believe through their pet, manipulated new media.
People need to wake up & smell the Bu**Shi* that's going on.... it's just going to get worse.
What can you do about it?.. absolutely nothing, but, at least you know what hit you when it does.
speculation is what is driving oil prices a this point. If you consider that we had one of the warmest winters on record, and that Americans are using less gasoline because the economy has slumped and people are traveling less then there is nothing that os driving the price of gasoline and heating oil other than market control by the oil companies.
A friend of mine does a lot of work as an engineer in the oil industry and he said that often from the time that oil is pumped out of the ground , to the time that it is shipped across the ocean to be cracked and distilled it will often change hands two or three times ( bought and sold by speculators) while on the tank ships. If a person or company who owns the crude decides to sit on it to influence price they do so. The problem is that oil companies are so large they are essentially all on the same page in that they can control the price.
despite all the flak , the answer is some sort of combination of green energy. solar heat, solar electricity, wind power, tidal power in varying forms, bio diesel, electric cars, etc.
no one piece is the answer , but in combination all of them are the answer and the future.
I can't believe this story. Why is it the president's fault. Do you think he wakes up at midnight every night and tells the oil companies to raise the prices? We pump a lot of oil here now look and see how much is exported. Just like that pipeline they want to build do you think the oil will stay here? If you do you are sadly mistaken. We export millions of gallons every week.
You can print money, but you can't print oil !!
Two Words - BEN BERNANKE. He introduced $100 oil to the world back in 2008. Iran Iran Iran was not the cause then, was it? He pumps free money onto the planet and oil gets bid up. And Bernanke has a President who likes high oil prices and provides cover, and Bernanke now has a media who provide cover as well. Every year since Obama became President there is a surge in oil prices that begins in about September/October.
Oil prices are being driven up by Big Oil, which is using this as a means to keep Obama from being re-elected.
I am telling you , I am scared. You are so right, I am so sorry I ever doubted you. You are the voice of Reason.
No, just fooling with you Abdul.
hehehe...
Somewhat ignored historical fact about oil company ethics:
Leading up to and during WW2 , Royal Dutch Shell was selling oil to The Nazi's AND Allies at the same time.
You got the cash , we got the goods , for a nominal fee....
I can't wait until a better hydrogen fuel cell car is developed so I can stick my middle finger up to Wall Street and the oil companies. At some point the automakers are going to grasp this technology because they know these high oil prices are screwing them over. The first automaker who makes it there will be the winner and then it will be all over for the oil industry, speculators and Wall Street.
True. Thought do you mean more electric cars as well?
You can do it right now, spend a little extra a get a Volt. Its an excellent car. Got one myself. No gas purchased for 4 months. I drive about 30 miles all electric and a few 300 Miles trip here and there overall 70% EV. During 6 months of my driving I send $700 less to OIL companies.
So we can all stick it to them allready. Why do you think the right is so adamant to try to bash the Volt when gas is close to 4 dollars a Gallon, the OIL industry knows that if the electric ball start rolling its game over, gas at 4 and above and people will take a close look at alternatives.
Test drive one, it wont hurt. Maybe find some local Volt owners and get their story.
With fuel cell vehicles, you're looking at a MUCH more complicated infrastructure change than with switching to electric. Complicated meaning expensive. Price speculation, also, is just too big of a money maker for the street to allow a paradigm shift of that magnitude to happen anytime in the next 5+ years, at least on a commercial scale where it would hurt them most.
Maybe so but from what I have seen the hydrogen fuel cell technology will lead the way for change and they (speculators) will have no choice but accept it. The world can't have a few individuals like this raping the world. Personally now I wish Bin Laden had taken out Wall Street. I mean really there seems nothing to put a stop to these people controlling the world markets from necessities to medicine. We can't have that...period.
OK so some people or country in this world can be selfish but of course the world is not perfect so why not?
I
Because Iran threatens to cut Oil Europe!
One person can make an impact. http://youtu.be/qpDGfjpOUe4
We all let them get to powerful. Oil has the monopoly on transport fuel so they can set the price. We all need to sacrifce and look at wasy to diversify. Next time you look for a car. Make sure you cross shop for Hybrids or National Gas Cars, Ethanol or Electric if that fits your drivining habbits. Then when you see the few thousand extra you have to pay for the car that not offset by the gas savings remember one thing. Sacrifice in the short run will bring benefit in the long run. We have forgot this, we all need to pay a little more for our cars so we can become free from OILs monpoly.
For Example the Volt cost 39500 before tax credit. You get a 7.5K tax credit then over 5 years you save atleast 1k a year which bring the comparable cost down to 27K. Sure its a little more than the other sedan you could buy. But what did you just do. You took $5000 that would be garanteed for the OIL companies over those 5 years and took it away from them, do it for 10 years and now you see where I am going. Now if a lot of people bought electric or National Gas or any other alternative energy car we would create an alternative and true competion. This would bring the prices down and we get some cleaner local enviroment as a by product.
The OIL industry know this and do not want these alternatives to come to life, they stand to loose TRILLIONS.
Quadrillions! hehehe...
If I had a dollar for every dumb sh_t that gets up and says we are out of oil, we are running out of oil or there is no spaer capacity I WOULD BE A MILLIONAIRE. I have been listening to this crap since the 1970's. Drilling does not work to bring the price down, take a look at natural gas. Remember just a few years back how expensive it was to heat your house? There is so much natural gas now they cant find places to store it all.
Non-renewable resource. The world uses 85 million barrels of oil per day. The proven world reserves are sufficient for 40 more years. Then it's gone. Within one person's lifetime, the next generation will see the end of the gasoline powered economy.
It would be better to quit burning oil now and be able to make plastics for hundreds of years.
40 more years of oil.According to President Jimmy [peanut] Carter he said when he was president that we would be out of oil in 30 years.There are massive amounts of undiscovered oil on this planet and more is being made all the time.Alaska has plenty but the group that runs our country the EPA won't let us drill because we might destroy the almighty tick turd.
1.Why doesn't anyone say our country now has Compressed Natural Gas and CNG vehicles have been around for 30 years or more my state of PA bought 30 CNG cars 30 years ago and they still are in use.
2.With the new oil here in the USA we are exporting millions of barrels of oil each week if our government representative gave a CRAP all they need to do is place a HUGE export tax on our oil and CNG and that would stop and we would have more oil than needed.
3.We should have a CNG distribution network here in the USA already other countries have theirs in place now but again out so called representatives do everything they can to stop this from happening, WHY the mighty dollar.
Using a so called might be a war with iran is just another excuse to raise the price of gas.This country has a glut of excess oil.That is why 2 east coast refineriers are being shut down for good.We don't need the pipeline from canada because the oil was[is] going to sold oversea anyway.Canada was just looking for a easy way to get the oil to market.If the U.S needed more oil we would be building new refineries instead of shutting [2] down.I smell money game just like the money game housing market.How many people became multi-millionaires because of that?Who did they leave to pay the bills? How many of those companies too big to fail are now going to fund Olebangers reelection.Think about that one.
So it's all and only about Iran, huh, Zakaria? Has nothing to do with the ludicrous restrictions liberals place upon oil producers on American soil, right?
Energy is the Driving force of American Commerce. Oil is the single most important component of our Nations Energy.
Oil is the raw material for our petrol-chemical industry: plastics, pharmaceuticals, everything from kerosene to asphalt to build our roads.
Being highly portable, it heats our homes, moves our products in commerce, and main fuel for transportation of the American people.
The United States has experienced a recent 15% increase of cost and that increase is directly due to Israel's threats of attacking the sovereign state of Iran.
AIPAC has blatantly supported, lobbied the United States Congress and President/Executive Office to wage war on Iran.
Currently, the United States consumes 19.6 million barrels per day, of oil, which is more than 25% of the world's total.
37% of the Energy used by the United States is derived from Oil.
A $15 increase of the price of Oil (approximate at todays $100/barrel cost) COST THE AMERICAN CONSUMER $300 MILLION PER DAY IN OIL ALONE.
$110 Billion per year, more than $300 per year for the United States citizen in raw wholesale costs at $100/barrel, nearly $1000/consumer unit.
There are 42 gallons in a barrel of oil. A $100 barrel of oil is $2.38/gallon.
Gasoline is a refined oil product and currently the national average for a gallon is $3.79.
Nearly every product in America cost is directly affected by the price of gasoline: farm products, groceries, commuting, manufacturing, etc.
This cost is not confined to simply Oil, that 15 % increase is nearly across the entire board of American consumerism.
***** This 15% increase is costing the American consumer nearly $1 Trillion/year. ******
This promoting of the War against Iran is expensive, and for whose benefit, certainly not the US citizen.
data: bls.gov news.release cesan.nr0
15% of 121M consumer units @ $50K/unit
AIPAC is a ultra-National Lobby connected to Foreign Interests, For Foreign Interests, And should Be required to Register as a Foreign Agent under FARA.
It arose from its predecessor AZC after having found illegal and ordered to be in compliance with the law under FARA .
AIPAC assimilated that influence in its inception.
The American Israel Public Affairs Committee was incorporated on January 2, 1963[11] by Isaiah L. "Si" Kenen. Kenen originally ran the American Zionist Committee for Public Affairs as a lobbying division of the American Zionist Council. Before that, Kenen was an employee of the Israeli Ministry of Foreign Affairs.
Let Iran bomb/blow Israel out of existence. We are not the world's police and it seems as though Obama is more interested in protecting Israel rather than the people who put him into office.
Thank Allah that America is willing and able to protect their allies; otherwise, snakes and scorpions like you would try and wipe them out. Why, because they love their children and you do not.
Oil is a finite resource. Oil companies have invested heavily in oil extraction/refining infrastructure and a distribution network. These companies will sensibly want to maximize their investment. There are unstable countries in the middle east where much of the world's oil lies. There will be increasing demand for oil driven by developing nations. It seems that America doesn't understand the need for change. We can buy smaller vehicles that are more gas efficient. That will lower demand here and buy us some time. Eventually, we need an American energy strategy that takes us away from oil. Oil companies won't like it. And for us, the fact is gasoline is never going to be that cheap again over the long term. Buying big, expensive vehicles with high fuel consumption just doesn't make sense. Yes, we are a free people, but freedom doesn't change the real world. Oil is going away.
