What is the biggest reason for the high gas prices?

Question

I'd like to know what everyone thinks about this. In my speculating opinion, I feel like oil is being phased out in the coming years. With the rise of hydrogen cars, ethanol, and environmentally friendly energy sources, it is only a matter of time before gas is obsolete. I think that's why the oil companies are gouging - because they know they're on their last leg. We saw the same thing happen with stamps before the emergence of the Internet and email.

That's my two cents. What do you guys think?

Answer 1

Demand is shifting, the dollar is very weak, instability in the oil regions (US caused)...It's also long overdue that the US do what it said it would in the 70's break free of it's dependance on oil (not just foreign) and find alternatives...they didn't follow through and here we are...again.

Answer 2

The biggest reason is that oil is now traded on the futures market like a share of stock.

Traders buy up the oil futures creating an artificial shortage and then hold on to them long enough for the price to rise and then sell them for a profit.

The oil companies have no control over the price of a barrel of oil on the global market.

If our politicians would let the oil companies recover oil from the domestic supplies that we have in this country the speculators wouldn't be guaranteed a profit in the oil futures markets and the price for a barrel of oil would drop immediately.

Even before the oil was recovered the threat of a larger supply would cause the price of the futures to plummet.

So few people understand the way the oil markets work it is scary, and the media doesn't bother to educate the public either.

All the false information out there is irritating and not at all helpful.

The biggest profiteers in oil are first the speculators, second is the government, and thirdly are the pension funds that hold the majority of oil company stocks, in that order.

Some politicians would like to take the profits the oil companies make out of the peoples pension funds and increase government spending, and the longer people are ignorant of how the oil trade works the more likely that becomes.

This would destroy a lot of the retirement funds that people are counting on to live off in old age making them dependant on government services justifying the jobs of some power hungry politicians. ( you can figure out which political party is supporting this course of action on your own , they are the same ones who repeatedly stand in the way of recovering available domestic sources of oil )

Answer 3

The Oil Economy + the slow transition to Green

Answer 4

well gas is running out and there trying to squise as much money as they can out of it

Answer 5

* Over-dependence on oil

* Demand > Supply

* Very slow movement to truly green cars and technologies

Answer 6

More people in the world, especially China, who now have enough money to buy cars. Either we need more gas or fewer cars. Well we can make more cars easily enough, but we can't make more oil. All the easy wells have been drilled, and many of them are already pumped dry. The new wells are all in expensive places like the deep ocean or far away deserts or places like that. eventually they will be pumped dry too. The world is running out of oil at the same time that there are more cars that ever using it up. Of COURSE the price will go up. Way up. In 5 years it will be $10. You wait and see! In 50 years it will be so expensive that nobody will use it. We will use ethanol or methanol or electric cars charged with nuclear power or coal power or solar power or wind power. But oil is just running out.

Answer 7

(Deep Breath)...ok, the dollar is weak which makes oil and other commodities a better value for foreign investors...so that added players to the oil speculation market have make prices jump un-expectedly...every time the Fed cut interest rates, oil goes up because your $1 bill in your pocket just became less valuable....add to that the ever booming economy of many nations that were 3rd world less than 10 years ago and you've got something of a perfect storm.

To get a little more technical on you...the price of a gallon of gas (let's use $4 as a basis price) is about 70% related to the cost of the crude oil, another 15% or so percent goes to Federal Taxes, another 3 or 4% to State and local taxes, 8% proffit for the oil industry and the remaining is the gas station proffit....so by and large, the Government is making far more money than "Big Oil" off of gas sales....yet we haul the CEO of Exxon to testify to price gouging, explain that one Nancy Pelosi!

On top of the perfect storm...you've got OPEC sitting on a Trillion Dollar industry about to become obsolete in a few decades and we're asking them to cut their proffits....ha ha ha is what they say, they suffered throug the 90's of $15 a barrel oil and now they're time has come to get even more filthy rich....they'll only cut production from here, they won't raise it.

