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    Posted March 11, 2012 by
    SahitMuja

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    Speculation is the main factor on skyrocketing oil prices.

     
    Sahit Muja: Speculation is the main factor on skyrocketing oil prices.

    The price of oil has been increasing from an average $45 a barrel when President Obama took office to $107 today.
    The U.S. and European economies have not improve at all.

    Why have the oil prices dramatically increased while the consumption has decreased on the world tow major economies the U.S and EU which represent more than 50 percent of worlds GDP about $30 trillion dollars? Speculation, Speculation and Speculation.

    The oil companies, banks and financial institutions must love the unrest in Arab countries and the problems with Iran.

    Speculation, this is where the real money is made, 20 percent profit in one month. The ownership cargo of oil changes hands many times on-route. The Chinese are not the subjected to the same amount of speculation on the oil cargoes heading for their shores.

    In this case China has a big advantage over his competitors on the world's markets.
    In the meantime prices will rise causing more speculation on commodities.
    The U.S. could drill domestically to provide oil for home use, leaving more for the rest of the world markets. If the U.S government ban was lifted Alaska alone could be the worlds eighth largest supplier.

    There is also huge reserves of oil , gas and coal across the country.
    The Iran crises is yet another of the excuses the oil industry comes up with to increase the prices. There's no shortage nor will there be because of what's happening in Iran.

    The oil countries can increase production at any time to cover the gap of production from Iran. Iran does not have the naval power to block the Straits of Hormuz, and its aging air force would be no match for the U.S., NATO and the Gulf Military.
    They're using it as an excuse to raise oil prices, too. This is PR from oil producing countries and oil companies.

    In the military event, the United States and NATO will likewise be compelled to do what is necessary to make those oil shipments to continue to go through the Strait of Hormuz-including force if that is what it takes.
    We've seen one excuse after another, even stupid ones like a pipeline leakage in Alaska, pushing prices up. How the hell has one leak in a pipe delivering maybe 0000.1% of the world's oil going to create a problem? None, absolutely none, of the reasons given in recent days for increases in oil prices have been valid.

    Rises in the price of fuel have a multiplyer effect in all the world's economies.
    Food prices are at the highers level and are increasing every day.
    High oil prices are effecting everything, raising the costs of raw materials and goods at every stage.

    Rising fuel costs therefore raises inflation exponentially. Farmers need to pay more to transport their goods to markets.They therefore charge higher prices. Grocers transporting fruit and vegetables to their warehouses and shops need to pay more in transport costs, and they add this to the farmer's mark-up.
    Raising the price of oil rapidly will do no good deed to the world.
    Running out of Oil? No world has so much oil feared running out of it is not valid.
    In recent years thanks to new technologies, such as three-dimensional seismic imaging, horizontal drilling and the ability to drill in ever-greater water depths, the oil and natural gas industry has so far managed to raise its output.

    Sahit Muja
    President and CEO
    Albanian Minerals
    New York
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