On Tuesday 29 April 2008 20:54:16 Cleveland, Kyle E. wrote:
> Has anyone been able to give a succinct, three-sentence-or-less
> rationale on why crude prices have jumped so astronomically in the last
> year.  During the OPEC crisis of the '70s there might have been
> shortages, but the price at the pump did not skyrocket in the manner
> it's doing now.
>
> Kyle
>

Hi Kyle,

I'll give you a two word answer:-

Rampant capitalism!! ;-)

(BP & Shell announced a PROFIT of $14,700,000,000 in just 3 months!!!) That's 
after all their costs, tax, R&D, drilling exploration, executive bonuses, 
etc., their left with that amount of profit in 90 days!!!

See:- <http://news.bbc.co.uk/1/hi/business/7372509.stm>

And this is just 2 oil companies, what about Texaco, Exxon, ...

I can see why the cost of crude has gone up - increased demand v. supply 
factored with increased uncertainty about future supply.

What galls is how highly "geared" this commodity is, everyone takes a % price, 
rather than a flat-rate based on volume:

Refining
Taxation
Retail

all charge as a percentage of the price, so any change in crude soon gears up 
to a larger change in gas/petrol.

Cheers

Deri

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