RWB

On Oil and Its Manipulation

Noudamon wrote: "All broken down, America receives just 12% of its daily import from the Middle East! To support the notion that unreast in that region is the logic behind our spiraling fuel costs is truly the crime of the millenium. "

America's consumption of oil is not what sets its price. It is a global commodity, and global consumption sets the price. It doesn't matter if we don't get much of our oil from the Middle East--trouble in the Middle East is likely to push futures prices higher worldwide. (And it should be noted that Africa has its own problems with oil that pushes both spot and futures up).

Peter Sterling wrote: "Its idiotic to try and legislate the oil price down. Stop buying oil from overseas first. Develop our own reserves."

Producers will always produce the cheapest oil first. Then they'll produce more expensive oil as long as they can make a profit at the current world price. Right now, there is almost no oil that is basically too expensive to get. But considering the time and capital expenses of developing new fields, and the historical volatility of oil prices, oil producers may be reluctant to dive headlong into more expensive forms of oil (oil sands, oil shales, etc.). So it's not a simple case of "develop our own reserves" solving all our problems. Even if we were to become a net exporter of oil, the oil we consume ourselves would still be priced by the world market.