I heard a couple names Warren Buffett ( Obamas biggest campaign investor) And Bill Gates are involved in this Speculation of OIL! Don't they have ENOUGH MONEY! Do you know anymore names? They will make HUGE Profits while us poor people suffer.Who Exactly Are These Oil Speculators Driving Up Gas Prices?
I listen to the Oil CEO's testifying in Congress last month May, 2008.... and they all lied that
1. Demands are now low
2. Supplies are now high .... about 3% increase
3. It cost about $10 to make a barrel of oil but trade on Wall Street for $130 a barrel
4. All the oil refineries are only operating at a 80% - 50% capacity because we already have too much oil
5. The US is currently the #3 largest producer of oil in the world.... we sell our extra oils to Japan
6. Plenty of oils right here in the USA =
June 22nd, 2008
The U.S. Geological Survey just published its official results of a groundbreaking study.
Its report confirmed a massive oil reserve in an area the locals have nicknamed the ';Bakken,'; which stretches across North Dakota, Montana and southeastern Saskatchewan.
The new USGS study estimates a whopping 3.65 billion barrels of oil in the Bakken...
The reported 3.65 billion barrels of oil mean estimate is for 'undiscovered' oil only, and doesn't include known oil, such as reserves.
In fact, the study reports a 25-fold increase in the amount of oil that can be recovered... compared to the agency's estimate back in 1995.
Discovered over 50 years ago, the Bakken deposit--once impossible to extract--is now being hailed as the single largest oil find in US history.
That's because, today, thanks to breakthrough drilling techniques like horizontal drilling, the Bakken's oil shales can be extracted relatively cheaply.
When that happens, this light, sweet oil will cost Americans just $16 per barrel! and trade on Wall Street for $130-$140 a barrelWho Exactly Are These Oil Speculators Driving Up Gas Prices?
Capitalism is like democracy.
Speculators are just the people who vote
on what the plan of the economy is.
Investors, although it may seem like a Las Vegas casino, are really just the managers of the direction of an economic system. Survival-of-the-fittest is like a religion. Humans want to live like sharks in a shark tank.
soros owns about 1/3 of halliburton.and yes you are right.but the republicans are just as dirty here.everyone is trying to make a buck! the problem is you need to force the speculators to store the oil they hedge.and also make them put up 50% in cash instead of 10% on credit,do this and you will see 2.50 overnight!
Airlines, Truck lines, Package delivery companies speculate to lower their risk of financial harm when prices rise. They do this to protect themselves.
Mostly pension fund holders.
All of us with a 401K. Primarily the teachers union.
Speculators perform a function in a commodities market - they generally take the opposite position of people in the industry who want to hedge their exposure to price changes.
Thus they enable the heating oil dealer to hedge his fixed price volume, which is what enables the dealer to offer fixed prices, which is what enables homeowners to fix their heating bills.
Generally, volatility DECREASES with volume. So, the problem isn't speculators generally, bad behavior among speculators (such bad behavior exists but it is not what causes global commodity bubbles), or even the amount of speculation, all other things being equal (because there is a short position for every long position).
The problem is with the supply of money and credit.
All hedging and speculating is done on margin - short term credit. Short term rates are ultimately a function of the cost of funds - the federal funds rate. When the Fed drops the federal funds rate aggressively, the differential between the cost of funds and the future value of a comodity increases. The speculators aren't deliberately trying to rig prices nor can they on a global scale - they're following their analysts' spreadsheets that compare the cost of funds to the future value of the commodity, and as noted above, that differential grows when the Fed aggressively cuts rates. This causes more money to flow into long positions, continuing to drive up the price of the commodity. If the Fed wishes to maintain the low cost of funds, it pours more liquidity into the market - thus the differential only grows, causing more money to flow into long positions, growing the differential further, etc......
That's the anatomy of a commodity bubble.
Right now the commodity is oil.
We've seen this with natural gas a few years ago, with metals, and with housing - that's a complex analysis but in the end, it too was a bubble.
I'm not suggesting that supply and demand issues shouldn't cause a price increase, just not a bubble like this. Generally the asset bubbles do occur with assets that were somewhat undervalued to begin with (natural gas, metals and housing are also examples) - - but they magnify the supply-demand picture dramatically.
