Q: Seriously... why are gas prices skyrocketing?

[battleknight24]

I know I sound like a moron, but why is this happening?


Peace,

[davidlynch]

1. Primarily because futures traders are bidding up crude and gasoline

[jsamuel]

4. your are more right than any other explanation in my opinion

they know prices are due to go up, so they keep investing and therefore raising the prices, which makes them money...

Then more people invest because the price is going up causing the prices to go up more...

Then more people invest because the price is going up causing the prices to go up more...

Then more people invest because the price is going up causing the prices to go up more...

Then more people invest because the price is going up causing the prices to go up more...

Then more people invest because the price is going up causing the prices to go up more...

Then more people invest because the price is going up causing the prices to go up more...

[Maple]

5. Sorry nothing to do with

skulduggery.

Did you think oil would last forever?

[jsamuel]

6. no, do you think the stock market doesn't affect the price of oil?

[Maple]

12. Oil has been a controlled substance

from the get-go. Like drugs. OPEC controlled it for ages.

Stock markets are neither here nor there, and operate mostly on rumor and hysteria. A roulette wheel at the best of times. Ignore the circus they represent.

However, there is no more cheap oil...and that changes everything...even though it takes awhile to sink in to people's minds.

But nothing lasts forever.

[jsamuel]

14. "Stock markets are neither here nor there,and operate ... on ... hysteria"

I think you just showed that:

1. You think the stock market doesn't affect the prices of anything.
(which is hysteria in itself)

2. That the hysteria over "peak oil" is driving up the price of oil in the stock market.

[Maple]

17. The stock market

is a roulette wheel. No serious investor bothers with it.

It is a modern version of 'bread and circuses'

Sorry to burst your bubble.

PS...and I didn't say anything about peak oil. I said we have lots of oil. Just no more 'cheap' oil.

[jsamuel]

21. "The stock marketis a roulette wheel. No serious investor bothers with it"

wow...

ok, I don't feel the need to argue anymore.

[Maple]

23. I don't know how to get this through to you

You've been suckered.

1929 taught you nothing.

Because you always thought you were smarter than anyone else.

Surprise!

[rman]

9. why is the oil industry doing this now, and not before?

[Maple]

13. The oil industry

isn't doing anything...maybe invoking that river in Egypt, but that's about all.

[jsamuel]

18. The oil industry is not doing this. It is INVESTORS. Just people who

want to make money. They see the stock market being stagnant and dropping in general while the price of oil is skyrocketing. They buy in at 50 dollars a barrel and now oil is near 70 dollars. They just make 40% on their investment in a few months. It is a gold mine.

[Maple]

20. LOLOLOL

There's one born every minute.

And two to take em.

[jsamuel]

22. thank you for the insult

and no explanation for why I am wrong.

[Maple]

25. Oh I've told you

but those bananas in your ears affect your ability to understand.

[rman]

24. then still: why now and not before,

if this is such a good way to make money?

If the cause of this behaviour is rising oil prices, then what's causing prices to rise in the first place? Alternatively: what's "first cause" of this upward trend (and why does it happen now).

I'd say there's only one new factor in play that wasn't there in the past: looming production shortfall.

[jsamuel]

26. That is the Million Dollar Question. Because GWB was elected with Dick.

Every major investor that knew GWB and Dick Cheney knew that they would want to invade Iraq, Iran, and other contries with oil to "secure America's place in the world" (PNAC). This way they knew BEFORE IRAQ that gas prices were going to go up. This is what caused prices to rise before we ever invaded Iraq. After we invaded Iraq gas prices went up as a result. This pattern was seen by many investors, even common ones. That has resulted in many other people seeing the prices skyrocketing investing in oil, thus raising the prices even further to what they are now.

[Maple]

29. Oil was supposed to pay for Iraq

No one expected the Iraqis to blow their own pipelines and cut off the oil...raising prices rather than securing more oil for the US.

[jsamuel]

31. "No one expected the Iraqis to blow their own pipelines...cut off the oil"

again that is AMAZING that you say that

Anyone who was alive during the first Gulf War knew this was going to happen...

