The reason gas prices are low in Mexico is not because “it’s a lie” (whatever that means), but because Mexico is an exporter of oil; the oil it uses domestically is “subsidized” by the government and is priced well below the world market price. The same is true in Venezuela, Saudi Arabia, Iran and other oil producing countries.
We need to stop the nonsense about our oil companies controlling the world’s oil supply. The supply of oil is controlled by the countries that produce it, not by the companies that buy it. And many countries are limiting the ability of our companies to gain access to their oil. They’re keeping it for their own companies, most of which are state-owned. We all know politicians lie, and now they’re blaming all our energy woes on the oil companies. So why do some of us believe them now? We’re never going to solve a problem if we don’t identify the real cause of that problem, and we can’t do that if we allow our inept politicians to sit on their butts for 35 years and now jump up and point the finger at anyone but themselves.
There is no evidence of a supply shortage in the oil markets. So, barring a supply disruption caused by a political crisis or a natural disaster in a producing country, there shouldn’t be any supply problem in the hear term. There are signs that demand for oil is edging down slightly in response to the high prices. If a drop in demand is accompanied by an increase in supply, that will cause the price to drop. Saudi Arabia has just started producing an additional 300,000 bpd and has committed to produce another 200,000 bpd by sometime next month. So demand is slackening and the Saudis are increasing the supply. But 500,000 bpd is a drop in the bucket when the world consumes 86 million bpd
It’s estimated that about 60% of the increase in the price of oil over the past two years is due to speculators. Another big factor is the decline in the dollar. Yet another is expectations of future shortages, which is a “when, not if” scenario. And there is also the fact that OPEC’s spare capacity is very limited and it will have very little room to increase production in the event of a crisis in the oil markets. Market players try to anticipate the future so they don’t have to just react to whatever happens. The problem with speculators is that they not only ride a trend, they help create and amplify it. And because they have so much money in play and can drive prices up or down, it’s hard to justify betting against them. They not only have a lot of money, but they’re “smart” as well. They cover themselves so if the price turns against them they don’t lose too much. If it goes with them they can make a lot.
One of the things the Saudis are doing is suggesting, pretty strongly, that western governments reduce their taxes on oil products to help bring prices down. Unfortunately for us, U.S. gasoline taxes are very low compared to those in Europe, so any significant reduction in taxes will probably have to take place over there.IF supply shortage is the real problem causing the high oil prices?
Because of massive speculation.
A hint at reduced supply triggers buying--thus driving prices.
The opposite occurs when there is a hint at increased supply.
Right now prices are going to continue to go up or hover around $4 a gallon. Come the this fall during the General Election, prices will go down a nice chunk so that Republicans can claim to be ';solving'; the oil crisis. The Oil companies will be all too glad to drop prices in order to put the republicans in a favorable light.
Happened 2004 and 2006--I just hope people will be wise to it.
There is no real shortage. There's not even a fake shortage like we had in the 70s.
The cost of gas has gone up because (1) instability in the Middle East has raised the possibility that there might someday be a shortage and (2) all the oil in the world is controlled by four or five companies so there is no competition, no 'supply and demand'.
There is NO SUPPLY SHORTAGE of oil, China and India are buying as much as they can, and as fast as they can. If they pumps 10 billion barrels a day and china and India buys it all, there is not shortage.... they just bought all that was pumped.
Short supply is not causing the high prices. Total oil consumption is the US is down 3% from last year. In the same time frame the price of gas at the pump has risen over 35%.
Because only a handful of CORPORATIONS control the oil industry.
Heck they're even trying to control corn prices now as well.
It seems as if they don't like having the competition.
its a lie that's why the price is low in Mexico.
No comments:
Post a Comment