that question was really not for you, you could have just ignored the question, my knowledge of this is from what i am paying at the pump, i am very sure there may be many people , in the forum working in "oil producing " countries, rigs, refineries , be it mumbai, gujarat or abroad. i am sure they know more than me . if you see the posts you will see someone working on core operations has posted a lot of good info on this.
Is oil price justified ?
- Thread starter raosrinivas
- Start date
Yes supply is not a problem, Known reserves in middle east can meet the worlds demand for next 100 years
At present the prices are more due to US crisis/ market speculators/ Global Politics not just based on economics of supply and demand.
Its a complex phenominon increasing supply would not solve the problem it might infact add a risk of drop in value..
what a situation it is
Bush says the rise in Crude is due to high demand by china and india.
Producers (OPEC) say its due to weak USD and Market speculations
Consumers Nations blame the energy policies, Environment risk and high cost of exploration and production one of the key factor.
Its an ideal situation where market speculators take advantage and the price will keep rising unless we have proper solution
At present the prices are more due to US crisis/ market speculators/ Global Politics not just based on economics of supply and demand.
Its a complex phenominon increasing supply would not solve the problem it might infact add a risk of drop in value..
what a situation it is
Bush says the rise in Crude is due to high demand by china and india.
Producers (OPEC) say its due to weak USD and Market speculations
Consumers Nations blame the energy policies, Environment risk and high cost of exploration and production one of the key factor.
Its an ideal situation where market speculators take advantage and the price will keep rising unless we have proper solution
its rather an incorrect question then my friend. You should have asked, is oil supply a real concern? because pricing is happening in the futures market (nymex etc) and the major players being funds who may not even recognize light sweet crude even if they are dropped in a pool of it. so the price of any asset you see rarely reflects what its "justified" price based on actual demand/supply usage should be!
bav is right. oil is a dirty game. and the only casualty of the game is common ppl like you and me or the man in the streets of a oil rich country http://www.arabianbusiness.com/510825-iran-increases-petrol-ration-for-new-year?ln=en
Petrol in US is about Rs.24, UK is Rs.22, Malaysia Rs,17, Pakistan Rs.18. Even with Crude rising this is what the price is globally. We are paying for inefficiencies somewhere.
Check it out here ->
w ww .ks h iti j.c om/r es ea rch/ pe trol. shtml
(Leave the spaces as usual)
So, why are we paying more? Why is Venezuela figuring in Inflation talks in India (25%) -Are we modelling ourselves towards that country? Shouldnt we compare ourselves with better countries and move towards better development?
Check it out here ->
w ww .ks h iti j.c om/r es ea rch/ pe trol. shtml
(Leave the spaces as usual)
So, why are we paying more? Why is Venezuela figuring in Inflation talks in India (25%) -Are we modelling ourselves towards that country? Shouldnt we compare ourselves with better countries and move towards better development?
True. These figures were a little old, at about $2.58 a gallon of gas.
But the fact remains that we have been paying higher than even the current US price for a very long time. WHY?
When crude price goes up, the customs duty goes up too, as it is a % of the price. It can be made fixed per barrel. It is almost 4 times of what was being charged when oil was around $30.
There are lots of things that can be done to handle oil price hike. In fact, many of these steps will bring down consumption (except for the increase in automobile popluation, which can only increase consumption) which would itself start oil prices down. Just some examples of what can be done :
1. Minimum Fuel efficiency Limits and Audit made statutory for all fleets of transport, high capacity generators in industry, etc., basically large consumers.
2. Education to keep engines tuned for private vehicles, and, other things to increase fuel efficiency (rather reduce fuel inefficiency). Service camps organized by Auto mfrs on fuel efficiency improvement. ECU implementations with the view of fuel efficiency on older automobiles without them. (ECU - Engine control unit).
3. Traffic discipline enforcement (Bangalore & Chennai - Chaos traffic).
4. Promoting R&D on fuel efficiency - you would be surprised only 15% of calorific content reaches the road/tyre.
5. Educating / recommending people to avoid vehicle use (thus fuel) as much as possible. Like, car pools, use of cycle to go to beach for a walk instead of using the car.
And, so on, and on, and on. Not to mention the politicians' extravaganza (show of strength, etc.,) with fleet of cars.
If these steps result in just 10% reduction in consumption, that will reduce our oil imports by about 15% (Our oil imports are 70% of our requirements), and, other countires follow suit, you would see future traders go for shorting Crude!
But the fact remains that we have been paying higher than even the current US price for a very long time. WHY?
When crude price goes up, the customs duty goes up too, as it is a % of the price. It can be made fixed per barrel. It is almost 4 times of what was being charged when oil was around $30.
There are lots of things that can be done to handle oil price hike. In fact, many of these steps will bring down consumption (except for the increase in automobile popluation, which can only increase consumption) which would itself start oil prices down. Just some examples of what can be done :
1. Minimum Fuel efficiency Limits and Audit made statutory for all fleets of transport, high capacity generators in industry, etc., basically large consumers.
2. Education to keep engines tuned for private vehicles, and, other things to increase fuel efficiency (rather reduce fuel inefficiency). Service camps organized by Auto mfrs on fuel efficiency improvement. ECU implementations with the view of fuel efficiency on older automobiles without them. (ECU - Engine control unit).
3. Traffic discipline enforcement (Bangalore & Chennai - Chaos traffic).
4. Promoting R&D on fuel efficiency - you would be surprised only 15% of calorific content reaches the road/tyre.
5. Educating / recommending people to avoid vehicle use (thus fuel) as much as possible. Like, car pools, use of cycle to go to beach for a walk instead of using the car.
And, so on, and on, and on. Not to mention the politicians' extravaganza (show of strength, etc.,) with fleet of cars.
If these steps result in just 10% reduction in consumption, that will reduce our oil imports by about 15% (Our oil imports are 70% of our requirements), and, other countires follow suit, you would see future traders go for shorting Crude!
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