Well I served in Vietnam and have been a 100% disabled veteran for years why all for nothing. Just like the more than 60,000 wounded veterans now that have came home to live there lives out in pain all for nothing.
I agree 100% our country is 16 trillion in debt my poor grand-kids will never experience life a I have not that my life was super but at least I had a job and could keep up with inflation. Let's dace it the entire world i bankrupt how are they trying to fix this with borrow worthless money, I am sure this will solve the problem.
We have all the oil in this country we need all we need to do is keep it here. CNG and oil wells. Have been going to TX for winters now for years and they have hundreds of capped oil wells sitting there now for years.
Anyway my point is we have all the oil we need if it would stay in the USA where it is being pumped from OUR ground. But because of the GREED of the dollar we export it and import oil.
Our so called representatives have to stop this in a minute just place a BIG excise tax on it large enough that no other countries will but it then our oil stays here as it should and we have no more oil crisis but an abundance of oil bringing the prices down.
I know this message is about oil costs but let's look at our country and it's leaders they do not give 2 cents about you all they care about is power, money and getting re-elected that is there only concern.
This is the USA we can do anything we put our minds to and we could have a CNG distribution network across this USA in six months if our representatives would allow it. BUT the oil industry naturally does not want it to be so especially when they are making BILLIONS daily.
To bad everything is about the dollar and not humanity
Ok I will try and cool off now
Speculation speculation speculation. Get it right the market controls the price of oil.
The speculation is also about the Dollar. Since oil is priced in dollars, a lack of confidence in our currency drives the number of dollars needed to buy a barrel of oil.
The oil price is set in DOLLARS. So if the dollar is worth less, you need more of them to buy a barrel. We are 16 trillion dollars in debt and the world knows that each dollar printed is worth less. Right now it's gas and oil, but in just weeks to months prices on everything will start climbing by the day. Hyperinflation is coming.
It is not "Iran, Iran, Iran". It is "The Islamic Republic of Iran, The Islamic Republic of Iran, The Islamic Republic of Iran".
It is also al Qaeda, especially in Yemen and Iraq. It is also Boko Haram in Nigeria. It is also the general turbulence in the Moslem countries.
Oil Prices are high because they are set by a global monopolistic cartel......that can make them anything they want to make them whenever they feel like it. Always rationalized by some of the 'smoke blowing' reasons as presented in this article
While your comments are good, you forget two factors:1-speculation has a definitive weight on the pricing 2- oil companies keep the number of refineries low, because they cost a lot to build and because they can control supply of gas thus affecting the price. The fact that wholesale gas is traded as a commodity doesn`t help either. So, blaming either party for the price of gas is ridiculous.
Some of us don't understand the "oil crisis", it is all speculation. We get a very SMALL percentage from Iran! It goes down to the refinaries! We don't get our 87 89 91 octane gas right off the boat! We refine it to produce the final product... gasoline. But thanks to the government, and farmers selling out, we now have ethanol. Ethanol makes up about 10% of the final product and approved to go to 15%! Ethanol is the reason gas is high in the first place. Here is the chain of events. Farmers sell corn to the refinaries. Refinaries process the corn to make ethanol (alcohol). This is corn that will not be used for human consumption or even animal feed. Which then causes food prices to go up. So... back to ethanol! This stuff is VERY bad for any engine! Here is the thing. Ethanol starts to breakdown (phase seperation) as soon as it has been produced. Ethanol fuels start to lose 1 octane point as early as 2 weeks and will continue to drop every 2-4 weeks. Notice the black sout at the end of your exhaust? Check engine light for emissions? Very POOR gas mileage? Not only are you paying more for gas (and getting less of it!), you are paying more for food, and now more for automotive repairs! We can go about pointing the finger at Iran, but its our own government and industry that is to blame! Unless we stand up and do something (like the brave middle eastern people) this country wil be no more! Revolution? Think about what the government would do if we start to protest and fight! You bet they would rule with an iron fist like the governments of Egypt, Libya, and Syria. So before we blame the middle east for anything, THINK!
How come no one mentions that OUR oil companies are making billions upon billions in pure profits EVERY year and their profit goes up my Billions every year. Also, no one mentions why they don't spend some of this HUGE profit and build refineries so shutting one down does not up the price. We could also regulate (sorry Republicans) speculators who drive the price up a lot more than anyone is saying. Perhaps if the Goverment stopped the use of gasoline engines in say 2025 we would come up alternate energy which is impossible when the oil companies are in control of our politicans.
I agree with Matt we need to do something besides complain. But the fact is at this point the electric cars are out of reach, and there is usually a few thousand due at signing. Also at $40,000 its cheeper to buy gas! I would encourage those who are willing to do something to determine the cost of the current car they have, Payment, Gas, Insurance and repairs. Then determine what they can afford in a more economical car. I was driving a F150 at 16MPG (paid in full) and spending 225 in gas. I now drive a SMART CAR (not for everyone) and pay $125 a month for the car and put about $80 a month in gas in it. A win for me now and in the future even more savings when gas goes even higher. There are many smaller economical cars out there that can be purchased for less than $16000 and if you have a decent trade in will come out with a fairly low car payment. May not work out for everyone but if it fits your situation go for it and reap the benefits! Sometimes it’s cheaper to keep the paid for car and take the hit on gas!
this is to prepared for the attack on iran so usa can have more in store...and then obama the half muslim president use this is as a tool for his election again, as before his ellection he will lower the price to show the people thats he is doing something ...mmmmmmmmmmmmm
dont allow iran to enter the immunity zone in any price.................Imagine if hitler did that you , your mothers and sisters and all your family will be slaves to the nazzies...iran muslims evil thugs of shiia cults are worse than hitler , make no mistake iran will use any thing because they want to start a war as this is will bring what so called AL MAHDI AL MONTADHAR....it is like the shiia massaiua to them , and the only way the MAHDI WILL COME BACK IS BY WAR, KILLING ZENA MOTAA ADULTERY AND CAIOUS thats what the sick shiia doctorine says in the books...fk all shiia and remove them from this earth and send them to the 4o vergins that they are waiting for...even some are dreaming to sleep with vergin mary in heaven cause she is vergin , so they pray extra prayers to see who is the one will be the lucky one to sleep with her in heaven that what they teach.
the muslims and arabs should attack russian interests any where every where inbcluding all embassies as russia veto on syria allow the killing of 17,000 women and children on the hands of the terrorists regieme of bashar al kalb of syria and hizboallah those evil getting weapons from evil russia and money from the great evil iran to kill daily backed by the evil iraqi shiia who provide men and shiia thugs to cross to syria and kill sunni...syria must be attacked if i was a leader in the middleast i wage war aganist russia and now in every mean possible until i get red of those communists puten and his followers...
Oil should be an important factor of national security. I don't understand why only a few private companies are allowed to make such huge profits, while the ever increasing oil prices threaten to jeoparidze the US economic recovery and national security ?
Another shallow article that fails to mention certain facts. 1) currently the USA exporting more oil than it has in decades while the amount of oil used by the USA is actually falling. The reason for this is because the USA has abundant natural gas which makes it cheaper to produce petroleum from shale using fracking and other technology. 2) The situation in Iran has little to do with the price of oil. The companies that supply oil to the world typically use different reasons to artificially inflate prices and there is a pattern of rising and falling prices. This particular author obviously has issues with Iran. As for future demand for oil, it will undoubtedly rise but so will the supply, at least for a limited period of time as long as the supply of oil bearing shale and other harder to get petroleum supplies last.
The U.S needs to identify oil products as what they are, U.S. Natural resources, property of U.S citizens. As such any export of oil products (oil, gasoline, natural gas) should be prohibited, with very few exceptions. Any oil producers drilling on U.S. property can only be able to sell it in the U.S. The U.S. companies are getting tax credits for drilling for oil, therefore they should not be allowed to cap off producing wells just because its cheaper to buy from overseas countries. Saudi Abrabia is using the price of oil to finance terrorists around the world, so in reallity the world is supporting terrorism by purchasing oil from Saudi Abrabia. OPEC is driving up the price of oil to whatever they want by artificially controlling the price of oil with a monoply controlling production levels.
We also need to mention the oil companies keep lobbying congress to increase the restrictions on using coal. If we used reallistic limits on coal we could cut our oil requirements by 50%. The oil companies wouldn't like that at all.
Spoken like the true shill he is.... for Aipac and the war mongers in the Israeli government. It's not Iran, Iran, Iran. The threat of war is coming directly from the mouths of Aipac and Natanyehu. Hasn't he been watching the news in the last week? (Aipac meeting, Netenyehu visit to US) Why does Zakaria ignore the obvious? Because he is a shill for the real war mongers.
Do not expect any thing better from hindu Jew's, criminal self centered, neither they are what they claim to be nor they live by what they claim in their hindu Judaism, filthy self center ism, way of hindu Jew's, criminal self centered, live by hindu soul, filthy desire and do any thing to satisfy, hindu soul, desire in their hinduism, criminality. instigators of hinduism, war among humanity for ages, by claiming to be , what they never are, obedient to truth absolute.
Hindu Jews? That's got to be a large group of people!
Kony 2012; Spread the word and soon you will be paying less for oil.
Its just crap Iran tried to start. Their hurting so they want to try to hurt the USA. And guess what? Hope,fear and saber rattling has done it. That and the fact the US oil companies are running production well below what they could. They match production to demand so as to keep the price there. Then sell any excess to the world market. That way theres never too much to drive the price down. Its simple.
Our great friend who call themselves “ We are you “ and “ You are us” and we cannot wait. We are now paying high prices for this heighten stupidity with high gas prices. Israel thinks they can play Bush Era tactics of fear, speculation and emotionally charge this country into another war. Israel is playing a risky game of politicizing the issue, instead of working for a solution within the region. When we thought they got it then they want to start the arms race in the region.
US needs to focus on building and becoming an economic powerhouse and we know we are not out of the woods yet. Markets are so much volatile. We are late in the game with China & Russia. We need to lock our targets with China and Russia. I think we took the right step with North K and need to separate them from China. We also need to be careful and not give away China and Russia with another North K in Persian region.
