Who here truly believes that demand - solely - has led to record oil

[Writer]

price?

I've heard this by countless analysts, and I'm struggling here. I can't believe that simply higher demand from China and India has nearly quintupled oil prices over the last several years. Yes I am certain that has played a part, but could it really have had THIS great an impact???

Then there is the war in Iraq, of course, and given that oil is sold as a future, worry leads to speculation that oil will be in short demand.

A part of me believes that we are being gouged in oil, hence being gouged at the pump.

What do you believe?

[hobbit709]

1. Greed

Pure and simple. Look at the oil company profits

[asjr]

2. And politics

[rrrevolution]

16. An Anonymous Energy Co Insider, "Its the Enron version of oil"

The Oil Companies are gaming the system just like Enron gamed the electricity blackouts in California to maximize profits.

The Oil companies take a refinery off-line for a short time, announce it is going off line, then raise prices in anticipation but never really take the refinery offline for any substantial amount of time. They have even admitted that prices spiked up just on the prospect that refineries might go offline, or that hurricanes might hit offshore platforms, or on rumors that Venezuela will cut sales to US.

It is the old Enron playbook.

They made so much money they could not reinvest it fast enough to dampend quarterly profit reports to shareholders. They are drowning in profits, and Bush just gave them billions more taxpayer money absolutely free of charge in the new Energy Bill passed.

The size of this fraud defies description.

[mtnsnake]

3. What better way to create more demand than to start a bogus war

[Maggie_May]

4. I knew this was coming

as soon as these Oil a** holes got into office. People couldn't not seen that Bush came from oil thats why these prises are so high. We are paying for this war. You might of got a tax cut but they can have it back if they lower my energy prises. I paying more a year in natural gas and gasoline and everything else than I did get back in a tax break.

[Writer]

5. I think there are hidden costs, also, in the cost of milk

and other dairy items. A part of me is wondering how we are paying for a war that costs millions each month to run.

That's a very interesting thought you have there.

[LoZoccolo]

6. The China and India factors have an extra layer of complication on them...

...in that it's not just that they demand more to be drilled, but they max out refinery capacity as well, which serves as a bottleneck on supply until it can be increased.

But yeah, it's no secret that the high cost allows the oil companies to hide a bigger profit in the consumer price somewhat.

[Pepperbelly]

7. It is not a matter of belief ... it is a matter of fact.

The fact is that if this were a matter of passing on increased costs to consumers, then the profit margins of the oil companies would have remained static, at least in proportion. But they have not. Earnings have surged between 40% and 100%. The oil companies are foundering in the crush of cash that has flowed into them since Georgie started his reign of terror.

We are not being gouged. We are being raped.

edited for spelling.

[dsc]

13. The profit has nothing to do with it

It is irritating to see the oil companies profit from this but the fact is there is way too much demand for a limited supply. The fact that the limited supply is cheap to produce is irrelevent in the final analysis. It is like fashionable shoes. Nike shoes don't cost much, if any, more to make than generic ones but since there is a huge demand for them they cost more to buy.

[candice]

17. It's the advertising $$ that you are paying for Nikes...

and the development costs. The shoes are all made by near-slave labor in those tax-free development zones...for a few dollars apiece and are stacked in piles by the children who make them. Read Naomi Klein's "No Logo" for the scoop.

Then the cheap shoes are hyped via advertising campaigns, which "justifies" the cost.

[Pepperbelly]

23. I believe you should reassess your position ...

If the oil companies were passing along costs from increased demand, then their increased profits would only mirror the increased demand, not exceed it by a factor of a thousand. IOW, the profit margins would remain identical with the only difference being one of volume.

But that is not the case.

Not even close.

In fact, demand has not been increasing within the USA, particularly in the last 6 months. What has been increasing is the amount of profit gained by the oil companies and that can be accounted for in only one manner ... gouging. Price fixing.

Rape.

[fishnfla]

8. Are oil prices at a record?

I know, I know, this is a RW talking point, but if it is factual we cant ignore it. If it isnt, we have to refute it.

At $67 bucks a barrel, that is a record in NOMINAL dollars, but when adjusted for inflation, it would have to be $80-something a barrel to compare to prices in the early 90's, thats the RW talking point.(George Will, current issue of Newsweek)

To be fair, we have used this "real dollars" vs "adjusted for inflation dollars" argument ourselves in budget/spending arguments before.

[Writer]

9. Actually, adjusted for inflation, it's just shy of the mark set

in the 1970's for oil prices then. It's already past the early 90's mark.

It's quite close, even adjusted for inflation.

[LoZoccolo]

10. Someone will probably take you to task for being fair...

...so I'd add that to be credible and thus effective as well, you have to do that. :)

[Writer]

11. Yeah, no kiddin'

"Toss aside reason and never lose ground! Attack! Attack! Attack!"

"Don't be REASONABLE! Be divisive and confrontational!"

"RARRRRRRRRRRRRRRRR!"

[LoZoccolo]

12. It's only nominally taking as stand as well.

It might seem strong along one dimension in being abrasive or violating social graces, but if it's transparently manipulative it's seldom compelling, and thus ineffective, and thus...well...not really strong.

[Writer]

15. Exactly. How many people have won you over

by yelling at you?

There is a smarter way.

[fishnfla]

14. I know, its like that old saying

you can use statistics any way you want to prove both sides of an argument
you start talking about this stuff and people's eyes just start to glaze over

but for the press to sound the alarm over "record oil prices" or another , new record oil price, when in (Or, IF in) fact there is nothing new over the sun, doesn't help with perspective.

