Can the price of oil really be explained by supply and demand?

Last year in 2007 oil was selling at $60.00 a barrel. By May of this year oil had reached 126.00 a barrel, over a 100 % increase. To look at a more recent period from December of last year to now oil prices have risen from 99$ a barrel to over 126.00. There have also been periods of dramatic drops. It went from $75.00 a barrel in summer of 2006 to less than $60.00 a few months later





If this were simply or primarily a problem of supply how do explain this extreme volatility?





The official story that it is really the fact that China and India have become competitors. But they were competitors in December 2007 when oil was $60.00 a barrel. Isn鈥檛 it more likely that speculation is at the root of this volatilityCan the price of oil really be explained by supply and demand?
You're missing the fact that demand has risen more since 2007.





Also that supply has not increased to meet that demand. In fact, overall supply is going down.





This is not because there is actually less oil, but because access to supply has become more and more restricted. Everytime new oil deposits are found, the enviros show up and say ';you mustn't drill here, you'll wipe out the endangered Red-Winged Deathsquito!';





Combine that with the bad idea of ';windfall taxes'; (Already tried in Russia and Mexico, and the reason both nations' oil production has declined considerably even as they've discovered new oil reserves), and it's a recipe for high oil prices worldwide.





Scarcity at home (the US) is even higher because we've basically maxxed out our capacity to refine oil into gasoline, because we aren't keeping up with demand by building or expanding refineries. (Also environmental) Or developing nuclear, solar, or other sources fast enough to replace oil-burning power stations.





Yes, some of it is speculation, but it's really a combination of all these factors and more.Can the price of oil really be explained by supply and demand?
Supply and demand is a factor, but not a justification for what we are all enduring right now. There is a tremendous amount of greed and gouging going on too. Eventually they will price themselves into such a recession, and cause closings of businesses %26amp; trucking firms. their greed will drive up prices for food, clothing, medicine, furniture, public transportation....on and on.





They will create a population who hates them and will never respect them. It will also cause politicians to fall out of grace, and be constantly voted out till someone gets the message that we are not taking it any more.
I'm wondering if this will eventually catch up to them. I agree that demand hasn't doubled in the last year and supply hasn't decreased so it doesn't make all that much sense.





I hope the bottom falls out and we can get back to $70-80 per barrel. I don't want it to go too far down because my state's economy is dependent on oil and gas. Because of this we have not experienced any recession.
you bet ye, if only those darn chinese and indians were not getting richer by the day.
Add to that the attempt by the EU and Asia to devalue the dollar and it does.


As far as the profits being made by the oil companies, that is free enterprise working. If government steps in to 'control' the execes you will see a fuurther reduction in gas availability. If you are absolutely against the profits that the companies are making, stop buying, reduce their profits.


Every aspect of commerece the goverment gets into it cause a rise in prices and a limit of availability. SO don't get them involved. Remember the Government produces absolutely NOTHING.


Reduce the US dependency on forgeign oil, shut off the 'free money' spigot to the countries that stab us in the back and the US dollar will increase in value and oil will not be the #1 issue of the day.
It can't be explained by supply and demand, because there is no true supply and demand with a commodity such as oil. There is a big wrench in there called commodity speculation, which would be just harmless gambling, if it weren't on the scale of billions of dollars and didn't skew the price so much.





Make no mistake, upper-echelon commodities speculation is not transparent, is highly subject to manipulation and inside fixing, contributes nothing (ZERO) to the physical market, and when it comes to vital commodities like oil, the one who pays for their profit is YOU.





Commodities speculation should be outlawed immediately.





If you're starting to become more educated about this issue, and thus angry鈥攚ho wouldn't be, except the ones getting rich off of it鈥攚rite to your Representative and voice your concerns:





https://forms.house.gov/wyr/welcome.shtm鈥?/a>