Do not expect any thing better from hindu Jew's, criminal self centered, neither they are what they claim to be nor they live by what they claim in their hindu Judaism, filthy self center ism, way of hindu Jew's, criminal self centered, live by hindu soul, filthy desire and do any thing to satisfy, hindu soul, desire in their hinduism, criminality. instigators of hinduism, war among humanity for ages, by claiming to be , what they never are, obedient to truth absolute.There is not a country in the world, where these hindu Jew's , racist self centered set their hindu criminal foot, and nation was not destroyed.
The price of oil is high for one reason, greed. They drill it for $4 a barrel and sell it to us for $124. As long as they can get away with it they will. They will keep making more excuses for the rise in prices. But we can't complain...after all it is free enterprise at it's best!
I thought it was determined back in 2004-2008 that all oil prices were controlled by bush and cheney
Your point Zippy?
False. The main reason for oil increasing is global speculation. We are not going to war with Iran unless Rick Santorum, Mitt Romney or Newt Gingrich get into the White House and that just ain't going to happen. Speculation increases the cost of oil, but it will eventually ease.
"The main reason for oil increasing is global speculation."
Oil increasing what Abdul?
Mr. Zakaria gives a short term reason for why oil prices keep rising. Long term, prices are rising because
1) supply is continuously decreasing - we keep on taking it out of the ground and burning it up,
and because
2) demand is increasing -- the human population of the planet keeps on going up.
Imagine how high the price will be in our grandchildren's time, or in their grandchldren's time, if we were to follow the Republican candidates' energy policy of drilling for and burning up our oil supplies as fast as possible and the Republican candidates' family values of making babies as fast possible. More than thirty times the current population competing over a fraction of the current supplies–Yikes.
You've touched on the only final answer. The population of the planet must decline, preferably to less than 1 billion. Without that, the only question is how long it will take, not what the final outcome will be. Population control, another area where the Republicans are all wrong, all the time.
Unless a "miracle" replacement for fossil fuels is discovered, like fusion, a major collapse of the global economy and population seems inevitable.
In the near-term this will be manifested by famines, driven by high food costs. These high food cost will be a function of production and distribution costs, which are driven by the price of oil.
I'd be very curious to see what humanity looks like in the year 2112.
what i don't like about republicans is they don't seem to use their brains or they just don't have any. their answer is to build a pipe line to lower the price of gas. #1 china offered to pay for a pipe line to the t pacific in order to buy all the tar sands oil from canada. the canadians don't really want the cost of putting the pipe line over the rocky mountians themselves which would allow them to sell oil to anyone. question if the oil was going to stay in this country why would we not build a new refinery in north dekota and not risk an oil spill between there and the gulf of mexico? could it be because the oil companies might want to ship and sell the oil to china from the gulf? do you think that republicans would be willing to control the price of oil in their worship of a free capitalist market or regulate the oil companies from exporting oil? what other reason would you want to pipe oil to the gulf were storms can shut down the refineries or cause spills from storm damage! the republicans claim that it will creat 10,000 jobs to build it. it only took 10,000 people to build the alaskin pipline with 1970s tech accross some much much harder country. why did the republicans vote down an amendment in congress last week that stated that all the steel pipe and jobs should be made and come from american? what a bunch of daaassssss! obama and many democrats figured it out so why can't republicans at least try to figure it out?
I know a lot of Democrats that don't use their brains either. Unfortunately, our country is full of all kinds that don't use their brains.
hindu criminal christian pagan fundamentalist have no brain, while other do not use it, Problem of America are not created by the one, having a brain and not using it but of brain less Republicans, like a hindu, stupid monkey.
That is correct Abdul, in America people can disagree openly with each other. They are not afraid that some big brute called Abdul will chop off their heads.
If anyone asks yet again, why the OCCUPIERS (OCCUPY is a worldwide permanent protest movement for justice and more equity for the working class) all over the United States and World are protesting. Listen up!“You control our world. You've poisoned the air we breathe, contaminated the water we drink, and copyrighted the food we eat. We fight in your wars, die for your causes, and sacrifice our freedoms to protect you. You've liquidated our savings, destroyed our middle class, and used our tax dollars to bailout your unending greed. We are slaves to your corporations, zombies to your airwaves, servants... to your decadence. You've stolen our elections, assassinated our leaders, and abolished our basic human rights as human beings. You own our property, shipped away our jobs, and shredded our unions. You've profited off of disaster, destabilized our currencies, and raised our cost of living, while lowering our wages. You've monopolized our freedom, stripped away our education and have almost extinguished our flame. Now you (international and domestic corporations) are trying to cripple/sabotage the internet by making our U.S. Congress create and pass SOPA/PIPA type legislation to end our ability to communicate and/or protest online effectively!! We are hit...we are bleeding... but we ain't got time to bleed. We will bring the giants to their knees and you will witness our revolution! WAKE UP AMERICA! SUPPORT OCCUPY!
The answer to why oil prices keep rising is twofold – speculation and profiteering. Prices don't rise, as if there is Adam Smith's "invisible hand".; that's just bad metaphysics. The solution is sixfold: 1) outlaw speculation; 2) nationalize all major energy industries; 3) embark on a Manhattan-style alternative energy programme based on tidal – remember Passamaquoddy?, geothermal, wind, and solar; 4) mandate meaningful fuel economy standards; 5) embark on a coherent Manhattan-style national public transportation system; stop adventurist imperialist wars and warmongering. These are necessary, but, alas, there is no National will.
If the bad guys loved their children as much as we love our children, the "National Will" would be to work together, for the good of the people.
Zakaria, you need to bone up on your politics, WE don't depend on Iran for our oil, also, if we are so worried about Irans oil, Why are we exporting our gas reserves? IF we may not be able to get oil in the future, Does it make sense to sell what gas we have? Try to fool someone else, The American people are not buying Washingtons bull anymore!!!
The speculators that drove oil prices up in 2008 are at is again.
You are off a year it was 2007! I know because of travel it cost a lot of money that year...
Why don't you wait for things to happen then raise the price instead of speculation. We saw what happened in Libya. price gone up so high, how come the prices didn't go down because Libyan crisis is almost over. It is just greed. the American investors don't' take.
It is how it is and we can't do a thing about it. how sad.
How can Iran effect oil this much when 75% of our oil is produced in the Western Hemisphere? Alaska/Canada/North Dakota product 5 times the oil Saudi Arabia/Kawait/Iraq and yet that small percentage is the driving force for Oil prices? no it isn't Iran, it is a political joke, Gas prices are paying for miss management by our goverment.
When Bush was President and gas prices were this high the UAW organized a semi-truck caravan to protest through Washington DC. The media kept telling us people had to choose between their next meal or a gallon of gas. Yes Obama is getting a free pass.
With so many liberals reading CNN, I'm surprised more are not commenting on the need for alternative energy sources, public transportation, bicycling & walking. Petroleum is a finite resource, after all.
Andrew
Bicycle Commuter, Wilmington, North Carolina
Yes, the general population is clueless about the finite nature of oil.
It's one of the reasons that my oil investments have been so incredibly profitable, and will continue to be.
Drill baby drill.
Learn baby learn
There is a lot of talk about oil and gasoline these days – and of fear premiums and even the ability of supply to match the pace at which demand is rising. To many I’m sure this may seem a fleeting moment brought on by “excessive” growth in demand. As before, Chicken Little’s cries will fade as investments are made to upgrade and expand pumping infrastructure on known fields and find new ones, just as in the early 1970's. Oil-dependent nations resolved the issue then by finding and developing oil supplies in the North Sea, Gulf of Mexico, and Alaska. The most recent assessment of world petroleum resources by the United States Geological Survey (USGS) provided support for the idea that we can develop current prices away (via its mean estimate of the three trillion barrels of oil for the world’s volume of extractable oil originally present) (Ahlbrandt 2000). Based upon these numbers, the US Energy Information Administration (EIA) projected that worldwide crude oil production wouldn't peak until between 2020 and 2030 (Wood and Long 2002). Others believe that when conventional oil does actually become harder to find that the market will ensure a transition to alternative fuels – liquified petroleum gas (LPG), tar sands, deep-water oil, etc. (Adelman and Lynch 1997).
It's the Republicans that want to go to war with Iran. The Republicans that are the oil kings and the Republicans that want to make President Obama a one term president. What better way to discredit him than to make tthe public angry about the price of gas. The Republicans are behind this. They can't even prove Iran is making nuclear weapons. However the Saudis have opebly admitted they are starting a nuclear program to make nuclear weapons and yet you don't hear anyone going after them or threatening war with them. It is all a political game by Republicans.
Hey Bonnie Hitler or Bonnie Mohammed, we know your tactics. Create problems between factions and then sit back and watch them fight. This only works with brainless morons like those in your tribe.
The price is in DOLLARS. If the dollar is worth less, then it will take more of them to buy things from people around the world. We print them everyday–and the 16 trillion in debt this country has, makes them worth less and less. Inflation is just around the corner, with hyperinflation not far behind.
On a matter as important as energy supply, it is crucial that policy-makers are paying attention when there is a potential for concern, and that they are asking the right questions. The most important question to ask now is, “how much longer can oil production increase and how quickly”. What is the range of possibilities? Once we identify this range we can grapple with the equally challenging, “what alternatives are there or could there be to oil, and how much can we realistically expect them to contribute and how soon?” The first question is the most pressing, for its answer indicates the urgency of the second set of questions. The most immediate option for answering the first question is to assemble from the recent literature the range of estimated dates at which world oil production may peak. This gives a range from 2004 to approximately 2100 or so (some estimates based on more likely resource estimates than others). This approach is not ideal, in that these estimates were generated using a wide range of methods and assumptions and are thus of questionable comparability.
Yet more propaganda ....we have more oil than we know what to do with...prices are up because big oil wants it up...how about an article explaining that they have closed a very large number of refineries to keep gas prices propped up...gas is almost $4 a gallon and they are closing refineries because its "not profitable" keep drinking the kool aid
A growing cadre of researchers, oil industry professionals and even economists are not so sanguine. They believe that the potential to find more oil and produce oil at ever increasing rates is more limited and doubt that either the oil or alternatives will be found in time to avert near- term supply disruptions (Duncan 2003, Bentley 2002, Deffeyes 2001, Campbell 1997). Each side insists they are right, in spite of the fact that neither can provide definitive evidence to support their case until after the fact – after the oil is found or not, after tar sands can or cannot ensure adequate supply at today’s prices, after it’s feasible for hydrogen to take over from oil or not.
