Quote:
Originally Posted by TheDoc
Well the demand for oil and use of it throughout the world is growing while it is shrinking in the States. That alone gives us less bargaining power, if another Country is willing to buy more and pays more, it's business we have to fight for, and that's more reasons to speculate on future costs.
Then just look at how we buy/sell it, we speculate on the value of our own supply based on the demands within our own country and around the world. If the supply slips in the States or in another Country, and demand holds or grows, the costs go up. That happens in natural business, then add in speculation and a few other reasons (one prob being opec) and we have the huge explosion in costs today.
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But why do we base it on supply and demand? The more they charge us, the less the demand, and the more supply. Do they charge me more for a bottle of water in Phoenix where it's hotter because of more demand? I think not.
If demand grows, costs go up? Why? It costs less to produce more in bulk. If I buy ten million barrels the price is set at once price, but if I buy fifteen million barrels it should be cheaper, right?
Why is the price of oil going up? Because of Libya? They produce two percent of the world's oil, nearly all of which goes to Europe? Libya can stop producing oil in the morning and it shouldn't have any affect on the price of oil in the US...