chuckwoww Posted January 5, 2008 Report Share Posted January 5, 2008 That was the past, but as demand increases, why should the price drop off? There's always the possibility that demand will drop....recession in the US for instance. Not likely but could happen. That could cause a price drop.. I still think global politics has a big effect on the price. Link to comment Share on other sites More sharing options...
shygye Posted January 5, 2008 Report Share Posted January 5, 2008 I thought the price was based on Speculation, and nothing more...? Supply and demand set the price in the long term. However speculation can drive prices through the roof in the short term. We have recently seen the speculation bubble in the USA housing market pop. House prices have dropped even though the amount of land is finite. Link to comment Share on other sites More sharing options...
shygye Posted January 5, 2008 Report Share Posted January 5, 2008 ... That was the past, but as demand increases, why should the price drop off? High oil prices makes other energy sources economically and financially viable. It also makes investments in energy efficiency cost effective. Link to comment Share on other sites More sharing options...
bust Posted January 5, 2008 Author Report Share Posted January 5, 2008 There's always the possibility that demand will drop....recession in the US for instance. Not likely but could happen. As a famous politician once said "recession is a state of mind" Link to comment Share on other sites More sharing options...
chelseafan Posted January 6, 2008 Report Share Posted January 6, 2008 ... That was the past' date=' but as demand increases, why should the price drop off? [/quote'] High oil prices makes other energy sources economically and financially viable. It also makes investments in energy efficiency cost effective. Thats true, but we're looking at a resource thats not renewable and will eventually run out, with this in mind, OPEC will try and hold/increase prices whilst bowing down to outside political pressure when necessary (albetit rarely). The Saudi's, Russians and the like hold most of the trump cards... Chuck, Hypothetically, even if the demand from the US reduced, will the price drop when there is such a dramatic increased demand from emerging countries. Am I right in saying that its OPEC who control the prices ? Link to comment Share on other sites More sharing options...
chuckwoww Posted January 6, 2008 Report Share Posted January 6, 2008 Chuck, Hypothetically, even if the demand from the US reduced, will the price drop when there is such a dramatic increased demand from emerging countries. Am I right in saying that its OPEC who control the prices ? If the US goes into recession China and India will get hurt too. But I don't think the demand will drop much. OPEC can control how much they pump so I guess they have some control over prices. But if world demand drops they sell less oil. Link to comment Share on other sites More sharing options...
chuckwoww Posted January 6, 2008 Report Share Posted January 6, 2008 As a famous politician once said "recession is a state of mind" Yeah, yeah, that's one of those clever things rich people say. Tell it to the guy who's lost his job and his house and family. Link to comment Share on other sites More sharing options...
pe7e Posted January 6, 2008 Report Share Posted January 6, 2008 OPEC can control how much they pump so I guess they have some control over prices. But if world demand drops they sell less oil. If demand drops they will also cut back on production to try to maintain the price already being paid. If you have a finite resource, it's better to sell 1000 barrels at $100, than 2000 barrels at $50. You may think the present price is too high but if I was a betting man, I would bet it's nearer to $125 than $100 by this time next year. Link to comment Share on other sites More sharing options...
Old Hippie Posted January 6, 2008 Report Share Posted January 6, 2008 ... That was the past' date=' but as demand increases, why should the price drop off? [/quote'] High oil prices makes other energy sources economically and financially viable. It also makes investments in energy efficiency cost effective. Thats true, but we're looking at a resource thats not renewable and will eventually run out, with this in mind, OPEC will try and hold/increase prices whilst bowing down to outside political pressure when necessary (albetit rarely). The Saudi's, Russians and the like hold most of the trump cards... Chuck, Hypothetically, even if the demand from the US reduced, will the price drop when there is such a dramatic increased demand from emerging countries. Am I right in saying that its OPEC who control the prices ? Isn't a lot of the world, as in Europe, India, China etc leaning towards more nuclear as a means of reducing their need for oil? seems I recall reading that somewhere. Hence, who really holds the trump cards is/are the countries who don't need as much oil in the future...it seems a lot of the world economy is based on that very need. Link to comment Share on other sites More sharing options...
bust Posted January 6, 2008 Author Report Share Posted January 6, 2008 As a famous politician once said "recession is a state of mind" Yeah' date=' yeah, that's one of those clever things rich people say. Tell it to the guy who's lost his job and his house and family. [/quote'] Not said by a rich person at all in fact a union official. The rich fall much harder in recessions don't worry. Link to comment Share on other sites More sharing options...
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