so, what actually causes the cost of oil to increase (just curious)

[mista_mo]

Allright,

Since I keep hearing (or rather seeing) threads and statements regarding why crude oil prices have risen, I was wondering which ones are actually the reason why, or is it a combination of reasons?

Why do people assume it was Bushes fault for oil prices rising? 8 years is a long time, and with oil reserves running low, and demand constantly rising, isn't it feasable to assume that oil is rising in price because the demand for it overcedes the current supply/pumping capacity? 8 years may not seem very long, but in that time....

United States
2000 census- 281,421,906
2008 estimate- 303,453,000
increase of roughly- 22,031,094 people

Canada
2006 census- 31,612,897 people
2008 estimate- 33,195,000 people
Increase of roughly- 1,582,103 people
(assuming roughly same birth/death rate, the population in 2000 was approximately 26,866,588 people (33,195,000 - 6,328,412) giving a population increase of about 6,328,412 people)

UK
2006 estimate- 60,587,300
2001 census- 58,789,194
increase of roughly 1,798,106 over a 5 year period
so, assuming birth/death rate is the same, the population in 2008 would approximately be 359,621.2 x 3= 1078863.6 + 60,587,300= 61,666,163.6 people.
Conversly, the population in 2000 would be approximately 58,429,572.8

*is this figure right? it can't be, how can the population growth be so relitively small?*

So, here we have 3 countries, each of which is showing an increae in population, each oh which is going to require more power to keep it's people prosperous.

thats all in 8 years.
Recap:
United States- 22,031,094
Canada- 6,328,412
UK- 3,236,590.8

so, if my math is right (bear with me, math was never my strongest subject), that means that in the 8 years bush has been in office, 31,596,096.8 people were born in Canada, United States, and United Kingdom.

Oil consumption (circa 2006) for these 3 countries was:
United States- 20,588
Canada- 2,218
United Kingdom- 1,816

*10 to the power 3 BBL/day, where BBL is a standard 42 gallon oil drum*

In 2005 production/consumption of oil is apprixmately 84 million barrels daily, with prices averaging about 60-67 dollers a barrel.

In 2008, prices are expected to average about 87 dollers, with a high of 95 dollers in january.

Is it not feasable, that with the population growth of the world (I know, I only selected 3 countries, but you get my example),and violence in many oil producing countries (NOT just Iraq), That prices would rise? Where does Bush fall in this? How can he be blamed for destabalising the oil market if he really only affectd 3 oil producing states?

Please, someone explain to me. I'm not doing this to try and give off the immpression of knowledge, or intelligence, I'm trying to get an idea why oil is at its current price, and the reasosn behind it.

[Terran]

Ok I think I can address some of these things because I am very interested in this subject and have been following it for some time....(I tried to make it as short as possible without getting into too many "boring" details...no one tends to read peoples long posts)

It is not Bush's fault for the increasing price of crude.... He has not helped it really to any large degree (which I will get to further down), but he has not hurt it to any large degree either.... So as much as I personally hate the guy this one is not his fault.


People sometimes blaim Bush for the price of oil because to some extent the price of crude can be effected by speculation. So instability in regions where crude is produced causes prices to rise....even speculation of instability within these regions can cause prices to rise...so people blaim Bush because the Iraq war does just that... but to the extent that prices are rising I dont think speculation and instability can be given the sole blaim...


A big issue effecting the price is all the various countries marching towards industrialization....(A TV, a Car, a refridgerator, air conditioning)....India, China, and various other places around the world are aggressively trying to achieve these goals. These places have huge populations...Imagine if everyone in China used as much fuel as an average person in the UK or Cananda...and thats just China...This really shoots the price up.

In the past when oil prices would get high consumption would decrease and prices of oil would drop. But with the amount of demand now even if the USA, Canada, and the UK all started demanding less oil, the price would not significantly drop because any crude that these countries dont suck up and use, is just sold to other countries that are trying to expand their economies.....
This phenomenom was actually predicted and predicted rather accurately back in the 70s....the Hubbert peak theory http://en.wikipedia.org/wiki/Hubbert_peak_theory

The Hubbert peak theory is based on the observation that the amount of oil under the ground in any region is finite, therefore the rate of discovery which initially increases quickly must reach a maximum and decline. Extraction roughly follows the discovery curve after a time lag (typically about 35 years[1][2]) for development. The theory is named after American geophysicist M. King Hubbert, who created a method of modeling the production curve given an assumed ultimate recovery volume. Hubbert's theory was initially greeted with skepticism by many in the oil industry, but has since gained widespread acceptance.
http://en.wikipedia.org/wiki/Hubbert_peak_theory
Maximum production can no longer satisfy global demand...and since its a finite resource it will only continue to get worse over the long run (even if this turns out just to be somewhat of a price hiccup)....

