What's the reasons behind high oil price

As the oil price trend continue to affect the global market, everyone is trying to find out some means on how to counter and at least try for a new solution for the alarming high oil price. But, before doing so, one could probably check out what's the reason behind the increasing oil price.


On May 13, the price of a barrel of oil briefly hit a record of $126.98 on the New York Mercantile Exchange The reason was ostensibly that Iran was cutting oil production. But there is no gas shortage. So why are prices still going up?

more...

Despite surprise rate cut, oil price still high in Asian morning trade

The price of oil, as oil spectators are expecting are suppose to go down due to the sudden Federal Rate cut. But in Asia, as recorded, oil price is still higher in morning trading. Will the oil price stay the same or will go lower after a day? Find out.

In morning trade, New York's main contract, light sweet crude for delivery in March, was four cents up at $89.25 a barrel.

The February contract, which expired Tuesday, had closed 72 cents lower at $89.85 in New York overnight.

Brent North Sea crude for March delivery was seven cents higher at $88.52 a barrel.

more...

Bush pushes OPEC to make better output

US president Bush appealed to the oil-producing countries, especially Saudi Arabia to improve oil output, which is by helping its price to lower. He also reiterated that the high oil price can be attributed to the US economic slowdown.He asked and hope for OPEC country members to put more supply in the oil market so to resolute problems in the oil industry.

"These are times of economic uncertainty but I have confidence in the future — immediate future," Bush said when asked if the U.S. was sliding toward a recession, as some economists fear. He said the underpinnings of the economy are strong. "I'm optimistic."

In public, Bush had been silent on this trip about the politically potent issue of oil prices but he changed course Tuesday. He raised the subject during a morning meeting with Saudi business leaders, saying oil prices were very high and "tough on our economy." He spoke more directly in an afternoon meeting with reporters who were unexpectedly summoned to his guest palace.

"I hope OPEC nations put more supply on the market," he added. "It would be helpful."

Bush conceded that, in reality, increasing output would be difficult. The demand for oil, particularly from China and India, is stretching available supplies, he said. "A lot of these oil-producing countries are full out" in terms of what they can produce, he said.

more...

Considerable risks in 2008 economy might happen, says OPEC

In its monthly oil market report, OPEC announced that there are some considerable risks on economy in the coming new year. The risks might be brought out by tensions and pressures on oil prices that also causes political instability. This would surely give OPEC a problem to resolute.

"Prospects for 2008 are increasingly clouded by the expected slowdown in the U.S. economy and other OECD regions, and by continued turbulence in financial markets in the wake of the deepening subprime mortgage crisis," the report said.

"The improving geopolitical situation and slowing economic outlook should help to further ease the pressure on the market."

OPEC also forecast world oil demand would grow by 1.3 million barrels per day next year, steady from the previous estimate and much lower than some projections.

more...