Oil Pricing

I did a search and didn't find anything on this, but since theres alot of threads about oil prices being so high, yet the supply is apparently still there.

My question is what causes the price to be so high? Expenses?

Supply and demand...

China's oil import % increase's in double digit figures every year

Fear of disruption in the supply is causing some of the rise.
There are strikes going on in Nigeria, chaos in Iraq, talk of attacks against Iran etc..

but then shouldn't the announcements by governments that the supply of oil throughout their fields is going to remain the same in a way calm down the prices, or at least off set with these fears of attacks?

The announcement by Saudi Arabia won't reduce prces because the extra oil they have is not sweet crude. It has a high sulphur content.

Not all people can process it.

Timesonline

SAUDI ARABIA�s oil minister said his country was ready to pump more oil but it could not find buyers as the Kingdom�s high-sulphur crude was being rejected by Western refineries.

In a bid to quell the surging price of crude, Ali al-Naimi said Saudi Arabia was ready to pump more crude but gave warning to consuming nations that they needed to invest in new refineries to process Saudi Arabia�s �sour� crude.

[edit on 11-10-2004 by AceOfBase]

Originally posted by Lucretius
Supply and demand...

China's oil import % increase's in double digit figures every year

But China still imports only around 5% of the worl'd total demand, compared to the american's 20%. They might be increasing but at the same time the supply is there, the demand raises 2% a year, its been said that theres enough to last through the 20th century, I can't see simply fears as one of the sole reasons for oil being $53 a barrel.

One thing to remember that the price of oil that you hear bandied about is not todays price. Its for futures or future production. Oil like any other product is subject to speculation. Thats what you have going here. There is a real and more importantly percieved issue with oil avalibility so traders and speculators are driving the prices up.

I read something about "Peak Oil" a while back that suggested that even if the oil is in the ground, the cost of sucking it out goes up after we reach the halfway marker. The articles went on to speculate that the halfway marker would be around 1998-2002, or so. That maybe be another factor in the rise of oil futures. Its worth googling "peak oil" if you're interested...

Well for now, the cost of extracting oil is stable and the supply is steady (though not growing any more). Current prices are caused by turmoil in many oil regions as well as China's increasing demand.

it used to take 1 barrel of oil to get 30 barrels of oil, now that gap is closing. The oil sands mentioned are even more expensive to convert.

Bush was the first person to mention 'peak oil', and it is real and it is a real worry.

Why doesnt the govt. crack down on illegal immigrants from mexico? In the book 'The oil age is over" by Matt Savinar, there was an agreement that USA would have access to the oil, if mexicans had access to US.

China seems to be our chief competitor for resources. There was a grea article in US News in April, but is no longer free to read online.
It was discussed in another thread which I could find mostly because I knew it was there:
www.abovetopsecret.com...