About Oil Prices

Mayoor Patel asked:


Current oil prices have increased almost 70% this year. There are a number of reasons for this increase, with three main reasons leading the list. First, there have been few new discoveries of oil in recent years. Second, there is a greater demand for oil especially from China, who is now the world’s largest importer, second only to the United States of America. Third, there is uncertainty in many places around the globe over oil supplies because of war and terrorism. One example of this last point is the report on the arrest of more than 170 people suspected of plotting to attack of Saudi Arabian oil fields, dispute over Iran’s nuclear program, and militant attacks and domestic disputes on Nigeria and Iraq.

These is a school of thought that teaches that oil price hikes are only the beginning of a long term trend. Current oil and gas prices are continuing to increase on a consistent basis, even in times of the year where they usually remain level or even drop a small about. This pattern has lead to a concern that an energy crisis is starting to emerge and the United States and every country in the world is about to experience a difficult period that will result in some hard changes in the way people live and work. The impact of higher oil prices on the economy and on investors is more complex that it would first appear. That is why taking a full global and historical perspective on the price of oil is important.

By looking at the Global Oil database, it can provide some analysis to help investors. Firstly, the increases in oil prices will have an impact on some economic sectors like the airline and auto industries. Secondly, high oil prices would certainly affect inflation. Recently, current oil price has already contributed to the moderate rise in U.S. prices. For Asian countries that experience higher oil demand in recent years, high oil prices would certainly be more unwelcome. China has already become a net oil importer. Net imports of oil would exceed 100 million tons this year, according to estimates. High oil prices would certainly eat into her trade surplus and hence trim economic growth. And lastly, as the demand for oil and human population increase, the world supply for oil will continueto decline. Thus, higher oil prices spur more exploration for oil, increase in the demand for oil substitutes like ethanol and biofuel, and encourage oil conservation.

Florence

JJ S asked:


The price of crude oil has dropped by dollars each day for almost a week. I think it’s down to about $124.44 a barrell right now. How low do you think it will go before it starts to hold steady or go back up? I think it may get down to $110’s, but not much more than that. I’m just guessing. Does anybody have more educated insight?

Eva

Renee23 asked:


Barrel of oil prices are falling sharp. Do you think this might link to fact that the US might start drilling for oil off shore in other areas beside the Gulf Of Mexico?

Allan

Andy Adams asked:


With the green agenda on everyone’s mind these days and people trying to save on their electricity use/carbon footprint/whatever today’s buzzword is it is understandable that we are trying to use less energy.  However whilst we’re trying to cut back on electricity and gas usage it is also becoming more and more scarce at the same time.  It is well known that oil prices have shot up over the past months which you’ll have no doubt noticed when visiting the petrol station forecourt over the past six months.  Well in some cases in California the same sort of idea is being proposed over gas and electricity prices: Increase the price as supplies draw thin.  The PG&E (Pacific Gas and Electric) made a plea to state regulators recently to increase utility prices by 6.5% to cover the soaring cost of natural gas that fuels the majority of California’s power stations.  This proposed increase would be done by increasing electricity bills by 4.5% in October with a further 2% increase set for January.The rise in electricity bills is a relatively unnoticed issue in the grand scheme of things with Petrol, Oil and Diesel taking centre stage in the high priced fuel crisis.  Natural Gas itself has increased in cost by 63% compared to this time last year.  Problems with power have worsened due to a poor performance from the hydroelectric power in the Sierra Mountains.  The mountains are home to a number of Hydro-electric dams which have had less significance due to a thin snow cap this year, possible another casualty of global warming?Natural gas has been popular in generating electricity as it burns cleaner than coal which has slowly been phased out.  Whilst opponents to the recent motion have acknowledged gas prices have increased they aren’t too happy considering that PG&E has already applied to increase rates earlier in the year too.  It seems that with Oil, Gas, electricity and all other fuel sources increasing in cost we should look to conserve as much as possible to try and lower our bills and damage to the environment too.

Tina

mbchelsea asked:


Apparently one of the key reasons (except of course the fundamentals of supply and demand) for the increase in oil prices has been speculation. Firstly, how does speculation effect prices, and secondly, has the Iraq war led to more speculation, thus further perpetuating the price rise? Please explain clearly and give sources/references.

June

harsh asked:


the recent rise(last few months) in the oil price a mere speculation or is there any reason for it ,if there is any reason then what is it?

Lawrence

archer asked:



Sinopec, the listed refining unit of the China Petroleum and Chemical Corp., hasn’t really benefited from recent declines in global crude oil prices, because its refining costs still far exceed domestic oil product prices, company officials said on Thursday.
China caps refined oil product prices at relatively low levels by world standards.
The officials said that although lower world prices would reduce import costs, global crude prices were still about 130 U.S. dollars per barrel, well above the break-even point of 80 U.S. dollars for Asia’s largest oil refiner.
Sinopec imports about 80 percent of the crude it refines.
Earlier reports said Sinopec and another leading company, Petrochina, the two leading oil companies, recorded a combined refining loss of 5.71 billion yuan (about 827 million U.S. dollars) in the first half as soaring world crude prices raised their production costs, which were up 47.9 percent year-on-year.
China’s oil companies have been losing money for each barrel of imported oil they refined and sold domestically, since they can’t pass on higher costs under the government-set refined oil prices.
The government raised the benchmark gasoline and diesel oil retail prices to 6,980 yuan and 6,520 yuan per tonne in June, up more than 16 percent and 18 percent, respectively.
The increases had helped reduce refining losses, said Sinopec. It said last week that its first-half net profit would decline by more than 50 percent because of the widening gap between the government-set prices of oil products and rocketing global crude prices.

Denise

ko.flok asked:


Oil price is rising obviously is rising, and it is caused by the demand and supply, with demand exceeds the supply.
So, what are actually the factors of these supply and demand…
OPEC come into mine as the supplier and China & India’s rapid economic growth also come to my mine as the cause of demand.

Can anyone explain me more about this supply and demand factors that causes the oil price to increase this much?

Tiffany

sir5er2000 asked:


I am trying to search for a website on the internet that I can access daily to find the current price per barrel of crude oil. This would be for the Williston Basin region in Montana.

Monica

greenjelly asked:


If the oil price is projected so far ahead why does the national petrol/diesel price rise so often in small increments. Could the fuel authorities not work thier increases out on a more once off basis by looking at the forecasted oil price figures.

Jonathan