The good news is that rising oil prices are promoting discussions of oil-supplies, and even occasionally "peak-oil" among the public and policy-makers . The bad news is that both the discussion and the information on which decisions can be made is incomplete, and decision- makers are stuck in the middle between the two camps of “experts” who may seem equally qualified to the layperson. Given that oil accounted for 40% of global energy use in 2000, and supplies essential raw materials for products from plastics to fertilizers, we are dealing with a resource on which billions depend mightily. Choosing the contention we like the best is not the best means to decide policy when economies, livelihoods and more may be in the balance.
The Do-Nothing Repugs in congress are to blame to kill the economy and blame Obama, they only care for their oil baron contributors; oil is too expensive for everybody, why don't the corrupt repugs push for natural gas pipe lines for Americans who don’t have access to it? As of today’s market prices: natural gas is 10 times cheaper than oil per BTUs, the equivalent price for a gallon of gasoline/heating oil would be 40 cents; these are real facts, educate yourself. I would love to heat my house and drive my car with natural gas and save a lot of money and stimulate the US economy instead of using expensive oil from countries who hate us. Millions of jobs would be created by using this inexpensive energy source if 50% of American households get it to heat their homes plus US drivers, just look at the Russians, Brazilians and Arabs: they are using it and smartly they are selling their expensive oil to us. Save by heating your house and hot water with electricity which is now cheaper than oil because electric power plans use it, also drive less, don't fill-up your car or heating tank; let those wall street blood suckers and Arabs choke to death with it.
blah blah blah, both wheels are off your wagon Abdul.
I really feel sorry for most of the posters here, who simply can't comprehend why oil's price is rising.
It's no speculation.
To put it in simple terms that you can understand, the world is running out of easily accessed "cheap" oil.
We saw this is 2008, when oil price spiked before the economic crash, and now that global GDP has recovered we have reached that demand level for oil again.
So, it's unfortunate that you don't comprehend what's happening, and those who deny market fundamentals are just kidding themselves.
The International Energy Agency estimated in January 2009 that oil demand fell in 2008 by 0.3%, and that it would fall by 0.6% in 2009. Oil consumption had not fallen for two years in a row since 1982-1983.[31]
The Energy Information Administration (EIA) estimated that the United States' demand for petroleum-based transportation fuels fell 7.1% in 2008, which is "the steepest one-year decline since at least 1950." The agency stated that gasoline usage in the United States may have peaked in 2007, in part due to increasing interest in and mandates for use of biofuels and energy efficiency.[32][33]
The EIA now expects global oil demand to increase by about 1,600,000 barrels per day (250,000 m3/d) in 2010. Asian economies, in particular China, will lead the increase.[34] China’s oil demand may rise more than 5% compared with a 3.7% gain in 2009, the CNPC said.[35]
Ah, so there is one person here who DOES understand the situation.
That's reassuring.
Strange how when gas was high for bush after 2 months the media was howling but after 3 plus years of high gasobamnas name is rarely mentioned.
No it cant have anything to do with his bans on drilling or the keystone pipeline-
The media bias is shocking-
As countries develop, industry and higher living standards drive up energy use, most often of oil. Thriving economies, such as China and India, are quickly becoming large oil consumers.[27] China has seen oil consumption grow by 8% yearly since 2002, doubling from 1996-2006.[25] In 2008, auto sales in China were expected to grow by as much as 15-20%, resulting in part from economic growth rates of over 10% for five years in a row.[28]
Although swift, continued growth in China is often predicted, others predict China's export-dominated economy will not continue such growth trends due to wage and price inflation and reduced demand from the United States.[29] India's oil imports are expected to more than triple from 2005 levels by 2020, rising to 5 million barrels per day (790×10^3 m3/d).[30]
China's crude imports last month hit an all-time high:
Crude imports at record 5.95 mln bpd, +18.5 on yr (Reuters)
up 18.5% YOY.
Global demand growth is robust, estimated at about 1 million BARRELS PER DAY above last year's average.
Where will this extra oil come from?
That's the question. (and NOT from Iran). As demand increases and supply stays stagnant, prices rise.
Comprende?
Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field of related oil wells. In order to understand physical Peak oil, the growing effort for production must be considered. Physical Peak oil occurs earlier, because the overall efforts for production have increased in the past few decades.[1] [2]
The aggregate production rate from an oil field over time usually grows exponentially until the rate peaks and then declines—sometimes rapidly—until the field is depleted. This concept is derived from the Hubbert curve, and has been shown to be applicable to the sum of a nation’s domestic production rate, and is similarly applied to the global rate of petroleum production. Peak oil is often confused with oil depletion; peak oil is the point of maximum production while depletion refers to a period of falling reserves and supply.
ala-
Your points are valid but theres no excuse that we as americans should be cowering to a minority of hippies working for the epa that refuse to allow us to drill the 500 years of oil we have in this country in order to save a mythicle animal-
We really need to stop paying to ship oil here when as said we have so much right under us.
How will oil production increase, what will cause it to peak and how will it decline? These questions determined our choice of methods. The history of oil production and demand shows that they match each other very closely. It seemed reasonable to assume that oil production would increase with demand if possible, else prices would increase to the point of stifling demand (as in the case of the recession of the early 1980's), and decreasing oil revenues. Data from many individual oil fields and nations shows that production tends to peak when approximately half of the original oil resource present has been extracted (unless extraction is aided by gas or water injection). Given these basic drivers, our methods increased oil production in individual countries until they had extracted roughly 50% of their oil before decreasing production. We adjusted the potential range of outcomes by varying, 1) the total oil resource present prior to extraction (often termed extractable ultimate resource, or EUR), 2) the rate of demand increase, 3) the maximum rate of increase in annual production, and 4) the percentage of original oil resource extracted at which peak/decline point occurs.
Hi “Evil” – I'm all for more domestic drilling, but why would that lower gas prices? Some facts:
- US gasoline consumption is at 15 year lows.
- Gasoline exports FROM the US are at RECORD highs
- US oil production is higher now than anytime in the last 6 years.
- Multiple US refineries have been closed due to lack of gas demand.
So, I would suggest to you that even if we had more US production, it would be exported as refined product (like gasoline), since that's the most profitable outcome for the oil companies.
While the advent of a peak in world oil production may, as some say, force reassessments of some of our regulatory requirements, rushing to discard laws heretofore beneficial to public health, welfare and quality of life may be as questionable as hitching economies to pyramid schemes fueled by finite resources. If nothing else, a peak in oil production will underline the finite nature of the resources on which humans depend. After whatever changes (if any, of course) are deemed necessary, societies will continue to depend on sustainable resources of soils, forests and water. Our children, and many of us, will still be around after any transitions we have to go through – so another task will be to minimize the environmental impacts of any proposed transition strategies.
These are challenging questions which should be demanding the full attention of everyone, but especially our best engineers, scientists and economists. Right now these issues have the attention of precious few.
Extracting oil from the shale is no simple task. The earliest attempts to extract the oil utilized an environmentally unfriendly process known as “retorting.” Stated simply, retorting required mining the shale, hauling it to a processing facility that crushed the rock into small chunks, then extracted a petroleum substance called kerogen, then upgraded the kerogen through a process of hydrogenation (which requires lots of water) and refined it into gasoline or jet fuel.
Read more: Oil Shale Reserves http://dailyreckoning.com/oil-shale-reserves/#ixzz1oosiAWw9
Extracting oil from the shale is no simple task. The earliest attempts to extract the oil utilized an environmentally unfriendly process known as “retorting.” Stated simply, retorting required mining the shale, hauling it to a processing facility that crushed the rock into small chunks, then extracted a petroleum substance called kerogen, then upgraded the kerogen through a process of hydrogenation (which requires lots of water) and refined it into gasoline or jet fuel.
But the difficulties of retorting do not end there, as Byron King explains:
“After you retort the rock to derive the kerogen (not oil), the heating process has desiccated the shale (OK, that means that it is dried out). Sad to say, the volume of desiccated shale that you have to dispose of is now greater than that of the hole from which you dug and mined it in the first place. Any takers for trainloads of dried, dusty, gunky shale residue, rife with low levels of heavy metal residue and other toxic, but now chemically-activated crap? (Well, it makes for enough crap that when it rains, the toxic stuff will leach out and contaminate all of the water supplies to which gravity can reach, which is essentially all of ‘em. Yeah, right. I sure want that stuff blowin’ in my wind.) Add up all of the capital investment to build the retorting mechanisms, cost of energy required, cost of water, costs of transport, costs of environmental compliance, costs of refining, and you have some relatively costly end-product.”
The answer to the question, “how much longer can we increase oil production?”, seems to be probably not much more than 30 years, and perhaps less than five. The problem is it is impossible to say whether our early or later forecasts of conventional oil decline-point will be more accurate. 2004? 2037? The prudence of the precautionary principle seems self-evident here – especially so because most of the oil necessary for the peak to occur in 2037 has not yet been discovered. No one wants to be “Chicken Little”. No one wants to be the proverbial ostrich, either. Until information to the contrary becomes available, the only logical conclusion seems to be that it is only a matter of time before alternative energy sources, and perhaps changes in behavior and commerce systems are needed. It is highly doubtful that energy policies dependant on conventional oil supply, no matter the source, will be effective.
A predicted shallow decline in the short run should give way to a steeper decline after 2016.
However, deep water and non-conventional oil production are growing strongly, turning a slight decline into a plateau for total crude oil (non-conventional oil is heavy and viscose or indeed tar-like oil). Given the growth in deep and non-conventional balancing the shallow decline in conventional production, it is predicted that we have entered about 2006 onto a slightly upward slanting plateau in potential oil production that will last only to about 2016—eight years from now (2008). For the next eight years it is likely that world crude oil production will plateau in the face of continuing economic growth. After that, the modelling is forecasting what can be termed ‘the 2017 drop-off’. The outlook under a base case scenario is for a long decline in oil production to begin in 2017, which will stretch to the end of the century and beyond. Projected increases in deep water and non-conventional oil, which are ‘rate-constrained’ in ways that conventional oil is not, will not change this pattern.
