Why oil price so high? What cause this? You explain plese?

Question

Why oil price so high? What cause this? You explain plese?

Answer 1

There is a growing shortage of oil and so, the price is forced up by the high unchanging demand and the repressed supply. This is basically because the world economy is so based upon the usage of oil-(plastics, transport etc) that there really is no alternative, meaning supply will outstrip demand as the reserves reduce in number and demand will increase as the population steadily rises worldwide.

Answer 2

There are many factors which help contribute to the ever increasing price of oil.

At source, the major producers such as Saudi Arabia are reluctant to force open their taps on full, also they fear any price reduction, simply because they did this in the past and it cost them billions of dollars.  So, they have no plans to go down that road again.

One American pundit suggested recently that the price of oil could reach $300pb by December 2008.  Wow!

For us common folk, the only thing we can do is reduce our dependance upon oil as much as possible.

I appreciate that there are many of us who have no alternative but to use our cars.  However, as a Londoner, the only time I actually need to use my car is when going to the supermarket to load up with a week's worth of supplies.

We are debating the issue at home and plan at some point to cut back to a fortnightly car trip to the supermarket.  Later, we may cut back further to a once a month trip.

The consumer has massive power and by simply boycotting any product, petrol whatever, it will force the price down.

I have heard people blaming speculators.  I should point out that speculators have lost more money over the years than they ever made, so I do not blame them one little bit for the hike in oil prices.

Oil price increases since 2003 - Wikipedia, the free encyclopediaThis effect, outlined in the export land economic model, could significantly reduce the oil available for trade and cause prices to continue to rise. ...

http://www.en.wikipedia.org/wiki/Oil_pri...

Oil Price Rise Causes Global Shift in Wealth - washingtonpost.comOil Price Rise Causes Global Shift in Wealth. Iran, Russia and Venezuela Feel the Benefits. By Steven Mufson. Washington Post Staff Writer ...

http://www.washingtonpost.com/wp-dyn/con...

Brown clashes with oil nations over causes of price surge ...22 Jun 2008 ... This is the third great oil shock in three decades, but this is the worst oil shock because of the severity of the rise in price, ...

http://www.guardian.co.uk/business/2008/...

The ever increasing price of oil in reality will have no effect upon the ability of the UK to produce energy.  UK has an estimated 200 years of coal.  Already the UK.gov are talking of building more coal fired power stations - even in the face of the bleeding obvious pollution it will cause.  It will make no difference.  The truth is that 'coal is king' - don't believe me?  Ask the Chinese.

Chinese coal fired steam locos

http://www.youtube.com/watch?v=drjpKw0N5...

How long before the USA reintroduces locomotives like these on their railroads?

The Mighty Union Pacific Railroad Company

http://www.youtube.com/watch?v=x8f9VFlNy...

Answer 3

Dollar weakness causes the price of oil to rise because oil is denaminated in dollars.

Answer 4

Contrary to the propaganda, there is no shortage of oil in the ground. There are new resouces being discovered constantly, and indeed new resourses being held over and saved.

What the real reasons are; is that China & India have become major consumers, and are set to rival even gas guzzling America in their journey to international power (trade and political).

Correspondingly, the Oil Producing States have decreased the flow to the world in the name of conservation(sic).

This has successfully ensured supplies and profit for the future of OPEC, where-as there was a ''perceived'' danger of running out.

Understandably where there is oil, there is also power; should an OPEC nation start to run out, that would mean diminution of power.

Of course the reduction of oil flow, coupled with the greater need brings in profiteering both for Opec and for Traders.

Fuel in itself is dangerous and is therefore handled in bulk by refiners, processers and distribution facillities. This is also a cost and profit burden.

Don't forget that taxes are added here in Employment Tax, various import and storage duties, with stamps + licenses, all cost and bunce to the host receiving Government

Of course when the fuel enters any receiving country various ''Duties'' are added on as a matter of course.

Some Governments are greedy and stupid, others less so.

Britain for instance is greedy and stupid in it's Government and adds 200% over and above. The Government has convinced itself too that a ''Duty'' is not by definition a tax, and therefore adds a further tax burden via VAT 17.5%

At every handling step there is a profit made, and a tax (sorry duty) levied.

Hope that helps.

Answer 5

because the price is linked to vat which means the higher the price the more tax you pay, also the reserves are running out according to the companies who find it, this means more money is needed to find new reserves in less favourable places, you have to consider the higher cost of fuel is driving up the cost of food, it is a spiral going up

Answer 6

no

Answer 7

It's Robert Mugabe's fault

Answer 8

oil is plenty... its just getting it out of the ground, cleaning it, putting it into a transport and getting it here, thats why it costs so much...

oh and the government taxing us to high h***s doesnt help.

Answer 9

high demand and low supply.

Answer 10

Because Robert Mugabe cheated in the Zimbabwe election.