Is the CURRENT PRICE OF OIL based on the FUTURE EXPECTATION ON THE OIL MARKET?

Since we our capitalism provides a Commodity Futures Market in order to allow investors to speculate on the future markets of oil supplies (which is advantageous since it averages out supply risk over a longer period of time instead of shorter durations more susceptible to sharp spikes).





If we think there will be MORE oil 10 years from now, we would see prices drop NOW?





If we think there will be LESS oil 10 years from now, we would see prices rise NOW?





Isn't that how it works?





It been a whole since I took economincs, but isn't that how it all works?





Does Obama and Pelosi know this?








[ [ Please STAR this, as I'd like as many economic experts to see this as possible ] ]Is the CURRENT PRICE OF OIL based on the FUTURE EXPECTATION ON THE OIL MARKET?
Yes it is. We all saw a drop as soon as Bush supported off shore drilling. But the Democrats don't want that, they want to see increased prices, strictly for political gain. Go figure. Is the CURRENT PRICE OF OIL based on the FUTURE EXPECTATION ON THE OIL MARKET?
Mostly yes, the oil price is based on speculators and how much oil they think we will be using and how much supply they think will be there. It is based on the more immediate future, the next month or so. If the oil companies really wanted to, they could actually put some real research money, from their record profits, into finding the next energy sources (that is how capitalism is supposed to work).
Oil prices will keep going up.





We knew this during the Carter Administration.





But Reagan, Bush, Clinton and Bush did nothing.





Now the former Speaker of the House Newt Ginrich has the gaul to say drill here, drill now, pay less. Don't protect America when you are the Speaker. But now that he is out of office Newt Ginrich has found religion.





Mr. News
Drilling now is the sensical thing to do no matter what effect it will have on the supply and demand. Our natural resources do not belong to a political party nor a small vocal minority of environmentalists. Our resources belong to all of us each and everyone. They are the property of the people and the states they reside in. We have for far too long alowed special interests groups to hold the will of the majority hostage.
OIl prices also drop when demand drops. Some plans to decrease deamand is more immediate than plans to increase supply.
not entirely... but to an extent you're correct.





the problem with speculation and the free market is that, when people talk about regulating speculation people complain that they are handcuffing the free market...





but a free market is not only free from intervention from the Government, but is also free from intervention of corruption...





Corruption occurs when speculators buy oil at MUCH HIGHER PRICES than it is worth...





....what this does is create artificial demand...which brings the price of oil up right now, but does not, in theory, reflect the future price of oil...because these people are buying at a much higher rate than they think oil should eventually be worth...





BUT this in turn causes oil prices to increase even further to unnatural prices... which were higher than they should have been to begin with...





this creates a never-ending piggy bank for speculators...well until the world runs out of oil, anyway.





as long as RIGHT NOW they continue to buy futures in oil for much higher than a free market would ever charge for oil...the price will artificially be driven higher... and higher and higher... non-stop profits.








this corruption fetters the free market even more than regulations would. because at least regulations' goals would be to keep the price as natural as possible.








EDIT: and as for ';increasing the supply'; in total...if we drilled everywhere in the entire united states, we would increase the worlds supply of oil 3%... we have 3% of the worlds oil... we USE 25% of the worlds oil... drilling everywhere possible would not effect the real price of oil...





also on the supply and demand mark:





even if we had more of the worlds oil...supply and demand seems to have no place in the Oil Market:





Since the year 2001, America's Oil consumption as gone down every year...and the price has gone up...this violates every supply and demand rule known to mankind... our DEMAND decreased, yet the price INCREASED








EDIT: I understand it's a world market... that is my point exactly... we have 3% of the worlds oil witin our borders... we are already drilling MOST of that... if we drill all of the rest of it up... that will not effect the price immediately OR in the long term... this oil everyone wants to drill in America... it is an insignificant amount ESPECIALLY when you consider how much oil we consume....