Oil Prices 101: What Goes Into Today's High Prices?

CNN:

Oil, Supply, Demand, Speculation, Failing Dollar, oil prices, crude oil prices, oil, oil companies, big oil, oil industry, peak oil

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Comments

[mamacat]

06:53 AM on 06/21/2008

1.) hedge fund price manipulation, due to the GOP installed Enron loophole.

2.) the exploding world population, accompanied by improving standards-of-living in much of the world

3.) the collapsing dollar. If the price of gas were expressed in year 2000 dollars, the last pre-Bush year, then the price would be closer to $2.50/gallon, even with the inflated prices caused by #s 1 and 2.

[ohiomark]

09:00 PM on 06/20/2008

This is how gas prices work.

http://auto.howstuffworks.com/gas-price.htm

Supply and demand.

[incontempt]

11:07 PM on 06/18/2008

Keith Olberman, finally, tonight discussed why fuel prices are up...ENRON and the loophole put into law with McCains assistance and with phil grahams direction... close this and oil/gas will drop by 25-50% OVERNIGHT....i want someone in jail....and McCain is directly linked to this corruption at the whole worlds expense...airlines failing....farmers quitting..the whole works.

The hammer is falling and the truth will be exposed....finally

[dadw5boys]

03:15 AM on 06/18/2008

What a half ass story.

Where is the offshore HEDGE FUNDS that are tripling the price of ther Furtures when they sell them?

[noneIn2008]

02:17 PM on 06/17/2008

We want the price to go up to cut usage. No need for more supplies, this would keep costs down and not cut consumption.

[pundit27]

12:16 AM on 06/17/2008

Why now and not in the 80s or 90s . . . try an administration that purposely destabilized the Mideast, that crippled any meaningful regulation over commodities trading and traded hundreds of thousands of Iraqi, American and other lives to fill their coffers. . .

[Ratbert]

04:59 AM on 06/17/2008

How has the Iraq occupation raised oil prices - before the occupation, when oil was cheap in the 1990's there was first an embargo that didn't allow Iraq to sell any oil, and then one that allowed them only to sell oil for food and medicine. So Iraq wasn't selling much oil in the 1990's. Their output now is pretty equivalent I believe. Saudi Arabia, Iran, Kuwait - have they changed how much they pump due to the Iraq occupation - I don't believe so.

How did hundreds of thousands of Iraqis dying from US bombs raise oil prices?

If speculation, and not supply and demand, has caused this runup in oil prices from under 20 in the late nineties to $140 now, then it is the greatest news the world could possibly get - a runup in price that will enhance convervation of a finite expendable resource - and yet it is only a temporary runup till the bubble bursts.

[1will]

08:54 AM on 06/17/2008

"Why now and not in the 80's or 90's."
The 1980's- Worldwide demand was lower than today and Reagan cut a deal with the Saudi's to pump more oil than the market required. This drove down prices and helped sink the Soviet Union. The Soviets depended on oil revenue.
The 1990's- Worldwide demand was also lower in this decade. China actually exported oil during much of the 1990's. Compare that to today. Saudi Arabia and Kuwait pumped every barrel they could to help pay for the 1991 Gulf War and the damages incurred. Russia pumped every barrel they could to keep their oil wells and pipelines from freezing. They also badly needed the revenue. Opec tried several times to lower production in order to drive up prices. One or two members would always pump more. It was almost 2000 before they got their house in order.
Americans bought large gas guzzlers throughout the 1990's. This drove up demand.
China and India had huge growth. This continues. While we worry about a recession China is experiencing double digit growth and consuming more and more oil (and steel, copper, lead, etc for those wondering why ammo is going up).
There was a recession across Asia in the 1990's. This drove down oil demand. There was also a currency crisis in Mexico and this made their oil even cheaper.
There is a lot to look at when comparing the price of oil today to the price 15-20 years ago.

[research]

10:16 PM on 06/16/2008

BushCo, the most Oil industry heavy administration in history,

presides over the Iraq Middle east destabilization war crime, admittedly for OIL.

Bush appeases, kisses, holds hands with, give Nukes to, gives weapons to...

The country and family most involved in the 9/11 attacks:

The Bin Ladens and the Saudis.

Following the money...Who benefited most from 9/11 and the Iraq War crime?

The Bin Ladens, the Saudis and BushChenyOil cronies inc..

And some of you people want to believe that there is no intent, but just supply and demand or peak oil, or some other fantasy.

BushCo robbed the world, right in front of your face!

[Ratbert]

05:44 AM on 06/17/2008

Can you be more specific about what was robbed? Are you saying that the Bush regime is profiting from Iraqi oil? Can you give the details of how they are doing that?

[research]

02:44 PM on 06/17/2008

140$ oil. 10% increase in demand. 10-80 years of reserves.

But you don't care because you make you money from oil?

