Commodity Prices, Oil and Resource Shortages

6 06 2011

Our article can be found here, and statistics on rising oil prices can be found here.

 

Questions:

1. Who do you believe holds responsibility for rising oil prices: Speculators, market commentators, suppliers, or a combination of all of them?

2. How do you think rising oil prices can be reigned in? Should they be reigned in?

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11 responses

6 06 2011
sidkhn

There is a lot of demand for oil right now thus resulting in excessive prices. There is more demand but less supply. In my opinion its ok if oil prices are controlled but they should not skyrocket. People are paying a lot more for oil right now than they were previously. Due to this people have actually started using public transit and i dont think its fair that the oil prices go so high, to an extent that people stop using their cars. The prices should be affordable. In addition to this, not saying this would happen but people might just stop buying gas at all.

6 06 2011
Carolyne Wang

1. Everyone holds responsibility for rising oil prices, but at certain times one party may hold more responsibility than others for rising oil prices. For example, in 2008 it was likely that speculators were the ones who drove the price of oil so high. Right now, oil prices are high partially because of the political conflict in Libya and partially because of speculators predicting that conflict in the East will drive up prices.
2. If oil prices are increasing not because of a supply issue but rather because of speculation, then oil prices should be controlled in order to prevent a drastic decrease in demand that caused the price of oil to drop over 100$ after it peaked in 2008. Oil prices should change according to the principles of supply and demand instead of according to artificially projected supply and demand.

6 06 2011
Peter S

1) Since it is a free market economy the price is determined by demand and supply. Everyone who relate to oil market can affect its price. This year, oil has been increasing since winter till may. In my opinion the actual reason is a political instability in Arabic world. Collusion can take place in some cases but Canadian government has already taken it under control. Also, speculators may add up additional value during uncertain market conditions in order to make money

6 06 2011
Peter S

2) Oil prices should be under the government control, but only because collusion is possible. Otherwise, it is a free market and equilibrium should be determined by sellers and buyers. Also government can take some actions if the market is overheating, like it was in 2008 when oil price reached $145 a barrel.

6 06 2011
lindashidilei

1. I would say that everyone has responsibility for the high oil price. Everyone is on it. Supplier couldn’t just drive up the price without spectators’ help. One party couldn’t have control over the oil prices, it’s more complicated than that. Sometimes, external influences kick in, like the natural disasters, political issues, wars, etc all can affect the up and down of oil prices.

6 06 2011
aenamorado

1. The blame game, who is to blame for the rising prices in commodities. The fact is, this blame can’t be shifted to 1 group, it is a collective altering of prices. All their actions cause the price to rise, for there is never one sole cause to events. A conclusion of that would suffer from the fallacy of single causation. In this economic matter, all are to blame for prices. One can peg speculators to have a bit more blame than others because their meddling drives the price above what its worth and one can argue, they shouldn’t be involved because they are not using the commodity themselves.

6 06 2011
jkeum132

1. In my opinion although all of them may have contributed towards the rising of prices, i believe the biggest contributor was the speculators. The speculators were indeeds the ones who was the first initiated the beginning the the rising prices. The rest almost fell into a domino effect where more and more causes are effecting the oil prices recently. In 2011, old prices are being affected with even conflicts of individual countries. For example, Libya, one the major oil supplying countries, is going through a violent protest against the government. People are too scared to work there meaning less barrels are out in the market lowering supply, ultimately rising the prices.

7 06 2011
mikeseo093

1. I think all of them have contributed to the price rise in oil, and I think we can’t really give the whole blame to a single group. Everybody was part of this. However, it is true that a particular group may have contributed to this more than the others, which, in this case are the speculators. They are the ones who basically started the rise of price of oil in the first place. Now, the price of oil is high because of the conflicts in the middle east.

7 06 2011
heshanim

1) I think a combination of all of them should be responsible for the rising oil prices. We have incidents from the past where every single one of them has been responsible for this rise in oil prices. At times it also causes due to various economic conditions in countries, as well as natural disasters etc. But most of the time its this combination that drive the oil prices high.

7 06 2011
Nahee Kim

In everyway, they are all responsible for the prising the gas. However, i think speculators holds the most responsibilities. The reason why there is an increase price of is becuase of peculators. In 2008, 60% of oil prices were speculations and it appears speculators are to blame. This shows how much speculators holds responsibilities. The oil prices are depending on speculations but little bit of other once.

7 06 2011
Maria Li

1) There is a very high demand for oil in the economy right now. However, there is not enough supply. The hike in oil prices are due to the inelastic nature of oil. A little shift in the quantity supplied affects the price greatly. So I think that it is caused by a combination of factors; supplies and consumers more specifically. Due to its inelasticity, oil suppliers can only meet the consumer demand at a certain price. Thus the high oil prices today. Furthermore, oil is becoming more and more scarce. Its becoming a rarity. Therefore, people have to pay a high price.

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