Who is getting benefitted from high crude oil prices?why the world community is unable to control this hike?

Abnormally high crude prices will harm the Industry all over


the world,make all commodities costlier and thereby making


the life of poor and middle class more misreable.Why strong


protest is not being made,it is a kind of black marketing


and unfair trade practice,may be part of this money is diverted


by Muslim countries to terrorist which another dangerous


dimention .Who is getting benefitted from high crude oil prices?why the world community is unable to control this hike?
Commodity speculators for one, and oil companies benefit as well.





The more important question is why can't we get a simple audit trail from the exchanges to make sure what Enron did to California isn't happening on the commodity exchanges for oil and other commodities?





If I may quote the most recent GAO report on this very subject:





However, because of the lack of reported data about this market, addressing concerns about its function and effect on regulated markets and entities would be a challenge. CFTC officials have said that they have reason to believe these off-exchange activities affect prices determined on a regulated exchange. In a June 2007 Federal Register release clarifying its large trader reporting authority, CFTC noted that having data about the off-exchange positions of traders with large positions on regulated futures exchanges could enhance the commission’s ability to deter and prevent price manipulation or any other disruptions to the integrity of the regulated futures markets.53 According to CFTC officials, the commission also has proposed amendments to clarify its authority under the CEA to collect information and bring fraud actions in principal-to-principal.Who is getting benefitted from high crude oil prices?why the world community is unable to control this hike?
It's both an issue of supply and demand, and taking the power away from the thieves who are manipulating it. Speculators, drillers (OPEC), oil companies, and refineries, are all getting their piece while the world suffers.





An aggressive move for new oil is necessary to alleviate


the short term problem of supply and demand, but not putting control of it in the same hands or by letting the same country's continue to have control.





Long term, we must develop alternatives to oil. Nuclear power is becoming a logical alternative in Europe, it should be too, in the US. Petro for vehicles is equally as important so the R%26amp;D must continue at an ambitious pace
If you look at crude oil prices you will see $50. to $88. then it sells on the backside of the stock market for $130.+ It' the stock speculators not the oil company's you know Chuck, Kemp, Bloomburg, Van Kempen. IT'S THE BROKERS THAT ARE KILLING US. Hey then after the refinery's have taken the chemicals out they do it again and buy up gas and hold it til they double their profit before selling it to the distributors
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Economic Outlook


David Smith





IT is hard to keep up with the price of oil. No sooner have we got used to $100 a barrel than it is in the $120s. Will the price rise to $150, $200 or even $300 a barrel? How far can it rise without doing severe damage to the world economy?





A few days ago Arjun Murti, the analyst at Goldman Sachs who predicted three years ago the price could top $100 a barrel, said the “superspike” could take it to $150 or $200. His prediction had more impact than a similar forecast days earlier from the president of Opec (the Organisation of Petroleum Exporting Countries).





Neither Murti nor Chakib Khelil, Opec president, are disinterested observers. Goldman is one of the world’s biggest traders in energy derivatives and Opec has a vested interest in a high oil price. But Daniel Yergin, president of Cambridge Energy Research Associates, has previously predicted a fall in prices and also thinks $150 is likely.





That would be enough to push petrol up to about £1.25 a litre and diesel to £1.40, well over £6 a gallon. It would also, one would have thought, be enough to tip some economies over the edge.





Indeed, why isn’t the rise in prices we have seen already having more of an effect? For those who were brought up on the rule of thumb that every 10% rise in oil prices led to a 1% drop in global growth, the resilience of economic activity in response to sky-high oil is surprising.





Those rules of thumb are, however, no longer relevant, according to the National Institute of Economic and Social Research. In January 2007, oil dipped briefly below $50, and futures markets pointed to a price over the next six to seven years in the $50s and low $60s. When the institute did its latest assessment, oil was above $100 and the curve suggested it would stay around that level.





Had it not been for that rise, America might have grown 2% this year rather than the 1.3% the institute expects. Growth in Europe and Japan would have been half a point higher. But in Britain, however painful the energy squeeze, the effect is calculated to be small, a mere quarter of a percentage point off growth (the smaller effect is because North Sea oil and gas production, while in decline, is still significant). The inflation effect is bigger, roughly a percentage point across all the advanced economies, but a far cry from the old days.





Ray Barrell, an economist with the institute, said the big change is that economies are less directly sensitive to oil prices than they used to be. The “energy intensity” of growth – the amount of oil, coal and gas needed to produce an increase in gross domestic product – has halved since the 1970s, reflecting greater energy efficiency and the shift away from heavy manufacturing.





Labour markets have also become more flexible, said Barrell, so workers accept temporary reductions in real wages when energy prices rise, while in the past they would have demanded compensation. The wage-price spiral used to mean expensive oil led to inflation, unemployment or both. Central banks now are under less pressure to act to head off the “second round” inflationary effects of dearer oil.





Life would be a lot easier if oil prices fell. So what will happen? Fans of mine are fond of reminding me I once wrote that the sustainable price of oil was $40 a barrel. I fear some of them did not understand the subtlety of the point so let me try again. It was based on BP’s statistical review of world energy, which shows the real (inflation-adjusted) price of oil right back to the Pennsylvania oil boom of the 1860s.