[incontempt]

11:07 PM on 06/18/2008

Keith Olberman, finally, tonight discussed why fuel prices are up...ENRON and the loophole put into law with McCains assistance and with phil grahams direction... close this and oil/gas will drop by 25-50% OVERNIGHT....i want someone in jail....and McCain is directly linked to this corruption at the whole worlds expense...airlines failing....farmers quitting..the whole works.

The hammer is falling and the truth will be exposed....finally

[RememberTheAlamo]

06:46 PM on 06/16/2008

Hi All,

Here are a few tips . . .

(1) Oil is all over the US
(2) Kansas is awash in oil
(3) There are huge fields off the CA coast
(4) Alaska has lots of oil (the field above Prudhoe is incredible)
(5) We have been pumping gas back into Prudhoe, since 1979
(6) Richmond, VA sits on enough gas to heat and run it for the next 60 to 100 years (but, not one well!)
(7) We seldom recover more than 10% of the oil in place . . . due to economics
(8) Price makes more oil recoverable . . . it is fun to redrill a field . . . you know what is going to happen!
(9) Price determines allocation
(10) Americans are good at adapting (nimbys . . . need not apply)
(11) Alaska wants to produce
(12) Texas wants to produce
(13) California does not want to produce
(14) . . . and environmentalists keep it all bottled up

This isn't about price . . . it is about environmentalism and our loss of ability to be pragmatic, creative and adaptable.

Request: Environmentalists . . . please sit down . . . let the a real leader take charge . . . ENTER Sarah Purlin

[Ratbert]

10:41 PM on 06/16/2008

Would you mind giving the amounts of oil and gas you believe are in Kanas, Alaska, Richmond and off the CA coast?

[RememberTheAlamo]

01:26 PM on 06/17/2008

Hi Ratbert,

Thank you for asking!

As to the Richmond basin, conservative estimates are for approximately 1 trillion cu ft of gas, which would power Richmond for well over 60 years (13 billion cu ft of consumption)

Kanas has oil and gas everywhere, it is just a matter of price, interest rate, inflation rate and EPA restrictions . . . lifting the EPA restrictions and Kanas likely could add 200,000 to 300,000 BOPD of production . . . those reservoirs have a lot left to give . . . many have 75-90% of original oil still in place.

CA has several known (elephant) fields off the coast. The USGS is in the process of releasing new estimates for these fields . . . the new estimates yield a likely production rate of 400,000 to 600,000 BOPD (size of current Prudhoe production) . . .along with huge gas reserves.

The ANWR well information remains "tight" . . . . but USGS is pointing towards 1 mm BOPD production. . . . and there is 20 Billion BBLs of oil in the heavy oil formation above medium weight formation which has not been tapped at all. . . . and those are just the things we can agree on!

Hope this helps!

Yours,

Rock Solid

[ImmanuelGoldstein]

01:13 AM on 06/18/2008

I'll give you a figure right here. Proven reserves in the USA are about 21 billion bbls.
Daily consumption is about 21 million bbls /day

http://tonto.eia.doe.gov/dnav/pet/pet_crd_pres_dcu_NUS_a.htm

http://tonto.eia.doe.gov/dnav/pet/pet_crd_pres_dcu_NUS_a.htm

We have about 1000 days of US consumption in proven reserves, so much for drilling our way out of energy dependence or domestric drilling providing any long term answer to the oil dilemma.

[darthdarcy]

02:20 PM on 06/16/2008

It's the Speculators by far who have created and are causing this crisis, and we can end it by returning to reasonable transparent Regulation..!

[Ratbert]

06:51 PM on 06/16/2008

Speculators didn't cause oil discoveries to decrease every decade since they peaked in the 1960's Speculators did not send an enormous amount of jobs from the United States and other developed countries to China and India - vastly increasing the amount of oil those hugely overpopulated countries use. Speculators did not cause the world's largest oil consumer - the United States - to increases its population by over 50% since 1970, nor did they cause it to give the enourmously popular SUVs and light trucks exemption from it's extremely modes gasoline mileage standards. Speculators have not been able to override the fact that oil is not only a finite resource, but an exhaustible one as well. The only thing speculators have done is give hope for those who rely on wishful thinking over facts.

[helonias]

12:18 PM on 06/16/2008

I see, demand goes up 3.7 % and the price doubles.

[DRaymond]

01:50 PM on 06/16/2008

Yes, because finding and developing new sources is expensive and reducing use is difficult.

[midtown]

03:47 PM on 06/16/2008

This is hogwash. The Saudi king said yesterday that oil should be $70/barrel. I grew up in the oil industry. There is no shortage, only secrecy about what's going on.This is like the phony war in Iraq. we are being bamboozled.

[Ratbert]

06:53 PM on 06/16/2008

In the early and late 1970's there were two huge price movements that were caused by only a small percentage of the world's oil being taken off the market.