Oil should be at $70/bbl and gasoline just under $3.00/gallon. If the Fed were to raise the Federal Funds Rate to 4.00% from 2.00% that's where prices would go. You'd be told on CNN that it would be the result of softer demand as a result of a slowing economy as a result of the rate hikes, but that's not true - what it would be is the traders no longer having an arbitrage because the gap between the cost of funds and the future value of the commodity would have closed.
Experts think the Fed will ';stay on the sidelines'; this time around and not raise rates - but the Fed is not on the sidelines. The Fed is busy tilting the entire field.
Wednesday, August 18, 2010
Will increased domestic oil production impact prices or supply?
OK, do we need a little realism here? The U.S. is not one of the world's major oil producers. So, what will the small boost in domestic production do? Sure we can drill offshore, but there is no guarantee that we will find oil. And what guarantee is there that whatever oil is found won't just be exported and sold overseas? The dollar is weak right now, making U.S. oil attractive to foreign buyers. Do people think that increased oil output here will have a significant effect on the world supply or global prices??Will increased domestic oil production impact prices or supply?
William you know absolutely nothing about oil production.....nada...zilchWill increased domestic oil production impact prices or supply?
Both, But we will not see any affect for about 10 years. They still have to build and drill for all the oil. 1 , oil production is gauged on a world level not a country level, so when they count the amount of oil in storage they just don't count the US or Spain they count the global supply and the global consumption. Also the price is going to depend on if your looking at US oil or Crude oil which is what Gas or Diesel is made from. US oil will be cheaper because like you said the dollar is weaker, but Crude oil will stay the same price because it is a global stock,
I have heard that any oil we find (or more like Exxon-Mobil finds) will be placed on the open market for the highest bidder - after all E-M wants to make as much money as they can. So, it's not going to go right to our refineries and our gas tanks.
Some people think that if we start, it will have an impression on OPEC and others and will put pressure on them to lower prices. But, I think they're all out to make a buck, and they'll just scale back output to keep the price high.
Yes,. it will impact prices and supply. OPEC will continue trying to influence global oil prices in it's favor.
As far as where the oil goes, it usually stays geographically close to where it is pumped from. The cost of transportation usually keeps it there. Much of the oil in Alaska goes to Japan and South Korea. Oil from the Ukraine goes to Russia and Europe. Because the United States is so energy hungry, we do import from all over the globe. We will also see China do this more and more.
The prices will fluctuate as America ramps up oil exploration and production and OPEC tries to control global prices. If OPEC wants to keep prices high, they will reduce their own production. This means that they will make less money. The less money they make, the more unhappy the member nations of OPEC become.
I don't think we can produce enough oil to break OPEC, but the increased production will at least be a stop gap to do something, by our own hands, to control our own fuel supplies and prices while we pursue all the alternate forms of cheap and renewable fuels that we will need in the future as the world finds that oil production cannot continue to meet its energy needs.
How'd you like that last sentence?
As far as not knowing if there is oil there, we do know there is oil there by the oil seeping into the ocean. Pumping it will actually reduce the pressure building that is forcing the oil to seep into the sea. We don't know how much there is, but we do know its there. We won't know how much is there until we start tapping the reserve.
Another advantage of tapping this resource is the ability to be more flexible and resilient in our supply sources. If hurricanes interrupt supply in the Gulf of Mexico, OCS drilling would still continue.jabbawockeez mask
William you know absolutely nothing about oil production.....nada...zilchWill increased domestic oil production impact prices or supply?
Both, But we will not see any affect for about 10 years. They still have to build and drill for all the oil. 1 , oil production is gauged on a world level not a country level, so when they count the amount of oil in storage they just don't count the US or Spain they count the global supply and the global consumption. Also the price is going to depend on if your looking at US oil or Crude oil which is what Gas or Diesel is made from. US oil will be cheaper because like you said the dollar is weaker, but Crude oil will stay the same price because it is a global stock,
I have heard that any oil we find (or more like Exxon-Mobil finds) will be placed on the open market for the highest bidder - after all E-M wants to make as much money as they can. So, it's not going to go right to our refineries and our gas tanks.