As the USA moves to alternative fuel sources, China and India will only get cheaper oil as our demand is reduced, so the US government will have to come up with new ways to tax the h**l out of us since our gasoline usage will be dwindling and all that tax money (combined w/Fed, State & Local...about 15-20% vs. the oil companies 8% proffit...) will need to be replaced.

We're in for a long haul of robbing Peter to pay Paul with our taxes....vote CONSERVATIVE if you want to see hang onto your paycheck, have any decision in your own healthcare, retirement, get illegal aliens out of your towns, keep Iran from Nuking Israel and destroying terror cells.....if none of those things are important to you go ahead and vote for Barry O'Bambi and see how much "Change" he gives you...as in what's left over from your paycheck after taxes are taken out.

(Sorry to get poltical...this stuff excites me)

Answer 8

GREED

Answer 9

those fat corrupt politicians

Answer 10

high floating rate of money........

Answer 11

To answer your question, the biggest reason is our own greed in the US.  

I think we need to stop complaining and conserve. Want oil prices to fall, cut back on consumption...simple supply & demand.  I guess to other people on this board I'm probably looking like a genius by now, but that's not the case.  I've seen this all before.. "I know how this movie ends, still I play... the starring role in Hovito's Way!" Jay-z

Don't expect oil to fall that far. You have insurance in case you die? Insurance for your car, home...? Then just buy some oil ETF's. For example, if oil goes to $200, and you invest just $2k, the difference you'll profit will offset the increase in gas and food.   If Oil goes down, then the cost of food, utilities, gas... almost everything will go down so you'll offset your investment.  I started doing this at Bush's inauguration because I remembered when his dad was in office... and I knew they were all oil men who gangstered their way into office.  

I turned $4500 into almost $30k in seven years (Gas/Food/Utilities Money) and I'm still long... as long as he's president. But, I have some short term puts to insure the short-term downside.

All you have to do is travel anywhere whether it be abroad or domestic to see the increase in demand for oil. Don't get me wrong $150 oil is unsustainable. But, as the world becomes smaller and emerging markets grow, so will the demand for oil. Moreover, we in America are just spoiled and wasteful and will suffer because of it. Ever pull into a gas station in Germany? Denmark? France? Italy? Do you hear them complaining all day everyday putting it on the front page of the paper? NO. They just don't buy as much, use public transportation and conserve. And, on top of all that 30% of what they spend on GAS is used to supply universal healthcare and other government services to ALL of their citizens.  I make six figures and can barely afford therapy for an injury suffered years ago.

In the US, just hop on any interstate east of the Mississippi and you'll see people doing 80-90mph like it's the speed limit and they're driving alone for the most part. Yet, they complain when they pull up to the gas pump. Want to save gas and affect demand... Slow TF down on the highway, for one. We're like little kids who want to eat everyone's ice cream and leave ours in the fridge. No, we need to drill for oil in ANWR, conserve, carpool, use public transportation if possible, implement more renewable energy sources, recycle, and don't waste.

... and find a way to provide universal healthcare for all of our CITIZENS, not "undocumented residents."  There's an oxymoron for you.

Answer 12

There are several reasons why and it all is base around supply and demand. China has become an industrial county and their fuel consumption has increased drastically. The USA still is high in consumption and still growing. The oil countries don't want to increase production to increase supply also not enough refineries to make more gas. Then the speculator paying more for the stock based on that people will not cut back on usage and oil counties won't increase production. If you believe that we're run out of oil that is just one more reason for stock to go up.  The increase in fuel cost will make the alternative fuels transportation worth making as the cost for them will be higher to start them up without outlets to provide the consumer the new fuels.

Answer 13

d**k cheney

bush

iraq war

saudis

speculators and investors who follow them

environmetalists

uranus

Answer 14

Speculation.

Answer 15

The excess supply of money and credit - which in turn fuels the speculators' long positions.