This is going to sound wierd im not sure if i believe this yet but i wanted to see what you guys thought,

I had a Friend tell me that he had heard that the US is Paying off Some Small opec countries to Intentionally Raise OIL prices, and that he had heard that the reasoning Behind it was that as of Right now the US economy and Japans economy were the only ones that could still grow at a healthy rate with gas above 2$ a gallon and that it is a US goal to keep prices that High for a awhile Because Chinas Economy would suffer a serious set back from high gas prices,

In a way this kind of makes sense to me since China wont re-evaluate the Currency and thats making it hard for US companies to compete, So higher gas prices Hurt chinas ability to ship Goods,

But i dont believe much of anything i just thought it was an interesting concept and wanted to see what you guys thought

zakattack

One thing to remember about OPEC et al. They set production quotas which can effect prices. Only the Saudi's have excess production capacity they can use to increase supply. The price of oil is not set per say by these countries but rather the various markets across the globe. The upsurge in prices is a function of tight supply due to increased demand, couple with speculative trading. If anything its the comodoties brokers that are just as responsable for the prices.

You did not say it in your post and this is not directed at you, but people are so quick to point thier fingers at the Arabs and OPEC etc. and blame them for the cost of gas, when there are so many variables in the equation.

Sorry man, but gas is much more expensive than two dollars a gallon in many parts of the world.

I would believe that they are intentionally raising prices domestically but setting back China would also hurt us, as everything we buy is made there, unfortunately.


There might be some truth to it, but it would be much more complicated than the scenario you propose.

Tax is the reason why gas prices are high. Taxes applied on gas in Europe are significantly higher than taxes applied on gas in the US.

Tax revenues from gas goes to road/highway and traffic system maintenance or construction as well as refinery or pipeline distribution and maintenance and it vary from state to state. California and New York are the highest in the nation whereas Minnesota and Texas are the lowest.

Why would the US intentionally want to put the enormous strain on our economy that results from high gas prices? Why would we want China to pay more for gas?

I doubt that the US would really want China paying more for oil right now. The high oil prices effect the price of all those plastic gadgets we buy from them. Also, the US auto makers are doing well in China, why would the US try to slow that down with a price fixing game on oil?

No, the main reasons prices are high:

A) The sheer number of cars on the road as compared to any other time in the history of the automobile. Experts predict that China alone will have 300 million cars on it's roads in the next couple of decades.

B) The serious lack of refining capacity. OPEC is puting out as much oil as is being demanded, it's the lack of refining capacity that could cause a bottleneck in the supply and is keeping prices elevated.

C) Taxes. In the US where the taxes on gas are still pretty cheap there are still nearly $.50 a gallon in transportation taxes alone. If you dissected the total costs for a gallon of gas just in taxes and fees that are paid by the oil companies you'd be amazed. And guess where the money to pay the storage, transportation, environmental and revenue taxes and fees comes from............ that's right, you the consumer. It's the same no matter what country you live in.

D) A serious growth in the use of plastics, which requires oil for it's manufacture. The huge explosion of the middle class in India and China is only going to make the growth of plastics continue to rise rapidly.

Very true looking4truth.

I work for a large irrigation distributor. I was looking out on our yard last week and I realized that everything in the yard except for the organic fertilizers was made from oil.

PVC, drainage, chemical fertilizers, bender board, landscaping fabric, pond liner, sprinkler heads, blowers, hedge trimmers, you name it, it's made out of plastic.

And that's just one huge industry in the states.

We need to stop burning gas so we can use oil for other things.