Prices have been pretty high lately and Im woundering what the prices are affected by.
2007-04-05 06:45:59 · 9 answers · asked by RYAN B 2 in Social Science ➔ Economics
It was the threat of another war. It meant Iran was one step closer to war with the west. Iran is a big oil producer, and in a war production would be down, and unavailable to its enemies.
Speculation and oil futures markets would run with that and prices would go up. The other culprit is the media and their tendency to report gloom based stories. They always report stories that we should expect higher gas prices, so guess what - it gives gas companies more room to do what we are now expecting.
2007-04-05 07:14:21 · answer #1 · answered by JuanB 7 · 1⤊ 0⤋
Its due to market speculation. Remember, the futures market (which trades in commodities like crude oil that is used to make gasoline) runs on potential future events. If there is any perceived threat to oil supply (such as an oil embargo or reduced national production) from a pretty major producer like Iran, barrel prices go up...meaning more $$ at the pump.
A kidnapping could set off a trade embargo on Iran, which would reduce oil supply by like 25%, so traders get nervous and start buying now.
Remember, other factors are the weather, car production, so on. Americans LOVE to drive, so oil refiners like Shell, Exxon so on can jack the pump prices up with impunity and blame it on demand. Some of its true, some of its pure greed.
2007-04-05 08:30:44 · answer #2 · answered by Anonymous · 0⤊ 0⤋
One theory is that Iraq was attacked so that Iraqi oil would stay off the market. About half the oil that the US consumes is produced in the USA. The cost to produce it is not affected by middle east production, but all oil is sold on a global market. This means the domestic producers make a killing whenever global prices go up. In this case with Iran, 40% of world oil is transported through the Straights of Hormuz, so any disturbance there makes people jittery.
2007-04-05 06:53:59 · answer #3 · answered by 2 5 · 2⤊ 0⤋
Just the fact that the situation existed is enough to have an effect because it heightens the concern that an incident will break out with Iran where they would be able to restrict oil exports from the middle east. Iran borders the straight of Hormuz (sp?) which is the tight waterway between the Persian Gulf and the Indian Ocean. This means they have the potential to disrupt ALL tanker traffic leaving the gulf.
2007-04-05 06:53:45 · answer #4 · answered by Dubberino 3 · 1⤊ 0⤋
Prices are affected by anything that remotely sounds like a good excuse for the oil companies, up to and including ingrown toenail by a Bedouin leader or the alignment of Jupiter and Mercury.
2007-04-05 06:51:26 · answer #5 · answered by Anonymous · 1⤊ 1⤋
It's a holiday weekend coming up....Easter.
People will be travelling more so demand will be higher.
When demand is high so are the prices.
They can't make them jump 50 cents in one week so they do it over a period of weeks so you don't notice the increase as much....that's my theory.
2007-04-05 06:50:03 · answer #6 · answered by Anonymous · 1⤊ 1⤋
when something involves strategy and people from Iran, just play 30 games of Backgammon, some strong coffee, maybe some weed if you smoke it, get on an old rug, smoke a cigarette maybe, then whatever it is, just let it figure you out.
2007-04-05 06:52:02 · answer #7 · answered by Anonymous · 1⤊ 1⤋
excuse for OPEC to jack the price up
2007-04-05 06:50:57 · answer #8 · answered by werewolf_hunter20 2 · 1⤊ 1⤋
any excuse is a good one to the ones who make the money
2007-04-05 06:49:30 · answer #9 · answered by natsuko1 3 · 1⤊ 1⤋