Why is the price of oil going up? The storm isn't a hurricane and the Gulf had 2 cat 5 storms with no damage?

Question

The amount of oil is limited coming from that region so why the increase? To me this is a sign of plain ripping the consumers off. If the rigs out there were able to withstand the two category 5 hurricanes why all of this fuss?

Answer 1

They have to shut down production as the people working on the rigs head for land.

I do wonder, though, if once this oil price increase hits the pumps -  it will come down.

Answer 2

they have to sock it to us while they can.

Answer 3

Which two category 5 hurricanes are you talking about?  If you're talking about Dean and Felix last year, those two did not enter the upper Gulf, but made landfall in southern Mexico and Central America, respectively.  If you're talking about Rita and Katrina in 2005, there was extensive damage, with dozens of rigs either destroyed or heavily damaged.

Also, you have to understand that the price of oil is not just based on supply and demand, but on speculation.  If speculators think that some event is going to have an impact on oil supplies, the price can go up or down based on that alone, even if supply and demand remain the same.  We have the deregulation of the financial industry to thank for much of this problem.  That is why there has been so much volatility in the price of oil over the last several years.

Answer 4

Is it? Gas is down to $3.45 where I am. It's been dropping a penny or two every 2 or 3 days lately.

But like someone else up there says, it still costs money to secure those rigs and evacuate them, beyond what they'll from being out of production for a week.

Answer 5

Any d**n excuse to s***w us even more than we already are.  They are saying it is for the loss of workers that have to be flown in shore and the damage that "could" be caused to the rigs if it does hit.