Oil prices shot up more than $11 to a new record above $139 Friday

[diversified]

It ceases to amaze me that there all always people who think there is some grand conspiracy with the price of oil. Common sense should tell them that when you add 2-3 billion people entering "middle class", that were not in "middle class" 10 years ago, like India and China, prices are going to rise. Sure speculators have something to do with the rise, but energy prices today are going to cheap in 10 years unless new energy sources and new infrastructure are developed.
If any consiracy exist, it is the low prices of oil in the US by our support of the Saudi government. Just look at the prices of energy around the world.
Common sense guys, if you are interested in buying your neighbors lawnmower and 5 more people become interested in buying the neighbors lawnmower, the price of the lawnmover is going to rise!

[hampdenwireless]

I agree. After the last energy crisis in the 70's alternative energy companies flourished. Many solar systems were build then. Just as things started to get going low prices and a flood of cheap oil killed em all.

Peak oil is here and there are buyers for every barrel of oil over $100. The price will not go below that barring the aftermath of a terrible war. I expect oil to stay between $100 and $150 because the higher price will kill some demand.

[EJFB1029]

Originally Posted by diversified

It ceases to amaze me that there all always people who think there is some grand conspiracy with the price of oil. Common sense should tell them that when you add 2-3 billion people entering "middle class", that were not in "middle class" 10 years ago, like India and China, prices are going to rise. Sure speculators have something to do with the rise, but energy prices today are going to cheap in 10 years unless new energy sources and new infrastructure are developed.
If any consiracy exist, it is the low prices of oil in the US by our support of the Saudi government. Just look at the prices of energy around the world.
Common sense guys, if you are interested in buying your neighbors lawnmower and 5 more people become interested in buying the neighbors lawnmower, the price of the lawnmover is going to rise!

Which would be true under normal circumstances, in this case its not, this price rise is pure manipulation, by our government, the oil companies, and "speculators" controlled by the very companies that the government just bailed out.

This is the actual situation in a nutshell:

GWB invades Iraq, creates instability in the Middle East

Iran pushes for higher oil prices, and fear of a US invasion causes them to speed up their nuclear ambition, further instability

Then, the Oil companies take advantage of every opportunity to increase prices, no government watchdog under a Republican administration.

Saudi Arabia sees that the US has a problem with refining oil, the oil companies created a bottleneck with not building refineries, oil companies convinced people that it was too expensive to build one, because of the mean environmentalists, but it was a conspiracy to control the flow of refined products. Saudi Arabia recognized that in 2004, and offered to build 2 refineries in the US, to keep prices stable, but were refused by the oil companies.

After Katrina, Saudi Arabia made the offer again to the government and the oil companies, but both the Bush administration and the oil companies turned them down again. Remember the price of gas going up after Katrina? Also, I wonder how the price of oil would be now, with an announcement and planning of two new refineries in 2004 or 2005.

At this point the US government was spending so much debt, that the dollar started to really go downwards in value.

Then two things kicked in, the government's deregulation of the banking industry back in the 1990's formed the basis of the current housing crisis, add to that, reports of peak oil. After that, it became a major housing crisis, and government bailout of mortgage lenders, the same lenders that are the basis of the oil investor groups, but now with cheap government money, which means money they can invest in oil for their "clients", the "speculators".

So now you got the government continually lowering the value of the dollar by more and more debt, adding to the fear of a crisis, although a real crisis, and speculator investment banks raising the price of oil for their clients.

And all the while, leaving OPEC in the dust so even they can't set prices, they just get to sit back and reap the rewards of US government corruption, and oil company policy.

