For instance, the oil prices went up when the FEAR of a hurricane in the Gulf was announced. OH wait! No hurricane! Prices did not drop though! Then, the fear of Israel's strike on Lebanon POSSIBLY causing Iran/Syria or other "oil nations" to cut supply. This didn't happen. However, the Alaska pipeline debacle DID happen, and they're raising prices AGAIN! How can they do that when prices never came back down for the hurricane that never happened, and the supply disruption from the Middle East never occuring?!?! Someone, please help me understand, or just at least spike the price of oil to some absurd number and LEAVE IT THERE so we can all budget our finances accordingly!!
2006-08-07 04:12:55 · 7 answers · asked by marky_mark_w 2 in Society & Culture ➔ Mythology & Folklore
because it's their job to spike prices no matter what the circumstances. And occasionally to depress the prices, no matter what the circumstances. It's called market manipulation.
It's why the law of supply and demand is not a very applicable principle. It's only true in a free economy, and there is no free economy when there are groups of informed insiders who can fix prices, and just a few men control too many of the resources and industries.
2006-08-07 08:24:32 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You don't understand how the free market works! The only place sellers set prices is at a retail store. Everywhere else in the world, price is set by negotiation.
In every transaction, there is a seller and a buyer. Each has a certain price they will accept. When they reach an agreement on price, then a transaction occurs. Oil has a current (spot) price and it has a future price. In fact it has lots of future prices, in the form of futures contracts that can be exercised on different dates.
If lots of people want to buy oil now, that drives the current price up. If lots of people want to buy a contract for oil a month from now, or a year from now, and are willing to pay a high price, then that is the price the sellers will get.
So the prices really go up for "fears" because the people buying oil think the price will be going up. If everybody thought there was a viable alternative, then prices would drop. It is in the financial best interests of big oil for there NOT to be any alternative, so governments (that all serve big oil) do their best to make sure that there is no alternative.
2006-08-07 04:27:33 · answer #2 · answered by pondering_it_all 4 · 0⤊ 0⤋
I think what is happening is that they are in fear of losing their profit. I also believe that they might use the stuff in the Middle East as an exscuse to raise prices just to get more money. Now I know this sounds one sided, but after people retire they get millions and millions of dollars to retire, it just sounds like they are taking the people for a ride. And why haven't invested in something that might be easy to consume instead of gas?
2006-08-07 04:19:52 · answer #3 · answered by bman 2 · 0⤊ 0⤋
because they can do what they want and know that nobody is going to or can do anything about it
2006-08-07 04:17:27 · answer #4 · answered by Anonymous · 0⤊ 0⤋
$$$
2006-08-07 04:18:42 · answer #5 · answered by ironica7 4 · 0⤊ 0⤋
They have their issues.
2006-08-07 04:25:44 · answer #6 · answered by ag_iitkgp 7 · 0⤊ 0⤋
One simple two word answer..............corperate greed
2006-08-07 04:16:52 · answer #7 · answered by wzzrd 5 · 0⤊ 0⤋