Reference: Bureau of Infrastructure, Transport and Regional Economics (BITRE), 2009, Transport energy futures: long-term oil supply trends and projections, Report 117, Canberra ACT.
Full report
aie.org.au/StaticContent%5CImages%5CReport_120106.pdf
Several factors affect both the long-and short-term oil supply conditions, and these conditions, in turn, affect the U.S. economy. The first factor is what the world's oil reserves look like and what the prospects are for adding to those reserves. The second consideration is where those reserves are and who has access to them. The final component is U.S. refineries' ability to refine oil and get it to market.
“The second consideration is where those reserves are and who has access to them.”
Let’s explore this a bit. It’s often stated the US has more oil reserves than Saudi Arabia. What isn’t mentioned, however, is that these reserves are largely comprised largely of “oil shale”. Oil shale, unlike “shale oil”, involves the extraction of something called an “oil precursor” named kerogen, which may then be processed into synthetic crude.
No one has yet figured out how to make oil shale profitable, since it currently takes more energy to get oil from oil shale than you can eventually use.
It’s called EROEI – just simple economics.
Extracting oil from the shale is no simple task. The earliest attempts to extract the oil utilized an environmentally unfriendly process known as “retorting.” Stated simply, retorting required mining the shale, hauling it to a processing facility that crushed the rock into small chunks, then extracted a petroleum substance called kerogen, then upgraded the kerogen through a process of hydrogenation (which requires lots of water) and refined it into gasoline or jet fuel.
But the difficulties of retorting do not end there, as Byron King explains:
“After you retort the rock to derive the kerogen (not oil), the heating process has desiccated the shale (OK, that means that it is dried out). Sad to say, the volume of desiccated shale that you have to dispose of is now greater than that of the hole from which you dug and mined it in the first place. Any takers for trainloads of dried, dusty, gunky shale residue, rife with low levels of heavy metal residue and other toxic, but now chemically-activated crap? (Well, it makes for enough crap that when it rains, the toxic stuff will leach out and contaminate all of the water supplies to which gravity can reach, which is essentially all of ‘em. Yeah, right. I sure want that stuff blowin’ in my wind.) Add up all of the capital investment to build the retorting mechanisms, cost of energy required, cost of water, costs of transport, costs of environmental compliance, costs of refining, and you have some relatively costly end-product.”
Why not just go solar or wind farming?
No mention of the devaluation of the dollar (inflation)? No mention of speculators? Iran is making up the shrinking sales of oil to Europe by selling it to China.
First it was IRAQ, Then LYBIA, now IRAN, The oil companies/commodities brokers always find some reason other than their greed to use as an excuse
Jeff – can you think of ANYTHING more vital to our modern society than oil?
Modern agriculture is dependent on oil and oil-based products, as is almost every other product that we use in this world.
It's no surprise that we'll be at war in Iran over oil, since the global economy can't survive as we know it without cheap, plentiful oil.
Big oil is exporting 600 THOUSAND barrels of finished gasoline A DAY. Go figure. Check out iea.gov weekly imports and exports. There's no refining shortage.
Every dollar spent on gas at the pump is taxed by the feds. The higher the price, the greater the tax. This provides incentive for higher gas prices....and little incentive to reduce them by drilling in the gulf or otherwise taping US sources of oil. We are being screwed by our own government. Thank you Obama.
Gas at the pump is taxed by the gallon – not like a sales tax that is more as the price goes up.
Govt should give more subsidy for hybrid cars so that they can use solar power and producce more solar energy to control the oil price.
I'll buy that!
It's very simple, GREED! NBC news recently reported that gas consumption in the US is at a fifteen year low. The oil companies don't want to loose money. By the way, lets stop the subsidies for big oil. Record profits quarter after quarter and we still give them breaks? How stupid do they think we are.
There isn't that much of what's called "spare capacity" – the ability to increase production quickly. The only ones who have it are Saudi Arabia and they are operating at their limits in some ways. Do developed countries like Canada, Norway, U$A, ect not have the ability to increase production quickly? This "spare capacity" sounds more like a general way of saying lets get our hands even more bloody with another war in a country that has lots of oil, i.e Iran, Iraq. I live in an area that has the ability to increase producitivity but has had to run pipelines and sell their "spare capacity" to other countries. Correct me if I'm wrong but thats the way I see all of this!
Abdul, let me correct you because you are wrong. Its not the oil stupid, its the war mongering from Iran stupid.
Actually Im from Alberta, and Im referring to US not taking the pipeline that was offered to get clean oil to your country not another dirty war.
Ironic that an American is calling the kettle black...... hhhhmmmm and Im not a muslim.
Sure thing buddy, if that's your story, then stick with it.
Hi Nick – you make a good point, that global spare capacity is about zero given that Iran's exports are now being eliminated through sanctions.
BTW, my understanding was that the pipeline to the gulf was to allow for the oil to be exported FROM North America, and NOT to be used by the US.
If the intent was to burn your oil as gasoline, you should just build a refinery in Canada and export the final product (gasoline) directly to the US – no transcontinental pipeline needed.
The Keystone Pipeline System is a pipeline system to transport synthetic crude oil and diluted bitumen ("dilbit") from the Athabasca Oil Sands in northeastern Alberta, Canada to multiple destinations in the United States, which include refineries in Illinois, Cushing oil distribution hub in Oklahoma, and proposed connections to refineries and export terminals along the Gulf Coast of Texas.
From an interview on NPR a couple weeks ago it was explained that the US can produce gasoline cheaply because of our reserves of natural gas. Because we can produce it cheaply, it could be traded to other countries for extra profit.
Engineering Student –hehehe, what are your references? No fair pulling facts out of thin air, its called lying.
http://wikimania2012.wikimedia.org/wiki/Main_Page
Here is my reference, show me yours big boy.
Engineering student - where are you???????
Try this link, it will explain the whole thing.
http://en.wikipedia.org/wiki/Keystone_Pipeline
Zakaria may as well be working for the oil companies. In fact I wouldn't be surprised if he or someone in his family recieves some sort of compensation from them. He uses the same old excuses the oil industry always rolls out. It goes like this; it's because India or China are demanding more, there might be a war somewhere, which basically does nothing to affect the world oil supply, that is the problem. One tanker went down in some remote part of the world and that caused the increase, a pipeline broke in Arizona, etc, etc, etc. The fact is that there never has been, and no where in the near future will there be a shortage of oil. It's all about the greed of the people who control the oil markets. They rake in millions of dollars into their own personal pockets each year and could care less what the rest of us have to pay. It's pure greed and nothing else. Everything else is the same lies the oil industry has been passing around since the so called oil shortage in the 1970'S.
Jamil, it's not China or India, its the Muslim world.
Texan
How about: The major oil companies have a monopoly and the US doesn't have a energy policy for independence. Plain and simple. Everyone knows this and we are tired of the smoke and mirror's by so-called experts with their intellectual explanations. As if they are smarter and the problem is way more complicated than anyone but they can understand.
Totally agree with JB!
Totally agree with BJ!
Oil prices are going up coz of wall street
Oil prices are going up coz of Iran and the endless fear mongering.
US oil production is at an 8 year high. Supplies are at or near historical highs. The US is now a net exporter or gasoline. The US consumption of oil is down nearly 8% in the last two years. Emerging economies such as china and india grossly exaggerated and their growth is slowing. European economies are in shambles. EIA and other forecasts show flat demand in the next year. So Why is oil and gas prices really climbing CNN? Wall Street oil speculation plan and simple. A barrel of oil is trades 30 times before it is ever pumped out of the ground and large investment banks and hedge funds are pumping up the price to line their pockets.
Well, the IEA and EIA have both said that global demand in 2012 will be higher than last year, by about 1 million barrels per day (averaging the two estimates).
Also, China's imports for oil in February hit an ALL TIME RECORD, so things don't appear to be slowing in Asian economies all that much:
BEIJING (Reuters): China imported a record 5.95 million barrels per day of crude oil in February, 18.5 percent higher than a year earlier, data from China's General Administration of Customs showed on Saturday.
The record imports came as domestic crude oil production rose only 1.6 percent in February year-on-year, and fell 1.1 percent in the first two months combined.
Chris, I appreciate your passion on this but you don't understand how futures work. It is known as a "zero sum game", meaning that for every futures contract buyer there is a corresponding seller. They are both betting on the price movement of the commodity, but one person makes money and one person looses money.
It's ultimately no more complicated than that, although there are many, many parties who want you to believe otherwise (for their own reasons).
Definition of 'Zero-Sum Game'
A situation in which one participant's gains result only from another participant's equivalent losses. The net change in total wealth among participants is zero; the wealth is just shifted from one to another.
Investopedia explains 'Zero-Sum Game'
Options and future contracts are examples of zero-sum games (excluding costs). For every person who gains on a contract, there is a counter-party who loses. Gambling is also an example of a zero-sum game.
Is the price of gas directly proportional to the price of oil? When the price of oil skyrocketed in 2008 so did the price of gas; when the price of oil went back down, why didnt the price of gas?
Why haven't more refinery permits been allowed? The supply of gasoline is low, which influences higher prices as i learned in an introductory economics course. If gas prices spike because a refinery is closed for two weeks due to "maintenance" then we should consider allowing another refinery to be build?
If we allowed that refinery to be built in the northwest then the XL pipeline wouldn't have been as big of an issue because it wouldn't have had to cross the entire country. Also, if the refinery was allowed to be built close enough to a port, it would allow canada to export their oil which is what i think they want to do.
I'm no expert, but these topics have come up in some of my courses and I believe warrant a serious discussion.
Elaborating on the lack of refinery permits, one of my professors said that a permit hasn't been allowed in like 25ish years.
I decided to verify, a quick google search landed me on a site called http://www.cnsnews.com
"Also according to NPRA, the last time a new oil refinery was built in the United States was 1993, when a small facility was built in Valdez, Alaska. The last time a new large oil refinery was built in the United States was 1976, says NPRA. Older U.S. refineries, however, have been upgraded and expanded in recent years."
You do not need anyone to talk to, do you Abdul. I wonder if, in fact, you do go to university, how a university is accredited in Iran. Can you explain that?
