NationStates Jolt Archive

This may have already been discussed but I missed it. Thought I would post it up here. So here's the question.

Whose fault are high oil prices? Do you blame Bush? The Republicans? The Democrats? The Saudis? The war in Iraq? Iran? Cuba? Martians? Mexico? Economics? The Kremlin? Kenya? Me?

I know that all of these are reasonable arguments but rather than just stating what you think it is and blaming somebody uselessly let's see some support of what you say.

Ready..... go.

Whose fault are high oil prices?
Trees and bugs for not dying enough millions of years ago.

Supply and demand. Not very exciting as some of the stupidity you here around this topic but the only truthful answer that exists.

Supply and demand. Not very exciting as some of the stupidity you here around this topic but the only truthful answer that exists.


How right. With the emerging and growing economies of China and India, the world's most populated nations, it was bound to happen. However, some fault must be placed at the traders. Remember that oil is a commodity and it is traded in US dollars. So, when the US dollar goes thru its cyclical devaluation, the price for oil will go up to maintain the same profit margin to the traders.

It's a Zorastrian conspiracy.

I blame the Iraq Invasion. The further it goes on, the higher uor prices go. Of course, I'm only guessing here, but you know.:D

Oil companies not doing enough about it and oilmen-turned-politicians who won't force them to do things about it.

I blame people who vote against off-shore drilling!

a mix of increased demand, stable supply, a weak dollar, and a few other more minor issues

Dinosaurs, for there not being more of them around to die 65 million years ago.

How right. With the emerging and growing economies of China and India, the world's most populated nations, it was bound to happen. However, some fault must be placed at the traders. Remember that oil is a commodity and it is traded in US dollars. So, when the US dollar goes thru its cyclical devaluation, the price for oil will go up to maintain the same profit margin to the traders.

Mind you, other factors such as the lack of a truly free energy market and excessive speculation stemming from inadequate transparency and overly loose margin requirements also affect prices. However, as enticing as it might be for the populists out there to blame a shadowy master cabal for speculative buying in the oil markets, the reality is that it is more a combination of groupthink and "greater fool" investing by individuals and funds that produces speculation. They all think prices will go up, and they also think people will buy from them at a higher price based upon that confidence. Eventually, of course, that greater fool is nowhere to be found and prices begin to fall as investors bail and move to other markets.

I feel that the investors burned in the housing bubble moved to commodities during the past year, producing the sudden spike in prices in the first half of this year. However, when the fundamentals began to pressure the commodities markets, these same investors bailed and are likely putting their money in to the dollar and likely equities. It seems to be supported by the data; if you look at the real estate and commodities markets together, they began to shift directions at exactly the same time, and the dollar and equities' performance and that of commodities have done the same over the past two months.

declining value of the dollar(notice how last month dollar went up in value and oil dropped in price) which is tied to the lower interest rate. however both the dems and the republicans would have pushed for lowered interest rates. seems to be the favorite strategy since Clinton. that accounts for the rise in value from 2 dollars to 4 dollars. the rest of the 1 dollar to 2 dollars(counting since 2000) is 1 increased world wide demand and war in Iraq creating instability (or fear of) in the oil producing regions. along with investors fleeing to commodities due to the declining dollar and housing bubble burst.

This may have already been discussed but I missed it. Thought I would post it up here. So here's the question.

Whose fault are high oil prices? Do you blame Bush? The Republicans? The Democrats? The Saudis? The war in Iraq? Iran? Cuba? Martians? Mexico? Economics? The Kremlin? Kenya? Me?

I know that all of these are reasonable arguments but rather than just stating what you think it is and blaming somebody uselessly let's see some support of what you say.

Ready..... go.

crab people. They're secretly stealing oil reserves from their underground lairs.

It's a combonation of many things, including, but not limited to, the value of the dollar, supply and demand, us going into the middle east and making things blow all to hell, and Canada's prices being so damn high (we get most our oil from them, remember).

Well 4 1 point i blame bush cause he was involved in making the war in Iraq. Since he had a chance 2 stop it but did not & could not have estimated how many years, soldiers, and money were needed. Part of why oil price r high is become he needed money 2 repay the soldiers 4 all they done. Another reason is cause fossil fuel is limited so the government wanted 2 make the ppl 2 try 2 save on gas so they raised the prices. But thats wat i think.