[Rybold]

Danatt, what Samuel Bodman said was pure politics/propaganda. It's funny how even RUSSIA recognized that something needs to be done about manipulation of the oil markets. Did you read what I typed about how Morgan Stanley manipulated the price? What I typed in that comment was 100% fact! Remember when Goldman-Sachs issued a prediction that oil would get up to "150 to 200 dollars per barrel by the end of the year," and the market shot up? Remember? That has NOTHING to do with fundamentals and everything to do with market manipulation! Is Goldman-Sachs and oil refiner? Does Goldman-Sachs operate drilling rigs? Then why should they have cared about oil back when oil was BELOW 100? Oh yeah, because they were buying and selling oil futures, trying to make a profit, and in the process they issued statements to manipulate the market so the price would go up and they would make profit.

Will oil eventually run "dry?" Yes. Will there eventually be less supply than demand (assuming the EV is not implemented)? Yes. But it is not happening today! We still have hundreds of BILLIONS of barrels of oil in the earth, that will, at current consumption levels, supply the world until 2025 to 2030! (Popular Mechanics, April 2008) Will oil prices eventually rise? Absolutely. BUT NOT THIS FAST!!!! On Friday, Oil went up 8%! Did global demand rise 8% in one day? Did Morgan Stanley need to make a profit on it's losing oil receipts? Yes. Why is the rapid increase a BAD thing? Look at the U.S. and WORLD economies! Look at inflation! Look at poor people that can no longer afford as much food as they could afford last month! Look at the price of diesel fuel! This is DESTROYING our economy, and the world economy as well! European fisherman, truckers, and farmers have been protesting in record numbers over the high fuel prices! It is crippling the global economy!
So, in short: Yes, oil should be rising. But not this fast.

Patsparks, for hard-working, property-owning, tax-paying citizens that own legal guns and have a permit, I personally feel that as the Constitution of our country says you have the right to bear arms, then you should have the birth-given American citizen right to bear a firearm. (FYI: my favorite historical hero is Thomas Jefferson)
If, however, someone in the innercity is caught with an illegal firearm, a can of spray paint, and baggy clothes, I think that individual should be castrated! See if that teaches them a lesson!

Fib222, nice analysis on that link. A few weeks ago, U.S. govt reported that consumer demand for gasoline dropped 4.3% in April. In the days that followed that report of the decline in demand, the price of oil was up. It is more than just the lack of developing new oil fields and the fact that the U.S. has not build one new oil refinery in the past 20 years. It is speculative trading.

EJFB1029, Well said. Thank you.

.

[zenMachine]

Originally Posted by patsparks

Why not? It happens every day with beef, pork, wheat, sugar, corn, barley, lamb, etc so why not energy? You can also trade electricity, gas, coal, as well as oil so what is the big deal? I'm not sure what all the fuss is about. If it all collapses the price will fall and a lot of investors will get their fingers burned. If the byproduct of high energy prices is reduced demand then isn't that a good thing?

Not so simple, Pat. If you read the link I provided, it talks about how these futures traders (aka speculators) are only required to have 5% margin instead of 50% for typical investments. The difference (a sinister loophole) creates a humongous incentive to pour money into those markets (oil, rice, corn, soybean, etc.)

The fuss is about this unlevel playing field where you and I, the lowly consumers, have to compete against these multi-billion dollar investment bankers for our everyday necessities. Not a fair fight, even if you're a true believer in laissez-faire free market (a very rare breed).

Speaking of everyday necessities, being from Texas I do a lot of outdoor barbecue in the summer. Noticed yesterday that refilling my two tanks of propane now cost over 35$ (a few months ago it was only $15). I need a hybrid grill. Bad.

[PriusSport]

The current price of oil is inflated by investors reading articles like the one posted, and gambling that prices will be higher in the future. That is precisely the point.

[Squint]

These two articles basically dispel the speculators/speculative bubble myth:

Big fund money and its effect on oil markets - May. 16, 2008

Bits of News - You better get used to $4 gas

[EJFB1029]

No they don't, they just try to spread the blame further and whitewash the "speculators", but they still put the blame on government and "speculators"

[Squint]

The authors of the articles have persuasive reasoning and are more qualified than you. Your paranoid rantings aren't very compelling.

[Fibb222]

reportonbusiness.com: Speculators not to blame for oil surge: Rubin