Lybia produces 3%....

Jarod

Jarod

Well-known member
Contributor
Lybia produces 3% of the worlds oil, why do we let the oil companies to jack prices up 20% based on this?
 
because oil is dirt cheap, so much so just the threat of it being slowed down makes people offer a reasonable price.
 
Libya produces about 1.5% of the worlds oil.

The spike started well before Libya became a hotbed. Egypt controls the Suez. If the new government were to put restrictions on use, that could jack up oil prices. Libya's lack of production effects prices. Turmoil in other mid east countries effects prices.

Any time you have the threat of war in the mid east, oil spikes. It is not a shock at all that oil jumped to the $100 range based on what is occurring in Northern Africa and the Mid East.
 
Superfreak said:
Libya produces about 1.5% of the worlds oil.

The spike started well before Libya became a hotbed. Egypt controls the Suez. If the new government were to put restrictions on use, that could jack up oil prices. Libya's lack of production effects prices. Turmoil in other mid east countries effects prices.

Any time you have the threat of war in the mid east, oil spikes. It is not a shock at all that oil jumped to the $100 range based on what is occurring in Northern Africa and the Mid East.
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So, while no oil is affected (prior to lybia) the price still goes up. Thats been my point, its not supply and demand, its perception that controlls the price of oil. If the oil companies can make it look like oil is going to be hard to get, they get away with charging more!
 
Jarod said:
So, while no oil is affected (prior to lybia) the price still goes up. Thats been my point, its not supply and demand, its perception that controlls the price of oil. If the oil companies can make it look like oil is going to be hard to get, they get away with charging more!
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astonishing that you actually get econ 101. So what industries do you want to have gov determine the price for?
 
Jarod said:
So, while no oil is affected (prior to lybia) the price still goes up. Thats been my point, its not supply and demand, its perception that controlls the price of oil. If the oil companies can make it look like oil is going to be hard to get, they get away with charging more!
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Do you think oil companies were behind the uprising in Egypt?
 
Americans will be shocked when the real shortage hits.
China buys more cars than we do, india is moving from bikes to mopads.
When we decide we don't want to be the only nation that doesn't drill for billions of barrells just sitting there it's already too late.
 
Topspin said:
Americans will be shocked when the real shortage hits.
China buys more cars than we do, india is moving from bikes to mopads.
When we decide we don't want to be the only nation that doesn't drill for billions of barrells just sitting there it's already too late.
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I was thinking this the other night at the pump. I don't think people have any idea how bad things can get, and how quickly. With so much in our lives & business tied up in oil, and so much of our oil need tied up with foreign sources, and so many of those sources being areas of volatility....it's just a recipe for disaster.
 
these problems now are with no serious reductions in output, but just fears over output cuts. Katrina shut down the gulf just for a short period and oil hit 150, 200 to 300 would not be out of line if a serious supply problem in the Kingdom were to erupt. Look for the king to start writing checks.
 
Onceler said:
I was thinking this the other night at the pump. I don't think people have any idea how bad things can get, and how quickly. With so much in our lives & business tied up in oil, and so much of our oil need tied up with foreign sources, and so many of those sources being areas of volatility....it's just a recipe for disaster.
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If Iran started a war right now, our ass would be cooked. There's no telling what gas would go to.

Iran wouldn't even have to attack us. Just some little country in that area.
 
Jarod said:
So, while no oil is affected (prior to lybia) the price still goes up. Thats been my point, its not supply and demand, its perception that controlls the price of oil. If the oil companies can make it look like oil is going to be hard to get, they get away with charging more!
Click to expand...


do you understand how commodities work? The oil companies are not setting the price, you idiot
 
Jarod said:
So, while no oil is affected (prior to lybia) the price still goes up. Thats been my point, its not supply and demand, its perception that controlls the price of oil. If the oil companies can make it look like oil is going to be hard to get, they get away with charging more!
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yes, like any stock, like any commodity, speculation on the future is going to be a component of oil prices.

When we have a period of high uncertainty, speculations rises. We saw the same thing in early 2008. 'expert' after 'expert' saying oil was going to $200/brl blah blah blah. Speculation drove prices up to $148. Then, when the 'experts' pulled their heads out of their asses, they realized demand had dried up due to high oil prices. Thus speculation began driving it rapidly down. It fell to about $37/brl. neither the $148 nor the $37 were realistic prices.

Uncertainty increases volatility via speculation. With stocks, bonds, oil, gold etc....
 
Jarod said:
So, while no oil is affected (prior to lybia) the price still goes up. Thats been my point, its not supply and demand, its perception that controlls the price of oil. If the oil companies can make it look like oil is going to be hard to get, they get away with charging more!
Click to expand...

how do oil companies set the price? my understanding is that speculators do this by trading oil as a commodity....
 
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