The Conservative Cave
Current Events => Economics => Topic started by: Chris_ on March 02, 2008, 03:20:53 PM
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What's Really Driving the Price of Oil? (http://www.spiegel.de/international/business/0,1518,538412,00.html)
There are plenty of answers. Some hold the crisis in the Middle East and constantly growing demand in China responsible. Others blame producing countries for keeping the oil spigot half-closed.
"Supply and demand cannot explain the high prices," says Fadel Gheit of Oppenheimer & Co., a leading commodities analyst. Like many in his profession, Gheit believes financial investors are driving up prices. He's reminded of the Internet bubble around the turn of the millennium. According to Gheit, oil is also seeing "excessive speculation" at the moment.
Once upon a time, all that counted in the oil business was production volume and consumption in the industrialized nations. Those days are gone. Oil is now part of every well-structured portfolio -- as was the case, until recently, with those abstract securities meant to enable the investor to secure a slice of the American real-estate boom.
Gheit has been in the business for 30 years. He worked at Mobil Oil and JP Morgan before moving to Oppenheimer. He remembers oil prices of $9 a barrel. In the hearings before the US Congress, he served as a star witness of sorts, attesting to the madness of the speculators. "The traders use every excuse in the book to drive up prices," he says, "it's pure hysteria." On some mornings, when he arrives at his office in Manhattan, London traders have driven up prices by $4 a barrel overnight, perhaps because a pipeline burst somewhere in the world. "I have a degree in engineering," says Gheit. "This isn't heart surgery. It's a plumber's job, child's play." The damaged pipeline was probably repaired even before Gheit found out about it -- but after the traders made their profits.
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I've got a board I can post this at that would make the libtard's heads explode. This is gonna be good.
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Lot of things cause oil price to go up. Supply and demand, any world crisis, accident at a refinery, and speculators.