How in the world does oil spike up so quickly?

The beauty of the market, whether it’s commodities, mutual funds, or just plain ‘ol stocks, is that they never fail to surprise me. Only a month ago, I wrote an article about oil and why (based on analyst’s opinions) the price has increased so much, going up to $147 per barrel back in July. Well, just four short weeks later, oil has come down to under $108 per barrel. How in the world does oil spike up so quickly? More importantly, how does it plummet so drastically? Oil prices have decreased over 25% in the last four weeks, which makes me laugh when I think about all of those big shots from Goldman Sachs and such who predicted that oil will hit $200 by the end of summer.

Of course, there are a number of reasons (based on analyst’s opinions) as to why the price of oil has decreased so much. The economy of “powerful” countries, such as China, is weak and in jeopardy of a recession. Demand for products has decreased due to these countries having weak economies. Furthermore, specifically with China, the currency there has increased in value, which obviously makes exports less desirable, hence, causing a decrease in the output of goods. Yet, the average person would conclude that if a county’s currency appreciates in value, why would it be having economical problems? For that, stay tuned for another article…we’re talking about oil here.

The demand for gasoline is weak, which makes oil less appealing to investors. This further drives prices down, considering consumers of gasoline are finding other means of transportation, a phenomenon that is not all that phenomenal. It was only a matter of time for people to start getting sick of paying over $4.50 at the pump for a gallon of gas. Another reason why the price of oil has decreased is because of a stronger dollar in the last few weeks. Our currency is on the rise (yippie!), and this is causing investors to pull out of commodities (such as oil). Investors usually purchase commodities in order to hedge against inflation, and if the dollar is increasing in value, well, there isn’t as much hedging necessary.

There are many other factors involved, including hurricane Gustav not having the impact investors had anticipated for it to have. Also, refineries are starting to slowly come back online after being shut down for various reasons. So then, is it safe to say that the oil bubble has finally burst? Or is it just leaking for now but getting ready to grow larger again? Some analysts believe that prices can spike again due to unforeseen geopolitical events (could they be any more vague?) or OPEC deciding to cut back production (basically them saying,” We need to drive demand up, so we should decrease supply and drive prices up because this year I want to make $2 Billion instead of only $1 Billion”).

Whatever the reason is for oil prices decreasing, I really don’t care. As long as gas prices are decreasing, which they have gone down in the past month from a national average of $4.11 to $3.67 according to AAA, and then I’m a happy camper. Might I add that just because prices have gone down about $0.45 doesn’t mean I’m satisfied? It wasn’t too long ago that I could fill up the gas tank of a gas guzzling Camaro for no more than $35.00. I’d like to see those times again, very soon, so I can drive more like Jeff Gordon rather than Ms. Daisy.

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$104 a gallon oil madness?

I don’t know about you guys but I’m getting very sick and tired of having to spend an unreasonable percentage of my monthly income just to drive around. Living in California certainly does not help the situation, either! Some people commute over 90 miles (each way) just to get to work. I guess I’m one of the lucky ones, since I only commute 25 miles to get to work. While I’m sitting there in the usual L.A. traffic, cooking in my car from the scorching summer heat, thinking about how I have another 22 miles to go, looking at my gas gauge and seeing it near empty, remembering that I have to pay $4.50 per gallon for gas in an hour (or more) doesn’t help my mood very much.

Okay, so maybe my opinion and whining doesn’t matter to anyone. But I have heard and read some information that the so-called experts have written and I thought it would be nice of me to share. The price of oil has increased by 100% in the last year. Prices have had this extended run due to a supply shortage from oil producing countries such as Iran, Nigeria, and Venezuela. These shortages have been caused by poor oil field maintenance and political problems, which also include attacks by rebels on oil fields (in Nigeria). Demand is, and has been, rising at a fast pace in the Far East (mainly China), India, and the Middle Eastern petro states. Demand in the United States, however, has been falling. Saudi Arabia has increased its output within the last few weeks. In the last few months, there has been a huge rise in purchases by speculators of oil contracts for future delivery.
There is a great deal of information like this that one can take into account (these were just a few examples) and try to find out what’s going on. Is it just these speculators that are driving this price up or is there some justification? Do the oil companies have a hand in this and are raising prices for profits? How much more is oil going to go up? There are just so many questions but so few answers.

I can tell you this: Make it simple with 104Inc. I stumbled upon104inc.com and found that they know how to make things simple and easy. The technology they have implemented is extremely advanced, yet they make it so easy for a user to get what they want. As a business, you can join the 104Inc. community and start saving yourself money. I for one, who is just way too tired of spending money on gas and everything else that has risen in prices due to this oil “problem”, am starting to increase my demand for simplicity and ease. Like these speculators, I start investing my time on 104Inc. as I get more familiar with it and understand what kind of business it is. They have over 2000 websites, such as 104Oil.com, 104Invest.com, or 104finance.com. On any of their websites, I can find a business for services I may need, or just browse through countless articles that may be of interest to me. So go ahead and check it out for yourself. Take a break from all of this oil madness and get into the 104Inc. craze…it’s going to be big!

http://www.articlesbase.com/economics-articles/oil-when-will-the-madness-end-511846.html