Some people think that if we start, it will have an impression on OPEC and others and will put pressure on them to lower prices. But, I think they're all out to make a buck, and they'll just scale back output to keep the price high.
Yes,. it will impact prices and supply. OPEC will continue trying to influence global oil prices in it's favor.
As far as where the oil goes, it usually stays geographically close to where it is pumped from. The cost of transportation usually keeps it there. Much of the oil in Alaska goes to Japan and South Korea. Oil from the Ukraine goes to Russia and Europe. Because the United States is so energy hungry, we do import from all over the globe. We will also see China do this more and more.
The prices will fluctuate as America ramps up oil exploration and production and OPEC tries to control global prices. If OPEC wants to keep prices high, they will reduce their own production. This means that they will make less money. The less money they make, the more unhappy the member nations of OPEC become.
I don't think we can produce enough oil to break OPEC, but the increased production will at least be a stop gap to do something, by our own hands, to control our own fuel supplies and prices while we pursue all the alternate forms of cheap and renewable fuels that we will need in the future as the world finds that oil production cannot continue to meet its energy needs.
How'd you like that last sentence?
As far as not knowing if there is oil there, we do know there is oil there by the oil seeping into the ocean. Pumping it will actually reduce the pressure building that is forcing the oil to seep into the sea. We don't know how much there is, but we do know its there. We won't know how much is there until we start tapping the reserve.
Another advantage of tapping this resource is the ability to be more flexible and resilient in our supply sources. If hurricanes interrupt supply in the Gulf of Mexico, OCS drilling would still continue.
How high will oil and gas prices have to be before obstructionist democrats will allow drilling in ANWAR?
They're high enough now.
But liberals want to destroy America.How high will oil and gas prices have to be before obstructionist democrats will allow drilling in ANWAR?
They won't be happy till everyone has to ride a bicycle.
But liberals want to destroy America.How high will oil and gas prices have to be before obstructionist democrats will allow drilling in ANWAR?
They won't be happy till everyone has to ride a bicycle.
The price of a barrel of oil today 19/04/07?
There are 2 prices, one the hidden price or the adquired price, two the profit price with all the additional, like cost for the war and else. which price you want to know.The price of a barrel of oil today 19/04/07?
Is being manipulated, as always, by the major oil distributors and oil companies. They keep super-tankers at sea until the price is right then bring in just enough to maintain the price where they want it. We've all been getting ripped off for years, and it ain't gonna git any better neither.
Is being manipulated, as always, by the major oil distributors and oil companies. They keep super-tankers at sea until the price is right then bring in just enough to maintain the price where they want it. We've all been getting ripped off for years, and it ain't gonna git any better neither.
Wouldn't low oil prices be good for refineries?
If gas is lower, the refinery will sell more gas. VLO dropped to 53.40 from 67.00. Is it a good buy?Wouldn't low oil prices be good for refineries?
As Nice_Guy said, price of the feedstock is just one part of the equation. All things being equal, lower oil prices are good for refineries. But all things are never equal. Refineries have to sell their product. If prices are low because demand is slackening, they may have to shrink their margins or refine less product.
Other factors include the weather (unusually hot or cold summer or winter), inventories (how much refined product is in storage compared to capacity), politics (is the Strategic Oil Reserve being restocked or depleted? is Congress likely to loosen laws relating to new refinery construction or make changes to other issues that affect the industry?), and natural disasters (is capacity reduced due to a hurricane?). Also, what is the business up to? Are they issuing new shares, are there any regulatory problems, etc.?
I wouldn't run out and buy Valero just because of the one factor you asked about.Wouldn't low oil prices be good for refineries?
I dont know but my damn schlumberger is taking it on the chin, i should have sold this turkey in may...if i wait i will be stuck with it for years until it ';recovers';
Not necessarily. Currently with high prices, wells that are not normally considered profitable are being turned on again as they are making money. With lower oil prices, the volume of drilling, exploration and wells actively producing will go down as there is less money to spend. With less new production coming on stream, the refineries will not sell more gas, but the gas consumption would have to go down or they wouldn't be able to meet the demand. High oil prices mean high demand. If the demand isn't there, the prices shrink and the refineries sell less (for example the recent drop is due to less demand over the peak summer season).
