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Originally Posted by SomeRandomGuy  This is not necessarily true. One reason prices are high is that speculators are willing to pay high prices due to the perceived risk to the supply because of the war in Iraq. Unfortunately, the US pulling out of Iraq might not necessarily change the risk perception of the speculators. It is entirely possible that they will reason that the weak US dollar, or the possible threat from Iran, etc. are substantial enough to warrant continuing to invest in oil at the current prices.
Unfortunately, speculators have the ability (to some extent) to set the price of oil. If the majority of traders in the NYMEX are willing to pay high prices, then prices will remain high, regardless of what the science and economics say should happen with prices.
There is a lot of finger point right now regarding who is to blame for the price of gas. I am not suggesting that speculators are (or are not) to blame. I just wanted to point out that while logically it would seem that ending the war in Iraq would cause prices to decrease, it is entirely possible that it would happen that way. |
Well not in the entire world think that the high price of oil today is caused by the US its presence in Iraq.
The US troops in Iraq since 2003. The oil price increased since then. But we note the strongest rising of the oil prices between 2007 and now. So they were already like 4 years in Iraq before the price started rise as quick as it does now.
In other parts of the world they point the "bank-mortgage-immovables-crisis" in the US itself that triggered the rise of the oil price.
As you say speculators wanted to make sure not to lose or even regain what they lost on another market by starting to speculate on the oil market.
So the military presence of the US in Iraq is probably an minor reason for the evolution of the prices of gas between 2007 and now.
If not....this huge increasing of the price would have happened earlier.
And of course the Dollar is at a low level compared to other monetary currencies...so if the shareholders of the oil companies want to stay in position they need to ask more dollars if they want to stay in competition with other growing economical parts of the world like China and India who are trying to make deals for oil themselves. And with China and India the demand for gas is higher than ever that explains the rising of the price also more the Iraq issue.
So I don't think the current prices and rising of the prices is in relation to where it comes from, but more related to who wants to make big profit out of it and how large is the demand of the world to it....knowing that we are passed "peak oil" 2 years ago.
And in fact a part of this story was already predicted by M. King Hubbert in 1956 when peak oil would be reached and that the prices would rise strongly at that moment. So forget about Iraq as the main cause of the fact that you have to pay so much for gas.