What do you get out of trolling the comment section of a news article? My sister's youngest child likes to act out to get attention sometimes.
I so enjoy calling an Islamist an Islamist. You think you can hide behind lies and deception. You are a Joke.
Student:
Last month the US largest export was refined gasoline. The US has been increasing its exports of gas consistently for years. We are awash in crude oil at the Cushing OK depot and we still have plenty of gas. We don't need refineries and oil companies don't want to build them. Why would Exxon want to build a 2 billion dollar refinery and push more gas into the market that we don't need. Usage is down nearly 8% in the US in the last two years. Oil producers are more than happy to sit back and watch billions of dollars get piled into the futures market by investment banks that artificially pushes up the price well beyond supply and demand fundamentals and reap the upstream and downstream profits. Get speculation out of the oil market and oil drops to $65 brl in two months and gas will be $2.25 by the summer.
whats with these republicans and their pipeline from canada ....im in quebec and im paying 1.35 a litre wich comes out to 5.40 a gallon ....why do they freak out with 4.00 a gallon prices...they should be paying more than us if they think canadians have so much oil that we would be shipping it out in piplines ....wasssup with this shhhhh...
I look at it this way; if you wish to drive your gas guzzling "terrorist supporting tank," by all means have at it. I'll continue driving my not so eco friendly motorcycle thats getting high 40's a gallon, and the car that's 7 years old and still getting high 30's per gallon when I need to. Oh wait that's right the P.O.U.S. called us polluters because we wouldn't buy their government motors crap that only gets in the 20's, what a joke!
Who cares?
FYI – all the GOP candidates (Paul excluded – he not really one of them) are doing a lot a sabre rattling war talk to drive the price of Oil up and stall the economy. In addition to the specualtors balme those who atre talking war – its not in the US interest – its solety their political interest. America call them on it – they are selling you out to stall the economy for votes.
That is quite the ruse you have discovered. Did you figure this out with your superior intelligence or is that what the imam said?
al jazeera is showing iran and a scientist by the name of Khan who got the isotopes from ucone a nuclear company that facilitates isotopes where khan got them for iran and the blue print on how to make nuclear weapons as well as for north korea and afgh IAEA Robert Kelly says and shows proof of under ground facilities where iran is building such weapons
rika33 go read the united states energy information administrating almost half of 4 oil producing countries have had oil production cut due to fighting in there countries DOES ANYONE ON THIS SITE HAVE HARD FACTS BACKING UP THERE INFORMATION MY GOODNESS NOO EVERYONE TALKS WITHOUT FACTS
Well my goodness, that is quite the ruse you have discovered.
Did you figure this out with your superior intelligence or is that what the imam said?
Sorry James I go carried away.
You, I agree with.
manumus BECAUSE CHEAP ENERGY HELPS GROWING NATIONS USE CAPITAL TOWARD JOB CREATION AND PRODUCT PURCHASING IN TURN ALLOWING MORE PRODUCTS TO BE MANUFACTURED AND BOUGHT
WhoCares LET ME KNOW WHEN U HAUL 10 TONS OF MATERIAL OR PRODUCE WITH UR B.S MOTOR CYCLE LMAO
Well I bet he can put the 2 wives and 7 kids on that motocycle.
Na no kids or wives. Funny though I have seen that in India, Thailand. My Fav is the China delivery guy with 4 dozen boxes balance on the back:)
I like your comeback.
Sorry James if you didn't find the humor in my jest.:) The ignorance of America thinking they alone are owed something. I support the use of rail, and trucking, but the "Urban Assault Vehicle" really! America still thinks this is the 1950's and wants cheap gas, as you have stated "we are in a global economy."
Okay I bite, so what do you think the Americans think they are owed?
rika33 RON PAUL IS AN ISOLATIONISHED HE DOESNT CARE IF THE MIDDLE EAST BURNS TO THE GROUND AS LONG AS UNITED STATES DOESNT HAVE TO HELP OR PAY OR INVOLVE TROOPS TO SAVE MIDDLE EASTERN LIVES LOL
chris go read the hydrogen economy you will learn a thing or 2 about energy CHINA and INDIA are the biggest buyers of energy and if china where to use the amount of energy the united states uses there would be enough oil for china no less the rest of world and oil production is down by nearly 3 million barrels of oil from its peek of 10 million barrels a day and hint america isnt the biggest user of oil my friend its india its china its brazil wake up we arent the biggest growing economies in the world thats so people that say dumb stuff like that in the media need to learn the numbers and oil production has increases 10 fold on private lands from the 1990s up until now not because of obama obama has ZERO control over private lands only federal and federal drilling is down over 90 percent does ANYONE READ OR DO RESEARCH OR FACT FINDING TO BACK UP THERE ARGUMENT WOW AMAZING
ENERGY CONTRACTS AS WELL AS ALL FUTURES CONTRACTS ARE BASED ON FUTURE SUPPLY AND DEMAND AS WELL AS PARTIAL CURRENT SUPPLY AND DEMAND AND SUPPLIES CURRENTLY ARE OFF ON AVERAGE 35-50 PERCENT AND A POSSIBLE CUT OFF WITH IRAN IN THE STRAITS OF HARMUTH FACTOR IN THE SUPPLY SIDE
Realist because we are a global economy and as a free market the highest payer gets the goods so if iran the 4th largest economy based on the mundi index that would leave a shortage of oil supply causing a bidding war for oil like nike does with its sneakers drives demand by limiting supply to consumers guaranteeing a a higher price for a product that is abundant how abundant oil is long term is questionable but currently its abundant
What gets me is the fact when BUSH was in office he had states row back gas taxes. He released millions of federal oil reserves. What has Obama done....NOTHING!!!
Jeff, why would you want to open the strategic reserve? Big oil wont like that, since it will hurt their bottom line, and your 401K. Second, if it's grid lock on both sides of the isle for a meaningful "Cafe Standard" increase less than twenty years out, let the Global market do it's job! If you can't effect change of the American mindset, nor get congress to something, let price dictate change! The P.O.U.S. is using the E.U. game plan from 20 years ago, minus the Tax the Sh(* out of gas theory.
Jim/WhoCares – sorry to burst your bubbles, but President Obama did indeed release oil from the SPR – but had no lasting effect – which is exactly what you would expect as that oil had to be rebought at a later date and prices actually ended up higher because of it.
Oil prices are high because demand is high. The Chindians want lots of oil. And they are just starting their growth curve – 20 years from now they will be using 3,4,5x more oil per capita.
If you want to whine about it the inevitable, that's your prerogative. If you want to benefit from it, invest in oil producers...
Bush is still the president. He is responsible for the rise of oil price. Obama is just a figure head.
Lets talk about the Bush/Cheney years. $50/barrel was a dip! Blame the GOP!!!
http://www.google.com/imgres?imgurl=http://bespokeinvest.typepad.com/bespoke/images/2008/05/21/oilparabolic1.png&imgrefurl=http://bespokeinvest.typepad.com/bespoke/2008/05/oil-price-chart.html&h=295&w=450&sz=62&tbnid=Y3fguSczPqabWM:&tbnh=79&tbnw=120&zoom=1&docid=3SXE1WodL7JdXM&sa=X&ei=2T1dT4jhKI2n0AGhy9GdCw&ved=0CEIQ9QEwAA&dur=112
Thank you Obama
The real reason in the US why the oil is so high is wall street and the spec market, Iran has nothing to do with this, pure greed hits america once again and our govt does nothing about this, yet again.
being a world wide comodity, oil is boutght and sold on a global scale faster then corn and wheat.The demand goes up the more the population increases .The higher demand will deplete the worlds oil reserves by 2050 and underground wells will run dry by the end of this century.There are alternative resources we could use,the energy from ocean current,wind ,sola rand possibly cold fussion.
WhoCares america is sitting on the largest stock pile of oil natural gas and coal and our president doesnt allow oil companies to pull it out of the ground and ANYONE WITH BRAINS WILL LISTEN TO T.BOON PICKENS WHEN HE EXPLAINS THAT THERE ISNT 1 ALTERNATIVE ENERGY THAT CAUSES THE FORCE FOR COMBUSTION THAN OIL AND GAS NATURAL GAS DOESNT HAVE A SYSTEM TO DELIVER THE PRODUCT OR THE PRODUCTS TO USE THE NATURAL GAS WITH ITS TO FUNNY HOW MANY PEOPLE COMMENT AND DONT TELL THE WHOLE TRUTH LOLOL WAY TO FUNNY AND EVERY SINGLE ADMINISTRATION GOING BACK 40 YRS ALWAYS DOES THE SAME EXCUSE OH SPECULATORS BLAH BLAH LOLOL YET OBAMA WONT ALLOW OIL DRILLING ON FEDERAL LANDS YOU WANNA DRIVE PRICE DOWN INCREASE SUPPLY ABOVE DEMAND WE HAVENT EVERYONE THINKS DEMAND BASED SOLEY ON AMERICAN DEMAND WE ARE IN A GLOBAL DEMAND AMERICAN DEMAND HAS DECLINED WHILE ASIA AND INDIA AND LATIN AMERICA HAVE INCREASES ABOVE OUR PRE DECLINE DEMANDS LOLOL TOO FUNNY WHEN I LISTEN TO COMMENTS AND OBAMA WANTS TO USE NATURAL GAS GUESS WHAT HOW THE HELL DID WE GET NATURAL GAS FROM DRILLING!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! DING DING
James, what's rule #1 of war? Just curious, would it not make more sense to pay a little higher price on the global market, and make the other Bast)(*D pay by expending his resources?