In answer to your first question, sure - buying more gas would ultimately be good for refineries. It doesn't look so good to stock holders, however, and every decision is made with their best interest in mind.
As Nice_Guy said, price of the feedstock is just one part of the equation. All things being equal, lower oil prices are good for refineries. But all things are never equal. Refineries have to sell their product. If prices are low because demand is slackening, they may have to shrink their margins or refine less product.
Other factors include the weather (unusually hot or cold summer or winter), inventories (how much refined product is in storage compared to capacity), politics (is the Strategic Oil Reserve being restocked or depleted? is Congress likely to loosen laws relating to new refinery construction or make changes to other issues that affect the industry?), and natural disasters (is capacity reduced due to a hurricane?). Also, what is the business up to? Are they issuing new shares, are there any regulatory problems, etc.?
I wouldn't run out and buy Valero just because of the one factor you asked about.Wouldn't low oil prices be good for refineries?
I dont know but my damn schlumberger is taking it on the chin, i should have sold this turkey in may...if i wait i will be stuck with it for years until it ';recovers';
Not necessarily. Currently with high prices, wells that are not normally considered profitable are being turned on again as they are making money. With lower oil prices, the volume of drilling, exploration and wells actively producing will go down as there is less money to spend. With less new production coming on stream, the refineries will not sell more gas, but the gas consumption would have to go down or they wouldn't be able to meet the demand. High oil prices mean high demand. If the demand isn't there, the prices shrink and the refineries sell less (for example the recent drop is due to less demand over the peak summer season).
In answer to your first question, sure - buying more gas would ultimately be good for refineries. It doesn't look so good to stock holders, however, and every decision is made with their best interest in mind.
Why are crude oil prices so high right now?
OPEC could be restricting oil supply, thus with lower supply =%26gt; higher prices...Why are crude oil prices so high right now?
From a historical perspective, gas prices acutually aren't that high. Over the last century overall real prices have been declining. Also if adjusted for inflation today's prices are still much lower than those experienced in the late 70s and early 80s.
References to the oil prices are usually either references to the spot price of either WTI/Light Crude as traded on the New York Mercantile Exchange (NYMEX) for delivery in Cushing, Oklahoma; or the price of Brent as traded on the Intercontinental Exchange (ICE, which the International Petroleum Exchange has been incorporated into) for delivery at Sullom Voe. The price of a barrel (which is 42 gallons) of oil is highly dependent on both its grade (which is determined by factors such as its specific gravity or API and its sulphur content) and location. The vast majority of oil will not be traded on an exchange but on an over-the-counter basis, typically with reference to a marker crude oil grade that is typically quoted via pricing agencies such as Argus Media Ltd and Platts. For example in Europe a particular grade of oil, say Fulmar, might be sold at a price of ';Brent plus US$0.25/barrel'; or as an intra-company transaction. IPE claim that 65% of traded oil is priced off their Brent benchmarks. Other important benchmarks include Dubai, Tapis, and the OPEC basket. The Energy Information Administration (EIA) uses the Imported Refiner Acquisition Cost, the weighted average cost of all oil imported into the US as their ';world oil price';.
Oil demand is highly dependent on global macroeconomic conditions, so this is also an important determinant of price. Some economists claim that high oil prices have a large negative impact on the global growth. This means that the relationship between the oil price and global growth is not particularly stable although a high oil price is often thought of as being a late cycle phenomenon.
OPEC, comprised of Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela, was formed to maintain the price of oil at a level most beneficial to its membership considered as a whole, and is considered to be a cartel by most observers.
