I thought the reason the price of oil came down recently is because we are in a seasonal downward price trend?

Question

There are a lot of solid economic and practical reasons that opening up more drilling offshore and in protected areas will not lower gas prices. This is a well-understood issue. Why is there a persistent psychology showing up in the polls that people still think that drilling more will lower gas prices?

Answer 1

What happens if we do not drill?  The amount of oil we use won't decrease markedly over time.  So we have to get the oil from somewhere or there will be a shortage and prices will go up.  If we get it from foreign sources, we are held hostage to their whims as well as to global markets.  If we get if from domestic sources, we at least have control and the prices will be more controlled as well.

If we had started drilling ten years ago off shore or in ANWR, the oil would be accessible now and the recent price spikes due to speculation and global demand may not have been as great.  If we don't drill now, ten years from now we will be held even more hostage to global forces and speculation.

Bottom line:  drilling now will probably not affect prices although it may affect speculation, which is a good thing in itself.  But ten years from now it will definitely affect prices since they will definitely be higher if we don't drill.

Answer 2

It doesn't matter, oil is on it's way out. 10 years, 20 years, whatever. GM is about to roll the Volt, T.Boone Pickens is building the largest wind farm in the world and plans to switch cars to run on Nat Gas.

The less oil there is the better.

Answer 3

We cannot drill our way to lower oil prices. Last I checked, oil extraction and refinement isn't a government program, so this crude will be developed by for-profit ventures and brought to the world market, not just US consumption. The US Department of Energy says the TOTAL proven crude reserve of US offshore and protected represents less than 8 months of current world consumption. The DOE also estimates it'll take 20 years to extract this oil at current rates. So in the final analysis, in the course of one generation, this oil will reduce prices at the pump by maybe a fraction of a cent or so for a short period of time.

Answer 4

We are not yet over with summer (seasonal) yet the price of oil drop recently.  We are however in a downward economic growth trend.  Low growth rate spooked oil speculators, investors, hoarders etc that an all out recession will translate to lower gas consumption.  Global recession or slow growth rate will stabilize gas consumption.

People are just addicted to oil hence when the idea about drilling more oil would solve the problem eveerybody just went gung ho about it.  Can't blame them, its an easy short-term solution for a far more complex situation.  But definitely, drilling more oil didn't push the oil price down, its just that everybody had cut down their gas consumption.