Remember that oil is a commodity and it is traded in US dollars. So, when the US dollar goes thru its cyclical devaluation, the price for oil will go up to maintain the same profit margin to the traders.
That's got nothing to do with the traders. If I want to buy something of you in Zimbabwean dollars, would you be happy to take the 10 that it might have been 20 years ago, or would you charge more to account for the fact that the unit I'm paying you in is now worth a lot less?

Mind you, other factors such as the lack of a truly free energy market and excessive speculation stemming from inadequate transparency and overly loose margin requirements also affect prices.
Futures prices. Speculative buying doesn't happen much in the spot market, and the connection between futures prices and future spot prices isn't definitive. Speculation has at best had a limited impact on the movement of oil prices over the past year or so, actual spot supply and demand did, combined with the slide of the US dollar (and for some of that, you can blame traders :tongue:).

I think the relationship you point out is a case of correlation rather than causation. The housing bubble popping sent the dollar sliding and investors running into commodities, that's true. But they'd be running into futures and derivatives markets, where the supply isn't really limited by how much oil is available at any given point.

http://i122.photobucket.com/albums/o263/Daneelo/ET%20graphs/OilEuros/CrudesED_Long_2008-03-18.gif

Take out the dollar's depreciation, and the spike already looks a lot more tame and can probably mostly be explained by growing demand and the odd pipeline attack.

Another reason is cause fossil fuel is limited so the government wanted 2 make the ppl 2 try 2 save on gas so they raised the prices.
The government doesn't decide petrol prices.

Yeah I'll definitely give the edge to future stocks and those different amazingly economic things including dollar depreciation. However more basically supply and demand plays a HUGE part here based on the market. Three main countries to think about here aside from Canda, Iraq, Syria, Saudi Arabia, etc.

Mexico: Mexico is the second largest producer of oil to the US and Mexico is having some issues with that. Ever since the revolution (yeah it was years ago but it set up precedent) their economy has been rife with various forms of corruption and overall poverty to be honest. Mexico's got huge amounts of oil in the Central Plains area but they just don't have the infrastructure to bring it out to in the demanded numbers.

Kenya: Quite simply Kenya is in a civil war of sorts and it's much harder to explore / drill / export oil while you're fighting off a rebel force or fighting the government in place.

Russia: The Kremlin has kinda of a communist policy toward oil prices. I'm not sure of the exact numbers (I'm sure you can find them if you really want them) but here's an overview with estimated stats. At $36 a barrel the oil companies make $36 a barrel. Good. At $64 a barrel the oil companies make $40 a barrel. At $110 a barrel the oil companies make $60 a barrel. Not so good. The government takes the rest of the money and directly invests it into alternative fuels and other worthy causes to "keep prices down." Oil drilling in Siberia, another huge source, is quite expensive to carry out (it's the tundra) and companies simply don't have the incentive to task that risk if they're not going to be paid back for their efforts.

I'm sure there's other countries like this but these are just three of the big ones in relation to the US. Especially Mexico because there are immigration issues. And Russia because there are post-Soviet issues. And Kenya because there are international secutiy issues. So I guess they're all "especially".

This may have already been discussed but I missed it. Thought I would post it up here. So here's the question.

Whose fault are high oil prices? Do you blame Bush? The Republicans? The Democrats? The Saudis? The war in Iraq? Iran? Cuba? Martians? Mexico? Economics? The Kremlin? Kenya? Me?

I know that all of these are reasonable arguments but rather than just stating what you think it is and blaming somebody uselessly let's see some support of what you say.

Ready..... go.

This thread has been highlighted on too many occasions. There are plenty of people to blame for the high prices we now face. I am not going into it again as I think I've stated my case multiple times already. I'm not so crass as to think people want to hear me repeat it again. This is my humble moment...don't grow accustomed to it. :fluffle:

Supply and demand. Not very exciting as some of the stupidity you here around this topic but the only truthful answer that exists.

The omnipotent one has spoken! Pay no attention to that man behind the curtain. (and cut)