DAVE go READ lolol futures contracts have 2 sides a up and down side you make money both ways oil fluxuates up and down so to say its a one sided profit is coming from people who dont understand futures cointracts lolol or how the market works its easy to blame someone than admit what the real problem is and fix it when u have a president who wants to run our country on pixy dust how the hell do you think europe and asia run there countries on oil gas coal nuclear wind solar allllllllllllllllll sources of energy because there isnt 1 alternative energy that does it all its like investing you dont invest in just one stock or sector or invest soley in the stock market u have a mix bag of investments same thing with energy but u cant cut off oil or gas otherwise u run the rick of what we have now u have to increase supply while building alternatives into the system you cant just cut a junkie off of his or her drugs u have to ween them off slowly daa
risk
does anyone know the draw backs to the alternative sources they quote lolol like i said READ!!!!!!!!!!!!!!!!!do RESEARCH THERE ISNT ONE SOURCE THAT U CAN IMPLEMENT AND IT WILL TAKE OIL OR GAS OUT OF THE PICTURE TO FUNNY LOLOL ALL THE ALTERNATIVE SOURCES LACK THE POWER IN GAS AND OIL AND OUR COUNTRIES IS 20 YRS OR MORE AWAY FROM REDESIGNING RE ENGINEERING OUR HOMES CITIES TOWNS STATES AROUND AN ALTERNATIVE LIFE STYLE ITS A CHANGE OF LIFE STYLE AND COMMUNITY STRUCTURE ITS EASY TO SAY USE IT USE IT ON WHAT DO YOU SEE NATURAL GAS STATIONS DOWN THE BLOCK NOOOOOOOOOOO!!!!!!!!!!! DO YOU SEE A POWER GRID UPTO DATE NOOO!!! DO U SEE NUCLEAR PLANTS TO OFF SET THE LOSS OF COMBUSTION POWER FROM GAS AND OIL AND COAL NO!!!! WE JUST STARTED TO BUILD NUCLEAR PLANTS AFTER 30 YRS 4 AND IT TAKES 7 YRS TO BUILD A NUCLEAR PLANT
SPECULATORS.
Article over. Pay me, CNN?
OBAMA NEEDS TO WORK FOR WALT DISNEY BECAUSE EVERY TIME HE TELLS A STORY ITS FANTASY TIME LOLOL NOTHING HE SAYS IS ACCURATE AND TRUTHFUL HE THINKS HE IS SPRINKLING PIXY DUST ON THE HEARTS AND MINDS OF PEOPLE WHO ACTUALLY DO FIND OUT THE FACTS LOLOL FOR THEMSELVES AND IF YOU LISTEN TO HIM GIVE SPEECHES LONG ENOUGH HE ACTUALLY RATS HIMSELF OUT LOOLOL SAYS THE REPUBLICANS ARE DUSTING OFF THERE 3 POINT PLAN TO DROP GAS PRICES DRILL DRILL DRILL THAN GIVES A SPEECH A WEEK LATER ON HOW NATURAL GAS IS ABUNDANT BECAUSE OF NEW WAYS OF DRILLING WOW THE MAN IS A GENIUS LOL YEA GO FIGURE IF U DRILL FOR MORE OIL U GET MORE SUPPLY AND DRIVE DOWN PRICE LIKE NATURAL GAS WOW WHAT A SHOCKER LOL GO FIGURE
BILL I HOPE YOU HAVE A GOOD JOB WITH UR 3RD GRADE EDUCATION LOLOL WE NEED MORE PEOPLE LIKE YOU THE DEMOCRATES NEED MORE PEOPLE LIKE YOU OBAMA NEEDS MORE PEOPLE LIKE YOU TO HELP HIM GET RE ELECTED SO HE CAN KEEP ROBBING YOU AND YOUR KIDS AND GRAND KIDS FROM PROSPERITY LOLOL
obama's falt
Even my sister's youngest child is more mature than you.
lkl
ahahha
BS, BS, BS.
gas prices are high and rising higher because the Fed is now in it's 4th year of loose monetary policy. This casues dollar debasing. Indeed the QE2 and now the "twist" of those extras dollars are working with the low interest rates to drive the dollar down further. Only Europes' Euro crisis and a mild winter has kept this from becoming a full blown hyper-inlfation disaster. As Gulf coast refiners can make more money selling refined gasoline overseas and get a favorable exchange rate return in dollars to pay their expenses, they will do so and domestic prices will climb further still
Amen. I would bet that the only people here that know the real answer to this question all follow the same GOP candidate.
gas is just a small portion of what oil is used for. Plastic bottles, shampoo, beauty products, even vasoline uses petroleum products, Read the labels of everyday items that we just use and toss and change the way we consume petroleum products and we can cut our oil dependency far greater than by just focusing on gasoline. This also takes politicians and speculators down a notch in their controls over our lives. Of course using a refillable steel water bottle and petroleum free household products is probably to liberal for most.
let me speak
If arms and tensions were to end today or next week, the oil players of this commodity would not relent. Once the price of this commodity has reached a price of Super Profit, greed unfortunately has always ruled the day with this commodity. All be it everything we consume is dependent on oil, IE, transportation, metals, plastics etc. It all begins in the Agriculture industry from the delivery of water to the field to grow the food to the tractors and equipment to maintain a robust harvest. Factoring this portion in to a consumption based world, we will never see fuel prices at the pump below 3.75 a gallon again.
I personally do not believe all that crap about Iran as the U.S. only bought about 3% of it's usage from Iran and with the current sanctions I do not believe we are even buying from them right now...And to top that off 2yrs ago I was working on Western Refinery's communication system and struck up a conversation with some of the administrative people there concerning GAS PRICES,they came back at me and stated that the reason that the OIL from our own soil is not sold to the American people AT A LOWER COST is BECAUSE THE U.S.CONGRESS SIGNED A TRADE AGREEMENT WITH OPEC THAT WE WOULD NOT UNDER-CUT THEIR PRICE PER BARREL LET ALONE PRICE COMPETE...IF THIS IS TRUE ,THEN OUR OWN GOVERNMENT IS INTENTIONALLY LYING TO US AND THIS IS WHY OUR COMPLAINTS TO THEM GO NOWHERE...!
??????? that.
Zakaria: Why oil prices keep rising. Ask your boss, Natanhaju. He is the poison of the Middle East...plus Saudi Arabia.
Maybe voting out every politician in Washington every time they come up for re- election will get their attention. It cannot be worse than what we have now. The problem is this, you cannot get them out of office by just talking about it. You have to vote your own congress person out in order for this to be a feasible solution. In the past most folks do not like the congress person in a neighboring district or state, but keep on voting for the one that represents them. this will have to stop in order to be effective
Vote the bums out of office.
Well you may have your wish granted alladin. I heard that Khameini talked to Allah and Mohammed and Ahmadinadork's wife and decided to get rid of Ahmadinadork.
For almost 70 years U.S. dollars has been worth more than Canadian dollars, but that changed last year thanks to Obama adding more than 1/2 ($5 triilion) to our national debt in less than 3 years as reported by the CBO and the Treasury! Since Canada is our single largest supplier of imported oil , the price at the pump was bound to go up. This geopolitical nonsense is for the weak minded who refuse to embrace world market prices. ...this is another spin job on behalf of Obama's failed presidency!
Sounds a lot like Blue Corsair, just as silly too.
While Canada is the largest exporter to the US it only accounts for 22% of our oil.
http://205.254.135.24/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html
What? #2?! could it be? Gasp!
Oil prices will continue to go up as long as Obama continues to spend like a drunken sailor! This geopolitical rhetoric that CNN is spinning is for weak minded people who have no clue about a devalued currency! ...food prices are sky rocketing too! ...and you can't blame that on the middle east either considering that we have more than enough oil right here on the north american continent! Maybe, Obama will veto some more of our attempts at drilling or prevent another pipeline just for good measure! ...we need to get rid of this clown!
Where do you get this crap man? It's fricken garbage!! We aren't the only oil consuming nation on the planet by the way. This geopolitical rhetoric that you speak of may be over dramatized but is in every way real. Food prices are up because there is more demand for food (on the global stage) and we had a terrible growing season last year.
Do you know how much refined gasoline this country exports on a daily basis? There is no preferential treatment to the US by the refineries. It's all sold to the highest bidder.
"Spending like a drunken sailor" at least he is spending money trying to make the nation better, whether or not you think its working or not is another thing entirely but I like the BLS website.
If this an example of our presidents supposedly good foriegn policy, I'd hate to see what his idea of a bad one is! We need a balanced budget! Out with the old and in with the new. Obama has to go!
Yay another call for a balanced budget during a recession! What a good idea! There is no way we can get a balanced budget realistically right now I think the calls for it are nearsighted and irresponsible. Do we need a balanced budget??! Yes, but we need to put the country on solid footing first. Jobs come, revenue comes then we work on the budget.
There's no way that we can sustain adding 1/2 or a record $5 trillion to the national debt in less than 3 years as reported by the CBO and the Treasury either! ...and we thought Bush was bad? ...LOL
Why are oil prices rising? Two words... Peak Oil.
"The reason (prices) are so high is really Iran, Iran and Iran. Bull sheet, bull sheet and bull sheet. Fareed, give me heed until I'm deed
The technology and infrastructure is just not there yet for electric cars. Gas hybrids like the Leaf and Prius are more practical at this point in time. Chevy should concentrate on building cars like this till electric cars become practical. We have the technology to have cars get 50 mpg. Start there.
comment from somewhere in the UAE- Blame W... oh wait, when he was in office oil was $50 a barrel?!? When gas prices rose then it was blamed on W and his oil buddies making a killing in the process. Now O is in the big office and oil is over $100. Obviously you all were wrong before about why gas was high in price. Just goes to show no matter who is in the Oval Office, it doesn't matter when it comes to oil/gas prices...it's a free market thing, you wouldn't understand.
It's the president's fault!!!
I mean during the Bush admin it was "Bush's fault" so logically would we not now say that it is "Obama's fault"?
eyteueute
greed greed good grief its all greed
the us cannot fight 2 wars at once. damn the syrians, why now the troubles. otherwise, the isrealis and the us
would be wacking iran
If everyone in the world is buddhist, there will be peace on earth. when's the last time you heard of buddhist wacking another buddhist.
Oil was already $100 before the latest Iran BS. Iran is not that significant, especially with soft demand. I suspect Fareed did no more than 10 min worth of research to write this dribble.
Can we trust any reporting from the media? Every article is political in nature, "Will what I write and publish make the reader see the Democrats are right?"
Fox, the same.
We can no longer trust anyone any longer, just your imam and allah. Sure thing Abdul!
If and when the US becomes energy independent, something that's supposed to happen within a few years, can we expect the price of oil to come down? Probably not. Why? How about telling our government to stop taxing each barrel of oil coming out of our soil!