Did I miss anything?....oh I recommend buying a firearm and learning a vital trade....:skull:
(Personally I am experimenting with how many potatos I can grow and maintain because at least then I dont have to worry about food...and If I can produce a surplus I can turn them into ethanol)



Only thing I can see that could possibly alleviate this situation is if we quickly develop the capability to mine H3+(Trihydrogen cation) from the moon(for reactors)....we would have to do this before serious economic troubles prevent us from mounting such a monumental endeavor...(which ever country secures this resource essentially owns earth)

[kortick]

there is a debate about wheter there is "peak oil"
at all.

Many scientists think that oil is a renewable
product created by the earth

the idea that dinosaurs died in such abundance
and created hundreds of millions of gallons of oil
is to them ridiculous.

they believe oil is a natural thing that the
earth constantly replenishes

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=38645

this article explains the basic idea
and gives scientific backup for it

i dont support or deny this theory

[Terran]

Well if thats true we have nothing to worry about....and the price increase is just a scam ;)

interesting concept....however

The abiogenic origin[the theory you brought up Kort] of petroleum has "recently"[2006] been reviewed in detail by Glasby and shown to be invalid on a number of counts.
http://static.scribd.com/docs/j79lhbgbjbqrb.pdf
This is a long read is pretty sophisticated....read the abstract if you dont want to read it all...



the idea that dinosaurs died in such abundance
and created hundreds of millions of gallons of oil
is to them ridiculous.


Well its not dinosaurs really....its billions and billons of tons of plant material, and microorganisms...

[slickwilly13]

Agreed, it is plant material from millions of years ago. But damnit, it has made my family wealthy. If only those stocks would split, again.

[Eyebiter]

Both China and India are starting to industrialize. The passenger car suddenly becomes an option for their populations. More cars = more demand = higher prices.

Of course the fact that a Texas oil man is in office, that the war in Iraq has hampered oil production, and the US is currently subsidizing the Iraqi economy to keep fuel prices low overseas has nothing to do with things.

Think gas is expensive now? Just wait until the head of the Saudi royal family King Abdullah kicks the bucket. Recommend reading this book for details

Sleeping with the Devil: How Washington Sold Our Soul for Saudi Crude by Robert Baer http://www.amazon.com/Sleeping-Devil-Washington-Saudi-Crude/dp/B000FBFO64/

[blind2d]

regardless, pollution is still my main concern. who cares if we have infinite oil if we all die out because the air is so bad? or the sun burns up the surface of the earth?

[zombie04]

another reason for the price increase may also be the fact that 8 years ago the price of oil was to a large extent undervalued. At the time all but a few states in Asia were in either a recession or depression. With China included in this, the price of oil fell to the low it did. When China's economy began to take off in 2002, the price of oil did the same (today China uses twice the oil it did 10 years ago). Factor this in with India, our own increased usage, and other countries developing, the price spiked to its current value.

And with prices of gasoline where they are, I'm assuming I'll be biking to work this summer...

[Khardis]

We have a stable output of refined oil and gas and an increasing demand. You put it together. When demand is greater than supply you get price increases. Simple economics. A lot of this could be alleviated if all the Green Nazis would stop passing retarded laws and let the government drill for oil in the gulf and parts of alaska as well as allow more oil refineries to open up.

[slickwilly13]

I understand there is oil on the west coast, but California is there. So, enough said.

[mista_mo]

Canada also has vast reserves of untapped oil...it makes me wonder why we don't try and use it, as Khardis said.

It just doesn't make sense to me. If we need it, why not use it?

[Tricky]

regardless, pollution is still my main concern. who cares if we have infinite oil if we all die out because the air is so bad? or the sun burns up the surface of the earth?

Not gonna happen,especially not in mine or your lifetime!the air isnt bad at all anyway,a lot better than during the industrial revolution...

[kortick]

It is all caused by my cat.

which isnt even a real cat,
but a spy sent by my enemies to decieve me.

hmm...maybe the meds need adjusting.

[C5NOTLD]

The oil industry could find the richest oil deposit in history and it could
produce a billion barrels of oil a year and the price of gas still wouldn't come down due to "overhead costs" from refining the new oil. It would still go up.

:mad: