As i heard on Fox News, this is the reason for high gas prices in the United States. Note: I am not playgarizing, i am just putting what i heard in my own words, aka paraphrasing.
So... The high price of gas here in the U.S. is a relentless jab at our pockets. But why is this happening? The price doesn't go down on a normal basis and no one likes that. But here are the reasons: 1. In the middle east, where most of the US's oil comes from, they are producing less. They are producing less due to the wars and uprising there. The demand doesn't stop, so the price to get it here in this first place is high.
2. India and China's demand has increased. The middle east just can't make enough at such a fast pace. So the price goes up.
I'm pretty sure all these facts are true, but correct if i'm wrong. I'm trying to write this out of sheer memory. You're welcome :-)
The fact you thought that oil was coming from the Middle East and that this justified an increase in prices is exactly why they're increasing your prices.
At least no one here has claimed it's the Obama administration. Thank goodness. Plus point for everyone here. I'll just like to correct what most people in this thread think, that oil prices are affected largely by non-OPEC oil production because America imports more from non-OPEC members. This is patently going against basic economics. Oil prices are set affected by global trends, which means to say that no single producer has monopoly power over oil prices. This doesn't mean that no country can affect the other, since we all know, hopefully about OPEC. Whilst it might seem that America has 9% of the world's oil reserves, sounds alot, until we factor in that OPEC controls more than 80% of the market share. And OPEC is a cartel. Which is led by SA, and all sorts of cheating, but we shouldn't complicate things in this brief economics explanation. It might seem that America is getting their oil from various sources that are not from the Middle East, and hence oil prices are not dictated by OPEC. This is false, oil prices are due to global supply and demand, and much of the world's supply still comes from OPEC, which heavily dictates and affects global prices. Also, the rise of India and China DOES affect when oil has been going up so much. Just to give an example, nearly 10 million cars were added in China in 2010 alone. That's a load of oil. Given that oil production cannot increase fast enough in the short run to meet such demand, due to having to set up refineries, pumps, yada yada. So in the short run, demand increases far more than supply can keep up with it, which any basic economics student knows, leads to a drastic increase in prices. To claim that the rise of India's and China's people and industries doesn't lead to an increase in global oil prices is to make one a laughing stock for economics.
At least no one here has claimed it's the Obama administration. Thank goodness. Plus point for everyone here. I'll just like to correct what most people in this thread think, that oil prices are affected largely by non-OPEC oil production because America imports more from non-OPEC members. This is patently going against basic economics. Oil prices are set affected by global trends, which means to say that no single producer has monopoly power over oil prices. This doesn't mean that no country can affect the other, since we all know, hopefully about OPEC. Whilst it might seem that America has 9% of the world's oil reserves, sounds alot, until we factor in that OPEC controls more than 80% of the market share. And OPEC is a cartel. Which is led by SA, and all sorts of cheating, but we shouldn't complicate things in this brief economics explanation. It might seem that America is getting their oil from various sources that are not from the Middle East, and hence oil prices are not dictated by OPEC. This is false, oil prices are due to global supply and demand, and much of the world's supply still comes from OPEC, which heavily dictates and affects global prices. Also, the rise of India and China DOES affect when oil has been going up so much. Just to give an example, nearly 10 million cars were added in China in 2010 alone. That's a load of oil. Given that oil production cannot increase fast enough in the short run to meet such demand, due to having to set up refineries, pumps, yada yada. So in the short run, demand increases far more than supply can keep up with it, which any basic economics student knows, leads to a drastic increase in prices. To claim that the rise of India's and China's people and industries doesn't lead to an increase in global oil prices is to make one a laughing stock for economics.
As u mentioned OPEC being a cartel They will intentionally keep the supply lower to increase the prices
Not all the time. Russia and Venezuela have been known to flood the market. OPEC isn't all powerful that some people think, but it has a degree of control that outstrips the other oil producers.
What I meant to say was that no single country or organization imports more oil to the United States than OPEC does.
How about NATO? On your chart, just Mexico and Canada often equal or surpass the entirety of OPEC to America.
At least no one here has claimed it's the Obama administration. Thank goodness. Plus point for everyone here. I'll just like to correct what most people in this thread think, that oil prices are affected largely by non-OPEC oil production because America imports more from non-OPEC members. This is patently going against basic economics. Oil prices are set affected by global trends, which means to say that no single producer has monopoly power over oil prices. This doesn't mean that no country can affect the other, since we all know, hopefully about OPEC. Whilst it might seem that America has 9% of the world's oil reserves, sounds alot, until we factor in that OPEC controls more than 80% of the market share. And OPEC is a cartel. Which is led by SA, and all sorts of cheating, but we shouldn't complicate things in this brief economics explanation. It might seem that America is getting their oil from various sources that are not from the Middle East, and hence oil prices are not dictated by OPEC. This is false, oil prices are due to global supply and demand, and much of the world's supply still comes from OPEC, which heavily dictates and affects global prices. Also, the rise of India and China DOES affect when oil has been going up so much. Just to give an example, nearly 10 million cars were added in China in 2010 alone. That's a load of oil. Given that oil production cannot increase fast enough in the short run to meet such demand, due to having to set up refineries, pumps, yada yada. So in the short run, demand increases far more than supply can keep up with it, which any basic economics student knows, leads to a drastic increase in prices. To claim that the rise of India's and China's people and industries doesn't lead to an increase in global oil prices is to make one a laughing stock for economics.
80% of market share? I have heard that they have 80% of oil reserves, but I have only ever heard of them having 44% the production.
They are factors, but they are not the major factors that are making it so expensive.
I can't see how to make a very good comparison... Lets say there are a bunch of kids in a classroom selling cookies. America likes cookies, so he eats all of his own cookies everyday, but would like more so he would buy a good bit from his friends who sell it to him cheaper. Over on the other side of the room, a group of students has gotten to together and started selling a bunch of cookies. America buys a few cookies from it, but still gets more from his friends. Then if the other kids start selling it to the kid who started a PE program so he needed more cookies, and since they have been bringing about the same amount of cookies every day so they have to raise their prices. This will effect America, who is still getting a few of his cookies from them, but it won't effect him completely since he is getting most of his cookies from himself and his friends. His friends might charge him a little more because they can get a bigger profit out of it, but it won't effect them as catastrophically as it would other peoples.
