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Oil

Unread postby Lookin » Wed 02 Nov 2005, 01:22:32

I'm a Student doing some research on the rise in oil prices.I wanted to know what are some of the keys reasons for the rise in Oil prices........Can someone please help me out...
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Re: Oil

Unread postby MonteQuest » Wed 02 Nov 2005, 01:26:31

$this->bbcode_second_pass_quote('Lookin', 'I')'m a Student doing some research on the rise in oil prices.I wanted to know what are some of the keys reasons for the rise in Oil prices........Can someone please help me out...


Supply vs demand, primarily the growth of China and India.

Infrastructure bottlenecks, for example, refinery capacity. The law of diminishing returns, lack of swing capacity, hurricane damage, and futures speculation.
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Re: Oil

Unread postby EnviroEngr » Wed 02 Nov 2005, 01:30:28

There's gotta be a dissertation in here somewhere?

It's off to a good start by any measure.
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Re: Oil

Unread postby Lookin » Wed 02 Nov 2005, 01:38:38

What do you mean when you say 'lack of swing capacity' and can you say some more on 'Future Speculation'??please.....
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Re: Oil

Unread postby MonteQuest » Wed 02 Nov 2005, 01:56:36

$this->bbcode_second_pass_quote('Lookin', 'W')hat do you mean when you say 'lack of swing capacity' and can you say some more on 'Future Speculation'??please.....


Swing capacity is the ability to fill in shortages in production. Right now, Saudi Arabia is our only swing producer and seems to be able to only produce sour crude to fill the gap. Sour crude is harder to refine than sweet light crude which makes the best unleaded gasoline.

Futures speculation has to do with the oil futures market. People speculating on the future price of oil to make money. Basically, many investors are buying futures thinking and hoping the market price will go up. The CRB has weighted the index heavily in this direction as well.
A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
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Re: Oil

Unread postby Lookin » Wed 02 Nov 2005, 02:15:22

Ok I get you there.....You also said that China is also responsible for the rise in oil prices.....this is because they have a great demand for oil thus they cause the supply to drop inevitably causing the producers to raise the price....am i getting this right?
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Re: Oil

Unread postby gt1370a » Wed 02 Nov 2005, 09:48:28

Go to Google and type in the following:
"Goldman Sachs" +superspike.pdf

Download the .pdf and read through it. If you have any questions post back to this board. This Goldman Sachs report will be a great reference for you.
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Re: Oil

Unread postby nth » Wed 02 Nov 2005, 11:42:42

Don't forget about US. US oil consumption has been rising quite a lot despite all those refineries closing down.
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Re: Oil

Unread postby MonteQuest » Wed 02 Nov 2005, 13:02:29

$this->bbcode_second_pass_quote('Lookin', 'O')k I get you there.....You also said that China is also responsible for the rise in oil prices.....this is because they have a great demand for oil thus they cause the supply to drop inevitably causing the producers to raise the price....am i getting this right?


Supply doesn't drop, the demand on exisiting supply increases. In a world of supply/demand this causes prices to rise.

China and India have some collective 2 billion plus people who are now just getting a taste of western afluence. China's GDP is growing at 9.5% per year.

Read this thread: http://www.peakoil.com/fortopic14224.html
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