If the "world is made out of oil", then why is oil at $140 per barrel instead of $4 ?

Question

I keep hearing my friends at work comment how the world is "full of oil" and that "all you got to do is just stick a pipe down and the stuff comes out". (all that type of talk). So why is it that oil is so high and not dirt cheap like it used to be a few years ago??

Answer 1

I guess the demand for oil in the USA is down.  China's demand for oil has been building for the past few years. They are developing and building alot of the structure many nations already had. Their fuel is .93 a litre (close to $4.00 a gallon as well). I feel sorry for Europe there cost was already high and now it increases just like the rest of the world.  IT seems like many other countries other then the USA are going through this as well. I remember when Clinton was in Office and I was in High school, I would fill up my tank for $20.00 and that seemed like alot to me at the time. In the US there is alot of oil, but should we dril for it instead of coming up with other resources. Honda jjust came up with a car that runs on hydrogen or something like that. The price is well over 100k. I think in 5 years this car will be affordable. I don't think anyone likes to spend more money on gas, but we are really dependant on gas. It is like like food to us, where would anyone of us in this current time be with out it, it helped build all nations. Its almost like what came first the chicken or the egg. Did oil or the car come first. Drilling for more oil will help, but I think cheap oil is part of the problem. If we open more oil fields it may be another 10-20 years before the ball gets rolling for alternative fuel.

Answer 2

The demand for oil is higher than the supply is.

Answer 3

talking about supply is redundant,there is no shortage anywhere.  plunging dollar is one reason ,becuse it is costing more to pluck it out(foreign markets taking euros) biggest reason is the speculators on commodities market,like a game of monopoly run out of control,congress or some thing has to intervene or it will get worse(since year 2002)

Answer 4

You can't "stick a pipe down and the stuff comes out". Companies spend millions of dollars to find, drill, refine and ship oil.

Oil is also pricey because of trade agreements and organizations of oil companies to keep prices high (OPEC does this because they can all charge the same high price instead of offering competitive low prices, so they can all profit)

Answer 5

I think increase in oil prices are due to less productions and more requirement or use. When production will increase & oil prices will be down.

So increased in demand for oil should be lowered by not using it i.e. by trying out other energy resources.