Why is oil getting so expensive?

Question

With the property crash are speculators moving into commodities?

Answer 1

Oil production has peaked.

Answer 2

because they are tight

Answer 3

So the rich oil tycoons can get even bigger island in dubai?

Answer 4

This is a great question. Basically nobody knows the answer because of the monopoly which exists within this industry. The official reason we are being given from political people is that oil is in short supply and that demand is exceeding supply by an ever increasing margin.

The answer to your second part is you bet your life they are; Oil, Gold, Rice, Metal etc are all increasing in value, therefore make attractive investments on the share market. Traditionally, property investers have always invested in shares during property slumps.

Answer 5

Speculators. Yes, they have always been in the commodities markets. They haven't had much to do with the real estate market at all.

The price of oil that speculators are paying is for future delivery which is driving the price up now. They are gambling on the supply either remaining static or dropping. The funny part is that there is no shortage. There are no long gas line like in the 70s, nor is there decline in production due to war or weather.

Unfortunately, the Liberals in the worlds governments don't see the price increase as a bad thing. They're actually counting on it. Their reasoning is that with the increase in price, there's a like decrease in use. That means the environmentalists win because there is a drop in the release of CO2 into the atmosphere which "supposedly" contributes to global warming.

The funny thing is that more scientists are concluding that the "global warming" thing is nothing more than a cyclic occurrence which is normal.

The problem we have in the US is that Congress is controlled by the Democrats who have the environmentalists as a large part of their Funding base. You notice I didn't say voting, because these organizations always tend to give more money to the left than toward the entrepreneurial side. They have to answer to the ones who pay their bills and they are the ones who don't want to see more oil production whether here or anywhere else. If it gets to a point where there are no more producing oil fields, the result will be a collapse of the world economy because there is no viable fuel that can replace gasoline or diesel fuel that can be in place for transportation within the next thirty years.

Bear in mind that for any alternative to be viable, it would need to A. Replace the fuels we have now that can be used in the vehicles we have now. B. Produse the same amount of energy that gasoline and diesel do now. C. Be cheap.

Auto makers are working on building vehicles that are more fuel efficient but there is one big problem. Are companies willing to replace fleets of vehicles with newer untried vehicles that cost twice as much, and cannot do the job their present fleets do? Are you willing to spend twice as much for a vehicle that is smaller, has a shorter range, and only can be fueled or charged at a facility that doesn't exist yet?

Answer 6

No.  The world is past peak production of oil.  In other words, not enough supply.

Answer 7

some say its the recent downturn of the dollar(American), since our dollar is worth less the amount of dollars we need to purchase oil is more, therefore oil price goes up, there are other factors too but this is a main contributor

Answer 8

No more Supply..

Answer 9

The consumption of oil has increased hugely, however, the amount of oil drilled out has stayed the same which has created an imbalance. The price of oil is getting higher because there is less of it. USA and some European countries will explain it better with the high number of cars and factories they have.