Just Curious...

let's not forget how gas prices magically plummeted in the months leading up to Barack Obama's election and then almost immediately climbed right back up.

The Iranian elections are impacting gas prices more then the American elections ... at this point.

I don't think the oil companies care who is in office. Check out this link:

http://www.indexmundi.com/energy.aspx?country=us&product=oil&graph=production

U.S. oil production had been in steady decline since 1985 until .... 2008. And it's been increasing ever since. :think:

peacefrompaul wrote:

That's weird that the Iranian elections are effecting the oil prices... I just don't see why.

I assume the elections are rigged by the Ayatollah as they were in 2009...

Could you explain for me?

It's election day in Iran today. The saber rattling over the past month (war games; threats on closing the straits; threats on attacking) have been in direct coloration to the elections. The rhetoric from Iran is why a barrel of oil has gone over $100 recently.

I believe the elections to be rigged, but I think recent action have been done to preserve a hard-line control and fear in the populace.

With such big, influential energy companies, there is little reason to believe that the election of which party will seriously change or dictate the cost of oil and gas. The reality is these are bought and sold based on very fabricated notions, not really supply and demand. If anything the OPEC's nations politics and stability effect the price more than our own leadership.

This is a very short-sighted commentary to this problem. The reality is before the Fed messed up things with inflation/printing money or Iran issues, there was Iraq issues or other middle east conflicts or perhaps the gulf oil spill or perhaps the changing of the season (winter/summer especially) fluctuates prices regularly. Your answer may seem succinct on the surface through a particular vantage point in a specific moment in time (now), but overall, for the rising gas prices and market for the past 10-20 yrs, it is not on point. If it were simply supply and demand, oil prices would be higher. If it were solely conflicts and foreign affairs/policies effecting stability, the prices would be much more erratic. 60 Minutes did a good piece a few years back about this topic and it clearly shows how much of the oil market is contrived and based on speculation than direct factors as you allude too. http://www.cbsnews.com/video/watch/?id=4713382n

inlet13 wrote:

No.

The rise in gas prices stems from printing of money by the Fed and global central banks (fueling inflation - this is the most important reason), the subsequent ever-so-slight rebound in the global economy (pushing demand higher), increased energy regulation in the US (acting as a premium on the price), less refineries (leading to a decline in supply), and perhaps 2nd most important - the threat of an Iranian war or conflict (pushing speculators to assume supply will decline).

If you think it's just gasoline that has shown increasing prices, and extreme volatility in certain cases, over the past several years, think again. Food prices have also shown a generally increasing trend, and volatility in certain situations. My point - this is primarily inflation driven, hence the Fed and central banks are primarily to blame. You can't print money for years on end and not expect that inflation will become a problem, particularly if certain non-inflationary aspects change (Iran cutting off supplies, etc.)

FiveB247x wrote:

This is a very short-sighted commentary to this problem. The reality is before the Fed messed up things with inflation/printing money or Iran issues, there was Iraq issues or other middle east conflicts or perhaps the gulf oil spill or perhaps the changing of the season (winter/summer especially) fluctuates prices regularly. Your answer may seem succinct on the surface through a particular vantage point in a specific moment in time (now), but overall, for the rising gas prices and market for the past 10-20 yrs, it is not on point. If it were simply supply and demand, oil prices would be higher. If it were solely conflicts and foreign affairs/policies effecting stability, the prices would be much more erratic. 60 Minutes did a good piece a few years back about this topic and it clearly shows how much of the oil market is contrived and based on speculation than direct factors as you allude too. http://www.cbsnews.com/video/watch/?id=4713382n

inlet13 wrote:

No.

The rise in gas prices stems from printing of money by the Fed and global central banks (fueling inflation - this is the most important reason), the subsequent ever-so-slight rebound in the global economy (pushing demand higher), increased energy regulation in the US (acting as a premium on the price), less refineries (leading to a decline in supply), and perhaps 2nd most important - the threat of an Iranian war or conflict (pushing speculators to assume supply will decline).

If you think it's just gasoline that has shown increasing prices, and extreme volatility in certain cases, over the past several years, think again. Food prices have also shown a generally increasing trend, and volatility in certain situations. My point - this is primarily inflation driven, hence the Fed and central banks are primarily to blame. You can't print money for years on end and not expect that inflation will become a problem, particularly if certain non-inflationary aspects change (Iran cutting off supplies, etc.)

No, I don't believe it's short-sighted at all. The Fed has been "messing things up with inflation/printing money" since (at least) the 70s (one could argue, they have been doing so since the Fed was created). And I don't disagree that prior to Iran there was Iraq issues or other mid-east conflicts. No offense, but I don't understand your point. Sure, there's been conflicts over there for extended periods of time, and anticipation of those conflicts drives prices up because of fears of supply shocks. It's pretty straight-forward in my opinion.

You said my answer may seem succinct "now", but not for over 10-20 years. My answer was in regards to the original posters question on why oil prices are high right "now". Basically, I was pointing out the complexities with these prices and the fact that it has nothing to do with who's in office other than the 'regulatory' aspect.

Moreover, I think Fed policy, regulation and taxes (think Ethanol), refineries, drilling (supply and demand which could include conflicts and spills) and finally world economic growth (particularly in EMs - think China and India) are the reasons for the high prices over the past 10-20 years.

Do I think speculation plays a part in high prices? That's not a simple question to answer. I'd say yes in that I think they certainly add to volatility. But, I'd say no in that they drive prices down just as much as up. After all, speculators are speculating and trying to make money on the direction of oil prices based on the following: central bank driven inflation, wars, conflicts, spills, regulation, world economic growth.