[edit] Price history
It has been suggested that this section be split into a new article entitled Price of oil. (Discuss)
A recent low point was reached in January 1999, after increased oil production from Iraq coincided with the Asian financial crisis, which reduced demand. The prices then rapidly increased, more than doubling by September 2000, then fell until the end of 2001 before steadily increasing, reaching US $40 to US $50 per barrel by September 2004. [2] In October 2004, light crude futures contracts on the NYMEX for November delivery exceeded US $53 per barrel and for December delivery exceeded US $55 per barrel. Crude oil prices surged to a record high above $60 a barrel in June 2005, sustaining a rally built on strong demand for gasoline and diesel and on concerns about refiners' ability to keep up. This trend continued into early August 2005, as NYMEX crude oil futures contracts surged past the $65 mark as consumers kept up the demand for gasoline despite its high price. (see Oil price increases of 2004-2006).) Crude oil futures peaked at a close of over $77 a barrel in July 2006, and in December 2006 at about $63. That is just about where they began the year 2006.[3]
Individuals can now trade crude oil through online trading sites margin account or their banks through structured products indexed on the Commodities markets.
See also History and Analysis of Crude Oil Prices, asymmetric price transmission, and Benchmark (crude oil)Why are crude oil prices so high right now?
Summer is on its way...oh...we are at war too.
From a historical perspective, gas prices acutually aren't that high. Over the last century overall real prices have been declining. Also if adjusted for inflation today's prices are still much lower than those experienced in the late 70s and early 80s.
References to the oil prices are usually either references to the spot price of either WTI/Light Crude as traded on the New York Mercantile Exchange (NYMEX) for delivery in Cushing, Oklahoma; or the price of Brent as traded on the Intercontinental Exchange (ICE, which the International Petroleum Exchange has been incorporated into) for delivery at Sullom Voe. The price of a barrel (which is 42 gallons) of oil is highly dependent on both its grade (which is determined by factors such as its specific gravity or API and its sulphur content) and location. The vast majority of oil will not be traded on an exchange but on an over-the-counter basis, typically with reference to a marker crude oil grade that is typically quoted via pricing agencies such as Argus Media Ltd and Platts. For example in Europe a particular grade of oil, say Fulmar, might be sold at a price of ';Brent plus US$0.25/barrel'; or as an intra-company transaction. IPE claim that 65% of traded oil is priced off their Brent benchmarks. Other important benchmarks include Dubai, Tapis, and the OPEC basket. The Energy Information Administration (EIA) uses the Imported Refiner Acquisition Cost, the weighted average cost of all oil imported into the US as their ';world oil price';.
Oil demand is highly dependent on global macroeconomic conditions, so this is also an important determinant of price. Some economists claim that high oil prices have a large negative impact on the global growth. This means that the relationship between the oil price and global growth is not particularly stable although a high oil price is often thought of as being a late cycle phenomenon.
OPEC, comprised of Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela, was formed to maintain the price of oil at a level most beneficial to its membership considered as a whole, and is considered to be a cartel by most observers.
[edit] Price history
It has been suggested that this section be split into a new article entitled Price of oil. (Discuss)
A recent low point was reached in January 1999, after increased oil production from Iraq coincided with the Asian financial crisis, which reduced demand. The prices then rapidly increased, more than doubling by September 2000, then fell until the end of 2001 before steadily increasing, reaching US $40 to US $50 per barrel by September 2004. [2] In October 2004, light crude futures contracts on the NYMEX for November delivery exceeded US $53 per barrel and for December delivery exceeded US $55 per barrel. Crude oil prices surged to a record high above $60 a barrel in June 2005, sustaining a rally built on strong demand for gasoline and diesel and on concerns about refiners' ability to keep up. This trend continued into early August 2005, as NYMEX crude oil futures contracts surged past the $65 mark as consumers kept up the demand for gasoline despite its high price. (see Oil price increases of 2004-2006).) Crude oil futures peaked at a close of over $77 a barrel in July 2006, and in December 2006 at about $63. That is just about where they began the year 2006.[3]
Individuals can now trade crude oil through online trading sites margin account or their banks through structured products indexed on the Commodities markets.
See also History and Analysis of Crude Oil Prices, asymmetric price transmission, and Benchmark (crude oil)Why are crude oil prices so high right now?
Summer is on its way...oh...we are at war too.
When will the oil prices go down?
Second Tuesday of next week.When will the oil prices go down?