In fact the first thing GWB said to Iraqi's while he was declaring war on Iraq on national television was "Don't blow up your oil lines" which is basically equivalent to telling the insurgents to do so...

[Maple]

32. By 'no one'

I meant the dipshits in the WH who can't EVER connect dots it seems.

ALL of this appears to have been a surprise to them...although the entire world warned them of what would happen.

[jsamuel]

34. While I would normally agree with the WH being dips, Dick Cheney knew what

was going to happen. He is not a dip as far as making money and oil are concerned.

[Maple]

36. After all that has happened

and all the predictions that have gone astray...I think it's safe to say that every member of the WH is a dip.

[rman]

33. So no peak oil?

OPEC is lying when they say production of sweet crude has peaked?

That's a relief.

[jsamuel]

35. no, they are not lying when they say that

there is a degree of "peak oil" happening, but only a degree. They could increase it, but they are not doing so on purpose. They can drive the prices up further by keeping supply low rather than expanding their oil production. Thus, they force the demand to go up and with it the price.

[Maple]

37. There is no more cheap oil

Elvis has left the building folks.

Minor ups and downs in the months ahead...but overall...that's all she wrote folks.

Find another fuel.

[rman]

38. But it's not a factor in rising prices?

Otherwise you'd already have mentioned it i'd think.

If "a degree" a peakoil is happening now, then is it not predictable there will be more of a degree of peakoil in the future? Does it not stand to reason that the industry is anticipating just that, and adjusts its behaviour now?

[jsamuel]

39. yes it is a factor

"Does it not stand to reason that the industry is anticipating just that, and adjusts its behavior now?"

Absolutely! People are investing now because they anticipate this. This supports the argument about investment.

Sorry if I left out this part. It is caused by several factors: Iraq, Iran, Ven., China, "peak oil"...

But the reason why it is happening NOW and why it started when it did has a lot to do with GWB's election and the resulting Iraq war. It was a catalyst for the process that is causing oil prices to skyrocket.

I will further add that I am NO EXPERT IN OIL OR THE STOCK MARKET, but just a normal citizen of the US.

[rman]

40. so we agree: Peak Oil is "first cause" of rising prices

[jsamuel]

41. for me, it is more the ANTICIPATION of "peak oil" rather than it is here

causing the prices to rise earlier and faster than they naturally would have if there was no Iraq war.

[rman]

43. I agree that's plausible.

Also it sort of makes sense for the oil industry (from their perspective) to maximize profits now. In the near future they will have to invest a lot in new refineries to deal with heavier crudes, and invest in new extraction technologies to get to polar- and deep water fields.

But it still means peakoil is first cause.

Whichever the case, these rising prices do help to soften the blow of the peak somewhat, if only because it causes a slow down of demand growth.
All this means that the production peak is having an effect now. I guess it depends on how one defines "peak" - but it's not like the peak is sharp and distinct.
Oil companies *have* to (and do) start extracting and refining heavier crudes, tar-sand etc. now, in order to keep up with demand. All these less attractive sources of oil do cost more to extract and refine, which obviously increases price, and the production capacity is lower then that of the mega-fields that used to be full of sweet crude.
Granted though, it does not look like there's actually a production shortfall now. But it does look like it will be soon - i think it's a matter of a few years.

All this would not be an issue if there'd be no peak.

[Maple]

42. One more time.....

There is no more cheap oil.

The oil in Saudi Arabia is running out.

There is more oil in the Athabasca oil sands of Canada than there ever was in Saudi Arabia.

But it costs 1 dollar to extract a barrel of oil in Saudi Arabia.

It costs 18.00 dollars to extract a barrel of oil in the Athabasca oil sands.

Hence the invasion of Iraq. It looked like a lifeline.

However, their oil fields are in complete dissarray..and they keep blowing up the pipelines and refineries...completing the wreckage.

That is why you'll continue to pay a higher and higher price at the gas pump.

It'll go up an down for a long time...and occasionally it'll look like things are getting back to normal. World events change from bad to good to bad again by the week.

But the fuse has long since been lit...there is no more cheap oil

Find another fuel.

[Maple]

27. As the price goes up

there is certainly still the chance to make money. Oil will go much higher than this.

