Why hasn't the doubling of the price of crude oil started an economical depression?
397461
Because all the people who went out and spent a ton of money on a big SUV now have to go out and spend a ton of money just to drive it. Add to that the owners of the new Hummers and you have gas guzzling taken to a new level.  This massive spending by owners of gas guzzlers will prevent any economic downturn.\n\nPoliticians will always blame things on something else, so they will shift the blame for their bad economic policy to increased oil prices, figuring Americans are too dumb and stupid to know the difference.  This is why they get away with $200 million pork barrel spending for a bridge in Alaska, bigger than the Golden Gate, to connect to a remote island where nobody lives.
365608
I'm a Petroleum Engineer, and about the closest thing you'll find to an expert on this subject, other than "The Expert," whomever the media says that is next.\n\nThere will never be "no oil" in your lifetime. You may not be able to afford it, but they cannot run out. \n\nNow that oil is $70/bbl, it opens the door to production of different grades of oil and different kinds of oil. \n\nAmerica has the biggest "Shale Oil" field in the world, at over a trillion barrels, that has never been tapped because it will be expensive to extract, and the technology has not yet been improved enough to tackle it. But money solves all of these prices, and $100/bbl oil would certainly do it. You will have to be surprised how fast the technology will ramp up when there's a profit to be made.\n\nAnother example is the "Coal Oil" sands in Canada that they are already extracting by truck and converting to usable oil. It's slower to extract and convert than to simply produce liquid oil, but the one field they are producing from today is bigger than the Saudi field, which is the biggest in the world. And that isn't the only "Coal Oil" field in Canada, and certainly not the only one in the world.\n\nMost people don't realize that we only produce about 20% of the oil from a producing oil sand, and leave the rest of it there because it was too expensive to produce by secondary or tertiary recovery methods. That is no longer true, so the natural oil reserves just doubled when the price of oil doubled.\n\nGovernments are good at creating crisis after crisis, so that they can be your friend and be the only one to solve the problem, that is, by taking control, taking your rights, enacting more laws, forming more committees out of their cousins, and generally living like Kings off of years of perceived crisis. Oh yeah, and they can take over whole countries if they need to and the gullible public is behind them on an invasion, and they can get enough young people to fight their special-interest wars for them.\n\nWhen I was in college in the 1970's, the known problem of that time was that temperatures were getting "colder." By the year 2030, it would be so cold that plants could not live and man would face extinction without drastically chaging things. That was to be in my lifetime.\n\nBut now the "experts" claim "Global Warming." It's all just a theory, like Evolution, but after so many "experts" parrot the "truth" in the media, and even colleges and universities begin teaching it as truth, then it becomes "truth,' even when at best it's a 50-50 shot. Why make a crisis out of something? There's money to be made, control to be taken, and new gov't offices to fill.
345940
Greed mostly.  The actual physical factors that drive it are production supplies and output demand but these could be leveled off and maintained for the most part so fluctuations come from CEOs of exxon and similar gas refinery companies or Leaders in OPEC messing with prices just to jack up the price to make more profits
640735
Oil prices are high because the demand is high.  \n\nImagine you had a pill that cured every health problem--obsesity, AIDS, cancer, and everything in between.  What would you sell it for?  You could sell it for $1 a pill--because everyone would want one.  Or, you could sell it for $1 million a pill--because everyone would want one.  Some people would sell it for $1.  Some people would sell it for $1 million.  People would fall everywhere in between.  \n\nWell, the oil companies don't have a magic pill, but they do have something that most of their customers cannot imagine living without.  They've realized that they can make a profit at $1.50 a gallon, but they can make a much better profit at $3.50 a gallon.  Why wouldn't they raise their price?\n\nAlthough I think the high prices suck, in the long term it is a good thing, because it will increase efforts to develop new kinds of energy and cars that are more efficient.\n\nBrazil has a fuel that is similar to ethanol that is made out of sugar instead of corn.  (Sugar is their main export.)  Since they developed this fuel, Brazil required cars to run on the stuff, and they are completely independent of foreign oil.  The U.S. should do the same thing with ethanol.  We could be done with foreign oil in ten years.
