YOMAG - Money & Economy - High oil prices

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High oil prices

Berlin 4. 12. 2007

A new oil crisis or just marketing ?

Why do the gasoline prices rise? Are there real reasons for the daily changes?

If you look at the fuel prices by the gas stations today, you wouldn’t be hardly shocked by the high prices because they’re changing every day.

Meanwhile the costs of 1 litre gasoline nearly amount 1,40€. For comparison, in spring of 2002 there were many discussions around the abrupt rise of the fuel prices of 0,15€ to approximately 1.10€ per litre, the litre of diesel costs 0.87€ at that time.

So you can see that the price trend doesn’t look hermless but rather alarmingly and should be for everybody a thought-provoting impuls.

The reasons of the high fuel prices are always that they have to do with the changes of the crude oil prices and the speculations at the stock exchange. In addition there won’t be oil for ever and everybody, because of that it becomes the position of an important and powerful merchandise.

Till today already twice in time it came to such a price rise that one spoke of an oil crisis.
The first and gravest began in the autumn of 1973. Because of the OPEC States (Organization OF the petroleum Exporting Countries) had sunk the oil production about 5%, they wanted to rise the prices consciously. On October 17th the crude oil price rose of approximately 3 US-$ per barrel (159 liter) to approx. 5 US-$ per barrel, this was a price increase of over 70%. During the next weeks the crude oil price reached a record mark of over 12 US-$ per barrel.

The second oil crisis was in 1979/1980, the main reason for the price increases was because of the revolution in the Iran and the begin of the 1st Gulf War (September 22nd of 1980 - August 20th of 1988). The price rise ended at nearly 38 US-$ per barrel.

In the last passing 5 years there was such a price increase like never before. In 2004 the costs per barrel reached a level of approx. 53 US-$, the reasons were political arguments as well as the oil trade at the stock exchanges. After hurricane Katrina has hit the east coast of North America on 2005, this one also destroyed important manufactories in the USA and at the gulf of Mexico.
Due to these events the price rose enormously, to over 70 US-$ per barrel.

The most current events were on September 13th of 2007, when the crude oil price reached for the first time a level of over 80 US-$ per barrel. This record was broken on November 7th in the same year, when it achieved a new record price of over 98 US-$ per barrel.

But many people observe the current developments more critically and even argue that the rise prices nothing has to do with the fact to do have that oil is limited. They are the opinion that the OPEC states takes this only as pretext by their profit to increase. But if this theory is true, the question would be if it is correct to abuse the market position like this.

I also believe it’s true that the oil will be more limited in future, however I am uncertain whether we just ultilized by the oil companies and if we have to agree this.

Or should we answer back...