The trick is knowing when to pull out. (no sex jokes please) It is gambling, however much they doll it up.

Cheap oil is running out...it will get more and more expensive.

Some temporary ups and downs to be sure...but overall...up.

Until the day...the alternative shows up. Basic capitalism in fact.

Make sure you're out before that...otherwise..splat.

[jsamuel]

28. I agree with you there :)

get out of oil before the prices go splat

[Maple]

30. Ageed...but it's hard to do

Getting off the horse in time that is.

There is always that temptation.....

[WeHoldTheseTruths]

45. Really refreshing to see your intelligent answer

right at the top.

Seriously.

Thanks.

[Maple]

2. Seriously

there is no more cheap oil.

That's all been used up.

It bought you a century of expansion.

Now there's lots of oil...but it's harder to get at, and more expensive.

And it isn't going to get any better.

[NEOBuckeye]

3. Peak Oil

In two words.

The longer answer? Peak Production of Sweet Crude Oil, the type of Oil that powers modern civilization. We're not quite out of oil yet (try 2040ish), but what remains will be far more difficult to extract and put to use, hence the major price increases you are seeing now.

Did we had plenty of lead time on this? Sure. But say a big thank you to money-grubbing Oil industry moguls and charlatans like Saudi-linked George H. W. Bush who did everything they could to profit like madmen while the party was still on. But in the three decades since our initial warning, the powers that be have done approximately squat to avert the impending, unprecedented energy crisis.

Get ready. Everything you know in your life is about to change dramatically.

Want more info?

www.peakoil.com
www.peakoil.net
www.lifeaftertheoilcrash.net
www.energybulletin.net

Follow the links above. They'll show you just how deep the "rabbit hole" goes.

And yes, The Matrix has you.

[LaPera]

7. PROFITS!

Rising Gas Prices and Big Oil's Agenda

Washington, D.C. - Institute for Public Accuracy - infoZine - Wenonah Hauter is director of Public Citizen's Critical Mass Energy and Environment Program; Hauter said yesterday: "Since Bush became president, the largest five oil companies operating in the U.S. -- ExxonMobil, ChevronTexaco, ConocoPhillips, BP and Shell -- have enjoyed profits of $254 billion, with ExxonMobil leading the way with profits of $89 billion.

"Clearly, there is a direct correlation between record prices paid by consumers and record profits enjoyed by oil companies. For example, the profit margin for U.S. oil refiners has shot up 79 percent from 1999 (the year Exxon and Mobil merged) to 2004. But rather than hold these price-gougers responsible, the energy bill signed by Bush this month gives $6 billion in tax breaks and subsidies to oil companies."

James Paul, executive director of the Global Policy Forum, has written several reports about oil including "Oil in Iraq: The Heart of the Crisis." He said yesterday: "Exxon, as the world's biggest and most profitable company, wields enormous power in Washington and in most other capitals as well. The company has plenty of lobby funds, as it enjoys more revenue than 185 national governments. Exxon has blocked a U.S. national policy on climate change and fought against environmental laws. Oil company interests are not only crucial in the war in Iraq, but also other conflicts, such as Iran. As world oil supplies begin to diminish, big oil dreams of ever-higher profits, and more oil wars to seize new and lucrative concessions."

http://www.infozine.com/news/stories/op/storiesView/sid... /

Record Prices Mean Record Profits for Oil Companies

As American consumers increasingly feel the pinch at the pump, oil companies have watched their profits soar.

The newest numbers from the second quarter of this year show Exxon Mobil with a 32 percent increase in earnings over this time last year — that's more than $7.6 billion.

BP saw a profit increase of 38 percent, totaling $6.7 billion, while Conoco Phillips — the third largest oil company in the country — recorded a 56 percent increase in profit, more than $3 billion.

"The huge profits are enormous because the public is drastically overpaying what it costs to produce," said Joan Claybrook, president of the consumer advocacy group Public Citizen.

Many of these companies long ago bought oil reserves at prices of $10 to $25 a barrel. With prices peaking near the $67 mark, the profit margin has been enormous.