For instance, what factors were used in the 70's and 90's to bring oil prices under control? what are the controlling factors? (more to the OP's point)

EDIT in, or, if in fact, to be fair ;)

[mcscajun]

18. No. It's not all about demand, but it's a big piece...

...but it's not just consumer demand, not by a long shot. How about the enormous amounts of fuel of all kinds required to keep Bush's War a'rollin' every freakin' DAY?!?!?!!

That's demand, now.

[fishnfla]

19. I believe that high oil prices helps sustain the Iraqi economy

(Back on topic Writer :) threadjacking is not fair )

According to a recent IMF report, oil prices are helping to shore up the Iraqi economy. Makes sense, they sell oil too, when the insurgents let them. IMF says prices need to stay that way to help Iraq

The 200 billion we spend there? Thats security money (poorly spent IMO) Of the reconstruction money, 40% or so goes for security alone.

So whats Bush gonna do? He understands oil, right? (rhetorical question) If the higher prices help float his beloved orphan Islamic federation, make his Saudi and Oil buddies rich, he's gonna let them fly

[rrrevolution]

20. Price is a Manageable Element of Any Economy

Just as interest rates can be changed without reference to market forces, price can be managed in the same way.

However, when an integral element of a market economy, here price, is artificially managed in a way that ignores the other market elements, there will be a reaction that cannot be hidden from those forced to participate in the market economy.

In short, as they set the price, things they did not anticipate will happen which they cannot hide.

[Contrary1]

21. I saw a documentary a couple years back...

it stated that the US did not even have to buy oil from the Middle East, that there was plenty in reserve right here.

The reason we kept buying their oil, they said; was so that our allies would be able to do so too. And that if we ever did stop getting our oil from them, the world's economy would collapse.

I had never heard that before. But, if it is true; it puts an interesting slant on the whole thing. I liken it to welfare, which we know the Repubs are all for.

[pscot]

24. Not true

U.S. production peaked around 1970, triggering the first oil shock, complete with round the block lines at gas stations. Domestic production has been falling since, despite rising prices. There is still a fair amount of shale oil around, but the energy and environmental costs of extracting it are prohibitive

[McCamy Taylor]

22. Higher with inflation in 70's w/embargo. It's US war policy to blame.

Iraq is in civil war, Iran is threatened with war. Venezuela is threatened with coup. The US is doing everything it can to destabilzie the governments of all the oil producers EXCEPT Saudi Arabia and the US. Keep oil prices high so Bush oil buddies and Bush Family Saudi bosses reap enormous short term profits. which is what the whole Bish presidencu is about.

Read Cash's "The Mind of the South." The "south" was all about cotton plantations which made a lot of money--if you had slavery--but slavery corrupted the South till this day. Now, oil is the new cotton, and the way the Bush family and friends are approaching oil draws upon the southern cotton tradition, with latino and arab and oriental people (I guess you could call them browns) around the world, replacing african slaves. Very dirty, sordid business, but what do you expect from a family which decided to go south and model itself on a tradition based upon exploiting the labor of others under the guise of serving a Calvanist diety?

Anyway, under Calvanism, if you make a profit, it is a sign of God's favor. So, if the Bush's kill or enslave foreigners to increase the price of oil that is a good thing, especially if they can lie to themselves that it is making AMERICA stronger. Never mind that 99% of America doesnt share the wealth. (This is in Cash, too.) The Bushes would have us imagine that American white pople belong to a brotherhood of white people who can all feel a rosey glow that their kinfolk--the Bushes--are so rich and powerful.

Read the book if you want to understand what makes *'s mind tick.

[welshTerrier2]

25. solely, no ... but China and India will be huge problems for the US

the global competition for oil is racing towards a very horrible confrontation ... oil is the achilles heel of industrialized societies and supplies are running short and the geo-politics are leading to confrontation ...

the "oil issue" is the biggest story of our time (hmmmm ... well, maybe global warming) ... anyway, Americans continue to buy gas guzzling vehicles ... truly, we have failed to awaken America ... we need to do better ...

most industry analysts know that high oil prices have resulted from several factors ... the US destabilizing of the Middle East has created instability in the oil markets ... markets do not like risk and uncertainty ... the longer the war goes on, the higher the price of oil ... and without a windfall profits tax, oil company profiteering continues unabated ... they, and their stockholders, are loving this war ...

China and India are both experiencing incredible growth ... China currently imports about 40% of its oil and that is likely to keep growing ... for more on the global competition for oil, check out this article (http://www.watchingamerica.com/nrchandelsblad000005.html) ... also an article i posted yesterday about Darfur (http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=2039014&mesg_id=2039014) pointed out that, in spite of fairly small supplies of oil compared to the Middle East, the US, China and India are competing heavily for available supplies in Sudan ... the argument made was that if these countries are fighting that hard for so little oil, they truly must be desperate to grab whatever oil they can ...

our country needs an energy policy that recognizes that the status quo cannot continue without leading to global war, a collapsed US economy, the devastation of global warming and a severely restricted quality of life ... Democrats need to do a much better job awakening and educating Americans to the risks we all face ... we need to go beyond important but wonky arguments about ANWR, ATV's in the national parks, timber companies harvesting old growth forests etc. and make America understand that their lives hang in the balance if we don't react to this emergency ...

our Party leaders have become bureacrats and "political technocrats" who are failing to lead us out of the darkness and away from the catastrophe that awaits us if we don't change course very soon ...