Do you know why the Oil price is high?

Americans DO NOT KNOW what high gas prices are. You have some of the cheapest fuel prices on earth, and are also among the most wasteful users of fuel. There are plenty of people suffering under high fuel prices, but none of them are in the US.

Took me a while to figure out who to believe on this one. Basic reality seems to be that the cost of storing oil is so low that the spot market follows the futures market very closely. I.e. if a seller can sell a contract for oil six months down the road for $140 and his cost of storing it that long is near zero, then an immediate buyer would have to offer him 138 or 139 to get his attention.

Other than that, the futures market is a pure zero sum game which forces us to concern ourselves with supply in future times. You have to give those guys some reason to go short on a particular commodity and until just now, they haven't had any.

Note however that George Bush only had to say one or two paragraphs about drilling for oil offshore and it knocked ten dollars off the price in a single day and, again, this is a pure zero sum game and people lost big bucks just from W. talking about it.

Americans DO NOT KNOW what high gas prices are. You have some of the cheapest fuel prices on earth, and are also among the most wasteful users of fuel. There are plenty of people suffering under high fuel prices, but none of them are in the US.

None of them do any real driving by American standards either. You hear the occasional story about French or German tourists figuring they'd like to see California and setting out from NY or Virginia in rental cars and wondering why they haven't gotten there twelve hours later.

I appreciate your quick response.
You are 100 percent correct.
Go to India and ask the taxidriver about their struggle to survive.
Or come to Germany ask any of the residents in Germany about the ordeal they endure.
I had been to Iraq( a country with abundant oil resorces) there too the normal Tom Dick and Harry like you and me are suffering.
In my above quote , the Resident of White house opined after 7 years misrule that Congress isthe sole culprit.
Smile a while

I disagree with Bush's assertion that we need greater supply. Hybrid technology has existed for 30 years. By now hybrids should be standard equipment. I did a report on hybrid and hydrogen powered vehicles when I was in college -- in 1979!

We actually need less demand. Ride a bike to the store. Take a hike somewhere. Take the train downtown.

Nickfun
I miss you so much and I am glad that you are back again to make this forum lively.
I need not type about Bush because i had aired my views umpteen times.
Better to make use of the public transport to reach your work-place than using Car.
Or take your neighbours along with you in your car.
This is the real solution.

Oh boy!

Like the D-line in NYC?

Gasoline prices at the pump are high in America because crude oil prices are high, period. Considering the crude oil price, the price of gas at the pump is not high in America. You will find few countries where it's currently lower.

Why are crude oil prices high? There are two theories among credible economists:

1) Hoarding: Because oil is depleteable, leaving it in the ground is a form of investment. Over time, this form of investment goes through bubbles and busts as any other. So the high oil prices could be caused by oil producing countries producing less than they could to "invest" in an asset whose value is rising.

2) Increasing demand from developing nations meets depleting supplies of crude oil.

Personally, I find #2 the most plausible.

I don't really know how much of the stories about capped oil fields to believe. Producers would have to have assumed that these recent prices were as good as it was going to get for a long time and I'd almost have to think that anything capped would have gotten uncapped this summer.

Oil prices in the US is high because of several reasons; a) the currency exchange rate of the US dollar depreciation, and b) world demand.

However, when we look at gas prices in the US vs all other countries, our gas prices are low. This is the first time in America's history we are paying over $4/gallon, while most of the developed countries of the world have been paying over $4/gallon for decades.

Our consumption of oil is one of the highest in the world even though we represent only five percent of the world population. That's because American car-makers continued to build gas-guzzlers while most other countries developed more fuel efficient cars and used bio-fuels to replace oil based gas.

With the greater demand for oil in China and India, oil prices will remain relatively high for the foreseeable future. America can begin to drill for more oil, but that's not going to effect gasoline prices for Americans any time soon - or for the long-term.

C I
I regret to retort this
"With the greater demand for oil in China and India, oil prices will remain relatively high for the foreseeable future. America can begin to drill for more oil, but that's not going to effect gasoline prices for Americans any time soon - or for the long-term.
When you compare the consumption of oil per head in USA or any European countries with India and China it is still far far far away.

There is no quick fix solution..
solution should start in the community level.
BUsh an oil magnet is the last person to solve this crisis.
pardon me for my critical views.
Regards
Rama