Does anyone feel that the recent increase in world oil prices

[hangloose]

has more to do with the lack of success the occupation has had in exporting oil from Iraq then the increase in demand. Since the cost of the war keeps going up and the ability to export has been hampered by the resistance the best thing to do is up the value of a barrel.

[Tace]

1. Problems With The Iraq Occupation Affect The Supply Side...

But China's and India's explosive growth affect the demand side. : )

[physioex]

2. Sure it's possible...

Iraq was selling oil even after the gulf war. So this drop in supply after the occupation will have an effect on prices. But for this country to passivly go along with Shrub, this couldn't have happened to a more deserving group of people....

[tritsofme]

3. The rise in oil prices is due to speculation in

the futures market and depreciation of the dollar.

Demand has not increased enough to justify the increase in prices we have seen over the past two years.

[rman]

4. both of course

Increase in demand would not be a problem if production would be able to keep up, as it used to until now.

[JohnnyRingo]

5. Yet, with all the supply and demand problems....

I've read that oil companies have doubled their profit margins to the point that they are having difficulty finding areas to reinvest.

That and the recent windfall of tax cuts geared toward them specifically, make me wonder why the "suffering" is meted out only at the pump.

[Fovea]

6. The twin revelations of Shell's serious overstatement

of its proven reserves and the news of the Saudis destroying a large deposit of oil through over production constituted a tipping point in the psychological makeup of oil producers.

It signalled the time to change to a scarce supply model was upon us.
Goldman Sachs prediction that the current squeeze will peak at 105 dollars a barrel means conservation will help ease the price a little. But that is a little as counted from $105/bbl, not $54.

Yes, the flow from Iraq was hoped to be bigger, and I bet it makes a difference. But even if Iraq started shipping full bore tomorrow, oil it going to go up possibly 100% of today's prices in one or two years.

[The_Casual_Observer]

7. Iraq is probably a net importer of oil/fuel , or nearly so

so I don't see what good high oil prices would be doing for them. Since chimp has been in office, the oil industry has shown no restraint, and chimp has done absolutely nothing to mitigate the situation.

[GettysbergII]

8. Peak Oil

I think it has more to do with perceptions that Saudi Arabia oil production has peaked or just about peaked which would be a very strong indication that world oil production has peaked or is very close to peaking. Which means our economy is only going to grow increasingly weirder and I don't mean that in a good way.

I strongly suggest reading The Party's Over by Richard Heinberg or viewing the DVD The End of Suburbia to get a firm grasp of the consequences on world oil production peaking.



https://secure.metafoundation.org/Merchant2/merchant.mvc?Screen=PROD&Product_Code=TPO&Category_Code=Books&Store_Code=META&Affiliate=peakoilaction
The Party's Over
Oil, War, and the Fate of Industrial Societies
By Richard Heinberg
Foreword by Colin J. Campbell

The world is about to run out of cheap oil and change dramatically. Within the next few years, global production will peak. Thereafter, even if industrial societies begin to switch to alternative energy sources, they will have less net energy each year to do all the work essential to the survival of complex societies. We are entering a new era, as different from the industrial era as the latter was from medieval times.

In The Party's Over, Richard Heinberg places this momentous transition in historical context, showing how industrialism arose from the harnessing of fossil fuels, how competition to control access to oil shaped the geopolitics of the 20th century, and how contention for dwindling energy resources in the 21st century will lead to resource wars in the Middle East, Central Asia, and South America. He describes the likely impacts of oil depletion, and all of the energy alternatives. Predicting chaos unless the U.S. -- the world's foremost oil consumer -- is willing to join with other countries to implement a global program of resource conservation and sharing, he also recommends a "managed collapse" that might make way for a slower-paced, low-energy, sustainable society in the future.

More readable than other accounts of this issue, with fuller discussion of the context, social implications, and recommendations for personal, community, national, and global action, Heinberg's book is a riveting wake-up call for humankind as the oil era winds down, and a critical tool for understanding and influencing current U.S. foreign policy.

[punpirate]

9. As others have mentioned...

... it's a combination of factors--speculation on the dollar (because oil is largely dollar-denominated), demand, and spot shortages created by both OPEC and natural causes. People are quick to forget that a number of offshore rigs and rig-to-shore pipelines and terminals were damaged in the Gulf of Mexico by hurricanes this past fall, and some oil facilities in Indonesia may have been damaged by the tsunami. There was a long managers' strike at Venezuela's PDVSA a couple of years ago, and a more recent accidental shutdown that required three weeks to get the refinery going again, and, of course, continued pipeline attacks in Iraq.

The oil which Saudi Arabia said it would pump to make up for OPEC restrictions on production turns out to be oil they can't easily sell--it's much heavier and sourer than their usual product from other fields, and many refineries aren't tooled up to use it as a feedstock.

A lot of different factors have come together to create the situation now, and eventually, someone will probably also find that there are groups gaming the system to drive the price up, as well.

If anything, what is happening now is a warning flag that things will get worse, not better, over time.