When people start taking this gas thing seriously, then oil prices will decrease. I decided to walk 2 miles to work twice a week, walk to the grocery store, anything to conserve gas. I refuse to be suckered into paying for a gallon of gas for $5.00. Due to high gas prices, food have gone up also, and it not going to stop at food. Please join me and conserve where you can, let's see how many barrels of oil we can leave in these big corporations' inventory. It will be so sad when the day come when we have to borrow gas money from family and friends and not be able to pay back the loan.When will the oil prices go down?
The oil prices were already low. Look at the prices in Europe... they were (and are) paying much more than what we pay. This is why cars are not as commonplace as in the states. It is more probable that we will be paying similar to the Europeans in the next few years. We are ALL feeling the hole in our wallets. This is one reason why it is important to focus on alternative energy sources for transportation (e.g., water, hydrogen powered, hybrids, electric, etc.).
The big picture answer would be ';When people stop using so much.';
It's all supply and demand. China and India are using more, the USA has not stopped driving hummers and SUV's, and all that costs power.
Not to mention hot weather causes more electricity which is not powered by electricity but by natural gas, which is what... oil based? Not sure how that works, but my electric company told me my electric bill went up because the cost of natural gas went up...
Don't know. Don't drive so much, get rid of the high performance vehicles and low mileage vehicles, and buy a motorcycle, scooter, bicycle......
Bush wants to drill in Alaska. Environmental lobbyists are keeping that from happening.
Wish I knew the answer.
Probably not for a long time player unless we are able to find some oil in Canada or Russia or alternative energy because less costly to use. I'm personally going to start riding my bike and carpooling more. I would also recommend using solar polar on your house if you have one.
Never. Unless some new super efficient and cheap source of energy is discovered and oil is no longer in demand, it will never go down dramatically because we are running out of a limited supply.
I'm very sorry to say that it will never happen. I wish that it would but, it's just not ever going to happen. That sucks big time. I just hate it. We could all use it. Everything is going up except wages.
When the president(be it Bush or whoever gets elected next) decides to move our troops out of the middle east and start drilling in Alaska.
When enough people quit using so much oil....probably never again.
When America starts to drill for oil in the north of Canada.
Whenever it feels like it.
ooooh about half past never? or february 30th, whichever comes first?
in the year 23258329852334 give or take a few millenia
Probably never
I dont know but I hope real real.. soon......
When there's none left.
I'll buy ';Never'; for ';500'; Bob.
Note the date on this report! American and European prices are out of date.
There is NO LIMIT on the price of oil. How much would a man who is dying of starvation pay for a loaf of bread?
May 29th 2008
From The Economist print edition
Not everybody is paying higher prices for oil
HALF of the world's population enjoys fuel subsidies.
This estimate, from Morgan Stanley, implies that almost a quarter of the world's petrol is sold at less than the market price.
The cheapest petrol is in Venezuela, at 5 cents per litre.
That makes China's pump price of 79 cents seem expensive, but even this is a bargain compared with $1.04 in the United States and $2.35 in Germany (see chart).
As the gap has widened between soaring international prices and fixed domestic prices, so has the cost of subsidies. Indeed, budgetary strains are now forcing some governments to lift prices.
On May 24th Indonesia raised fuel prices by around 30%. This was the first increase since 2005, but it still leaves petrol too cheap at 65 cents a litre.
Dearer oil is likely to push up inflation from 9% to 12%.
But without the increase, the government's subsidy bill was heading for an alarming 3% of GDP this year.
In the past week Taiwan has also raised petrol prices by 13% and Sri Lanka has lifted them by 24%.
Malaysia has one of the biggest fuel-subsidy bills in the world, estimated at as much as 7% of GDP this year.
By holding down the price of petrol, Malaysia now has the lowest inflation rate of all the 32 emerging economies tracked by The Economist.
But the government is expected to allow prices to rise soon to curb its widening budget deficit.
In theory, rising crude-oil prices should reduce global demand.
But if domestic prices are capped, then emerging economies will continue to guzzle oil, pushing world prices still higher.
Emerging economies accounted for more than the whole increase in world oil consumption last year鈥攂ecause demand in the rich economies fell.