478800
WRITE CONGRESS AND THE SENATE AND ASK WHY THEY WILL NOT RELEASE OUR OIL RESERVES???? THIS WOULD HELP BRING DOWN THE PRICE OF GAS!!! ALSO ASK WHY WE HAVE NOT BUILT ANY MORE REFINERIES IN DECADES!! THE OIL COMPANIES PURCHASED ONE A FEW YEARS BACK AND SHUT IT DOWN AND REFUSE TO OPEN IT AGAIN!!The soaring profits have already attracted the attention of many members of Congress. On Tuesday, House Speaker Dennis Hastert warned companies that any price gouging is "unacceptable, and any company who does it will be prosecuted." He urged the oil companies to explain to the American public what they are doing to bring down the cost of oil and natural gas. And he urged them to build new refineries and pipelines. THERE HAS BEEN NO NEW OIL REFINERIES BUILT IN THE USA SINCE 1976! WHY HUGE PROFITS AND THEY WON'T DO ANYTHIGN ABOUT IT!!!
1049330
I dont disagree with your theory.  I just want to add one of my own that helped push the prices up.\n\nA few years ago the oil futures went on the public trading market.  Yes.  The public, the entity as a whole that believed everything from the world is flat to Milli Vanilli can sing, is at the helm of the future prices of crude.  Can you imagine what happens when the public hears that there was a problem, of any magnitude, to a oil line or ship?  What happens when summer comes around and naturally the public again buys up all the oil futures in hopes to make a quick buck.\n\nGreed is what drives prices.  The greedy people that are making the money will call it marketing/economics.  No one entity is to blame for the results.  It would be too easy.  Just dont leave out anyone at fault.  Bush, Iraq, war, EPA, tax, and even the public are all together and individually at fault.
690244
Gas prices are rising due to the rise in the price of crude oil.\n\nThe price of West Texas Light Crude rose to over $70 a barrel on the international market, although it has now fallen to $69.63. The price of Light Crude tends to be higher than other Crude Oil prices because it contains less sulphur. This reduces the refining costs involved with making petrol that conforms to the environmental standards in the US and Europe.\n\nAlthough OPEC and other Oil producing countries have increased production of oil, the demand is outstripping the supply.\n\nThe economy in China is growing fast and as the masses enjoy more disposable income, they buy cars which in turn require more oil.\n\nThe Indian economy is also getting stronger and they too are buying more oil.\n\nA further complication that adds to the demand is the lack of refineries. The efficient refineries are operating at almost full capacity which means that less efficient plants are being pressed into service. The problems in obtaining refined product places further pressure on demand side prices.\n\nOn the supply side, there are political uncertainties in a number of big oil producing countries. Such uncertainties cause problems within the supply chain and cause prices to increase.\n\nOPEC cannot produce enough extra oil to satisfy the extra demand.\n\nIn the past, Russia could be relied upon to pump extra oil. However, Russia is busily re-nationalising Oil Production (e.g. The recent Yukos case). This means that Oil production in Russia has fallen away from 2004 levels. Although Russia has huge reserves, it will be a while before production starts to grow again and so they cannot be relied upon to meet the extra demand. \n\nVenezuela is having a little spat with US Oil companies. Go Venezuela! Unfortunately, this is also effecting supply. \n\nNigeria, well is Nigeria. However, the locals are not happy with the way that oil companies operate and have taken to protesting over the way their land is being poluted. Local bandits and industrial unrest all combine to threaten oil supply.\n\nThen there is Iran which is in dispute with the west over Uranium enrichment.\n\nWhenever demand outstrips supply, speculators get involved. The US leads the way in commodity speculation. With continual upward pressure on the price of oil, speculators are having a field day.\n\nThe complication that the US has brought to speculation factor is the invention of 'virtual speculation'. These are speculators who speculate on the commodity speculators. This in turn causes prices to fluctuate more wildly and pushes prices even higher in a rising market or lower in a falling market.\n\nThe only way to improve the situation would be to either increase supply or reduce demand.\n\nIncreasing supply will take many years to be effective.\n\nTherefore the only way to reduce prices is to reduce demand. So, if everyone used less fuel the prices would fall.\n\nTime to dust off your old pedal cycle?
728064
Very Profitable. The oil supply is dwindling. If the problems aren't fixed now then they will when the price goes higher.
69495
You have a point about oil revenues from Iraq paying for the war.  So far, production has not made this possible.  The government doesn't sell gas, oil companies do.  They sell their products at the price the market will bear, just like Home Depot, American Airlines, and Wendy's.  Exxon-Mobil made about 9.7 cents per dollar of revenue during their biggest quarter last year, which was their biggest quarter ever.  Want to know what your bank made?  Probably around 25 cents!! Wonder no more why interest rates are so low....the banks are pocketing the change, but you don't hear any uproar about that.   Oil companies typically make around 5.7 cents per dollar, lower than most industries.  If you want to live in a country that has price controls, try China, Cuba, or the former Soviet Union.  Didn't work out too well for them.
