If offshore drilling is so safe...why do prices shoot up just at the possibility of a hurricane?

Question

Oil prices have gone up the last 2 days because they are worried about Gustav inflicting damage. Yet....we are supposed to drill MORE offshore wells in the Gulf?????

Answer 1

Because it slows down production.  Less of something makes it more valuable, okay?  Do you see how that works?

Answer 2

Because oilers will drive up the price for any reason they can come up with---even if it is a manufactured one.  

Answer 3

It's called the law of supply and demand.  Supply will be reduced if the hurricane threatens the Gulf of Mexico.

Answer 4

Oil prices go up when a hurricane approaches the gulf, and they go down in the fall every four years when the Republicans are up for re-election.  Notice the price decreases so close to the Republican National Convention.  I see right through it.

Answer 5

I have worked oil rigs in Newfoundland, Norway, Alaska, Mexico, and California and they are pretty darn safe. Santa Barbra seeps more oil naturally than the amount that is spilled due to the drilling there. As a matter of fact drilling would actually help to prevent the natural seepage therefore helping to clean the environment. The rigs shutdown during heavy storms as a safety measure which reduces production and tips the supply/ demand ratio.  

Answer 6

These people look pretty happy:

http://content.clearchannel.com/Photos/s...

I think the effects on prices come more from possible damage to the rigs which would take them offline for an undetermined amount of time.

Answer 7

Excellent and completely valid point.

Plus gotta love all the usual answers about "supply and demand". There IS no free market in oil — 60% of the NYMEX oil price is from unregulated large-scale speculation, which has nothing to do with physical production or delivery.

Answer 8

Supply and Demand....Intro to Economics.

Answer 9

Well the economic answer is that oil speculators are pricing the oil higher because the U.S. supply may temporaily dip. Since our consumption is so high anyway that mean tight or short supplies to drive the price higher.  My personal belief is that the Republicans are trying to scare us to think drilling has to be part of our energy future no matter what.  Hurricanes,safety,safe beaches be damned!  The Republicans wanna just drill and let the oil companies keep all the profits.

Answer 10

When we drill off shore it is best to be careful..we need to drill more

and one place is good as another..someone is going to get that oil

might as well be the US..

Drill me now

or

drill me later

Answer 11

because it slows production down. simple question, simple answer.