Even more eye-opening is the profit in Saudi Arabia. Saudis are making an average of $208 million more each day since the increase in crude oil prices first began in December 2003.

Will Profits Lead to Solutions?

"The answer is yes, but the impact of those is not immediate," said Mike Rothman, the head of integrated oil research for the International Strategy & Investment Group.

Consumer advocates say Congress is doing nothing to speed up the process, instead passing an energy bill that gives tax breaks to the oil industry.

"They got $6 billion in the energy bill over 10 years. That's a huge, huge amount of money," said Claybrook. "And you'd think with the price of oil at $65 a barrel, they didn't need any new incentives."

http://abcnews.go.com/WNT/story?id=1029991

[rman]

8. The gap between oil supply and demand is closing

The rising prices are either a direct result of peakoil, or a pre-emptive response by the industry to impending peakoil.

[rman]

10. OPEC: "sweet crude production has peaked"

The problem with refineries is that there is not enough refining capacity for the heavier crude that oil corporations are switching to.


OPEC Monthly Oil Market Report Aug.05
Refinery expansions efforts needed to match evolving crude supply - Report
Vienna, 17/8/05
http://www.opec.org/home/Special%20Features/2005/Fea082005.htm

Refinery capacity expansion plans are needed in the major consuming regions to reflect the evolving quality of global crudes if efforts to moderate crude prices and reduce oil market volatility are to be effective, according to the OPEC Monthly Oil Market Report for August. The report highlights the fact that recent production trends have resulted in a global crude slate that is heavier and sourer. At the same time, the refining sector has been slow to not only expand to meet the increasing demand but also to adapt to the changes in crude quality. The resulting constraints in the downstream sector have become a major source of upward pressure on prices.

“The recent rise in crude oil prices to new record highs — triggered by a series of refinery outages that have aggravated downstream constraints along with increased geopolitical tensions — only highlights the pressing need to enact concrete measures that would encourage rapid and sizeable investments in the refining sector,” the report said. The report noted that it will take several years to deliver the projects needed to ease current bottlenecks and prepare the appropriate refining capacity to meet expected demand. “Any delays will only continue the current mismatch between the installed refinery capacity and crude type, and undermine OPEC efforts, and those of other producers, on the upstream side to reduce volatility in the oil market,” it added.


OPEC Monthly Oil Market Report Aug.05
http://www.opec.org/home/Monthly%20Oil%20Market%20Reports/2005/MR082005.htm

also mentioned in the report:
"Brazilian oil supply is now expected to average 1.99 mb/d, a growth of 190,000 b/d versus 2004.
The performance in the second quarter of 2005 was better than expected, with the two new
deepwater fields (Barracuda and Caratinga) now reported to have reached peak production."

[firefox]

11. It is the perfect storm.

The object is to make money. The oil industries gamed federal politics with people that saw it their way. There would be no real alternatives to the gas automobile. Then all they had to do was wait until increased demand met peak oil.

[wli]

16. 90+ years in the making, too

People saw this coming from the first oil wells that were dug.

[radwriter0555]

15. So the gas cos can make a massive profit...

there is no other reason.

[wli]

19. mostly Enron-style fraud

The market-efficient price is far lower. Things are at a peak right now, but that doesn't motivate the price. It's called gouging and artificial scarcity. Things don't suddenly get bad with Peak Oil, they just slowly get harder and scarcer over time.

[Warren DeMontague]

44. "Cuz Of Librul Environmentalist Tree Hugging Hippie Tie Dye Wearing

Composting Recycling Hybrid Drivers Who Believe in Evolution Instead Of Jesus!"

[fujiyama]

46. Primarilly

the demand is much higher now than it was before. India and China are emerging markets and this newfound industrialization, wealth and development means a higher demand in energy.

I would also guess that the output from Iraq is not high. It was a major oil producing state...The oil that is coming out is in the hands of Cheney's friends, who are gauging us.

[no_hypocrisy]

47. Investors are switching from real estate to petrol. New bubble.

[Hubert Flottz]

48. Because Bush don't need to worry about being reselected now.

Anyone but a fool, would have seen this coming. It's the oil companies payola for supporting Bushco in 2004!