It is not all about high price of crude oil.You are not telling the whole truth. Five years ago, during last surge in prices, price of a barrel of oil was as high as $150 but the gas price got up to around $4.10. So how come now that oil price is around $107, gas price is about as high as that period. What else explains it but greed of oil companies and the fact that they are taking advantage of the situation to make even more profit at the expense of working people.
@kaveh – Oil isn't $107 (WTI) – it's $123 (Brent). WTI is artificially low because it is based on supply at Cushing, Oklahoma – a place that is now flooded with oil from the Bakken producers – they have grown production so fast that there are bottlenecks in the system causing a localized glut, therefore reducing prices. Most of the world's oil is priced against Brent, which has traded at a significant premium to WTI for a while (Brent used to trade at a modest discount to reflect higher sulfur content).
And gasoline prices didn't hit prices reflective of $150 back in '08 because oil spiked quickly and then dropped fast (thanks to the shenanigans on WS that crushed the world economies). Turns out 2011 saw the highest average gasoline prices in the US – because the oil price was relatively steady. Forget paying attention to WTI crude – that's not what the true world price is any more – it's all based on Brent (with quality adjustments for metals, acid, sulfur, API etc etc).
Iran may be $10-$15 bbl "fear premium" but that's it. Oil is up because demand is up and supply cushion is getting thinner and thinner. The Era of Cheap Oil is gone. So get used to it. Now oil is being priced relative to it's incredible utility – it's energy density, it's mobility, it's versatility. No other energy source has so many valuable attributes.
You can whine about it, but it won't change anything. You can do something about it – invest in energy companies, particularly light oil producers (not the integrateds) – they will be big(ger) winners. The best values are Canadian-listed international juniors. Some trade at incredibly low PEs of 2x.
You're right, but it's like walking into an insane asylum and saying "the sky is blue, the earth is round, Elvis is really dead and the Apollo moon landing really happened". Some people just won't want to believe you.
Like a kid in a candy store, he will always come back for more no matter what the price.
I say, bring on the petroleum pigs and all their power pirates, soak the American public until they can no longer swim their way to work thru the sludge pits they alone have continued to fill because of greed.
My retirement affords me the advantage of living where I chose, my bags are packed for Taiwan a lifetime of academic studies and research. I’m out-of-here.
Sully
Fareed has left out the obvious fact that the oil market is the most manipulated market in the world. It is manipulated on the supply side by cartels and its trade is manipulated by speculators who trade the prices up for their own profit while adding zero value. Oil companies are also complicit and manipulate supplies to keep prices at the levels they want (until they get grilled on capitol hill then the prices mysteriously decline for no apparent reason). There are two things that must happen to stabilize oil prices: end dependence on foreign oil and eliminate the incentives to manipulate the supplies and prices for profit.
Do you think??
Oil companies want electric cars?
Healthcare industry wants healthy people?
Private prisons want law abiding people?
War profiteers want peace?
Banks/Creditors want debt free people?
Politicians want educated independently free thinking people?
DO YOU WONDER WHY THINGS ARE THE WAY THEY ARE? WHEN IN SHARK INFESTED WATERS, EITHER LOOK AND BE LIKE A SHARK, HIDE, BECOME A PILOT FISH AND ATTACH TO A SHARK OR GET OUT OF THE WATER.
omfg, if i hear another kook talking about big oil squashing their electric cars... Just go to the damn dealership and buy one and sh** the **** up. The rest of your conspiracy theories are just as baseless and absurd. Healthcare intentionally making people sick? Private prisons... You weirdos out there do no understand both the complexities and simplicities of the world. Water doesnt flow downhill to avoid your perceptions, it's simple topology and gravity. And the economy is following the law of supply and demand, not some vast evil scheme to undermine you personally.
Calm down Serviceman. Take your meds. By your comments we know you watch FOX News and listen to Rush. My point went way over your head. Seek help, you might be suffering from PTS.
Just mention oil prices and look at how many kooks come out of the woodwork. The fact is that we pay the same prices for crude oil as the rest of the world, we import half of what we use and every player in the market (the largest of which are actually governments, not shifty, shady Wall Street "manipulators") has the chance to buy more of it and/or sell less of it when they expect the price to go up and is thus a "speculator". Nothing Obama can do is going to change any of this any time soon; not increasing exploration for expensive US and Canada production (though domestic exploration should be encouraged for other reasons), not cracking down on this "manipulation" phantom-menace. The Iran fear-factor will be built into the price of oil until the present crisis is resolved or the world gets bored of waiting and assumes it will go on indefinitely. Anyway, if Obama wants to do something useful in the mean time he should push to get rid of the stupid EPA mandates for ethanol content, volatility and oxygenation; these do nothing but make certain refiners rich, drive up prices in certain cities and restrict the efficient functioning of the gasoline market. He should also support the House bill mandating that cars be able to run on methanol as well as ethanol; methanol is the one fuel that can be made CHEAPLY from domestic sources. China saves billions by blending it into their fuels (the current wholesale price is under $1.50 per gallon), while we stubbornly refuse to consider it. Using our abundant natural gas to make methanol is a much cheaper way of using our own resources than generating electricity to power $40,000 subcompact cars.
just flatten those arabs and take the damm oil!
I didn't read all of the comments, so maybe it has been said, but the reason for the rising prices is only related to one thing: the over-printing of US Federal Reserve Notes. Oil is traded for ounces of gold, and then converted to US dollars. Since the dollar is weak, it takes many dollars to buy an ounce of gold.
Forget supply demand; forget Iran; forget speculation. The real reason is the linkage between oil:gold:dollars and the price of gas will increase even if Iran becomes friendly like Canada. The price will rise even if China and India stops consuming. The price will rise because right now the dollar is artificially "strong" at the moment. Gas, when compared to gold, is about $.75 priced too low. As soon as the Euro and the Europeans regain some sign of stability we will see this $.75 rise in our gasoline prices.
Wake up and stop listening to this drivel about Iran, instability, speculators and supply/demand.
I read that gasoline prices are also being inflated by refining costs: several oil companies have coincidentally shut down a number of refineries because they don't use cheap natural gas to crack the oil. Basically to maximize profit, several gasoline refineries are offline.
No! The US has excess refining capacity at the moment. The number one export product last year
(besides dollars and debt)? REFINED PETROLEUM PRIODUCTS... GAS, Diesel, JP4
http://www.usatoday.com/money/industries/energy/story/2011-12-31/united-states-export/52298812/1
Speculation. Speculation. Speculation. Wallstreet (I know, its not traded ON Wallstreet, but the name refers to all large-scale gambling on the necessities of life executed by "investors"). As talk of a recovery grows, the idea that a recovered economy will want more oil grows. And the betting on that growth increases. Those bets drive up the price. How freaking long will we tolerate the rich bleeding us to death? Sheesh.
Zakaria is a simple SOB. But, there is something even more simple. Where do people put their money these days? You want to retire, right? So you probably had a good ride on real estate, but that party ended, didn't it? Way back in the 90's you had a good ride on the stock market, right? Good luck with that these days. Oil too, had it's bubble burst a few years back, but everyone can see the fundamentals for oil in the future still reflect that the Chinese and much of the former 3rd world are industrializing at a pace so rapid, it is doubtful we will ever again have enough oil to meet demand. Therefore, if you want your poor little 401k to grow, you probably did like everyone else and put it where the growth is at. And that means money flowing into petroleum speculation. Zakaria, you need to look a little deeper at retirement.
Oil prices keep rising because there is a Democrat in the White House. They will drop like a stone if a Republican is elected. Therefore, expect them to stay high. There is no free market – the price is rigged by the oil giants. When they yell about Capitalism and Free Markets, it's just propaganda to ward off desperately needed regulation. I haven't seen a whiff of Capitalism since Reagan.
Since the U.S. and Israel are doing all the smack talk, trying to goad Iran into a war, wouldn't it be prudent to cool it for awhile. War with Iran is not in best interest of the U.S. We have nothing to fear from Tehran. Israel and its powerful domestic lobby are pushing this war. Let's bail on them. And, yes, the oil price rise is mostly linked to speculation. Duh!
I don't care how much people speculate about oil and I don't care about how much they screw around with Iran. maybe 10% of the price of oil is speculation and fear. 15% if you want to stretch it. So, where is all the oil going? All I have to do is look at China and India where the middle class are buying more cars that any other region in the world's history. GM has opened up something like 9 auto plants in Asia in the past couple years alone (that was while they were being bailed out in the US and closing plants in America by the way). Ford has followed suit as well. China is on the verge in less than a decade to surpass the US as the world's largest consumer of oil. India is not far behind. Other parts of Asia are also experiencing great wealth expansion. What does the media (like CNN) think Asia does with great wealth expansion? Buy more bamboo rickshaws? Nope. They buy lots and lots and lots of cars and oil products like plastics.
Also China and India account for 50% of all the luxury goods consumption in the world. Gucci, Chanel, etc are tripping over themselves to expand into these regions and reap massive rewards. The US alone does no even account for anything close to 50% of the consumption all the world's luxury goods. You want to sell cars, expensive hand bags, jackets, anything really... look to Asia. That is where all your oil is going. China is striking deals with Iran while the US jerks around with them. China is striking deals with Canada while the US jerks around with the pipeline idea. China is striking deals around the world while the US spends, yet another, decade jerking around doing nothing productive.
Natural Gas is not traded on the open market, electricity is not traded on the open market, water is not traded on the open market. Why is oil traded on the open market? It's because 20 years ago some rich politicians decided they could become richer and BS'd that trading oil would make prices come down. Ya, how's that working out now? We only get 10% of our oil from Syria yet the problems there are making the price of oil skyrocket? BS! Fn BS. Whats making the price of oil skyrocket is oil being traded on the open market where it does not belong.
That's an easy one! Canada is our single largest supplier of imported oil into our country and since Obama spent us out of existence with a new $5 trillion recod that he added to the national deficit, U.S. dollars are now worthless than canadian dollars! Mexico is our second largest oil supplier and their Peso has caught up significantly too! The U.S . gets alomost none of its oil from the middle-east! This geopolitical nonsense is a smoke screen for the failed policies of the Obama administration! ...what else would you expect from CNN! ...LOL
Because they want more profits. Every other excuse is a smoke screen.
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