Why crude price is going up?is this because of real mismatch of supply and demand?or artificially pulling up?

Question

Why crude price is going up?is this because of real mismatch of supply and demand?or artificially pulling up?

Answer 1

87 million barrels of demand

85 million barrels of supply

Good ol supply and demand at work.

P.S. Ignore the politicians now trying to cover their tracks, and point the finger at speculators.

They are in fact partially responsible for the increase in oil prices since they have not allowed drilling in over 27 years and we have not built a refinery in the U.S. for over 30 years.

Answer 2

Yes.  The supply side is shrinking.  Many Oil producing nations have recently turned into oil consumers.  Crises in countries like Nigeria have fuelled this shortage.  Also there are rumours that hoarding is also one of the reasons for such a sharp surge

Answer 3

We're caught in a proverbial vicious cycle.

1) The world is using all of the petroleum that being produced.  

2) This causes a weak dollar which amplifies the price increase.

Incidentally, many countries have fuel subsidies.  To keep their economies alive they pay consumers a portion of the cost of fuel.

If we had planned ahead, we could have converted electricity generation and home heating to natural gas or coal.  We can produce all we need of natural gas and we have enormous quantities of domestic coal.

For those who blame speculators, that is childish.  That is the core idea in a commodities market.  

If it were that simple, why doesn't everyone open a commodities account and get rich?

Answer 4

Oil is priced in US dollars.  And every time the US dollar goes down against other major currencies, oil goes up.  Because with cheaper dollar, oil becomes cheaper for people with other currencies to buy oil.

There is increasing demand for oil in many countries, even when people in USA are cutting back on their oil consumption.  And the demand for oil increases, when the US dollar goes down and oil becomes cheaper to buy for those countries.

Perhaps the US central bank, the Fed, is artificially depressing the value of the US dollar by keeping the interest rate below the inflation rate.