New Technology that Will Cut the Price of Oil in Half?

[loosecannon]

If we decrease demand they just increase the price.

Inaccurate. Demand was crushed in the wake of summer '08, and the price plummeted.

Ahh you mean commodity investors thought it would plummet so they caused it to plummet?
The price of oil is driven more by investors than demand.

Occasionally the price of commodities is driven by speculators rather than by demand. It doesn't always happen by a long shot.

 

[uscitizen]

Sure as Heck happened during the Iraq war and contributed to our downfall.
Made the GDP look great for Bush though.
and no it is not always the case such as in the 73? Arab oil embargo.

 

[loosecannon]

It may be the new norm that speculators set prices but after getting burned in July 08 when oil fell from $146/bbl to $36/bbl in a month I don't think many investors want to go there again.

Considering dollar devaluation present prices seem to me to be demand driven since at least last year.

 

[uscitizen]

Since last year the price increase has likely been 50/50 demand/speculation driven.

 

[westwall]

Since last year the price increase has likely been 50/50 demand/speculation driven.

According to these folks up to 60% of the price is driven by speculators.

‘Perhaps 60% of today’s oil price is pure speculation’

 

[loosecannon]

Since last year the price increase has likely been 50/50 demand/speculation driven.

I thought about this and I don't believe it is true. We are simply spending far more to extract oil from insane depths etc, and the dollar has weakened considerably in the last few years despite deflation and the CPI.

I am not even sure if it is possible that speculation and demand can drive oil prices at the same time. It seems like an either/or not a both/and, to me.