Crude Oil Board

our daughter(15) has an essay to produce on "the rising price of oil" and has to present it in max 10 min. could anyone give me some hints?
thanks!

That is a tricky question. Too general perhaps.

Tricky: Cost of oil is no longer rising, it's falling, and falling hard. Maybe the view should be that "did oil rise more than it should have" citing the fact that it's $60.00 today and down $20 in recent months.

Too general: prices of everything goes up. Oil is simply such a big thing in the advanced world we notice it. If gas stations did not have huge prices posted on signs, we might not be as concerned. Can you imagine driving and seeing a gallon of milk price posted on every corner store, supermarket and convenience store? We would talk about it daily at the water cooler, and boast when you drove 20 mins to save a nickel!

Price is managed by supply and demand. The more "big" a thing is, new influences appear such as politics, greed, cartels/monopolies, fraud and hedge funds... and more.

Perhaps a 15 year old may want to simply look at why we want oil so much, and why we don't use alternatives. Simple options like taking transit and walking to work/school when it is often convenient and economical. We still choose to buy SUV's and drive 2 blocks for milk. We are willing to drive 20 mins to save a nickel on gas, without noting that we spent $5 to get there in gas, wear-on-car, and personal time.

Current price may be low only because of the interm elections. If I and others are correct in this view, prices will resume their rise in mid November.

Or prices are falling because the US is heading into recession, officially by Feb perhaps. In which case, rapidly decreasing demand, and loss of jobs in the US and then world will cause oil prices to cut in half of today until the world economy rebalances.

Well, there are a few thoughts.

your daughter should look at basic supply and demand. Opec increases and decreases as well as the chages in consumption and how they relate to gdp and the federal reserve increasing interest rates to slow economic activity. also katrina had an effect on the price of oil today. peak oil production is around the corner and the market has to be above 45 to 50 dollars a barrel for deep well drilling to be profitable. The problem with deep oil drilling is the initial capital investment for start up is huge. Coal is a great alternative, we can make diesel from coal. This requires oil to be at 30 to 40 dollars a barrel. it is environmentally beneficial as long as the company producing ctl (coal to liquid) fuels sequesters the carbon dioxide they remove. right know there are talks of price floors in the United States for alternative fuels, one might to a search on the governor of montanna. swietzer I think is how you spell it. the price floors are so the us can become energy self sufficient.

hope this helps

Katinka, take a look at the articles on the front page of http://oil-price.net
They go in great details to explain what's happening. Your daughter should feel free to reference them in her essay.
Steve

Crude oil prices will gain as a short supply and increasing demand.