terrorists fears drives oil market

Causes speculation in the market. Big issue is that terrorists might destroy a pipeline somewhere or otherwise affect the flow of oil from certain countries lowering supply. Demand continues to rise so as supply is threatened price rises.

Hybrids help but more drivers are coming than Hybrids can help. Even if the entire U.S. were to drive Hybrids starting today we would still consume more gasoline 10-15 years from today because of the increase of drivers on the road all things being equal. The big driver of this train is also China which is using an incredible amount of oil to fuel its economy.

Only expect things to get worse and not better even without terrorist fears affecting the market.

 

Lucky for us, the price will eventually get high enough it will start to really affect whether or not people drive. What they drive will eventually be affected as well.

I feel like something close to $3 per gallon is going to be the ceiling for what is tolerable for most people. After SUV and truck owners start paying $70 to fill up a beast that can barely do 300 miles before it needs fuel again, they'll realize they don't quite need so much vehicle.

With supplies as tight as they are and such miniscule excess production and refining capacity, any little oil event is going to push the price up. Tanker crash, pipeline explosion, refinery fire, all could cause more price increases.

Once I sell my WRX, I don't really care how high it goes, I can afford to drive.

 

Money once directed at 'fun' will go towards gas. That's all the harm I'm expecting to experience.

Trick is, the 'fun' budget pays for cable TV and other random incidentals I'd prefer not to live without...

 

Hoo-ya to ya. USAF here, and my bro just got out of the USMC a few days ago.

It's not Osama that's driving the price up, it's the commodities traders. If they have any reason at all to drive the price up, they will. It's all speculation. If a trader sees Osama make a threat against oil pipelines or pumping facilities, the trader considers the likelyhood that Osama will go through with it. If he considers it likely, a scarcity of oil could ensue, which would drive up the price (reduced supply). Therefore, the commodoties trader (along with others) buys into oil futures, driving up the price. If many were selling, the price would probably drop.