Are the rising gas prices connected to the current US Wars?

[Dr. A ♥ O 203]

Question of the day:

What portion of the price per the gallon of gas funds the wars we are in?

At the beginning of this summer gas reached $4 a gallon across the nation with predictions to get to $6-$8 a gallon by the end of the summer and $10 a gallon by the end of this year.

On the heels of this news the Arab League meets and out of the kindness and generosity of the Saudi King's heart he agrees to immediately start pumping more oil.

I don't understand why the price of gasoline is rising when Saudi Arabia's King announced they are going to start pumping more barrels which should lower the gas prices.

During this war it is surprising to me the US hasn't been taxed more heavily to fund the trillion dollar deficit. I theorize that our government is so in bed with the corporations that instead of raising taxes they are raising gas prices. A lot of what is going on over there is privatized. Halliburton's Cheney's private army security and everyone knows the Bush's are Texas Oil Millionaires.

Do certain Saudi Princes members of the Arab League have some kind of alliance with the oil corporations of the United States and the UK?

I know the US and the UK have oil issues history with Iran since the 1950's.

One main reason cited for this war was because the US wanted the oil in Iraq; which is the second largest known oil reserve next to Iran's.

Edited June 20, 2008 by Olivia*

[mawilson 2,133]

The question doesn't make any sense.

"What portion of the price per the gallon of gas funds the wars?"

The oil companies are not paying for the war - wouldn't that be nice?

[Nasturtium 500]

Oil is priced on the international market in dollars (except Iran, they don't sell in dollars and are not part of this system). When the US dollar falls in value, the price of oil must raise in order to maintain profit levels. The reaosn gas prices have been raising is because of the falling dollar values. The reason plastics haven't raised yet and other things with petroleum bases (or not raised as much) is that many manufacturers are not yet passing on the cost as well as there is a greater lag time in the process with other things besides oil and fuel. The real question is not why is oil going up, the real question is why is the American dollar falling. Pumping more oil isn't going to make much difference when our economy keeps dropping.

[Aubrey 10]

Oil is priced on the international market in dollars (except Iran, they don't sell in dollars and are not part of this system). When the US dollar falls in value, the price of oil must raise in order to maintain profit levels. The reaosn gas prices have been raising is because of the falling dollar values. The reason plastics haven't raised yet and other things with petroleum bases (or not raised as much) is that many manufacturers are not yet passing on the cost as well as there is a greater lag time in the process with other things besides oil and fuel. The real question is not why is oil going up, the real question is why is the American dollar falling. Pumping more oil isn't going to make much difference when our economy keeps dropping.

Fuel prices have skyrocketed worldwide, so it really has nothing to do with the weak dollar. Everything I've heard on the news and read says the cause is twofold: excessive demand, particularly new demand from the east such as China and India, and speculation, causing a "bubble" in the price.

Edited June 20, 2008 by Aubrey

[mawilson 2,133]

The reaosn gas prices have been raising is because of the falling dollar values.

That's not exactly true.

There *is* a correlation, of course -

but the price of oil has more than doubled since May 2007 ($60-120, right-hand side of

the chart), while the dollar is only 23% weaker than it was a year ago ($1.30-1.60,

left-hand side of the chart.)

The correlation just means that traders in the two markets are looking to each other

for cues, nothing more.

[Nasturtium 500]

It's priced world-wide in dollars on the market. Mawilson and Aubrey, you are correct though-- there is an element (a significant element) of speculation as well and yes, higher demand from countries like China and India... but it's not the war in Iraq that has driven up the prices. Neither is it due to any real US consumption issues IMO. I just don't see it. We've cut consumption statistically, but it still goes up-- we can't beat out the usage of the aforementioned countries and continents and our economy is still weak/weakened/failing/whatever you want to call it. Sorry I didn't mention those as well... I was just thinking about the US! Egocentrism hits hard at 3am

[mawilson 2,133]

It's priced world-wide in dollars on the market. Mawilson and Aubrey, you are correct though-- there is an element (a significant element) of speculation as well and yes, higher demand from countries like China and India... but it's not the war in Iraq that has driven up the prices. Neither is it due to any real US consumption issues IMO. I just don't see it. We've cut consumption statistically, but it still goes up-- we can't beat out the usage of the aforementioned countries and continents and our economy is still weak/weakened/failing/whatever you want to call it. Sorry I didn't mention those as well... I was just thinking about the US! Egocentrism hits hard at 3am

There's no higher demand from India and China, it's total BS.

