Why is the price of oil getting higher?

Question

Why is the price of oil getting higher?

Answer 1

limited resource

speculators driving it up

war in iraq

bush is stupid

bush is stupid

bush is stupid

Answer 2

There are several causes, one of which I feel is more suspect but possible.

1. Speculation-- Speculators have bought oil futures and there is more demand for oil futures.  Therefore, prices go up.

However it is uncertain how much they actually affect gas prices.  There is much debate.  Too often blame gets put on them-- they deserve some blame, but NOT all of it.

2. High demand.  China, India, and other countries have a growing and big demand for oil.  That is why prices have gone up.

3. Decreased value of the dollar.  The dollar has lost its value partilaly bcause of the national debt.  Dollars were printed to help pay the debt.  Unfortunately, that has led to problems.  It made the dollar worth less (and interest rates being lowered decreased value dollar) so that's a problem.  It causes higher inflation- things become more costly because the dollar is not as good as it once was.

Three causes, three very adverse effects.  Only two of which I'm actually certain on for causing gas prices to surge up.

Answer 3

Crude Oil has only doubled in price in real terms, but the US Dollar is dropping like a stone.

India and China and other emerging economies are now buying oil to support their economic expansions. Meanwhile successive US governments have stuck their heads in the sand rather than develop new technologies.

Also, while foreign countries taxed the use of gasoline, the US has always subsidized it using tax payer's money. So while the price of gas (petrol) has tripled here in the last few years, the price in Europe has only increased from about $8 per US gallon to about $10.50 per US gallon.

So to answer your question, there are two main factors:

1. Supply vs demand is behaving in the normal free market economic model. Greater demand = higher equilibrium point (price)

2. Falling value of the dollar (with respect to the Euro, Yen, Pound) means that more dollars are required to buy the same thing.

Answer 4

Because whenever there is an increase in demand, the prices will go up.

Answer 5

The typical liberal answer is bush and his oil buddies are doing it to get richer. The typical conservative answer is liberals want it high so people will be forced to conform to government control over their lives.