[perseus29]

As I hear more people repeating the talking points that oil prices keep going up because of decrease supply or because countries like china and india are increasing demand, here is a nice read.

http://www.businessweek.com/lifestyl...041_945564.htm

ExxonMobil (XOM) Chief Executive Officer Rex Tillerson was quoted by Marketwatch as saying, "The record run in oil prices is related more to speculation and a weakening dollar than supply and demand in the market." He added, "In terms of fundamentals, fear of supply reliability is overblown."

[Valerie Salva]

Originally Posted by perseus29

As I hear more people repeating the talking points that oil prices keep going up because of decrease supply or because countries like china and india are increasing demand, here is a nice read.

http://www.businessweek.com/lifestyl...041_945564.htm

ExxonMobil (XOM) Chief Executive Officer Rex Tillerson was quoted by Marketwatch as saying, "The record run in oil prices is related more to speculation and a weakening dollar than supply and demand in the market." He added, "In terms of fundamentals, fear of supply reliability is overblown."

The public is lead to believe that gas prices, as well as the so-called nursing shortage, are simple matters of supply and demand.

IMO, supply and demand have little to do with either situation.

[llg]

I saw an explanation on MSNBC or some such TV channel a week or so ago about it is primarily due to the fact that the international oil market is conducted in US dollars. The US dollar is the standard currency. With the dollar being so weak in relation to other currencies, it makes our dollars "worth less" on the international market ... so we have to spend more of them to buy the same goods and services. The currencies of other countries are stronger -- and therefore can be converted more cheaply into US dollars to spend, enabling them to buy gas more cheaply than usual ... providing more competition for the available oil and driving the price up even further.

However, as the report I saw pointed out, Americans should still be working on reducing our consumption. While the "supply and demand" dynamic may not be the primary force at work producing the current spike in prices, it does still play a role -- and will continue to play a role in the long run after this crisis with the US dollar is over.

[bethin]

I think it is a combination of things, one of them being that the Kingdom has 5,000 princes to keep wealthy. I just finished a book that discussed the oil prices in relation to supply/demand/plain greediness. Most of it is pure greediness.

[Cursed Irishman]

There is a movie called "Who Killed The Electric Car?" that cites one of the main reasons for electric cars failing, on the fact that there is still 9 TRILLION dollars worth of oil in the ground. Since theres so much oil, theres no incentive to find alternative technologies.