But recent price increases will make little difference to global consumption unless China and India follow suit.
India's state-owned oil companies face mounting losses, as they are forced to sell fuel at fixed prices below cost.
Petrol prices are actually slightly higher in India than in the United States, because Indian motorists pay much higher fuel taxes, but diesel is about 40% cheaper than in America.
The oil firms are partly compensated by bonds which the government issues to them鈥攁 trick which allows the government to keep the subsidy off its books.
At today's prices, the total subsidy (including the full losses of oil companies) could be as much as 2-3% of GDP this year. Morgan Stanley estimates that the government's total budget deficit (central and state governments and all off-budget items) is running at 9% of GDP in this fiscal year.
The government must hold an election by May next year, so it is reluctant to raise fuel prices by much. It is thought to be considering a modest rise combined with a cut in excise duty.
In early 2008 Chinese motorists paid roughly the same for their petrol as Americans did.
Whereas the pump price in America has since jumped by 33%, Chinese prices have remained fixed, swelling the losses of state-owned refiners.
According to Dragonomics, a Beijing-based economic research firm, the retail price for diesel is about 40% below that in America.
To cut their losses, oil firms have reduced supply, causing shortages at some petrol stations.
However, China is less likely than other countries to lift prices soon.
Oil subsidies are estimated at less than 1% of GDP, and its budget surplus and small public debt mean that the government can afford to keep prices down for some time. Most likely, it will delay increasing fuel prices until food-price inflation has eased.
Across the emerging world, governments fear that lifting fuel prices will hurt the poor and so trigger social unrest.
Yet fuel subsidies are an inefficient way to protect the poor: they mainly benefit the richer owners of cars and air-conditioners, and favour energy- and capital-intensive industries, rather than those that create most jobs.
An IMF study of five emerging economies found that the richest 20% of households received, on average, 42% of total fuel subsidies; the bottom 20% received less than 10%. That money would be better spent on health, education and infrastructure. Not only would this benefit the poor, but higher prices would also help to dampen global oil consumption, and hence the price of oil.
When people start taking this gas thing seriously, then oil prices will decrease. I decided to walk 2 miles to work twice a week, walk to the grocery store, anything to conserve gas. I refuse to be suckered into paying for a gallon of gas for $5.00. Due to high gas prices, food have gone up also, and it not going to stop at food. Please join me and conserve where you can, let's see how many barrels of oil we can leave in these big corporations' inventory. It will be so sad when the day come when we have to borrow gas money from family and friends and not be able to pay back the loan.When will the oil prices go down?
The oil prices were already low. Look at the prices in Europe... they were (and are) paying much more than what we pay. This is why cars are not as commonplace as in the states. It is more probable that we will be paying similar to the Europeans in the next few years. We are ALL feeling the hole in our wallets. This is one reason why it is important to focus on alternative energy sources for transportation (e.g., water, hydrogen powered, hybrids, electric, etc.).
The big picture answer would be ';When people stop using so much.';
It's all supply and demand. China and India are using more, the USA has not stopped driving hummers and SUV's, and all that costs power.
Not to mention hot weather causes more electricity which is not powered by electricity but by natural gas, which is what... oil based? Not sure how that works, but my electric company told me my electric bill went up because the cost of natural gas went up...
Don't know. Don't drive so much, get rid of the high performance vehicles and low mileage vehicles, and buy a motorcycle, scooter, bicycle......
Bush wants to drill in Alaska. Environmental lobbyists are keeping that from happening.
Wish I knew the answer.
Probably not for a long time player unless we are able to find some oil in Canada or Russia or alternative energy because less costly to use. I'm personally going to start riding my bike and carpooling more. I would also recommend using solar polar on your house if you have one.
Never. Unless some new super efficient and cheap source of energy is discovered and oil is no longer in demand, it will never go down dramatically because we are running out of a limited supply.
I'm very sorry to say that it will never happen. I wish that it would but, it's just not ever going to happen. That sucks big time. I just hate it. We could all use it. Everything is going up except wages.
When the president(be it Bush or whoever gets elected next) decides to move our troops out of the middle east and start drilling in Alaska.
