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Politics : Libertarian Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Sidney Reilly who wrote (6886)	3/26/2008 11:23:04 AM
From: TimF	Respond to of 13056

There is plenty of oil, and plenty of demand for oil. Demand has been rising, at the same time the value of the dollar has been falling (both in general inflation terms and against other currencies). Add that together and its hardly surprising that the nominal dollar cost of oil has gone up a lot. The oil producers are conspiring to drive prices up and acting in concert which creates a monopoly situation. You mean OPEC? To the extent that anyone can and does collude to set oil prices it is them, but often their power is relatively limited. At times like today when supplies are tight compared to demand they could cause the price to shoot upwards by pulling supply off the market, but while high prices help them, too high of prices cause recessions (which reduce demand), and increase the push for conservation and alternate energy sources. When supply is not tight, they don't have the discipline to consistently keep supply/sales low to push up prices. Overall the cartel does increase prices, but it can't do so consistently. If you mean the US, or even more generally the private "western" oil companies, than your talking about a group that has little ability to "rape the public", there share of reserves and even of production is declining.