5-10% higher, maybe, not 200%.

[Nasturtium 500]

There's no higher demand from India and China, it's total BS.

5-10% higher, maybe, not 200%.

You think so? I'd like to see some good articles on that if you know of any offhand good sources (I can look up my own articles, I've just had problems with finding good sources). It did strike me as odd but it's so widely reported and I haven't found otherwise. One of the things my Dh and I were talking about is this car, a Chinese make called "Cherry" in Jordan. It gets incredible gas mileage (I won't say how much as I cannot really remember exactly what he said and don't want to misquote) that would make me wonder if they aren't all geared towards a much more economical market. Aren't they also heavily into scooters and other really gas-friendly things in addition to car-ownership still being fairly uncommon? I remember seeing less than 10% or so owning cars in India.

5-10% is like a drop in the bucket compared to 200%

[mawilson 2,133]

5-10% is like a drop in the bucket compared to 200%

Well, of course! You don't think the demand doubled in the past 12 months, do you?

China's oil demand rose 6% in 2006, 10-12% in 2007.

(And no, it doesn't mean it'll be 25% this year, 50% next, and 100% in 2010.)

[mybackpages 0]

With the current state of hte housing industry and the weak dollar, investors have been looking for non-US dollar investments and many turned to oil commodities. As the price of oil went up (due in part for the demand of investors) more investors turned to oil as an investment. The demand encourages higher prices.

It's not the only reason oil prices have reached record highs, but it is one factor.

[mawilson 2,133]

With the current state of hte housing industry and the weak dollar, investors have been looking for non-US dollar investments and many turned to oil commodities. As the price of oil went up (due in part for the demand of investors) more investors turned to oil as an investment. The demand encourages higher prices.

It's not the only reason oil prices have reached record highs, but it is one factor.

[Dr. A ♥ O 203]

Bump

[Dan J 277]

With the current state of hte housing industry and the weak dollar, investors have been looking for non-US dollar investments and many turned to oil commodities. As the price of oil went up (due in part for the demand of investors) more investors turned to oil as an investment. The demand encourages higher prices.

It's not the only reason oil prices have reached record highs, but it is one factor.

In essence, yes, but our weak dollar is the result of billions in borrowing from foreign banks to balance the budget and pay for the war in Iraq.

When you track it all the way back to the source, the war in Iraq, specifically the way it has been funded is the reason for high gas prices now.

[mybackpages 0]

With the current state of hte housing industry and the weak dollar, investors have been looking for non-US dollar investments and many turned to oil commodities. As the price of oil went up (due in part for the demand of investors) more investors turned to oil as an investment. The demand encourages higher prices.

It's not the only reason oil prices have reached record highs, but it is one factor.

In essence, yes, but our weak dollar is the result of billions in borrowing from foreign banks to balance the budget and pay for the war in Iraq.

When you track it all the way back to the source, the war in Iraq, specifically the way it has been funded is the reason for high gas prices now.

I don't disagree with you about the impact of the war in Iraq (and I would add 7 yrs of Bush policy all around) but I can't simplify it down to a single cause. There is a mix of factors some at the doorstep of Bush and some totally our of anyone's hands.

[Dan J 277]

With the current state of hte housing industry and the weak dollar, investors have been looking for non-US dollar investments and many turned to oil commodities. As the price of oil went up (due in part for the demand of investors) more investors turned to oil as an investment. The demand encourages higher prices.

It's not the only reason oil prices have reached record highs, but it is one factor.

In essence, yes, but our weak dollar is the result of billions in borrowing from foreign banks to balance the budget and pay for the war in Iraq.

When you track it all the way back to the source, the war in Iraq, specifically the way it has been funded is the reason for high gas prices now.

I don't disagree with you about the impact of the war in Iraq (and I would add 7 yrs of Bush policy all around) but I can't simplify it down to a single cause. There is a mix of factors some at the doorstep of Bush and some totally our of anyone's hands.

I'm not saying it is the single cause, but by itself, its likely the largest factor. By itself a weak dollar only accounts for a small portion of the price increase, but its amplified by speculation and a generally weak economy.