Why haven't oil prices dropped like a rock?

[Direckshun]

So I admit I know very little when it comes to this subject. But weren't we told "drill baby drill" going back as far as the 2008 GOP convention, and that an oil surge from something like the Keystone Pipeline would drop gas prices down to something ridiculous like $2/gallon?

I never believed that rosy scenerio, but we've gotten the most promising news in energy independence this past year when it has now been projected for America to overtake Saudi Arabia in oil production.

So here we are, projected to be the global leader in oil production. Something that not even the Keystone Pipeline could have achieved, and goes beyond even its rosy projections in terms of oil generated for American usage.

Oil prices have largely held, have they not? My understanding (limited as it is) is that oil is priced based on the projection of how much we'll be able to acquire in the future:

There are many factors that commodities traders look at when developing the bids that create oil prices:

• Current supply in terms of output, especially the production quota set by OPEC. If traders believe supply will decline, they bid the price up. If they believe supply will increase, they willing to pay as much for oil, and the price falls.
• Oil reserves, including what is available in U.S. refineries and what is stored at the Strategic Petroleum Reserves. These reserves can be accessed very easily, and can add to the oil supply if prices get too high. Saudi Arabia also has a large reserve capacity. If it promises to tap those reserves, traders allow oil prices to fall.
• Oil demand, particularly from the U.S. These estimates are provided monthly by the Energy Information Agency . Demand usually rises during the summer vacation driving season. To predict summer-time demand, forecasts for travel from AAA are used to determine potential gasoline use. During the winter, weather forecasts are used to determine potential home heating oil use.

Our current supply is increasing, our reserves are or will be increasing.

So what's the story on this?

Thanks in advance.

[KILLER_CLOWN]

*Profit Margin

DING DING DING DING!!!

[CoMoChief]

Our dollar is falling

[blaise]

Let's just use the same type of argument Direckshun used about Obama job numbers. The "jobs saved" approach. The price would have been twice as high without more production. Tada!

[Bewbies]

Originally Posted by CoMoChief

Our dollar is falling

For a commodity traded in dollars you'd think this would be more obvious to people...

[Direckshun]

Originally Posted by CoMoChief

Our dollar is falling

Not really.



The dollar is also projected to strengthen against the Euro over the next four years.

[KILLER_CLOWN]

Originally Posted by CoMoChief

Our dollar is falling

True this has happened since the creation of the Federal Reserve but it doesn't explain everything here.

[Stewie]

Oil production increases mean nothing when refinery capacity isn't allowed grow.

[frazod]

Gas has gone up about 50 cents a gallon in the past month. Seems like the price has gone up every time I pass the nearest station.

Haven't heard a word about it in the media, though. I guess they're too busy reporting on Dan Marino's bastard baby.

[KILLER_CLOWN]

Originally Posted by frazod

Gas has gone up about 50 cents a gallon in the past month. Seems like the price has gone up every time I pass the nearest station.

Haven't heard a word about it in the media, though. I guess they're too busy reporting on Dan Marino's bastard baby.

Yup, complete ****ing bullshit if you ask me. It happens every election cycle though no matter who the incumbent sides with. Bush had gas prices drop drastically in 08 from $4 to about $1.19 and it rose steadily over a 6 month period(if i'm not mistaken on that timeframe) and Obama had the same thing happen this time around. I knew it couldn't last.

[petegz28]

I have said this time and time again ...

weak $ = high oil and commodity prices

[petegz28]

Originally Posted by Direckshun

Not really.



The dollar is also projected to strengthen against the Euro over the next four years.

We just hit a 14 month low against the Euro, Professor

[petegz28]

Originally Posted by Bewbies

For a commodity traded in dollars you'd think this would be more obvious to people...

The painfully obvious escapes people like Mrs. Direkshun.

If you listened to his hero during the debates, it was implied that gas prices are high because the economy is doing good.

[petegz28]

It's almost like clockwork

[RNR]

Originally Posted by petegz28

The painfully obvious escapes people like Mrs. Direkshun.

If you listened to his hero during the debates, it was implied that gas prices are high because the economy is doing good.

And Mitt did not even call him on it. These shitbags were taking photo ops in front of gas signs when Bush was in office claiming to be outraged by the high prices. Not a peep from them now