Quote:
Originally Posted by The Gaijin
Basically it is supply and demand. When crude was plentiful a few years ago - the price was way down. This was not such a good thing as low cost producers (like the Saudis) can pump it out of the ground for a few bucks a barrel. But that also limited exploration and we developed many wasteful habits. (How many SUVs on the roads in 1990??)
Now that the world economy is growing (with the large economies of China and India growing the fastest), oil consumption has gone up. The price has followed. And as the supplies are tight - issues #1 - #5 can be taken advantage of. The Swedes too!
Oil, tar sands, coal or even energy in the form of nuclear power can be plentiful, but take a load of time and money to develop. But who is going to invest in far off-shore drilling rigs or tar sand refineries if the price may fall again?? This is where we are at.
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Great answer, (thanks the rest of you heathen dogs
). But what would make the prices fall again? The Chinese are going to continue to grow, (we'll all be speaking it in 75 years), along with India. Don't you think that demand alone will keep prices where they're at??