Tim Cole said:
Seriously guys....what is the cause of this other than OPEC slowing production down to maximize their profits?
Tim, read the thread !? Have you checked what the US Dollar has done while the price of oil has gone "up"?
Let's say that you sell basses to the Middle East they way they sell oil to us. Now let's say they pay you in "Fiat Currency Dollars" and in 2000 you used to be able to buy one gold bar or one loaf of bread for that Fiat Dollar, or maybe one Mercedes 500 SLK for 100000 of those Fiat Dollars. But 6 years later for one of those Fiat Dollars it takes you 150000 to buy a Mercedes and 2 to buy a loaf of bread and 2 to buy a gold bar not because the prices of those things have gone up but because the value of the Fiat Dollar is sinking fast because world's central banks are realizing that the Fiat Dollar is bunk and the country that's issuing it is going into bankruptcy they way they're headed then what will you do? You're going to need to crank the price up of your basses quite a bit just to break even wither where you were at in 2000.
You might then say, man I can't afford to get paid in Fiat Dollars anymore because I bank 'em at one value but when I spend 'em they're worth much less. I think maybe I'll start selling my basses in Euros or Gold, and make the people with Fiat Dollars buy Euros or Gold to pay me off. Then the Euro goes up and the Fiat Dollar goes even farther down 'cause it has even less purpose and cachet.
Now substitute "oil" for "basses" and "US Dollar" for "Fiat Dollar being issued by a country that's almost bankrupt" and you'll get the idea that oil at best has only maintained its pricing, that the US Dollar will tank much further, and that the prices for foreign goods for Americans - including Oil and Gold - will get a heck of a lot more expensive in the coming years.
It's not even close to ramping up the way it will, perhaps in 5-10 years, when there's a genuine panic when regular folk start to understand the above, which most National Banks around the world and to some degree OPEC have already figured out and begun to act on.
There's a large part of your answer. Then check the "Peak Oil" thread, also previously referenced, and you'll get almost the rest of the answer.
The remainder is made up partly of hoarding for "energy security" and lack of refining capactiy.
Once again, it's going to get a LOT more expensive before long and those who sit complaining or espousing cheap conspiracy theories will not be well-equipped to deal with it by doing something *now* for themselves and their families before it gets any more "too late" than it already is. It starts by getting an overstanding (sic) of what the problem really is and what it will likely lead to.
The governments have been caught very short, ignoring clear and dire warnings that have been put forth for years now if not decades but that smarter countries have been acting on, but you needn't let it happen to you individually.
EDIT - in a past complaint thread about oil prices, around from this time last year if I recall correctly, I posted the exact same thing about investing in oil & gas & uranium rather than sitting still or muying another bass/amp you might not need, and about understanding how currency fluctuations appear to affect prices and what can be learned and predicted from it.
Anyone acting on that advice now would be laughing at gas price increases. I say this not to say "I told you so" or to say I'm smarter. Far from it. We all have to learn the hard way and I am sharing that knowledge asbest I can, but soft language won't get the point across so please understand I mean no offense (and Tim this whole thing is meant generally and not directed at you). I am saying that if my posts are similarly ignored this year, those who ignore them will be that farther behind next year and the year thereafter when we'll be posting the same stuff in a thread titled "Just paid over $6 for a gallon in Michigan !"
Nothing changes, but you can change what you're going to do about it.
One more example if this still is not clear, and it'll sound too familiar to those who recall my past posts on these subjects but it's the best I can come up with.
For Americans Sadowsky basses have not gone up or down in price the past 5 years. For Canadians and Australians (and most other "First World" citizens) the prices have gone down about 40%. That's because of the slide in the US Dollar. Had the opposite been the case, we'd be saying "how come the price has gone up!?!??!" just like we see in these oil threads, but the prices haven't changed - just our buying power has changed per our national currencies.
Another example - many complained bitterly when Aguilar affected a massive price increase a couple years ago. For me, they cost the same in CDN dollars now as they did before the huge price jump, maybe less in fact. Why? The US dollar tanked that much in the meantime.
Again, this is not even close to the only factor in oil/gas pricing, but it's a major one and needs to be comprehended to fully overstand (sic) our place in the Economic world and our buying power in it. Wars are fought economically now, but sadly Western Governments don't get it at all. Meantime, Asians countries are dumping their US Dollar and loans holdings in favour of Gold and property in Hawaii (I think half of that state is foregn owned now?) or downtown Manhattan, buying our banks and major corporations (Saudia Arabia holds 7% of the value of the stocks in the USA at last count), taking "our" jobs via outsourcing, etc. Most importantly buying up oil fields and oil producers and uranium supplies while we in the West go further and further into personal and national debt to bomb sand dunes and buy new DVD players.
Our ancestors "bought" North America for a bunch of beads, bottles of booze, and ratty blankets. It's now being bought out from under us using our own possibly-soon-to-be-worthless dollars 'cause they don't want to keep 'em in their National Banks 'cause the value keeps dropping fast. This makes the value drop faster, thus pricing us further out of the game. And of course "they" got these Dollars in the first place by selling us cheap trinkets like schlockbuster DVDs payed on "made in China" DVD players watched on "made in China" bigscreen TVs and by lending us the money on credit we used to buy all that junk (and lending us the money to buy bombs for all those sand dune ... do people realize that the US gov't borrows massively from "them" and if not to whom do they think the national debt, spiralling out of control as it has been, is owed to

?).
Incredible? Conspiracy? Xenophobia? Anti-US tirade? Not hardly and despite the current currency advantage Canada is just as mixed up in it as the US so other than having the resources in the ground "we" are only slightly better off. The current stuff is all fact and the future predictions are an exptremely plausible outcome of the path we're now on. Don't take my word for it. It's easily verifiable for those who want to. Just do some searches on foreign land ownership in the US or on Chinese purchasing of oil lands and producers in the past decade. Or just read the no-fun parts of any respectable newspaper going back the past few years. These are not secrets, except maybe to those in charge. People say it, but no one wants to hear it (witness this thread and others like it), and when the politicians debate they of course speak nothing of it assuming they can even comprehend it. It can all be averted, but not the way the West is currently handling it.
Good rant eh? IMO !