Real oil prices were very high at the start of the period, above $100, but came down by the 1880s and stayed roughly within a $10-$20 range, with occasional jumps, for the next 90 years.





From 1973 to 1985 there was a spike, initially to the equivalent of the mid $40s, then a peak of over $100, on Opec’s flexing of its muscles and the Iranian revolution. Prices then dropped, averaging $20-$30 in real terms from the mid1980s until 2003. In cash terms, the recent rise above $40 happened only in 2004.





The question was how much prices needed to rise to allow for tighter supplies, rising demand from China and India – as set out in a new paperback of my book The Dragon and the Elephant – and rising costs. Nobody denied this meant a permanently higher level of prices.





Goldman Sachs suggested a five-year average of $60 a barrel, which was at the high end of predictions. Most other forecasters expected a rather smaller adjustment. Everybody, including me, expected prices to be higher than in the past, but not this high.





So today’s prices are unusual. Inflation and the dollar’s weakness mean the $40 I wrote about three years ago should be adjusted to between $50 and $60. But that is a long way from $125, which is what the market says oil is worth.





Anybody who doubts something odd is going on should look at the reaction to last Wednesday’s announcement of a large rise in crude stocks by the US Department of Energy. Instead of falling, prices hit a new record. “It’s going higher because it’s going higher,” said one trader. Did somebody once write of the wisdom of crowds?





In the four years since oil prices broke above $40, global demand has risen from 82.5m barrels per day (bpd) in 2004 to an estimated 87.2m this year. Supply has just kept pace, rising from 83.4m to 87.3m in the first quarter.





Interestingly, demand in the advanced economies is predicted by the International Energy Agency to be 48.9m bpd this year, 0.5m lower than four years ago, with even North America’s oil use down. So it seems that many countries are responding to higher prices in the normal way.





But demand in emerging economies is up 5.2m bpd, driven by China, up 1.5m bpd; the Middle East, up 1.3m; other Asia, up 0.8m; Latin America, up 0.8m, and Africa, up 0.4m.





So when will the oil bubble burst? Probably not until there is more solid evidence that both supply and demand are responding to higher prices. The higher the price, the more likely such a response. But it takes time. In some economies, like China, prices are controlled. Much oil is bought on long-term contracts, not reflecting current market prices.





As I have said before, oil spikes eventually end. But they do not always end quickly.
While there are a host of benefactors due to the high costs - primarily the countries where oil is produced and the basic supply chain providers. Market speculators of course are in the mix and do probably add as much as 30% of the cost overall.





There's a joke about two men falling off a cliff, as one man with a parachute falls past the other, he notices that he is not wearing a parachute, and so he asked the only really relevant question ';Did you jump or were you pushed?';.





The plain fact that we are reaching a peak in light sweet crude is plain to see





http://ww.theoildrum.com





The alternative sources (tar sands etc), could keep things going for another few decades perhaps but our appetites are increasing so our demand upon these resources will increase as well. Good estimates suggest that by 2030, we are in a much less friendly environment for oil production / dependency.





As it stands we already have to compromise our national interest to be captive to capricious authoritarian or terroristic regimes.





This circumstance therefore does not change until WE THE PEOPLE choose to change it.





Elect politicians who are more responsive to the citizenry and less to big businesses.





For one, I decided after 9/11 that a hybrid car and shorter commute were easily accomplished steps I could take to lessen my dependency.





As a nation however, we need to acknowledge that we use increasing - not decreasing quantities of oil.





Japan, by contrast, put massive investment into public infrastructure (mass transit, and nuclear %26amp; geothermal energy) such that they have used about 6 million barrels per day since the 1970's).





In the US, we use more than twice that (about 14million barrels per day as of 2004) our use is doubling every 10-15 years, so we aren't even headed in the right direction, while that doesn't include our domestic production as well, we need to completely rethink our situation.





No more sprawling Mc Mansions or Hummers, - 5 or 6 dollar gas may fix that problem naturally. However, we need to redevelop our economy around the idea of high-energy production centers in or near cities, hot-rock geothermal, coal and nuclear primarily, solar and wind etc, in more rural / sunny areas where appropriate.





Personally, having researched something into the idea of fusion, while it's possible that a fusion reactor is possible to create or come online in the next 25 years, it is to my mind a speculative energy systems, and have by necessity - no part in this plan since we are in the position of having to actually restructure our economy and lives around the existing crop of technologies.





For my money, the book ';The Long Emergency'; written by James Kunstler paints a pretty dismal perspective on the overall prospect of the US publics' ability to successfully transition to a more sustainable energy economy.





I personally do not share his pessimistic view, I do not however discount that there will be pain and possibly some noticeable austerity in our future, rather than the cornucopian perspective we have held to for nearly 90 years.





So in the end, we could choose - like Japan or Germany or other industrialized ';first world'; nations to intentionally transition our economy, OR we could just choose to run the engine of our economy as is or with slight modification until it sputters and falters at a time and in a manner not of our choosing.





The choice seems obvious enough, we must accept these costs / alternatives, because we have a stark future otherwise.