Question:

Oil is at all time high of $145. WHAT will make this go back down?

by  |  earlier

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This is s******g up the entire world, economy, stocks, etc. The projected value isn't even $125, it's wierd speculators driving it up, ultimately they are only hurting themselves. When will oil go back down so the rest of the economy can recover? What will make is go back down?

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9 ANSWERS


  1. If we pressured capitol hill to drill our own oil, we have the largest amount of oil reserves in the world. Yet the "save the earth" people wont allow us to drill even though these places are desolate. Some of the places already drilled have seen a greater animal population because of the warmth put off by the platforms. this in turn creates a better environment for trees and plants which will help solve some of our so called "global warming" problems. It is all really just a matter of getting the idea that we are "hurting the environment' out of our heads and focusing on ways to "co-inhabitate' the two (oil production and ecological stability)


  2. get rid of all the cars that use gas

  3. Never! America needs takes over opec.

  4. When the consumption of crude oil goes down over 10%.  Until then the oil producers have no incentive to lower the price.  If you where running a business, and had a 100% sell rate just overnight, why would you lower the price?

  5. I don't believe I have ever given so many thumbs up to so many answers ever before.  Too bad the government is not so astuted as the folks who answer these questions.  The plain truth is that the supply of oil is deminishing but not the demand. There is a supply demand inbalance which until corrected will mean no lower price for oil.  Of course speculators are taking advantage of the situation.  Why should they not?  We had an opportunity to prevent the sudden run up in price back in the 1970s, and we did for a while.  But Washington shut their eyes while Detroit convinced the car buying public that what they really needed was a gas guzzling 400 hp SUV or pick up truck rather than a 38 mpg Escort.  Smart.  Very smart.  Then to add insult to injury Washington decided that what the U S really needed was a weaker dollar, so they drove down the value of the dollar and drove up the price of oil.  Cute, really cute.  

    The U S might very well be the only country in the world where public transportation does not exist from 90% of the cities.  And for the other 9% the only form is air transportation.  We can take a train from only about 10 cities on the east cost not counting commuter rail.  I suppose bus travel still exists somewhere. I don't know where.  

    In the UK trains run every 1/2 hour to darn near every city in the UK.  In South American buses run every 2 hours to almost everywhere.   The U S is so far behind the public trasportation curve, it may never recover.  Maybe we are about to find out.  

    Got to go now.  Got to jump in my SUV and drive two blocks to see my buddy.

  6. What will make it go down is when everyone stops driving their gas hogs and stays home.

  7. 1. the Fed raising rates will do it. there will always be speculators, but low rates makes it very cheap and tempting to gamble in commodities.

    2. a greater then expected surplus of oil reported.  motorists driving less, more fuel effecient cars on the road, really high unemployment.  

    3. counties that are subsidising oil (like China)  no longer being able to afford to do so

  8. I'm not sure.

  9. It's not speculation!  It's ROW (rest of world) demand.  China and India are emerging economies and they use more and more oil.  Think about it....

    Ten years ago one would see a broadcast from China and everyone was riding bicycles.  Nowdays, you see traffic jams!

    The other MAJOR factor is the lack of new sizable discoveries and the WEAK US dollar.  As oil is denominated and priced in USD as the dollar gets weaker it is relatively less expensive to other countries..

    Example.  The Fed has has been lowering rates to help stimulate the economy and help those with loans.

    As the Fed lowers the interest rate (Fed funds) the dollar gets weaker.  Why?  The major other interest rate determined in Europe (LIBOR) stays the same (just today got raised to 4.25%).

    The dollar is weaker as a result vs. the euro currency.  Why? Investors want higher yields or higher interest rates and will pay more for that interest rate denominated in that currency.  Hence, the euro is at an all time high compared to the us dollar.

    Anyhow...we complain about $4 gasoline.  In Britain, the same gallon costs about $8.  Europe has traditionally had higher fuel costs due to higher taxes.  That's why you always see such small, fuel efficient cars in Europe.

    In other parts of the world, such as China, fuel is capped at non-market prices.  Meaning that it's artificially low.  It's a government policy to encourage economic growth, a stable political situation, etc.  These countries tend to use more and more due to these policies as well as growth in general.

    The only thing that will make oil go back down is reduced world wide consumption and or a major shift to alternative energy.  The current high price of oil does create a so called "demand destruction", meaning people consume less of the product as it's price goes higher.

    In my opinion it could pull back somewhat, but I believe $100+ oil is here to stay for the next year and a half at least....

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