1135453
Inflation is caused by the increase in the cost of goods and services. Inflation that is caused artificially, like the price of crude oil, can only be stopped by taking away the oligopolistic profits the sellers make. Inflation caused by true scarcity cannot be cured.\n\nSo far, this (USA) country's only answer to inflation has been to increase the cost of borrowing money, which seems crazy, since that makes prices go up also. I guess you have to have a degree in economics to understand why stupidity works.
650101
People already complain enough about the trade balance and then we want to forbid exports?\n\nThe number of barrels exported is pretty miniscule compared to the daily usage.  They could just hedge with futures contracts and stop producing the oil if there was a law against exports.  The net would a real shortage including the ever popular gas lines.  It wouldn't affect actual prices that much.\n\nIf you look at the actual data, last week, we imported 9.8 million barrels of crude oil and exported 22 thousand barrels.  That's not a very strong case that exports affect oil prices at all.  We do export petroleum products, such as plastics and other such things because it's sensible to export the excess, especially if you get a better price for it.
1182403
While there are some subsidies for oil or service companies overseas, there aren't any here in the States.  In fact, a large reason the deficit shrunk last year was due to corperate taxes on oil companies.  That coupled with the 18 cent sales tax on gas generates huge revenues for the government.  It's true.
1171490
So far, there's not enough demand to warrent the extra cost of developing alternative energy sources.  In order to stop using oil (for power) we will need to find cheaper ways of getting alternative energy or become much more motivated to do so.
1056073
It is a real concern, but whenever someone makes a prediction about when a country of the world will reach peak oil output, they do so with what then is considered a researve.  As the cost of a barrel of oil increases, sources for oil that were once not considered a researve then become on because at that cost it is economically viable to recover it.  With the recent spike in oil prices, North America can now clasify the tar sands in Canada and the oil shales in Colorado oil researves, and that being the case, it is estimated that in the US alone, we now have more economically recoverable oil then Saudi Arabia, the worlds largest exporter.  As the price continues to increase, other marginal sources will become economically viable.  Sooner or later, we will reach a point where there simply isn't enough oil available for any price, but that is still a ways off yet.  I believe that before we reach that point, oil will be more expensive then alternate fuel sources.  Through simple economics, I believe that people will begin using these alternate fuels simply because they are less expensive.  I believe that the high cost of oil will spawn invention and inovation into the energy sector, and I believe that has already begun.  We are working on increasing production of biodiesels and ethenol, and there is increased research into fuel cells and electric autos.  I think the future lies in hydrogen burning technology personally.  We already have engines that burn Hydrogen, but we're still working on the fuel tank dilema.  So, for a long answer, I believe that there is and will be time. I'm looking foward to being put out of buisiness.
873620
If they release oil reserves every time the price rises a little it will go down, but we will pay for it dearly when the oil producing countries see that our reserves are getting low. Six years ago our reserves were at an all time low. We held our own for a while but eventually the suppliers realized we didn't have backup and that's how we reached the all time high prices. Several months ago the reserves were in the ninety percent range and that is when it finally started dropping. If they do use the reserves properly gas prices will remain stable. If it does drop dramatically look out we will pay for it later.
1147879
Basically it comes down to supply and demand.  There is increasing demand for oil (mostly from developing countries like China and India, but demand in the US is increasing also).  OPEC is already producing near its capacity, coupled with no relatively new oil refineries having been built, this causes the an increasing demand against a slower (negligible) increase in supply of the refined oil used for gasoline.   Hurricane Katrina knocked out some production capacity which is still not completely up and running.  Also there are other less significant reasons such as the changing of fuel additives from mtbe to ethanol (this has been done for environmental reasons).  To put a few non-truths to bed...  The oil companies were NOT found to be doing any price gouging (illegally increasing prices beyond unreasonable economic fundamentals).  Second, everyone wants to blame President Bush for increasing prices when in fact he no longer has any personal investments in oil companies(he did this specifically to discredit these accusation most likely); in fact President Bush has probably more to lose from high oil prices than any other single individual alive.  He wants a strong economy, with little inflation and needs that help for party elections this fall.  If you want a specific group of people to blame, you should look at commodity traders themselves, they are the ones who control the international price changes from day to day and are the ones who fear supply disruptions (such as the one that occured in Africa, threats from Iran and Venezuela recently) and terrorists act which affect the flow of oil (the so called terror premium).
474948
Well, it won't run out completely, but it is projected that demand will outpace production within that time frame.  This is based on Hubbert's Curve and if you're interested, try researching Peak Oil.  Regardless, when demand outpaces consumption, expect the price of gasoline, and anything else associated with petroleum, to increase in price drastically.