When enough people quit using so much oil....probably never again.
When America starts to drill for oil in the north of Canada.
Whenever it feels like it.
ooooh about half past never? or february 30th, whichever comes first?
in the year 23258329852334 give or take a few millenia
Probably never
I dont know but I hope real real.. soon......
When there's none left.
I'll buy ';Never'; for ';500'; Bob.
Note the date on this report! American and European prices are out of date.
There is NO LIMIT on the price of oil. How much would a man who is dying of starvation pay for a loaf of bread?
May 29th 2008
From The Economist print edition
Not everybody is paying higher prices for oil
HALF of the world's population enjoys fuel subsidies.
This estimate, from Morgan Stanley, implies that almost a quarter of the world's petrol is sold at less than the market price.
The cheapest petrol is in Venezuela, at 5 cents per litre.
That makes China's pump price of 79 cents seem expensive, but even this is a bargain compared with $1.04 in the United States and $2.35 in Germany (see chart).
As the gap has widened between soaring international prices and fixed domestic prices, so has the cost of subsidies. Indeed, budgetary strains are now forcing some governments to lift prices.
On May 24th Indonesia raised fuel prices by around 30%. This was the first increase since 2005, but it still leaves petrol too cheap at 65 cents a litre.
Dearer oil is likely to push up inflation from 9% to 12%.
But without the increase, the government's subsidy bill was heading for an alarming 3% of GDP this year.
In the past week Taiwan has also raised petrol prices by 13% and Sri Lanka has lifted them by 24%.
Malaysia has one of the biggest fuel-subsidy bills in the world, estimated at as much as 7% of GDP this year.
By holding down the price of petrol, Malaysia now has the lowest inflation rate of all the 32 emerging economies tracked by The Economist.
But the government is expected to allow prices to rise soon to curb its widening budget deficit.
In theory, rising crude-oil prices should reduce global demand.
But if domestic prices are capped, then emerging economies will continue to guzzle oil, pushing world prices still higher.
Emerging economies accounted for more than the whole increase in world oil consumption last year鈥攂ecause demand in the rich economies fell.
But recent price increases will make little difference to global consumption unless China and India follow suit.
India's state-owned oil companies face mounting losses, as they are forced to sell fuel at fixed prices below cost.
Petrol prices are actually slightly higher in India than in the United States, because Indian motorists pay much higher fuel taxes, but diesel is about 40% cheaper than in America.
The oil firms are partly compensated by bonds which the government issues to them鈥攁 trick which allows the government to keep the subsidy off its books.
At today's prices, the total subsidy (including the full losses of oil companies) could be as much as 2-3% of GDP this year. Morgan Stanley estimates that the government's total budget deficit (central and state governments and all off-budget items) is running at 9% of GDP in this fiscal year.
The government must hold an election by May next year, so it is reluctant to raise fuel prices by much. It is thought to be considering a modest rise combined with a cut in excise duty.
In early 2008 Chinese motorists paid roughly the same for their petrol as Americans did.
Whereas the pump price in America has since jumped by 33%, Chinese prices have remained fixed, swelling the losses of state-owned refiners.
According to Dragonomics, a Beijing-based economic research firm, the retail price for diesel is about 40% below that in America.
To cut their losses, oil firms have reduced supply, causing shortages at some petrol stations.
However, China is less likely than other countries to lift prices soon.
Oil subsidies are estimated at less than 1% of GDP, and its budget surplus and small public debt mean that the government can afford to keep prices down for some time. Most likely, it will delay increasing fuel prices until food-price inflation has eased.
Across the emerging world, governments fear that lifting fuel prices will hurt the poor and so trigger social unrest.
Yet fuel subsidies are an inefficient way to protect the poor: they mainly benefit the richer owners of cars and air-conditioners, and favour energy- and capital-intensive industries, rather than those that create most jobs.
An IMF study of five emerging economies found that the richest 20% of households received, on average, 42% of total fuel subsidies; the bottom 20% received less than 10%. That money would be better spent on health, education and infrastructure. Not only would this benefit the poor, but higher prices would also help to dampen global oil consumption, and hence the price of oil.
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